Annual report 2021
As the world changes,
we make it easier to be tryg
Contents
Management’s review
Highlights 03
Tryg at a glance 04
Business areas 06
Income overview 07
Introduction by Chairman and Group CEO 08
Events in 2021 10
Financial outlook 12
Targets and strategy 15
Strategic initiatives 17
Business initiatives 18
Tryg’s results 20
Private 25
Commercial 27
Corporate 29
Sweden 31
Investment activities 33
Capital and risk management 35
Investor information 39
Corporate governance 41
Supervisory Board 45
Executive Board 49
Corporate Responsibility 50
Financial statements
Financial statements 55
Group chart 127
Glossary 128
Product overview 130
04
39
08
12
Tryg at
a glance
Investor information
Introduction by
Chairman and
Group CEO
Financial
outlook
Tryg aims to pay a nominal, stable
and increasing ordinary dividend, while
maintaining stable results and a high
level of return on capital employed
Shareholder remuneration
(DKK per share)
2017 2018 2019 2020 2021*
Ordinary dividend Extraordinary dividend
1.65
6.8
6.4
3.3
6.6
7.0
4.28
* Calculated on the new 654m number of shares
following the DKK 37bn rights issue to fund the
RSA Scandinavia acquisition
Annual report 2021 | Tryg A/S | 2
Highlights 2021
Financial 2021 Financial Q4 2021
2.6% 14.0826
86.2 373m
1.07 188
941m568m
1,596m
0.8
1,206m
0.84.9%
14.1
3,709m
Premium growth
in local currencies
(6.4% ex bonus and
premiums rebates)
2020: 7.0%
Expense ratio
2020: 14.1
Technical retult
(DKK)
2020: 3,495m
84.5 837m 1,008m
Combined ratio
2020: 84.5
Tryg's stand-alone
investment return
(DKK)
2020: 311m
Total investment
return (DKK)
2020: 311m
4.28 1884,093m
Dividend per share
(DKK)
2020: 7.00
Solvency ratio
2020: 183
Profit before tax
(DKK)
2020: 3,541m
Group underly-
ing claims ratio
improvements
percentage points
2020: 0.6
Income from RSA
Scandinavia
(DKK)
2020: 0m
Group underlying
claims ratio
improvements
percentage points
2020: 0.6
Premium growth
in local currencies
(5.1% ex bonus and
premiums rebates)
Q4 2020: 7.4%
Expense ratio
Q4 2020: 14.0
Technical result
(DKK)
Q4 2020: 780m
Combined ratio
Q4 2020: 86.3
Tryg's stand-alone
investment return
(DKK)
Q4 2020: 513m
Dividend per share
(DKK)
Q4 2020: 1.75
Solvency ratio
Q4 2020: 183
Total investment
return (DKK)
Q4 2020: 513m
Income from RSA
Scandinavia (DKK)
Q4 2020: 0
Profit before tax
(DKK)
Q4 2020: 1,223m
Premium growth of 4.9% (7.0% in 2020) was re-
ported for FY 2021 driven primarily by the Private
and Commercial segments. Growth excluding
bonus and premiums rebates was 6.4%.
Technical result of DKK 3,709m (DKK 3,495m)
impacted positively by the underlying claims de-
velopment, a DKK 333m Alka synergies and lower
than normal large and weather claims. Invest-
ment income of DKK 1,008m primarily impacted
by positive capital markets developments driven
mainly by equities and properties returns. Overall
pre-tax profit was DKK 4,093m (DKK 3,541m).
Quarterly dividend of 1.07 per share, bringing the
total dividend for the full year to 4.28 per share,
generally supporting TryghedsGruppen’s member
bonus. Solvency ratio of 188.
1,370m
Profit/loss
(DKK)
Q4 2020: 1,038m
3,158m
Profit/loss
(DKK)
2020: 2,773m
Annual report 2021 | Tryg A/S | 3
Management’s review - Contents
We aim to distribute a
nominal, stable increase
in dividend and to pay out
60-90% of our profit.
Attractive
dividend policy
Strong market position
Tryg is the largest non-life insure r in
across Denmark, Norway and Sweden.
Our 4,700 employees provide peace of mind
for 4 million customers and handle approxi-
mately 1 million claims on a yearly basis.
4 million customers
Trygheds-
Gruppen
TryghedsGruppen owns
45% of Tryg and contribu-
tes to projects that create
peace of mind via Tryg-
Fonden. In 2021, Tryg-
Fonden has contributed up
to DKK 650m.
Broad diversity
of products
We offer a broad range
of insurance products for
private individuals as well
as businesses.
* ‘Tryg’ means feeling protected and cared for.
Tryg at a glance
As the world changes, we
make it easier to be tryg*
Read more about our history at tryg.com
1
Market position
3
Market position
3
Market position
22.7%
Market share
16.9%
Market share
15.2%
Market share
Norway
Sweden
Denmark
Annual report 2021 | Tryg A/S | 4
Management’s review - Contents
Financial impact of the RSA Scandinavia acquisition
Tryg is the largest non-life insurer in Scandinavia and #3
insurer across all Scandinavian countries
Sweden Norway Denmark
Tryg technical result pre-acquisition,
Five-year avg., %
1
Tryg technical result post-acquisition,
Pro-forma, %
2
Expected deal returns
Synergies to be realised (DKKm)
~7 ~17% ~1% #1EPS
ROI Market share
(Pro-forma)
42%
DK
27%
NO
10%
NO
6%
SE
48%
SE
67%
DK
Market share
(Pro-forma)
Remain
#1 player
High-teens EPS
accretion in 2023
1)
Five-year average, 2015-2019
2)
Pro-forma technical result based on reported five-year historical average contribution by country
for Tryg and Denmark, Sweden, Norway, plus estimated transaction synergies by country
Source: Investor Presentation: Recommended Offer for RSA Insurance Group plc (available on tryg.com)
~60
~350
~650
~900
2024202320222021
Annual report 2021 | Tryg A/S | 5
Management’s review - Contents
Business areas
Private Commercial Corporate Sweden
1)
Private provides insurance products
to private customers in Denmark and
Norway. Private offers a range of
insurance products including motor,
contents, house, accident, travel,
motorcycles, pet and health.
Commercial provides insurance
products including motor, property,
liability, workers’ compensation, travel
and health to small and medium-sized
business in Denmark and Norway.
Corporate provides insurance products
including property, liability, workers’
compensation, transport, group life etc.
to corporate customers under the brand
Tryg in Denmark and Norway, and Mod-
erna in Sweden. Tryg is part of the global
AXA Corporate solutions network.
Sweden provides insurance products to
private individuals within car, house, pet,
child, boat and accident insurance etc.
57% 14% 7%22%1,355 222 314640
employees
2)
employees
2)
employees
2)
employees
2)
of premiums of premiums of premiumsof premiums
Distribution channels Distribution channels Distribution channelsDistribution channels
BrandsBrands Brands Brands
Own sales agents • Call centres •
Real estate agents • Internet •
Car dealers • Franchises
Call centres • Internet •
Own sales agents • Franchise offices
Own sales agents • Call centres •
Internet
Own sales agents •
Insurance brokers
Annual report 2021 | Tryg A/S | 6
Management’s review - Contents
1)
Sweden is excluding Trygg-Hansa
2)
Employee numbers do not include shared service units such as IT, Finance etc. and claims departments
Income overview
DKKm Q4 2021 Q4 2020 2021 2020 2019 2018 2017
Gross premium income 6,041 5,744 24,137 22,653 21,741 18,740 17,963
Gross claims -4,229 -3,963 -16,275 -15,437 -14,857 -12,636 -11,865
Total insurance operating costs -847 -806 -3,394 -3,202 -3,081 -2,704 -2,516
Profit/loss on gross business 966 975 4,468 4,014 3,803 3,400 3,582
Profit/loss on ceded business -135 -187 -731 -499 -566 -624 -779
Insurance technical interest, net of reinsurance -5 -7 -29 -20 1 -10 -14
Technical result 826 780 3,709 3,495 3,237 2,766 2,789
Income from RSA Scandinavia
a)
568 0 1,206 0 0 0 0
Currency hedge related to RSA Scandinavia 0 0 -1,035 0 0 0 0
Tryg stand-alone Investment return 373 513 837 311 579 -332 527
Investment return after insurance technical interest 941 513 1,008 311 579 -332 527
Other income and costs -171 -70 -624 -265 -188 -172 -77
Profit/loss before tax 1,596 1,223 4,093 3,541 3,628 2,262 3,239
Tax -223 -185 -932 -768 -783 -529 -720
Profit/loss on continuing business 1,373 1,038 3,161 2,773 2,845 1,733 2,519
Profit/loss onsiscontinued and divested business after tax -3 0 -3 0 -2 -2 -2
Profit/loss 1,370 1,038 3,158 2,773 2,843 1,731 2,517
Run-off gains/losses, net of reinsurance 232 314 963 1,145 1,194 1,221 972
Key figures
Total equity 49,008 12,264 49,008 12,264 12,085 11,334 12,616
Return on equity after tax (%)
b)
18.0 34.2 7.8 22.5 24.6 14.9 28.8
Return on own funds (%)
c)
40.0 48.9 23.0 32.6 35.1 16.3 21.9
Return on tangible equity (%)
c)
37.5 80.0 16.1 55.4 62.5 21.2 31.0
Number of shares 31 December (1,000) 653,447 301,750 653,447 301,750 301,750 301,743 301,945
Earnings per share (DKK) 2.10 3.44 5.51 9.19 9.42 5.73 9.12
Operating earnings per share (DKK)
d)
2.14 3.53 5.70 9.54 9.82 5.84 9.12
Net asset value per share (DKK 75.00 40.64 40.05 37.56 41.78
Ordinary dividend per share (DKK) 1.07 1.75 4.28 7.00 6.80 6.60 6.40
Extraordinary dividend per share (DKK) 0.00 0.00 1.65 0.00 3.31
Premium growth in local currencies 2.6 7.4 4.9 7.0 17.1 6.3 1.7
Gross claims ratio 70.0 69.0 67.4 68.1 68.3 67.4 66.1
Net reinsurance ratio 2.2 3.3 3.0 2.2 2.6 3.3 4.3
Claims ratio, net of ceded business 72.2 72.3 70.5 70.3 70.9 70.7 70.4
Gross expense ratio 14.0 14.0 14.1 14.1 14.2 14.4 14.0
Combined ratio 86.2 86.3 84.5 84.5 85.1 85.1 84.4
Run-off, net of reinsurance (%) -3.8 -5.5 -4.0 -5.1 -5.5 -6.5 -5.4
Large claims, net of reinsurance (%) 2.7 3.5 1.8 2.2 2.1 2.6 1.4
Weather claims, net of reinsurance (%) 2.0 2.6 1.9 1.6 1.9 2.0 1.7
Discounting (%) 0.7 0.2 0.5 0.2 0.7 1.0 1.0
COVID-19 claims, net of reinsurance (%) 0.0 -0.9 -0.5 -0.8 0.0 0.0 0.0
Combined ratio on business areas
Private 82.2 83.3 83.7 83.9 83.7 81.6 82.1
Commercial 91.9 85.7 83.8 83.3 86.8 80.3 82.6
Corporate 95.7 103.7 89.4 88.0 87.6 95.6 90.0
Sweden 81.7 75.5 83.6 83.2 84.8 86.0 88.1
a) Tryg's acquisition of RSA Scandinavia impacts the Financial Statements from 1 June 2021 (date of closing) b) ROE is calculated as Profit for the year after tax divided by the weighted average equity (as
prescribed by the Danish FSA) c) Definition to be found in Glossary/APM on page 128 d) Adjusted for depreciation on intangible assets related to Brands and Customer relations after tax
How to read this annual report
Tryg started to include the RSA acquisition
in its accounts as of 1 June 2021. The RSA
assets are “equity-accounted” from 1 June
until the end of 2021 therefore a total of
seven months.
The “equity accounting” in 2021
means that Tryg is showing the net
profit contribution from the RSA
assets for the period as “income from
RSA Scandinavia”, this item is booked
into the overall investment result and
totalled DKK 1,206m for the full year.
Additionally, the investment result is
also impacted by the one-off cost of
the currency hedge that Tryg entered
at the time of the acquisition, this
totalled DKK -1,035m for the full year.
Tryg’s stand-alone investment result
has been reported separately to clear-
ly distinguish the different lines, this
totalled DKK 837m for the full year.
Tryg expects to fully consolidate Codan
Norway and Trygg-Hansa during Q2 2022.
More details on the operational perfor-
mance of Codan Norway and Trygg-Hansa
can be found in the report on page 24.
For Q4, the income from RSA Scandi
-
na
via totalled DKK 568m while Tryg's
stand-alone investment return was DKK
373m. The total investment income was
therefore DKK 941m.
Annual report 2021 | Tryg A/S | 7
Management’s review - Contents
The largest non-life insurer in Scandinavia
In November 2020, Tryg made a recommended
cash offer together with the Canadian insurer
Intact Financial Corporation to acquire RSA
Insurance Group PLC. During the spring of 2021,
shareholders of all companies and all regulatory
bodies approved the transaction. Tryg has taken
over RSA’s Swedish and Norwegian business and
co-owns RSA's Danish business on a 50/50 eco-
nomic basis. The transaction has made Tryg the
largest non-life insurer in Scandinavia and cre-
ated a much more balanced group with a strong
footprint in Denmark, Norway and Sweden.
We are very happy that we can now look back on
a highly successful process that involved raising
capital through the largest ever Danish rights
issue of DKK 37bn, and the sale of the co-owned
RSA Danish business to Alm. Brand for a very
satisfactory price. We are also pleased to see
that we have already had good results from the
acquired business in 2021 and that the integra-
tion and synergies are following our ambitious
plans.
Positive developments in all areas
Tryg reported a technical result of DKK 3,709m,
which should be seen against the guidance
given at the beginning of 2021 of DKK 3.3-3.7bn
(guidance was changed to DKK 3.5-3.8bn in
H1), so the result was at the upper end of this
range. The result was helped by a lower level of
weather and large claims, but also positively im-
pacted by strong organic growth and improved
underlying profitability.
In 2021, Tryg developed very positively in all
areas. Our most profitable segment, the Private
business, continued to exhibit strong growth
and high profitability. In Commercial, we saw
improved profitability with strong growth, while
in Corporate we saw improved underlying prof-
itability in all main markets based on continued
pricing initiatives.
Strong and profitable growth supported by high
customer satisfaction
In both Private and Commercial, we are very sat-
isfied with the strong and profitable growth. Tryg
has a very strong focus on customers and we are
pleased to see an increase in customer satisfac-
tion from 84 at the end of 2020 to 85 at the end
of 2021. This development was also supported
by a general improvement in the retention rate
and a net inflow of customers.
Introducing new, ambitious financial targets at
our Capital Markets Day
Tryg hosted a Capital Markets Day in London on
16 November 2021 and presented new targets
under the headline “Growing a successful core
while shaping the future”. The key message was
that Tryg is targeting its highest ever technical
result at DKK 7.0-7.4 bn in 2024, to be achieved
through continued growth in the successful
existing business, synergies from the RSA
transaction and by continuing to develop new
products and services. Tryg also communicated
ambitious targets for customer satisfaction and
corporate responsibility.
The ambitious technical result target was the
foundation for keeping the strong shareholders’
remuneration focus unchanged, Tryg expects
to return a total DKK 17-19bn to its owners
between 2022 and 2024, split between DKK
12-14bn in ordinary dividends and a previously
announced share buyback programme of DKK
5bn following the closing of the sale of the co-
owned RSA Danish business to Alm. Brand.
Another year with COVID-19
COVID-19 has continued to impact the world’s
economic trends and societies in general via
restrictions and lockdowns. From a business
perspective, Tryg’s figures were particularly
Tryg has a strong focus on shareholders and
expects to pay a total of DKK 17-19bn to its
owners between 2022 and 2024.
”
impacted at the beginning of the year, with lower
than normal claims frequencies in travel and
motor insurance. Towards the end of 2021, the
impact was very limited despite the outbreak of
the Omicron variant. COVID-19 led to changing
ways of working, with more remote work and a
increased number of virtual meetings. Despite
this, Tryg managed to improve customer satis-
faction and maintained a high level of sales.
Thanks to all employees
2021 was another very challenging year for all
Tryg employees as a result of the COVID-19 pan-
demic but also due to the acquisition of RSA’s
Scandinavian activities. We are very proud that
we managed to strongly develop the existing
business and significantly improved Tryg’s stra-
tegic position by closing a very important acqui-
sition. The Supervisory Board and the Executive
Board would like to thank all employees for their
great efforts and to welcome our many new
employees in Sweden and Norway following the
Codan Norway and Trygg-Hansa acquisition.
JUKKA PERTOLA
Chairman
MORTEN HÜBBE
Group CEO
Annual report 2021 | Tryg A/S | 9
Management’s review - Contents
Events in 2021
Rights issue of DKK 37bn to finance the acquisi-
tion of Trygg-Hansa, Codan Norway and 50% of
Codan Denmark
On 1 March 2021, Tryg announced the launch of a
rights issue to finance the acquisition of Trygg-Hansa in
Sweden, Codan in Norway and 50% of Codan in Den-
mark. Tryg experienced strong support, with almost full
take-up and 99.7% of shares subscribed to by existing
shareholders or other investors through the exercise,
which was also the largest rights issue ever in Denmark
and one of the largest in Europe.
Tryg and Intact complete RSA acquisition
On 1 June, Tryg completed the acquisition of RSA In-
surance Group plc together with the Canadian insurer
Intact. Following the completion of the acquisition, Tryg
and Intact initiated the separation of the RSA business,
providing Tryg with the ownership of Trygg-Hansa,
Codan Norway and a 50/50 economic ownership of
Codan Denmark. Following the acquisition of Codan in
Norway and Trygg-Hansa in Sweden, Tryg has become
the largest non-life insurance company in Scandinavia.
Sale of Codan Denmark
On 11 June, Tryg and Intact entered into a conditional
share purchase agreement for the sale of Codan Den-
mark to Alm. Brand for approximately DKK 12.6bn. The
sale of Codan Denmark is expected to be completed in
H1 2022. As a result of this transaction, Tryg announced
that an expected share buyback of DKK 5bn will be initi-
ated after the completion of the sale.
Capital Markets Day
On 16 November, Tryg hosted its Capital Markets Day
in London to launch the new strategic plan, “Growing
a successful core while shaping the future”, and set
new, ambitious, financial targets for 2024. Tryg targets
a technical result of between DKK 7.0 and DKK 7.4bn,
a combined ratio at or below 82, and an expense ratio
that remains around 14. Tryg also introduced a new
profitability target - return on own funds (ROOF), which
is set at or above 25% in 2024.
Group
Private and Commercial exceed expectations
In November, Private Denmark announced it had
reached a key milestone, as DKK 10bn was achieved
in premiums. Commercial Denmark has also reached
several significant targets: DKK 3.5bn in premiums
and more than 80,000 commercial customers in the
portfolio.
TryghedsGruppen’s member bonus
For the sixth consecutive year, TryghedsGruppen, Tryg’s
largest shareholder, paid out a member bonus for 2021
of DKK 715m, equivalent to 5% of premiums paid for
2020. The bonus was paid to Tryg and Alka customers in
Denmark, the same as every fourth Dane.
Alka Mobil
At the beginning of 2021, Alka started a new mobile
phone subscription company in Denmark called ‘Alka
Mobil’. Alka Mobil offers attractive prices and other
loyalty benefits for customers in Alka and members of
the unions that co-operate with Alka, equivalent to 2.5
million Danes. In October, the Danish Consumer Coun-
cil, Tænk, named Alka Mobil best in test amongst 160
different mobile subscriptions.
Tryg Business
In 2021, Commercial Denmark has focussed on the
concept, Tryg Business, to the lower commercial seg-
ment (0-19 employees). When the customers choose to
collect several of the company’s insurances in Tryg, they
achieve a discount (up to 15%) and special benefits.
Tryg Business is an important initiative in the core busi-
ness to increase the number of products per customer
and last year’s focus resulted in one-third of all commer-
cial customers being signed via Tryg Business at the end
of the year.
Denmark
Annual report 2021 | Tryg A/S | 10
Management’s review - Contents
Events in 2021
Lifebuoy no. 50,000 handed out
Tryg has been providing lifebuoys for 69 years, and this
summer lifebuoy no. 50,000 was handed over. The
lifebuoy was given to the rescue company Region Vest.
Since 1952, when the first lifebuoy was hung up, Tryg
estimates its lifebuoys have helped save more than
1,000 lives.
Re-use of car parts
As a part of its Corporate Responsibility strategy, Tryg
has encouraged its network of suppliers to increase the
use of used parts in car repairs. By the end of 2021, the
efforts meant that at least 10 per cent of all damage
repairs included at least one used part.
More pets in Norwegian families
The number of pets has increased significantly in Nor-
way during the pandemic, and it has been important for
Tryg to be able to offer pet insurance that accommo-
dates this growth area. It was therefore gratifying that
Norsk Familieøkonomi (Norwegian consulting compa-
ny)selected Tryg’s dog and cat insurance as best in test
for the second year in a row.
Integration
The Norwegian organisation is expected to be fully
integrated and operational by 1 April 2022. At that
time, employees from both organisations have been
reappointed based on a thorough competency survey.
To create a common corporate culture in the merged
organisation, a culture survey has also been conducted.
The goal of this process is to create viable solutions that
serve both the company, the individual employees and
the work environment in the best possible way. The new
and integrated company will be the 3rd largest non-life
insurer in Norway and will be a strong and competitive
player in the Norwegian insurance market.
Norway
In this section, events in Sweden relate to Tryg’s Moder-
na business and not to events in Trygg-Hansa in 2021.
Moderna hits historical highs
Moderna breaks records in customer satisfaction. The
customer satisfaction score hit an all-time high in Q3
within claims, up 69% compared to 2020. Insight-driv-
en investments in Self-service functionality lifted My
Pages from last place to joint first place in the Swedish
market during the year, and a number of technical
applications were launched, such as Swish and Fraud
detection.
In addition, the strength of the Moderna brand is at a
historically high level. Helped awareness has increased
Sweden
17% since 2020, Spontaneous awareness 40% and
Consideration 10%.
Integration
In 2021, Moderna, together with Trygg-Hansa,
succeeded in reaching many important integration
milestones. For example, a number of important
decisions were made and communicated during the
autumn as to which core IT system will be used and
migrated, what brands are to be kept and what the
future management team will look like. As the next
step in designing the new organisation, organisation-
al levels below the country management team will
be presented at the end of February 2022. Focus on
designing the future organisation is one of the main
priorities in 2022 as well as getting to know one an-
other better.
There is no doubt that employees in both Moderna and
Trygg-Hansa feel a strong commitment to the integra-
tion, as the results from several pulse surveys are very
positive.
Broker Desk of the Year
Moderna received the award Broker Desk of the Year
from Söderberg & Partners with the motivation: “Mod-
erna has climbed past all other insurance companies
in terms of the overall grade for all parts of the annual
survey”.
Annual report 2021 | Tryg A/S | 11
Management’s review - Contents
Financial outlook
The COVID-19 pandemic again characterised
most of the narrative in 2021. Vaccination plans
were pushed by governments all over the world
and the situation seemed to improve during
the spring and the early summer. New variants
and the arrival of cold weather later in the year
means the number of infections has been grow-
ing rapidly despite a relatively high vaccination
rate in the western world. The financial markets
have followed developments closely and expe-
rienced a degree of turmoil at times, especially
when new and worrying issues arose. Most asset
classes developed positively (especially equities
and properties) and inflationary pressures
started to materialise in different parts of the
economies. The year ended with another variant
of the virus (Omicron) triggering a new alert
and increased restrictions. Despite significantly
higher infection rates, the high vaccination take-
up has resulted in less pressure on the health
system due to fewer people being severely ill
and hospitalised. In Scandinavia, a lockdown
similar to spring 2020 has proved unnecessary
and only some milder restrictions have been
re-introduced.
The COVID-19 pandemic broke out in the beginning of 2020 and
has continued to impact the world's economies, health systems and
businesses in general in 2021 as well. The Scandinavian countries
were able to navigate through this period better than most, thanks
to a high level of trust in public authorities, balanced overall public
finances and a low level of unemployment.
Societies re-opening have provided a strong
economic boost in Scandinavia (and all over the
world), though fears of rapidly increasing infla-
tionary pressures are building. Central banks
have turned more “hawkish” in their narratives
and this has resulted in different bouts of vola-
tility in the financial markets. In this context, it is
important to remember that Tryg has previously
disclosed a positive P&L impact of approximate-
ly DKK 300m from a 100 basis points parallel
shift in the interest rate curve. The impact
would primarily come from a higher technical
result (via a higher level of discounting of claims
reserves) of around DKK 200m and a higher
re-investment rate on the bonds portfolio of
around DKK 100m. The negative mark-to-mar-
ket movement that would hit the fixed income
portfolio would be broadly offset by a positive
gain on the liabilities side.
The Scandinavian countries continue to do rel-
atively well compared to most European coun-
tries. Relatively high vaccination rates (helped
by a high level of trust in public authorities),
solid overall public finances and relatively low
unemployment rates are strong competitive ad-
vantages, especially in troubled times. Govern-
ment indebtedness across Scandinavia remains
low compared to larger European countries and
this has allowed for various schemes to support
businesses and contain the damage from the
prolonged lockdown period.
Scandinavian non-life insurance markets remain
relatively stable. The region is characterised by
relatively high product penetration, and ratios of
non-life insurance premiums as a percentage of
GDP are some of the highest in the world. Product
offerings are broader and also significantly more
diverse compared to larger European countries.
Motor and property insurance make up around
65% of total premiums, but accident and health
and other products are also very well developed.
Households generally cover their insurance needs
relatively well and there is generally a high level
of trust in insurance companies and high brand
recognition.
Retention levels are very high in Scandinavia
compared to nearly everywhere else in the
world. This is a key profitability driver, as it
helps insurers keep their overall expenses
low. Retention rates hover around 90% in the
Private and Commercial (SMEs) segments,
which represent more than 80% of Tryg’s total
business. A direct-distribution model also con-
tributes significantly to the very efficient setup.
At the end of 2021, Tryg reported an expense
ratio of 14.1% (in line with 14.1% in 2020).
Tryg’s reserves position remains strong. At the
Capital Markets Day in November 2021, it was
disclosed that run-off gains are expected to be
between 3% and 5% in 2024. Tryg’s systematic
Annual report 2021 | Tryg A/S | 12
Management’s review - Contents
Tryg hosted a Capital Markets Day in London
in November 2021 to launch the new strategy
and updated financial targets for the new group
including Codan Norway and Trygg-Hansa. Tryg
is targeting a technical result in 2024 between
DKK 7.0 and 7.4bn driven by a combined ratio
at or below 82 and an expense ratio around 14.
The overall technical result target is underpinned
by DKK 900m in synergies from the Codan
Norway and Trygg-Hansa acquisition. Tryg also
introduced a new profitability measure, return
on own funds (ROOF), which is targeted at or
above 25%, also in 2024.
claims reserving approach still includes a margin
of approximately 3% at best estimate.
In 2022, weather claims net of reinsurance and
large claims are expected to total DKK 600m
and DKK 550m for Tryg stand-alone. Updat-
ed amounts that include Codan Norway and
Trygg-Hansa will be published in spring 2022
together with re-stated figures for the enlarged
group.
The investment portfolio is divided into a match
portfolio corresponding to the technical provi-
sions, and a free portfolio. The objective is for
the return on the match portfolio to be approx-
imately zero, as capital gains and losses on the
assets side should be mirrored by corresponding
developments on the liabilities side. The free
portfolio is invested in different asset classes
with a view to obtaining the best risk-adjusted
return. The return on bonds in the free portfolio
(slightly above 60% of the free portfolio) will
vary, but given current interest rate levels, a low
return is expected. For shares, the expected
return is around 7% with the MSCI World Index
as a benchmark, while the expected return
on property is around 5%. Investment return
in the P&L also includes the cost of managing
investments, the cost of currency hedges, inter-
est expenses on subordinated loans and other
minor items.
In the past few years, corporate tax rates have
been lowered throughout Scandinavia. In Den-
mark, the rate will remain at 22% in 2022, while
it is at 25% in Norway and 21% in Sweden. Cap-
ital gains and losses on equities are not taxed in
Norway, which reduces the expected tax payable
for an average year to 21-23%.
RSA Scandinavia acquisition is on track
Impact of the RSA Scandinavia acquisition
High level integration in three stages
A new Swedish management team has been
established to lead the Swedish business post-merger
RSA Scandinavia assets equity-accounted starting 1 June 2021.
Net profit contribution is booked under ‘income from associates’ under investment activities
RSA Scandinavia assets fully consolidated
in the financial statements
Deal closing
1 Jun 2021
Completion following regulatory
approvals
Alm. Brand announces acquisition
of Codan DK
Filing for demerger
approval
Completed separation of RSA
Scandinavia into DK, NO, SE
Closing of Codan DK sale
to Alm. Brand
Codan DK
sale announced
11 Jun 2021
Demerger application filed
4 Oct 2021
Demerger
Est. 1 Apr 2022
Codan DK closing
Est. H1 2022
“Day 1” preparations
1 June 2021
Execution of synergies takes place
1 June 2021-Q3 2024
Separation of RSA Scandinavia into DK, SE and NO
Est. April 2022
Integration of Trygg-Hansa and Codan Norway begins
From Q1 2022
1 2 3
Annual report 2021 | Tryg A/S | 13
Management’s review - Contents
2022 outlook
For 2021, Tryg extraordinarily published an an-
nual earnings guidance, as the previous strategy
period (and related financial targets) ended in
2020 but Tryg decided to postpone its Capital
Markets Day by one year from November 2020
to November 2021, driven by the process for the
acquisition of Codan Norway and Trygg-Hansa.
Tryg hosted a Capital Markets Day in November
2021, launching new financial targets for the
enlarged group for 2024. Tryg will therefore not
publish a detailed annual earnings guidance
going forward but will refer to the 2024 financial
targets presented at the most recent Capital
Markets Day, which is in line with previous finan-
cial communication.
In the first quarter of 2022, Codan Norway,
Trygg-Hansa and 50% of Codan Denmark will
still be reported as “equity accounting” and
therefore the quarterly net profit will be
booked in Tryg’s investment result. However,
Tryg expects to start a full consolidation of
Codan Norway and Trygg-Hansa (post the
demerger of Codan Norway and Trygg-Hansa
from Codan Denmark) from Q2 2022.
Tryg has identified synergies from the acqui-
sition of Codan Norway and Trygg-Hansa of
DKK 350m in 2022 growing to DKK 650m in
2023 and DKK 900m in 2024.
At the time of writing the annual report it
is expected that the vast majority of the
remaining DKK 1.3bn (approximately) inte-
gration costs related to the Codan Norway
and Trygg-Hansa acquisition will be booked
in 2022 against the other income and costs
line (as in 2021). More precise details will be
published during the year.
7.0-7.4bn
Technical result
(DKK)
≥40%
Digitalisation
(% growth in value -creating
actions upon login)
≤82%
Combined
ratio
88
Customer
satisfaction
14%
Expense ratio
(reaffirmed)
20-25,000
Corporate responsibility
(tonnes CO
2
e)
≥25%
Return on
own funds
Financial targets 2024
Customer targets
At the Capital Markets Day in November,
Tryg guided for an expected solvency ratio of
between 195 and 205 as per Q2 2022 following
the full consolidation of Codan Norway and
Trygg-Hansa and the sale of Codan Denmark to
Alm. Brand - the guidance is confirmed.
The overall tax rate for the FY is expected to be
between 21% and 23%, as the consolidation
of Trygg-Hansa's Swedish earnings will slightly
reduce the tax rate considering the lower corpo-
rate tax rate in Sweden.
Annual report 2021 | Tryg A/S | 14
Management’s review - Contents
Targets and
strategy 2024
Tryg hosted a Capital Markets Day on 16 November 2021
unveiling new financial and strategic targets
Financial targets
Tryg has hosted a Capital Markets Day in
November 2024 where new financial targets
were published. Tryg targets a technical result
of between DKK 7.0 and 7.4bn driven by a com-
bined ratio at or below 82. The expense ratio
remains stable at around 14 as in the previous
strategy period. In addition to the three financial
targets, Tryg also introduced a new profitability
target, return on own funds (ROOF), which is set
at or above 25% by 2024. All financial targets
are underpinned by the DKK 900m in synergies
related to the acquisition of Codan in Norway
and Trygg-Hansa.
Customer targets
Tryg believes that high customer satisfaction and
retention rates lead to lower distribution costs.
Customer targets are therefore of high impor-
tance for realising the financial targets. Tryg has
disclosed two ambitious targets relating to the
customer experience.
The first target builds on the customer journey
from onboarding the customer to the claims
handling and relation process. In 2021, Tryg
reported a customer journey satisfaction score
of 84 (on a scale from 0-100) and the target is to
reach 88 by 2024.
Distribution
Own sales force
and partners
Processes
Combination of in-
house and sourcing
Insurance
Prevention
Claims handling
E
m
p
l
o
y
e
e
s
E
m
p
l
o
y
e
e
s
E
m
p
l
o
y
e
e
s
E
m
p
l
o
y
e
e
s
Pricing
Pricing according
to risk profile
Products
Full non-life
product range
As the world changes,
we make it easier to be tryg*
Our purpose
Grasping opportunities to
develop rather than just
defending our business
• Digitalisation
• New products
• Analytics
Adjusting to customer
preferences and needs
• Self-service
• Straight-through
processing
• Packaging of products
Increasing customer
relevance and share
of wallet
• Product innovation
• Prevention
• Add-on services
Tryg’s business model
Tryg makes it easier to be
‘tryg’ for its customers by
offering them insurance
against risk, efficient claims
handling, and advice and
services to prevent claims
from arising in the first place.
By making it easier for our
customers to feel protected
and cared for, we benefit all
of Tryg’s stakeholders. Via
TryghedsGruppen’s 45%
ownership of Tryg, part of the
company’s profit is returned
to customers, who are also
members of TryghedsGrup-
pen. Tryg’s purpose is valid
for all stakeholders – our cus-
tomers, our employees and
our shareholders.
* ’Tryg’ means feeling protected and cared for
Employee satisfaction
(Index)
Tryg Nordic Nordic financial
market
74
72
80
2020 2021
75
73
80
Tryg has an employee satisfaction level above the average of
the Nordic sector.
Source: Global Employee and Leadership Index
Annual report 2021 | Tryg A/S | 15
Management’s review - Contents
1
Secondly, Tryg has set a target to grow ‘val-
ue-creating actions’ upon login online. To exem-
plify this, if a customer logs in to tryg.dk to report
a claim, buy insurance, self-service or similar,
the customer creates value in a very low-cost
frictionless manner. Tryg aims to increase this
low-cost value-creating action by 40% by 2024
(vs ~ DKK 14m in 2020).
Tryg is also introducing a new target related to
corporate responsibility. By 2024, Tryg aims to
reduce carbon emissions by 20,000-25,000
tonnes in claims handling, equivalent to approx-
imately 1,000 annual household emissions.
Sustainable claims handling with initiatives
within e.g. motor, property, and content claims
is expected to be the main driver of reaching
the sustainability target. Read more about Tryg’s
latest corporate responsibility initiatives on page
19.
Tryg 2024
Full speed ahead in
a successful core
Key enablers
Data and analytics IT capabilities HR - people, organisation
and culture
Trygg-Hansa
and Codan NO
synergies
Shape
the future
Change the
way to win in B2B
Advanced approach
to claims
Sales and customer
excellence
DKK ~1,050m
increase in TR
Grow among smaller
SMEs in Commerical
Improve profitability
in Corporate
DKK ~600m
increase in TR
Expand the market
of today
Build the market of
tomorrow
Leverage scale to
realise cost synergies
Share best practices
to realise commerical
synergies
DKK ~1.5bn premi-
ums in 2024+ across
product types
DKK ~900m in
synergies
Corporate Responsibility
Customer experience
Annual report 2021 | Tryg A/S | 16
Management’s review - Contents
2 3 4
* Commercial customers are defined as enterprises with below 100 FTEs and/or DKK 100m turnover.
Corporate customers are defined as enterprises with more than 100 FTEs and/or DKK 100m turnover
Tryg has defined four key strategic pillars to
support both the financial and customer targets
for 2024. The new strategic initiatives build
upon the targets set for the previous strategy
period, where Tryg had a strong track-record in
terms of delivering on strategic priorities as well
as the synergies relating to the acquisition of
Alka. In the 2021-2024 strategy period, Tryg will
continue its journey towards growing the Private
and SME business while improving profitability
in Corporate and the delivery of synergies relat-
ing to the acquisition of Trygg-Hansa and Codan
Norway.
Full speed ahead in a successful core is the
leading strategic pillar for reaching the 2024
financial targets. The target aims to increase the
technical result by DKK 1,050m in 2024 through
the continued improvement of Tryg’s core busi-
ness. DKK 650m will relate to a more advanced
approach to claims, such as the claims handling
process, procurement savings and a focus on
reducing the level of fraud. DKK 400m will be
reached through sales and customer excellence,
including partnerships as lead generators, cross
and upselling as well as pricing and analytics.
Change the way to win in B2B
*
is another key
pillar to support the CMD targets and aims to
increase the technical result by DKK ~600m in
2024. Small customers make up the most prof-
itable segment. Therefore, Tryg aims to grow the
Commercial business while making Corporate
more profitable. This involves a 30% portfolio
increase in the SME segment (0-9 employees)
and aiming for a ~90% combined ratio with
run-off levels around 5-7% in the Corporate
segment. An increased focus on more accurate
underwriting, improved segmentation to reduce
risk exposure, improved sales and distribution,
and new products and services will support the
target of reaching DKK ~600m by 2024.
Shape the future aims to grow premiums by
DKK 1,500m via new products and services by
2024+. This initiative builds on Tryg's continued
focus on launching new and profitable products.
In the previous strategy period, Tryg successfully
launched more than 50 new products, thereby
growing the topline by more than DKK 1bn in
premiums. Expanding the market of today and
building the market of tomorrow will support
realising the target. Tryg does not see any value
in defining a specific growth target, as profitabili-
ty remains the key focus.
Trygg-Hansa and Codan Norway synergies are
targeted towards DKK 900m by 2024. 80% of
the synergies will be driven by cost synergies
such as administration & distribution, procure-
ment and claims. The remaining 20% in syner-
gies will be derived from commercial activities,
including initiatives such as up- and cross-selling
and the repricing of Moderna. By utilising the
experiences from the Alka acquisition, Tryg
believes it will facilitate the full realisation of
synergies.
Strategic initiatives
Annual report 2021 | Tryg A/S | 17
Management’s review - Contents
In 2021, Tryg continued to build on the foun-
dation for customer and sales excellence
established during the previous strategy period
(2018-2020). Additionally, 2022 will see a strong
focus on the B2B segment, and initiatives will be
implemented to continue to grow the Commer-
cial segment and increase profitability in the
Corporate segment.
Private
In Private, Tryg continues to build on the strong
foundation of innovative capabilities. In 2021,
several new offerings were made available to
Private customers, making it easier to be ‘tryg’.
In 2021, Tryg Denmark established a part-
nership with Volvo Polestar, making Tryg the
default insurer for Polestar cars in Denmark. The
partnership with Volvo Polestar supports Tryg's
ambition to expand the ways partnerships are
formed, as the insurance is offered as a part of
the Polestar digital sales flow.
Also in Denmark, a number of preventive
options related to bicycling were included in
content insurance to provide “tryghed” for all
customers. The options include a bike lock
with alarm, rear reflector bike tracker GPS, or
an Alarm box to mount on the bike. In 2021,
approximately 20,000 customers have bought
content insurance with the option of selecting
one of these preventive elements.
To ensure a healthy and profitable business, Tryg
Norway has continued the focus on cross and
upselling. As the distribution of the Enter car
insurance has been very successful in the recent
year, special focus has been given to cross-sell-
ing to Enter customers. In 2021, around 30%
of all Enter customers were insured with one or
more products by Tryg.
In 2021, the new company - Alka Mobil - was
launched. Alka Mobil is a low-price mobile
phone subscription available to all Alka custom-
ers and members of the unions with whom Alka
cooperates. Approximately 2.5m people in Den-
mark can get an Alka Mobil subscription. With
this offering, Alka seeks to deliver a solution to
customers and union members that provides a
tangible financial advantage.
Business-to-business (B2B)
At Tryg, a key priority has been to grow the
attractive and profitable SME segment while
finding the right balance between risk and price
among large Corporate customers. One way of
stimulating growth in the small business seg-
ment is through tailoring products to accurately
cover the needs of the smaller companies in the
Commercial segment. An example of this is the
new health product – Behandling Enkel (‘Simple
Treatment’) – which was launched in Norway in
2021. The product contains the most frequently
used coverages. In 2021, approximately 12% of
all customers chose Behandling Enkel as their
health insurance.
In Denmark, a new packaged product – Tryg
Business – was launched as a head start to
2021. The product seeks to reduce complexity
by bundling the most relevant insurances and
also incorporates prevention elements, such as
annual online workplace assessments (man-
datory in Denmark) and access to ‘Tryg Tilbage’
(‘Tryg Return’), which is additional help should an
employee suffer an accident. More than 16,000
customers now have Tryg Business.
In 2021, Tryg has also continued to expand the
Tryg Garanti business across Europe. During the
year, offices have been established in Belgium,
and in Switzerland a license to operate has been
acquired. Tryg Garanti now has offices in Den-
mark, Norway, Sweden, Finland, Germany, the
Netherland, Austria, Switzerland and Belgium.
In Corporate, the focus has been on profitability.
To strengthen the work around profitability, the
tools and capabilities used when matching price
with risk have been enhanced. In practice, this
means that more data are included and utilised
in the decision process.
Claims
In the Danish and Norwegian claims organisa-
tions, the implementation of a new and more
effective claims handling system (Guidewire)
has continued in 2021. The new claims han-
dling system boosts the quality of the claims
handling process by ensuring that all the correct
information is collected and that the customer
receives payment as quickly as possible. Simple
claim types, such as travel claims, are handled
as “Straight Through Processing”, which is a fully
automated claim handling. Other, more complex
claim types are automated to the extent it is
possible. By the end of 2021, approximately 30%
of all claims in Denmark were being handled in
the new claim system and approximately 40% of
all claims in Norway.
Business initiatives
Annual report 2021 | Tryg A/S | 18
Management’s review - Contents
At Moderna, the digitalisation of the customer
claim journey continues. The purpose is to
provide Moderna customers with the best and
fastest possible experience when submitting
claim requests. To ensure this, Moderna has im-
plemented Swish payments to Private custom-
ers. 50% of all customers choose to receive their
claims payment via Swish.
Corporate Responsibility
In January 2021, Tryg launched its new Corpo-
rate Responsibility strategy: “Driving sustainable
impact”. The strategy includes supporting Tryg’s
customers in the green transition by offering
sustainable insurance products and sustainable
claims handling. In order to offer customers sus-
tainable claims handling, Tryg will favour work-
ing with sustainable suppliers. Therefore, Tryg
has started to screen suppliers for compliance
and performance. Tryg will evaluate suppliers in
terms of the minimum requirements described
in Tryg’s Supplier Code of Conduct, and will
also conduct an ESG (Environmental, Social and
Governance) risk screening. The screening pro-
cess of suppliers has been initiated in 2021 and
the target is to have screened 70-90% of Tryg’s
suppliers by 2024.
A specific example of a sustainability initiative
is ‘smart repair’, where Tryg cooperates with car
repair shops to reduce plastic waste by repairing
bumpers instead of replacing them. Every year,
Tryg/Alka pays for having approximately 30,000
bumpers replaced. In 2021, ‘smart repair’ has
resulted in a waste reduction of 15-20 tons
of plastic. To ensure the repair is attractive to
suppliers, the base payment has been increased
regardless of time consumption, and Tryg is also
offering support to repair shops that do not have
the competencies and equipment to perform
the repair.
Alka acquisition has been executed successfully
In November 2018, when the acquisition of
Alka was completed, Tryg disclosed a synergy
target for the acquisition of DKK 300m by 2021.
Synergies have been progressing well, and total
synergies of DKK 333m have now been reported
at the end of 2021, thus realising the synergy
target. Synergies have been accumulated from a
large number of initiatives focusing on revenues,
costs and claims, with the bulk of synergies
stemming from the latter. In total, synergies of
DKK 92m stemmed from revenue, DKK 101m
from costs and DKK 140m from claims.
With respect to claims, synergies are derived
from continued savings from utilising Tryg’s bet-
ter supplier contracts e.g., for motor and build-
ings. Revenue synergies have been achieved by
increasing the effectiveness of the distribution
setup, with best practices from Tryg's sales
channels applied to Alka, and from better risk
assessment and more accurate tariffs. Finally, in
relation to costs, synergies are derived from, e.g.,
savings on buildings and marketing.
Tryg believes the Alka acquisition has been
executed very successfully and by utilising some
of the key learnings, Tryg has the know-how to
ensure a well-executed integration of Trygg-
Hansa and Codan Norway.
RSA synergies
In Q4, synergies of DKK 35m were realised, thus
totalling DKK 63m for 2021. Synergies have
mainly been achieved through reduced RSA
group charges and natural attrition. Year to date,
synergies of DKK 56m related to administration
and distribution, DKK 5m in synergies was linked
to commercial initiatives and finally DKK 2m
related to claims costs.
Tryg is working extensively towards a demerg-
er that will separate Codan Denmark from
Trygg-Hansa and Codan Norway. The separation
process is currently as expected and on track.
The demerger is expected to be complete on 1
April 2022.
Annual report 2021 | Tryg A/S | 19
Management’s review - Contents
Alka synergies
(DKKm)
RealisedTarget
2019 2020 2021
75
90
150
176
300
333
RSA synergies
(DKKm)
20222021 2023 2024
60
63
350
650
900
RealisedTarget
Tryg’s results
Premium growth of 4.9% (7.0%) was reported for FY 2021 driven primarily by the Private and
Commercial segments. Growth excluding the bonus and premiums rebates was 6.4%. Technical result
of DKK 3,709m (DKK 3,495m) impacted positively by the underlying claims development, DKK 333m
in Alka synergies and lower than normal large and weather claims. Investment income of DKK 1,008m
(DKK 311m) primarily impacted by positive capital markets developments driven by equities and
properties returns. The overall pre-tax profit was DKK 4,093m (DKK 3,541m). Quarterly dividend of 1.07
per share, bringing the total dividend for the full year to 4.28 per share, supporting TryghedsGruppen’s
member bonus. Solvency ratio of 188.
Results 2021
Tryg reported a premium growth of 4.9% (6.4%
excluding bonus and premiums rebates), pri-
marily driven by good growth in the Private and
Commercial segments. The Private segment was
up 5.8% (8.3% excluding bonus and premiums
rebates), while the Commercial segment was up
6.1%. Corporate reported a virtually flat top-line
development. Tryg reported a technical result of
DKK 3,709m (DKK 3,495m) that was impacted
positively by the underlying claims development,
full delivery of Alka synergies, lower than normal
large and weather claims and slightly lower
claims frequencies driven by COVID-19 devel-
opments, although with lower positive impact
than in 2020. The overall technical result of DKK
3,709m should be seen against the updated
guidance of H1 2021 of a technical result range
between DKK 3,500m and DKK 3,800m. Tryg
reported a combined ratio of 84.5 (84.5) driven
by a claims ratio of 70.5 (70.3) and an expense
ratio of 14.1 (14.1). Private, Commercial and
Sweden reported positive top-line development,
while the Corporate segment was virtually flat.
The reported technical result improved markedly
for Private, Commercial and Sweden, while it
was slightly down for Corporate. The underlying
claims ratio improved for Commercial, Corporate
and Sweden, while it was flat for Private.
Synergies from the Alka transaction amounted
to DKK 333m in 2021 (DKK 176m in 2020) and
therefore exceed the targeted DKK 300m. The
DKK 333m of synergies can be split into DKK
140m from claims, DKK 101m from costs and
DKK 92m from revenue synergies.
The investment result was DKK 1,008m (DKK
311m) including the income from RSA Scandi-
navia of DKK 1,206m, the cost of the currency
hedge of DKK -1,035m and Tryg’s stand-alone
investment return of DKK 837m. Financial
markets developed positively during 2021, with
especially equities and properties posting solid
returns. COVID-19 developments continue to
impact the development of the financial market
and have been causing heavy and concentrated
sell-offs. In addition, inflation has been pointing
upwards since after the summer and the central
banks' narrative has been about increasing in-
terest rates in 2021. Tryg continues to pursue a
relatively low-risk investment strategy with limit-
ed equity exposure and a conservative fixed-in-
come profile (more than 90% of fixed-income
securities are Nordic covered bonds). Further-
more, it is worth remembering that Tryg marks
to market both assets and liabilities (in accord-
ance to Danish Financial Supervisory Authority
rules), resulting in P&L volatility in turbulent
times, while other Nordic and European insurers
hold large parts of their fixed-income portfolios
to maturity, or book most of their asset moves
to shareholders’ equity. Tryg’s asset allocation
remained broadly unchanged during the period.
In 2021, Tryg reported synergies of DKK 63m
related to the Codan Norway and Trygg-Hansa
acquisition (more details in the Business initia-
tives section on page 19).
3,709m
Technical result (DKK)
2020: 3,495m
4,093m
Profit before tax
2020: 3,541m
70.5
Claims ratio, net
of reinsurance
2020: 70.3
14.1
Gross expense ratio
2020: 14.1
84.5
Combined ratio
2020: 84.5
Financial highlights 2021
Annual report 2021 | Tryg A/S | 20
Management’s review - Contents
Other income and costs totalled DKK -624m
(DKK -265m), with the large increase entirely
driven by the booking of integration costs relat-
ed to the RSA Scandinavia acquisition totalling
DKK 349m. Other income and costs include the
annual depreciation of customer relations and
brands (mostly related to the Alka acquisition) of
DKK 136m, some holding company costs and
smaller items.
The pre-tax result was DKK 4,093m (DKK
3,541m), while the net profit was DKK 3,158m
(DKK 2,773m).
In 2021, Danish customers received their fifth
member bonus from TryghedsGruppen (Tryg’s
45% key shareholder). The 5% bonus is appre-
ciated by customers and seen as an important
competitive advantage, boosting customer loyal-
ty and supporting customer targets.
Premiums
Premium income totalled DKK 24,137m (DKK
22,653m), representing growth in local curren-
cies of 4.9%. Growth was 6.4% after adjusting
for a high bonus and premiums rebates in the
Private segment. The Private segment had
a strong growth of 5.8% (9.0% in 2020) and
8.3% when adjusted for bonus and premiums
rebates. Growth in Private Denmark is still driven
by lead-generating partner agreements and
cross-selling to the existing customer base, and
also the use of Tryg’s own digital platforms (tryg.
dk) to generate leads has increased in 2021. The
semiconductor chips shortage has impact-
ed negatively the sales of a new car in 2021.
COVID-19 developments in Malaysia and other
Southeast Asian countries have been impacting
heavily the production of chips. Fewer new cars
have been imported, this has impacted the level
of Motor insurances especially in the second half
of 2021 as customers have preferred to keep
their old cars awaiting for their preferred models
to be available. Partner agreements are attrac-
tive, as they generally display a longer customer
lifetime (compared to direct private business), a
higher number of products per customer and a
lower expense ratio. Prices are typically slightly
lower compared to direct Private business, while
overall profitability is similar.
As expected, the termination of the Nordea
agreement led to a reduction in the Nordea
portfolio, which has negatively impacted overall
retention levels. However, the reduction in the
Nordea portfolio has been more than offset by
sales to Danske Bank customers, resulting in a
positive net impact. Private Norway reported
robust growth, driven by price adjustments,
upselling to existing customers, and continued
strong sales from Enter (Tryg’s dedicated car
brand in Norway), which capitalised on the
robust trend in sales of new and used cars.
The Commercial segment in both Denmark and
Norway continued to develop positively, realising
growth of 6.1% (5.5%). In Commercial Denmark,
Tryg saw a net inflow of customers and growth
was impacted by the sale of packages and
cross-selling to existing customers. In Norway,
price increases were pushed through, especially
for large Commercial customers, leading to
higher premium income, and packages were
also introduced to the customers.
In Corporate, premiums were up by a modest
0.3% as a result of Corporate’s continued work
on sustainable profitability initiatives. Improving
profitability in the Corporate segment is one
of Tryg’s key priorities, which is why significant
profitability initiatives have been implemented in
Denmark and Sweden.
Sweden reported growth of 2.7% based on
strong sales to the niche areas Atlantica (boat
insurance) and Bilsport MC (vintage cars and
motorbikes), but also strong sales from the
Danske Bank distribution agreement.
The impact of bonus and premiums
rebates
Tryg has many years of experience and
a long history in developing partner
agreements in both Denmark and Norway.
The majority of partner agreements are in
the Private segment. In general, partner
agreements support Tryg’s strong results.
Tryg tailors the different agreements to
the partner's needs and therefore each
partner agreement has specific features.
Some partner agreements include profit
sharing, typically based on a combined
ratio target. In accordance with the
current accounting rules, profit sharing is
booked as bonus and premiums rebates
and is therefore deducted from the total
premium income. This has led to some
volatility in the premiums pattern between
quarters. It should be noted that bonus
and premiums rebates in IFRS 17, which
will come into force from 2023, will be
included in the claims line, so the top-line
should exhibit a more stable development
between quarters.
In the charts, premium growth excluding
bonus and premiums rebates is clearly
more stable, reflecting the real develop-
ment in premium income. The high level
of bonus and premiums rebates in 2021
reflects the strong profitability of the part-
ner agreements.
Annual report 2021 | Tryg A/S | 21
Management’s review - Contents
Private premium growth
(%)
2019 (Ex Alka) 20202018 2021
Reported Ex bonus and premiums rebates
8.9
9.7
7.8
8.4
9.0
9.6
5.8
8.3
Group premium growth
(%)
Reported Ex bonus and premiums rebates
6.3
6.7
6.1
6.4
7.0
7.4
4.9
6.4
2019 (Ex Alka) 20202018 2021
Claims
The claims ratio, net of ceded business, was 70.5
(70.3). The underlying claims ratio for the Group,
excluding large claims and weather claims, run-
offs, discounting and COVID-19, was 72.0 (72.8),
which was 0.8 percentage points better than FY
2020. The Private underlying claims ratio was flat
at 69.0, in line with recent developments.
COVID-19 had a relatively modest impact on
the full-year figures at a total of DKK 129m
(DKK 179m), primarily driven by lower travel
insurance claims in H1. The COVID-19 situation
developed positively between the spring and the
early autumn with societies in Scandinavia fully
re-opened, social distancing measures cancelled
and economies rebounding strongly, in part thanks
to successful vaccination campaigns. The positive
development came to a halt towards the end of the
year when a new and highly contagious COVID-19
variant, Omicron, began spreading rapidly, increas-
ing the number of people infected and hospitalised
and forcing new restrictions to be re-introduced.
Strong growth in the Private segment in more
recent periods is having some impact on the un-
derlying claims ratio development, as ‘new’ busi-
ness is initially and generally is not as profitable as
‘old’ business. The claims ratio for new business
is approximately 3% higher than the claims ratio
for existing business, primarily because new cus-
tomers tend to make more frequent claims under
their insurance policies during the first couple of
years. Meanwhile, profitability initiatives in the
Corporate segment should help sustain the im-
provement in the Group’s underlying claims ratio.
Tryg continues to expect an improved underlying
claims ratio for full-year 2022.
In 2021, inflation, especially for building materi-
als, was particularly evident in Denmark and
Norway. Tryg has strong procurement agree-
ments that mitigate inflationary developments,
thus gaining time to prepare price adjustments if
needed. Tryg expects some negative impact on
the partner agreements to be renegotiated in
2022 and therefore price adjustments have been
initiated effectivet from the beginning of 2022.
In 2021, large claims totalled DKK 428m (DKK
500m), while weather claims totalled DKK
456m (DKK 368m). Large and weather claims
were thus below normalised yearly expecta-
tions of DKK 550m and DKK 600m a year. The
overall run-off result was DKK 963m (DKK
1,145m) or 4.0% (5.1%) on the combined ratio.
The run-off result was driven mainly by run-off
gains in the long-tail segments.
Expenses
The expense ratio was 14.1 (14.1). At the recent
CMD in November 2021, Tryg repeated an
expense ratio target of around 14, also in 2024.
In general, Tryg has been working to reduce
distribution costs, and some of the savings from
these initiatives are being invested in new digital
solutions. The expense ratio is also positively
impacted by satisfactory growth, especially in
the Private segment in recent years. This high
growth impacts the costs in the sales year, as
commissions are paid upfront in many distribu-
tion channels. The high growth, however, also
improves economies of scale for Tryg, as the
shared service units in particular are not signif-
icantly impacted by premium growth and thus
support the low expense ratio level.
Investment activities
The investment return for the full year totalled
DKK 1,008m (DKK 311m). The investment return
includes the income from RSA Scandinavia of DKK
1,206m (equity accounting for 7 months since clos-
ing 1 June 2021), the one-off cost of the currency
hedge related to the acquisition of RSA Scandinavia
of DKK -1,035m, and Tryg’s stand-alone investment
return of DKK 837m. Tryg’s stand-alone investment
return was clearly above the normalised run rate,
driven in particular by the equity and property asset
classes. Financial markets developed favourably
during 2021, though there were periods of intense
volatility. After the summer, inflation started to
dominate the narrative together with the more
hawkish tone of the central banks. Later, a new
COVID-19 variant, Omicron, spooked the markets
and resulted in rapid and heavy sell-offs. COVID-19
developments remain critical for the financial mar-
kets and the broader economic recovery.
The free portfolio produced a very healthy
income of DKK 1,007m (DKK585m), almost
entirely driven by equities and properties, with
both asset classes up around 18%. Fixed-in-
come returns were slightly negative or close to
zero in general. The total return from the free
portfolio was 8.0% (5.3%).
The match portfolio reported a positive DKK
134m (DKK -19m) contribution primarily driven
by decreasing spreads between Euros and
Danish swap rates. Other financial income and
expenses totalled DKK -304m (DKK -255m). The
amount is more negative than previously guided
driven primarily by the inclusion of negative
interest expenses following the closing of the
DKK 37bn rights issue.
Other income and costs
Other income and costs totalled DKK -624m
(DKK -265m). This line includes the integration
and restructuring costs related to the RSA Scan-
Annual report 2021 | Tryg A/S | 22
Management’s review - Contents
Order on Solvency and Operating Plans for In-
surance Companies. The model is based on the
structure of the standard model. Tryg uses an
internal model to evaluate insurance risks, while
other risks are calculated using standard model
components. The solvency capital requirement,
calculated using the partial internal model, was
DKK 9,866m (DKK 4,855m at year-end 2020).
The significantly higher level is explained by the
acquisition of Codan Norway, Trygg-Hansa and
the 50% of Codan Denmark, which significantly
impacts the overall capital requirements.
Tryg has previously mentioned that once the
sale of Codan Denmark becomes effective, the
solvency capital requirement will be approxi-
mately DKK 1bn lower, all else being equal. At
the Capital Markets Day in November 2021, Tryg
disclosed an expected solvency ratio of between
195 and 205 as per H1 2022. This guidance
already incorporates the previously announced
intended approximately DKK5bn share buyback
following the closing of the sale of Codan DK -
the guidance remains unchanged.
Tryg’s solvency ratio displays low sensitivity to cap-
ital market movements. The area with the highest
level of sensitivity is spread risk, where a widening/
tightening of 100 basis points would impact the
solvency ratio by approximately 20 percentage
points. Sensitivity to the falling equity market and
interest rate movements are low.
Tryg has recently (at its Capital Markets Day) re-
fined its dividend policy. The company continues
to target a nominal, stable increase in dividend
payments on a full-year basis and the targeted
pay-out ratio remains between 60% and 90%,
based on operating earnings (and not reported
earnings). This is driven by the fact that reported
earnings will be burdened by an approximately
DKK 600-800m (after tax) annual amortisation
dinavia transaction (DKK 349m). Additionally,
depreciation of customer relations and brands
(mostly related to the Alka acquisition) of DKK
136m, and finally holding company costs and
other smaller items.
Profit before and after tax
Profit before tax was DKK 4,093m (DKK 3,541m),
while profit after tax and discontinued activities
was DKK 3,158m (DKK 2,773m). The total tax bill
was DKK 932m (DKK 768m), equating to a tax
rate (measured on the pre-tax result excluding the
income from RSA Scandinavia) of approximately
23%, which is in line with expectations.
Dividend and solvency
The solvency ratio at the end of the year includes
all figures related to RSA Scandinavia, which
means that both own funds and the solvency
capital requirement fully reflect the acquisition.
The solvency ratio (based on Tryg’s partial internal
model) was 188 at year-end 2021 compared
to 183 at year-end 2020. Own funds were DKK
18,559m and the solvency capital requirement
was DKK 9,866m. As stated previously, both
figures now include Codan Norway, Trygg-Hansa
and 50% of Codan Denmark. Tryg will pay a
quarterly dividend of DKK 1.07 per share on 29
January 2022 (in line with previous quarters in
2021), corresponding to approximately DKK
700m. That amount has already been deducted
from the overall own funds level. Tryg’s own funds
predominantly consist of shareholder equity and
subordinated loans. These items should be ad-
justed for the total amount of intangibles on the
balance sheet (fully deducted in Solvency 2).
Regarding the solvency capital requirement,
Tryg calculates its individual solvency capital
requirement based on a partial internal model
in accordance with the Danish FSA’s Executive
826m
Technical result (DKK)
Q4 2020: 780m
1,596m
Profit before tax
Q4 2020: 1,223m
72.2
Claims ratio, net
of reinsurance
Q4 2020: 72.3
14.0
Gross expense ratio
Q4 2020: 14.0
86.2
Combined ratio
Q4 2020: 86.3
Q4 Financial highlights 2021
of intangible assets deriving from the Codan Nor-
way and Trygg-Hansa acquisition. The targeted
pay-out ratio is secondary to the aim of increasing
the annual dividend. Tryg aims to pay DKK 12-
14bn in ordinary dividends between 2022 and
2024 and has additionally unveiled an approxi-
mately DKK 5bn share buyback programme to
start in H1 2022 following the closing of the sale
of Codan Denmark to Alm. Brand.
Results Q4 2021
Premium growth of 2.6%, or 5.1% excluding the
bonus and premiums rebates. Tryg reported
a technical result of DKK 826m (DKK 780m)
driven by an improved underlying claims trend
and the higher than previously guided delivery
of Alka synergies, while the sum of large and
weather claims was below Q4 2020 and below
normal expectations. The combined ratio was
86.2 (86.3) driven by a claims ratio of 72.2 (72.3)
and an expense ratio of 14.0 (14.0). The underly-
ing claims ratio was flat for the Private segment
and improved 0.8 for the Group driven by profit-
ability initiatives in Commercial and Corporate.
Overall investment income was DKK 941m
driven by a DKK 568m income contribution
from RSA Scandinavia and Tryg’s stand-alone
investment results of DKK 373m. The overall
pre-tax result was DKK 1,596m (DKK 1,223m),
while the result after tax was DKK 1,373m (DKK
1,038m). Tryg will pay a quarterly dividend of
1.07 and reported a solvency ratio of 188.
Premiums
Premium growth was 2.6% in Q4 2021, or 5.1%
after adjusting for the bonus and premiums re-
bates. The bonus and premiums rebates totalled
DKK -400m in Q4 2021 vs DKK -240m in Q4
2020. These growth levels reflect the particularly
strong profitability of Tryg’s partner agreements
and some, at times complex, periodisation be-
Annual report 2021 | Tryg A/S | 23
Management’s review - Contents
Tryg started to include the RSA Scandinavia acquisi-
tion in its accounts as of 1 June 2021. The RSA assets
are “equity-accounted” from 1 June until demerger.
The “equity accounting” in 2021 means that Tryg is
showing the net profit contribution for the period as
“income from RSA Scandinavia”, this item is booked
into the overall investment result.
Trygg-Hansa reported an adjusted premiums growth
of 4% for the full year, the growth excluded one-off ad-
justments in the comparison period, the reported pre-
miums growth was 6%. This is a result of strong new
business performance in the personal lines segment,
which grew by 3%, mainly due to strong performance
in the Motor segment. Commercial Lines grew by
6% from strong retention in property as well as new
business volumes in motor. The quarter isolated grew
by 5% on an underlying basis, which is driven by the
same fundamental drivers as for the full year.
Trygg-Hansa’s technical result for the year came in
at DKK 2,019m and a Combined ratio of 78.8%, this
includes the impact of DKK 149m from the extreme
weather that hit Gävle (Central Sweden) in August.
Large losses and weather losses were higher in 2021
vs 2020. The business continues to perform well
driven by improving underlying claims ratios in the
Commercial segment while the performance remains
stable in the Private segment. Expenses was at a
satisfactory level mainly driven by good growth and
tight cost control.
For the fourth quarter, TH delivered a technical result
of DKK 508m (DKK 505m) driven by a Combined
ratio of 78.8 (75.8). The Q4 2020 combined ratio
was helped by a relatively high run-off result and
COVID-19 recognition.
Trygg-Hansa and Codan Norway Financial
performance in FY and Q4 2021
Codan Norway reported a premium growth of 3% in
2021, with growth in Q4 isolated ~1% compared to
the prior year. Commercial Lines drove the growth
with 4% for the full year, while Personal Lines real-
ised 2% growth. Q4 growth was limited by demerger
activities, shifting business to Tryg, as well as overall
low activity in the market.
Codan Norway's technical result for the full year was
DKK 163m driven by a Combined ratio of 85.5%, this
is significantly better than the corresponding period
last year, marking a record result for Codan Norway.
The improvement is driven by better underlying
claims ratio, benign weather events, run-off and low-
er overall expenses. For the quarter isolated, Codan
Norway delivered a Technical result of DKK 44m
driven by a Combined ratio of 84.2%, DKK 124m
better than last year, driven by benign weather paired
with lower expenses.
Codan Norway and Trygg-Hansa reported an overall
DKK 218m investment result (pre-tax), the high
amount was driven by a positive performance of the
REITs (real estate investments trusts) portfolio in the
first part of Q4 and by equities in the second part of
Q4. Additionally, positive value adjustments were
recorded on the Swedish inflation swaps portfolio.
During the second half of the quarter, the REITs
portfolio was sold (as previously announced) and
re-invested primarily in equities.
It is important to note that due to potential minor
discrepancies in definitions and internal reporting
systems the figures may differ slightly from Tryg’s
own reporting.
tween quarters. Growth in the Private segment
was 3.1%, or 7.3% after adjusting for the bonus
and premiums rebates, and it was predomi-
nantly in the Private Denmark segment that the
bonus and premium rebates impacted the
top-line. Commercial reported top-line growth
of 5.1%, while Corporate showed a top line
reduction of 2.5% following targeted profitability
initiatives. Sweden grew 1.5% driven by price
adjustments and a strong development in niche
businesses Bilsport MC (vintage cars and motor-
bikes) and Atlantica (leisure boats).
Claims
The claims ratio (net) was 72.2 (72.3). Large
claims were DKK 162m (DKK 201m) - higher than
Q4 2020 and above the normalised run rate of
between DKK 135 and 140m per quarter. Weath-
er claims were DKK 122m (DKK 148m), below
a normal Q4 experience when approximately
30% of the annual DKK 600m weather claims are
booked. The run-off result was DKK 232m (DKK
314m) or 3.8% on the combined ratio. The under-
lying claims ratio was flat for the Private segment,
while it improved 0.8 for the Group, driven by
profitability initiatives in the Commercial and
Corporate segments. COVID-19 developments
had a negligible impact on the quarter, while they
impacted the claims ratio by 0.9 in Q4 2020.
More restrictions were put in place towards the
end of December in both Norway and Denmark,
but no lockdown has been re-introduced as the
overall health situation is better compared to the
beginning of 2020. It remains to be seen how the
new restrictions will impact claims frequencies at
the start of the new year.
Expenses
The reported expense ratio was 14.0 (14.0).
Various initiatives aimed at lowering distribution
costs are being implemented, and some of the
savings from these initiatives are being invested
in new digital solutions and partnerships. At the
Capital Markets Day in November 2021, Tryg
reiterated its expense ratio target of around
14%, also for 2024.
Investment activities
The investment return totalled DKK 941m and
was the sum of the income from RSA Scandi-
navia (equity accounting for Q4) of DKK 568m
(the primary driver was a Q4 technical result
of DKK 552m) and Tryg’s stand-alone invest-
ment income of DKK 373m. Capital markets
developed positively in Q4, and good returns
came primarily from properties (up 8.8% in the
quarter) and equities (up 5.9% in the quarter).
The free portfolio returned DKK 413m (DKK
513m), the match portfolio returned DKK 30m
(DKK 17m), while other financial income and
expenses totalled DKK -70m (DKK -17m).
Other income and costs
Other income and costs totalled DKK -171m
(DKK -70m). All the integration costs from the
acquisition of Codan Norway and Trygg-Hansa
will be booked against the other income and
costs line. In Q4, DKK 122m was booked, which
is below the previous communication of DKK
300m. The difference is likely to be booked in
2022. Additionally, the amortisation of customer
relations stemming from the Alka acquisition
and other minor items are booked in this line.
Taxes
The total tax expense was DKK 223m (DKK
185m), resulting in a tax rate of 14.0%. The
slightly lower than normal tax rate is primarily
attributable to positive developments in the
financial markets during the quarter.
Annual report 2021 | Tryg A/S | 24
Management’s review - Contents
Private
5.8% 2,219m 13.2 83.7
Premium growth
(local currencies)
2020: 9.0%
Technical result
(DKK
2020: 2,045m
Expense ratio
2020: 13.6
Combined ratio
2020: 83.9
Financial highlights 2021
Results 2021
Private reported a technical result of DKK
2,219m (DKK 2,045m in 2020) and a combined
ratio of 83.7 (83.9). The higher result was im-
pacted by the strong growth in premiums, while
the total level of weather claims and run-offs
was similar to the level reported for FY 2020.
Synergies from the Alka transaction also had a
positive impact on the overall technical result.
The Private underlying claims ratio for 2021 was
unchanged compared to 2020.
Premiums
Gross premium income increased by 5.8%
(9.0%) measured in local currencies. In Private
Denmark, the positive development continued
with premium growth of 3.8% (7.4%) driven
by a continued strong performance from all
sales channels. Due to the current accounting
treatment, premium growth in Private Den-
mark was negatively impacted by a high level of
bonuses and premiums rebates, representing
profit-sharing related to partner agreements.
Exclusive of the bonus and premiums rebates,
Private in total would have reported a growth of
8.3% and Private Denmark would have post-
ed growth of 7.3%. In the Norwegian part of
Private, premiums increased by 9.8% (12.3%)
in local currencies, helped by continued strong
sales to both NITO and OBOS customers and the
car dealer channel Enter. The retention rate of
90.5 (90.1) in Denmark was impacted by churn
from the cancellation of the Nordea portfolio
following Tryg’s agreement with Danske Bank.
Excluding the impact of the Nordea agreement,
retention was 91.2. The reduction in the Nordea
portfolio has been more than offset by sales to
Danske Bank customers, resulting in a positive
net impact. The retention rate was 88.5 (88.4)
for the Norwegian part of the business, which
was very positive and helped by the fact that
retention levels are generally high for partner
customers.
Claims
The claims ratio, net of ceded business, was 70.5
(70.3). A slightly higher level of weather claims
and lower positive impact from COVID-19 were
broadly offset by a slightly higher level of run-off
gains and discounting. The underlying claims
ratio was unchanged compared to 2020 and im-
pacted by the high growth in Private resulting in
many new customers, who in general have a 3%
higher claims frequency. As Private is the most
profitable area with the lowest capital require-
ment, strong growth in this area is a structurally
good development for the Group. Claims inflation
was very much in focus in 2021, particularly
because of high price increases for building
materials and spare parts for automobiles. Tryg
is helped by robust procurement agreements,
but started adjusting prices during the year to mit-
igate any potential inflation impact.
Expenses
The expense ratio has decreased to 13.2 (13.6),
reflecting good top-line growth and tight cost
control in 2021. The number of employees was
1,355 at the end of the year against 1,344 at the
end of 2020. The increase is driven mainly by
upscaling in customer service in Denmark.
The business area accounts for 57% of
the Group’s total premium income.
57%
Key figures – Private
DKKm Q4 2021 Q4 2020 2021 2020
Gross premium income 3,433 3,245 13,685 12,743
Gross claims -2,363 -2,209 -9,377 -8,883
Gross expenses -396 -414 -1,803 -1,727
Profit/loss on gross business 673 622 2,505 2,133
Profit/loss on ceded business -63 -80 -270 -76
Insurance technical interest, net of
reinsurance
-3 -4 -16 -12
Technical result 606 537 2,219 2,045
Run-off gains/losses, net of reinsurance 34 12 136 120
Key ratios
Premium growth in local currencies 3.1 9.0 5.8 9.0
Gross claims ratio 68.8 68.1 68.5 69.7
Net reinsurance ratio 1.8 2.5 2.0 0.6
Claims ratio, net of ceded business 70.7 70.5 70.5 70.3
Gross expense ratio 11.5 12.8 13.2 13.6
Combined ratio 82.2 83.3 83.7 83.9
Combined ratio exclusive of run-off 83.2 83.7 84.7 84.8
Run-off, net of reinsurance (%) -1.0 -0.4 -1.0 -0.9
Large claims, net of reinsurance (%) 0.0 0.0 0.1 0.2
Weather claims, net of reinsurance (%) 2.8 3.1 2.2 2.1
Annual report 2021 | Tryg A/S | 25
Management’s review - Contents
Results Q4 2021
The technical result totalled DKK 606m (DKK
537m) with a combined ratio of 82.2 (83.3).
The higher technical result was due primarily
to a higher level of premium income, slightly
lower level of weather claims and somewhat
higher run-off. The underlying claims ratio
was unchanged, in line with developments in
previous quarters.
Premiums
Gross premiums increased by 3.1% (9.0%).
In Q4, Tryg reported continued high growth
levels in Denmark and Norway for the reasons
described for the full-year development. The
retention rate in Denmark increased from
90.1 to 90.5 despite churn from the Nordea
agreement. In general, the churn from the
Nordea agreement was significantly offset by
sales to Danske Bank customers. In Norway,
the retention rate was almost unchanged with
88.5 against 88.4 in Q4 2020.
Claims
The gross claims ratio was 68.8 (68.1) and the
claims ratio, net of ceded business, was 70.7
(70.5). The underlying claims ratio was un-
changed and positively impacted by the claims
excellence programme and Alka synergies, but
also slightly negatively impacted by the high
growth, due to higher claims frequencies for
new customers. There was no positive impact
from COVID-19 in the quarter, while Tryg saw
a positive impact corresponding to 1.2% in the
same quarter previous year.
Expenses
The expense ratio was 11.5 (12.8) and in line
with the same period last year, thus supporting
the focus on efficient operation.
3.1% 606m 11.5 82.2
Premium growth
(local currencies)
Q4 2020: 9.0%
Technical result
(DKK)
Q4 2020: 537m
Expense ratio
Q4 2020: 12.8
Combined ratio
Q4 2020: 83.3
Q4 Financial highlights 2021
Annual report 2021 | Tryg A/S | 26
Management’s review - Contents
Commercial
Results 2021
Commercial posted a technical result of DKK
850m (DKK 798m in 2020) and a combined ra-
tio of 83.8 (83.7). The higher technical result was
realised through a positive premium income and
helped by a strong improvement in the under-
lying claims ratio, which offset a higher level of
large claims and a lower level of run-off.
Premiums
Gross premium income totalled DKK 5,294m
(DKK 4,930m), representing a 6.1% increase
when measured in local currencies. Commer-
cial Denmark reported a growth of 6.6%, while
in Norway, premiums increased by 4.9%. In
general, Tryg reported strong development
in Denmark, with a net inflow of customers
supported by many initiatives such as the high
level of sales of insurance packages. In Norway,
growth was primarily based on high acceptance
of price adjustments. The retention rate for
Denmark was 88.6 (88.6), helped by a strong
market position as evidenced by various market
surveys and TryghedsGruppen's member bonus.
In Norway, the retention rate increased to 89.4
(89.2), which was a positive development in a
period with price adjustments.
Claims
The claims ratio, net of ceded business, was
66.6 (66.9). Tryg registered a higher level of large
and weather claims overall compared to 2020.
The run-off level was 5.8 (7.1), reflecting a strong
reserving position. The underlying claims level
improved in both Denmark and Norway and was
particularly helped by price initiatives in Norway
targeting large Commercial customers.
Expenses
The expense ratio was 17.2 (16.9). Tryg’s
initiative is aimed at improving expense levels in
Commercial Denmark through the recruitment
of independent sales agents. In Norway, as
mentioned, pricing initiatives for large Commer-
cial customers were widely accepted, which also
had a positive impact on the expense ratio level.
At the end of the year, Commercial had 640
employees compared to 617 at the end of 2020,
primarily due to continued expansion in the
credit and surety business and upscaling in the
sales part of Commercial Denmark.
6.1% 850m 17.2 83.8
Premium growth
(local currencies)
2020: 5.5%
Technical result
(DKK)
2020: 798m
Expense ratio
2020: 16.9
Combined ratio
2020: 83.7
Financial highlights 2021
The business area accounts for 22% of
the Group’s total premium income.
22%
Key figures – Commercial
DKKm Q4 2021 Q4 2020 2021 2020
Gross premium income 1,352 1,261 5,294 4,930
Gross claims -910 -781 -3,334 -3,167
Gross expenses -267 -232 -913 -831
Profit/loss on gross business 175 249 1,048 932
Profit/loss on ceded business -66 -68 -191 -130
Insurance technical interest, net of
reinsurance -1 -2 -7 -5
Technical result 109 179 850 798
Run-off gains/losses, net of reinsurance 77 138 309 348
Key ratios
Premium growth in local currencies 5.1 6.5 6.1 5.5
Gross claims ratio 67.3 61.9 63.0 64.2
Net reinsurance ratio 4.9 5.4 3.6 2.6
Claims ratio, net of ceded business 72.2 67.3 66.6 66.9
Gross expense ratio 19.7 18.4 17.2 16.9
Combined ratio 91.9 85.7 83.8 83.7
Combined ratio exclusive of run-off 97.6 96.6 89.6 90.8
Run-off, net of reinsurance (%) -5.7 -11.0 -5.8 -7.1
Large claims, net of reinsurance (%) 5.6 2.6 3.4 3.0
Weather claims, net of reinsurance (%) 1.1 2.8 1.5 1.6
Annual report 2021 | Tryg A/S | 27
Management’s review - Contents
5.1% 109m 19.7 91.9
Premium growth
(local currencies)
Q4 2020: 6.5%
Technical result
(DKK)
Q4 2020: 179m
Expense ratio
Q4 2020: 18.4
Combined ratio
Q4 2020: 85.7
Q4 Financial highlights 2021
Results Q4 2021
The technical result was DKK 109m (DKK
179m) with a combined ratio of 91.9 (85.7).
The result was negatively impacted by a higher
level of large claims and a much lower level of
run-off. Premiums increased by 5.1% (6.5%).
Premiums
Gross premiums increased by 5.1% (6.5%) in
local currencies, primarily due to increased
customer numbers in Denmark and price
adjustments in Norway. The retention rate in
Denmark was stable at 88.6 (88.6), while the
retention rate in Norway increased to 89.4
(89.2) despite increased pricing, reflecting high
acceptance of this initiative.
Claims
The gross claims ratio was 67.3 (61.9) with
a claims ratio, net of ceded business, of 72.2
(67.3). The claims ratio was impacted by a
higher level of large claims and also a substan-
tially lower level of run-offs compared to the
prior-year period.
Expenses
The expense ratio was somewhat higher
compared to the full-year level at 19.7 (18.4),
which did not represent a trend but reflected a
somewhat volatile expense pattern.
Annual report 2021 | Tryg A/S | 28
Management’s review - Contents
Corporate
0.3% 361m 11.4 89.4
Premium growth
(local currencies)
2020: 1.5%
Technical result
(DKK)
2020: 401m
Expense ratio
2020: 10.9
Combined ratio
2020: 88.0
Financial highlights 2021
Results 2021
The technical result amounted to DKK 361m
(DKK 401m in 2020) with a combined ratio of
89.4 (88.0). The lower technical result is primar-
ily due to a lower level of run-off gains (8.2% vs
12.9%). Tryg continued to see a positive devel-
opment in the underlying claims ratio, primarily
due to significant price initiatives in all coun-
tries. Premium growth was almost flat at 0.3%,
impacted by the aforementioned price increases
that led to a somewhat higher churn.
Premiums
Gross premium income totalled DKK 3,457m
(DKK 3,376m), representing an increase of 0.3%
(1.5%) when measured in local currencies. As
mentioned, growth was impacted by profitability
initiatives in all countries. Tryg has seen a neg-
ative premium development in recent quarters,
reflecting the profitability initiatives.
Claims
The claims ratio, net of ceded business, was
78.0 (77.2). The level of large claims was 6.6
(9.8), weather claims were 1.1 (0.6), and the run-
off level was lower at 8.2 (12.8). Tryg continued
to see an improved underlying claims level driv-
en by the profitability initiatives in all countries.
The full impact of these initiatives in combina-
tion with new initiatives will improve profitability
further in the coming years.
Expenses
The expense ratio of 11.4 (10.9) was slightly
higher compared to the prior-year period, but
still at a satisfactory level. The number of em-
ployees in Corporate was 222 against 212 at the
end of 2020, primarily due to the strengthened
focus on portfolio management.
The business area accounts for 14% of
the Group’s total premium income.
14%
Key figures – Corporate
DKKm Q4 2021 Q4 2020 2021 2020
Gross premium income 850 844 3,457 3,376
Gross claims -691 -732 -2,423 -2,311
Gross expenses -116 -105 -396 -367
Profit/loss on gross business 42 7 638 698
Profit/loss on ceded business -5 -38 -273 -294
Insurance technical interest, net of
reinsurance
-1 -1 -4 -2
Technical result 36 -32 361 401
Run-off gains/losses, net of reinsurance 60 80 282 436
Key ratios
Premium growth in local currencies -2.5 2.0 0.3 1.5
Gross claims ratio 81.4 86.7 70.1 68.5
Net reinsurance ratio 0.6 4.5 7.9 8.7
Claims ratio, net of ceded business 82.0 91.2 78.0 77.2
Gross expense ratio 13.7 12.5 11.4 10.9
Combined ratio 95.7 103.7 89.4 88.0
Combined ratio exclusive of run-off 102.8 113.1 97.6 101.0
Run-off, net of reinsurance (%) -7.1 -9.4 -8.2 -12.9
Large claims, net of reinsurance (%) 10.3 19.9 6.6 9.8
Weather claims, net of reinsurance (%) 1.3 1.4 1.1 0.6
Annual report 2021 | Tryg A/S | 29
Management’s review - Contents
Results Q4 2021
The technical result was DKK 36m (DKK -32m)
with a combined ratio of 95.7 (103.7). The re-
sults were positively impacted by an improved
underlying claims ratio and a much lower level
of large claims. Premium growth was negative
and impacted by price increases to improve
profitability.
Premiums
Gross premiums were down 2.5% (up 2.0%)
in local currencies due to a continued focus
on price initiatives in all countries to improve
profitability.
Claims
The gross claims ratio was 81.4 (86.7) and the
claims ratio, net of ceded business, was 82.0
(91.2). The lower claims ratio was primarily
caused by a lower level of large claims. The
underlying claims ratio improved as a result of
the above initiatives in Norway, Denmark and
Sweden.
Expenses
The expense ratio was 13.7 (12.5) and some-
what higher than Q4 2020, which did not,
however, represent a trend but rather reflected
negative premium development and some
volatility in expenses, but in general expenses
is not a concern for the Corporate business.
-2.5% 36m 13.7 95.7
Premium growth
(local currencies)
Q4 2020: 2.0%
Technical result
(DKK)
Q4 2020: -32m
Expense ratio
Q4 2020: 12.5
Combined ratio
Q4 2020: 103.7
Q4 Financial highlights 2021
Annual report 2021 | Tryg A/S | 30
Management’s review - Contents
Sweden
2.7% 277m 16.7 83.6
Premium growth
(local currencies)
2020: 4.9%
Technical result
(DKK)
2020: 268m
Expense ratio
2020:16.8
Combined ratio
2020: 83.2
Financial highlights 2021
Results 2021
Sweden (Moderna) posted a technical result of
DKK 277m (DKK 268m in 2020) and a com-
bined ratio of 83.6 (83.2). The higher technical
result was composed of a significantly improved
underlying claims ratio, a much higher level of
weather claims and a lower run-off level, but was
also impacted by a positive development in the
Swedish currency.
Premiums
Premium income totalled DKK 1,701m (DKK
1,604m), representing an increase of 2.7%
(4.9%) when measured in local currencies.
Premium income was impacted by price
adjustments and strong growth for the niche
businesses Atlantica (leisure boats) and Bilsport
& MC (vintage cars and motorbikes) as well as
pet insurance. Very strong customer satisfaction
growth, with Moderna’s self-service solution
reaching the highest score on the Swedish
market, was also supportive of premium devel-
opment.
Claims
The claims ratio, net of ceded business, was
66.9 (66.4). The claims level was positively
impacted by pricing adjustments, resulting in an
improved underlying claims level, and negative
impacted from a much higher level of weath-
er-related claims because of flooding in Gävle in
the third quarter. The high run-off result of 13.8
(15.5) was driven by a strong reserving position
for motor insurance but was at a somewhat
lower level than previous year.
Expenses
The expense ratio was 16.7 (16.8), and therefore
slightly lower than last year. At the end of the
quarter, the number of employees was 314 and
thus somewhat lower than year-end 2020, when
323 were employed. This also reflects restraint
in hiring people due to the coming integration
between Trygg-Hansa and Moderna.
The business area accounts for 7% of
the Group’s total premium income.
7%
Key figures – Sweden
DKKm Q4 2021 Q4 2020 2021 2020
Gross premium income 407 393 1,701 1,604
Gross claims -264 -241 -1,141 -1,067
Gross expenses -67 -55 -284 -269
Profit/loss on gross business 75 98 276 268
Profit/loss on ceded business -1 -1 3 1
Insurance technical interest, net of
reinsurance
0 -1 -2 -1
Technical result 74 96 277 268
Run-off gains/losses, net of reinsurance 60 84 235 249
Key ratios
Premium growth in local currencies 1.5 4.9 2.7 4.9
Gross claims ratio 65.0 61.3 67.1 66.5
Net reinsurance ratio 0.1 0.3 -0.2 -0.1
Claims ratio, net of ceded business 65.1 61.6 66.9 66.4
Gross expense ratio 16.6 13.9 16.7 16.8
Combined ratio 81.7 75.5 83.6 83.2
Combined ratio exclusive of run-off 96.5 96.8 97.4 98.8
Run-off, net of reinsurance (%) -14.8 -21.4 -13.8 -15.5
Weather claims, net of reinsurance (%) 0.0 0.0 2.3 0.1
Annual report 2021 | Tryg A/S | 31
Management’s review - Contents
1.5% 74m 16.6 81.7
Premium growth
(local currencies)
Q4 2020: 4.9%
Technical result
(DKK)
Q4 2020: 96m
Expense ratio
Q4 2020: 13.9
Combined ratio
Q4 2020: 75.5
Q4 Financial highlights 2021
Results Q4 2021
Gross premium income for Q4 2021 was
DKK 407m (DKK 393m). The technical result
was DKK 74m (DKK 96m), with an expense
ratio of 16.6 (13.9) and a combined ratio of
81.7 (75.5).
Premiums
Gross premium income was DKK 407m
(DKK 393m), up 1.5% (4.9%) in local cur-
rencies. The primary growth driver was the
aforementioned price adjustments to im-
prove profitability, but it was also positively
impacted by strong sales from Danske Bank.
Claims
The gross claims ratio was 65.0 (61.3) and
net of ceded business 65.1 (61.6). The higher
claims level was primarily due to a lower level
of run-off gains at 14.8% compared to 21.4%
for the prior-year period.
Expenses
The expense ratio was 16.6 (13.9) and was
impacted by adjustments relating to previous
quarters and therefore did not represent the
actual expense level.
Annual report 2021 | Tryg A/S | 32
Management’s review - Contents
Investment activities
The total market value of Tryg’s investment
portfolio was DKK 42.9bn (DKK 40bn) at year-
end 2021. The investment portfolio consists of
a match portfolio of DKK 29.7bn (DKK 28.1bn)
and a free portfolio of DKK 13.2bn (DKK 12.4bn).
The match portfolio is constructed with low-risk
fixed-income assets that match the Group’s
insurance liabilities, so that fluctuations resulting
from interest rate changes are offset to the great-
est possible extent. The free portfolio reflects the
Group’s capital, which is predominantly invested
in fixed-income securities with a short duration,
but also in equities and properties.
The investment return for the full year was
DKK 1,008m (DKK 311m), representing the
sum of Tryg’s stand-alone investment return of
DKK 837m (DKK 311m) and the net profit for
7 months* of Codan Norway, Trygg-Hansa and
50% of Codan Denmark, which totalled DKK
1,206m (DKK 0m), and the cost of the currency
hedge related to the acquisition of RSA Scandina-
via of DKK -1,035m (DKK 0m).
Tryg’s stand-alone investment result showed a
free portfolio result of DKK 1,007m (DKK 585m),
driven primarily by strong returns on equities
and properties. The match portfolio reported a
positive DKK 134m (DKK -19m) contribution
primarily driven by decreasing spreads between
Euro and Danish swap rates. Other financial
income and expenses totalled DKK -304m (DKK
-255m).
Free portfolio
Financial markets developed positively during
2021, with especially risky asset classes such
as equities and properties producing solid
returns. The narrative was generally dominated
by developments in the COVID-19 pandemic
and discussions around inflationary pressures
following a strong economic rebound after
the reopening of societies in the spring and
summer. These themes continued to dominate
discussions towards the end of the year. The
free portfolio produced a very healthy income
of DKK 1,007m (DKK585m), almost entirely
driven by equities and properties, both asset
classes were up around 18%. Fixed income
returns were slightly negative or close to zero
in general. The total return on the free portfolio
was 8.0% (5.3%).
Match portfolio
The result of the match portfolio is the differ-
ence between the return on the match portfolio
and the amount transferred to the technical
result. The result can be split into a 'regulato-
ry deviation' and a ’performance result’. The
regulatory deviation was DKK 78m (DKK -48m),
driven primarily by a decreased yield spread
between the FSA/EIOPA discounting curve (in
EUR) and the assets side invested in Danish kro-
Financial highlights 2021
1,008m
Total investment return
(DKK)
837m
Tryg's stand-alone investment
return (DKK)
1,206m
Income from RSA Scandinavia
(DKK)
-1,035m
Currency hedge related to
RSA Scandinavia (DKK)
Key figures - investments
DKKm Q4 2021 Q4 2020 2021 2020
Free portfolio, gross return 413 513 1,007 585
Match portfolio, regulatory deviation and
performance 30 17 134 -19
Other financial income and expenses
a)
-70 -17 -304 -255
Income from RSA Scandinavia
b)
568 0 1,206 0
Currency hedge related to RSA Scandinavia 0 0 -1,035 0
Total investment return 941 513 1,008 311
a)
DKK 156m moved from Other financial income and expenses to Currency hedge related to RSA Scandinavia compared to
reported Q1 2021
b)
Tryg's acquisition of RSA Scandinavia impacts the Financial Statements from 1 June 2021 (date of closing)
Return - match portfolio
DKKm Q4 2021 Q4 2020 2021 2020
Return, match portfolio -47 -33 -332 548
Value adjustments, changed discount rate 104 48 528 -530
Transferred to insurance technical interest -27 2 -62 -37
Match, regulatory deviation and performance 30 17 134 -19
Hereof:
Match, regulatory deviation 16 4 78 -48
Match, performance 14 13 56 29
Annual report 2021 | Tryg A/S | 33
Management’s review - Contents
Q4 Financial highlights 2021
941m
Total investment return
(DKK)
373m
Tryg's stand-alone investment
return (DKK)
568m
Income from RSA Scandinavia
(DKK)
ner. The performance result was DKK 56m (DKK
29m), as Nordic covered-bond spreads narrowed
slightly.
Other financial income and expenses
Other financial income and expenses is primar-
ily characterised by interest expenses related
to outstanding subordinated debt, the cost of
currency hedges to protect shareholders’ equity
and the cost of running investment operations.
Other financial income and expenses totaled
DKK -304m (DKK -255m). The higher level com-
pared to 2020 is primarily driven by the negative
interest costs paid on the rights issue funds in the
period between the rights issue and the actual
closing of the transaction. Tryg has previously
guided that this line should report a result of
approximately DKK -60m per quarter.
Investment result in Q4 2021
The last quarter of the year has been character-
ised by positive developments in the financial
markets, especially the returns from the equity
and property asset classes. Fixed income returns
(in the free portfolio) were meagre, as increasing
interest rates have resulted in negative value
adjustments on the bonds.
The free portfolio posted a total income of DKK
413m (DKK 513m), almost entirely driven by
equities and properties, with returns of 5.9%
(14.0%) and 8.8% (2.9%). The match portfolio
returned a positive DKK 30m (DKK 17m) with
contributions both from the regulatory deviation
and the performance. Other financial income and
expenses were DKK -70m (DKK -17m), broadly
in line with expectations.
Tryg’s total investment result for the quarter was
DKK 941m (DKK 513m) including a DKK 568m
income from RSA Scandinavia. The result ex-
cluding RSA Scandinavia was DKK 373m and is
well above normalised levels. Tryg has published
a newsletter where it has guided for an annual
normalised investment income between DKK
0m and DKK 200m.
Investment activities post the RSA Scandinavia
acquisition
Starting in Q2 2021, the investment result has
been shown as Tryg’s stand-alone investment re-
sult and (in a separate line) the income from RSA
Scandinavia. All tables with reference to the free
and match portfolio returns will be unchanged,
offering the same transparency into Tryg’s invest-
ment activities. Following the acquisition of RSA
Scandinavia's activities and after de-merger, Tryg
will increase its invested assets by approximately
DKK 25bn, divided between an approximately
DKK 6-7bn higher free portfolio and an approx-
imately DKK 18-19bn higher match portfolio.
These invested assets pertain to Codan Norway
and Trygg-Hansa alone. During the transition
period, Tryg will gradually start to adjust the
assets mix, moving towards the allocations of
Tryg's portfolio.
Return - free portfolio
Investment assets
DKKm Q4 2021 Q4 2021 (%) Q4 2020 Q4 2020 (%) 2021 2021 (%) 2020 2020 (%) 31.12.2021 31.12.2020
Bonds -7 -0.2 15 0.4 -35 -0.9 88 2.3 3,896 3,839
Credit bonds -11 -0.5 113 5.0 5 0.3 136 6.3 2,154 2,261
Investment grade credit -7 -0.9 12 1.3 2 0.3 70 7.2 784 908
Emerging market bonds -5 -0.7 44 7.6 -1 0.0 25 4.6 709 654
High-yield bonds 1 0.1 57 7.8 4 0.7 41 6.2 661 699
Diversifying Alternatives
a)
-16 -1.6 6 0.6 -10 -1.0 20 2.1 1,021 935
Equity 157 5.9 307 14.0 506 18.9 277 13.5 2,710 2,588
Real Estate 290 8.8 72 2.9 541 18.2 64 2.7 3,370 2,806
Total 413 3.2 513 4.5 1,007 8.0 585 5.3 13,151 12,429
a)
Diversifying Alternatives consist of CAT Bonds and a tactical mandate including bonds, interest-based investment funds and equity-based investment funds.
Annual report 2021 | Tryg A/S | 34
Management’s review - Contents
Capital and risk management
Risk management is a key function at Tryg. The
assessment and management of Tryg’s aggre-
gated risk and associated capital requirement
constitute a core element in the management of
the company.
Tryg’s risk management is based on the targets
and strategy and the risk exposure limits decided
by the Supervisory Board.
Strategic and business risk
Definition Strategy Risk Management Objectives and methods
Financial losses or lost opportu-
nities due to a lack of ability to
carry out business plans and
strategies.
This includes the risk of not
being able to adjust to changing
market conditions in a timely
fashion.
Tryg is one of the most successful non-life insurance com-
panies in Scandinavia.
The current strategy (as presented at the Capital Markets
Day in November 2021) is to a large degree to continue
down this path.
Tryg has chosen to implement a highly decentralised orga-
nisation with a large degree of autonomy for each business
unit. This ensures a timely reaction to changing market
conditions in the separate business units.
The risk management policy adopted by the Supervisory
Board sets out guidelines for risk management.
The strategy process sets out overall strategic objectives.
This is done as a bottom-up process where the individual
business units contribute with concrete business plans.
Risk management carries out ongoing risk identification
and assessment to ensure that all existing and emerging
strategic and business risks are reported to the Supervisory
Board on a semi-annual basis.
Close monitoring of each business unit with regard to their
performance towards the overall strategic objectives.
Tryg’s Supervisory Board defines the framework
for the company’s target risk appetite and there-
by the capital which must be available to cover
any losses. The company’s risk management
is based on four risk categories: Strategic and
business risk, Insurance risk, Investment risk and
Operational risk. A detailed description of these
can be found in the tables below.
Annual report 2021 | Tryg A/S | 35
Management’s review - Contents
Insurance risk
Definition Strategy Risk Management Objectives and methods
The risk that insurance premi-
ums are insufficient to cover the
compensations and other costs
associated with the insurance
business.
The risk of the insurance provisi-
ons being inadequate.
Taking on insurance risk is the cornerstone of Tryg's busi-
ness model. It is therefore naturally the area where Tryg
has the largest risk appetite.
Tryg's main focus is to write primary non-life insurance bu-
siness in Scandinavia, the Private and Commercial busi-
nesses (SMEs) are considered the most attractive seg-
ments.
The insurance portfolio should be well-diversified and pro-
fitable with an overweight on the retail segment. Increased
focus on the retail segment in the coming years will help to
mitigate insurance risks, as this segment is typically less
complex and also drives value creation.
Tryg has a conservative approach towards claims provisio-
ning.
The insurance risk policy adopted by the Supervisory Bo-
ard sets out general guidelines for permitted insurance risk.
This includes guidelines for provisioning, general underwri-
ting principles, new products, profitability measuring,
reinsurance etc.
Capital Markets Day target for ROOF and UW results sets
the overall ambition for profitability versus capital con-
sumption (measure of unexpected risk).
Day-to-day monitoring of developments in the insurance
business (premium growth, underlying profitability, capital
consumption, etc.) is key to ensuring development in line
with desired risk appetite.
Reinsurance is used to reduce the underwriting risk in situ-
ations where this cannot be achieved to a sufficient degree
via ordinary diversification. The retention limit specifies the
maximum loss that Tryg is willing to take on a specific
event. The capacity of the reinsurance programme is set so
that it is very unlikely that a breach will occur. Both the re-
tention limit and the capacity are approved by the Supervi-
sory Board.
The internal model used to calculate the solvency capital
requirements in Solvency II are used to allocate capital
consumption to the business and thereby ensure sufficient
profitability in the insurance business.
The actuary function calculates the technical provision ba-
sed on the guidelines set out in the insurance risk policy.
These are regularly presented to the Supervisory Board.
Investment risk
Definition Strategy Risk Management Objectives and methods
Financial losses due to changes
in the value of financial assets or
liabilities.
Tryg has decided to divide its investment assets into the
free portfolio and the match portfolio.
The strategy for the match portfolio is to mitigate interest
rate risk from provisions.
The strategy for the free portfolio is to achieve the optimal
market return on a medium-term basis taking risk, liquidity,
etc. into account.
The investment risk policy adopted by the Supervisory Bo-
ard sets out general guidelines for permitted investment
risk. This includes specific maximum limits for
• asset classes
• interest rate risk
• currency risk
• credit risk
• counterparty exposure
• SCR market risk
Daily reporting on investment return on all asset classes.
Independent daily control ensures compliance with per-
mitted risk-taking.
Annual report 2021 | Tryg A/S | 36
Management’s review - Contents
Operational risk
Definition Strategy Risk Management Objectives and methods
Risk relates to errors or failures
in internal procedures, fraud,
breakdown of infrastructure, IT
security and similar factors.
The Supervisory Board sets out the overall strategy regar-
ding operational risk.
The operational risk policy adopted by the Supervisory Bo-
ard sets out general guidelines for operational risk. This in-
cludes general guidelines for IT security, physical security,
compliance, fraud, money laundering, contingency plan-
ning, and model risk.
Ongoing identification, assessment and reporting on risks
and any incident that has imposed a loss or a near loss for
Tryg.
Capital management
Capital management and capital modelling are
central and key functions in the Finance team
at Tryg. Capital management covers broadly the
company’s current and future capital require-
ments, capital allocation to the different lines
of business and required returns. In addition,
capital management analyses the dividend
outlook and the ability of the company to meet
its return on own funds target (previously return
on equity). Tryg’s solvency ratio is a function of
developments in own funds and the solvency
capital requirement (based on the approved
partial internal model). As mentioned previously,
Tryg has modelled the insurance risk internal-
ly, while all other modules are based on the
standard formula. The capital model is based on
Tryg’s risk profile and takes into consideration
the composition of Tryg’s insurance portfolio,
geographical diversification, its claims reserves
profile, reinsurance programme, investments
mix and overall level of profitability. The solvency
ratio was 188 at year-end 2021 compared to
183 at year-end 2020.
The acquisition of Codan Norway, Trygg-Hansa
and 50% of Codan Denmark impacted both own
funds and the solvency capital requirement in
2021 since closing 1 June 2021. A rights issue
of DKK 37bn to fund the acquisition was con-
ducted in March and new loans of DKK2bn were
issued. The solvency capital requirement virtu-
ally doubled, although the amount at year-end
2021 includes approximately DKK 1bn pertain-
ing to the 50% ownership of Codan Denmark.
The amount will therefore be approximately
DKK 1bn lower in H1 2022 upon the final closing
of the sale of Codan Denmark. The overall own
funds level will be impacted by the “loss” of
shareholders’ equity pertaining to Codan Den-
mark and by the intended share buyback (the
amount will be fully deducted at the start of the
programme), while the proceeds from the sale
will impact own funds positively.
The key components of Tryg’s own funds are
shareholders’ equity, qualifying debt instru-
ments (both Tier 1 and Tier 2 debt) and future
profit, while all intangibles are deducted in the
calculation. own funds totalled DKK 18,559m
at the end of 2021 vs DKK 8,884m at the end
of 2020. The upwards movement was primar-
ily driven by the difference between the funds
raised for the acquisition, and also as usual by
Annual report 2021 | Tryg A/S | 37
Management’s review - Contents
the net result for the year minus dividends paid.
The solvency capital requirement (SCR) is
calculated in such a way that Tryg should be able
to honour its obligations in 199 out of 200 years
and is regularly stress-tested. At the end of 2021,
Tryg’s SCR was DKK 9,866m, up approximately
DKK 5bn from the end of 2020. The significantly
higher level is explained by the acquisition of
Codan Norway, Trygg-Hansa and 50% of Codan
Denmark, which significantly impacts the overall
capital requirements.
Tryg’s solvency ratio continues to display low
sensitivity towards capital markets movements.
Fixed-income securities represent some 90% of
Tryg’s invested assets, and the highest solven-
cy sensitivity is therefore towards spread risk,
where a widening/tightening of 100 basis points
would impact the solvency ratio by approxi-
mately 20 percentage points. Lower sensitivity
is displayed towards equity market losses and
interest rate fluctuations.
Shareholders’ remuneration
The Supervisory Board regularly assesses
the capital structure in light of future internal
earnings forecasts and balance sheet needs.
The projections include initiatives set out in
the company’s strategy for the coming years
and are also based on the most significant risks
identified by the company. Capital adequa-
cy is measured in relation to Tryg’s strategic
targets, including the new return on own funds
target (ROOF) and the dividend policy. Tryg
will pay a Q4 dividend per share of 1.07 on 28
ly DKK 5bn, although, the precise buyback
amount will be communicated when all aspects
of the transaction are settled. As previously
indicated, TryghedsGruppen does not expect to
participate in the share buyback programme to
facilitate overall increased ownership of Tryg. At
the Capital Markets Day in London in November
2021, Tryg refined its dividend policy going for-
ward. Tryg continues to aim to offer a nominally
stable and increasing ordinary dividend on an
annual basis. The targeted pay-out ratio of 60-
90% (based on operating earnings) is secondary
to the aim of increasing the annual dividend.
Moody’s rating
Tryg has an “A1” (stable outlook) insurance finan-
cial strength (IFSR) rating from Moody’s. The
rating agency highlights Tryg’s strong position in
the Nordic P&C market, robust profitability, very
good asset quality and relatively low financial
leverage. Moody’s also assigned an “A3” rating to
Tryg’s subordinated debt and a “Baa3” rating to
Tryg’s Tier 1 debt. The ratings were re-affirmed
following the completion of the acquisition by
Tryg and Intact Financial Corporation (Intact) to
acquire RSA Insurance Group Pls (RSA), whereby
Tryg would acquire RSA’s Swedish and Norwe-
gian operations, and Tryg and Intact would co-
own RSA’s Danish business via a 50/50 econom-
ic participation. Moody’s expects the acquisition
to further increase and broaden Tryg’s earnings
base in the long term. Furthermore, Tryg’s lever-
age will reduce materially in the short term.
January 2022 after having paid a dividend for
the first nine months of 3.21 per share. The
dividend per share in 2021 is based on the
higher number of shares (approximately 654m)
following the rights issue to fund the acquisi-
tion of Codan Norway, Trygg-Hansa and 50%
of Codan Denmark in March. In June, together
with Intact, Tryg announced the sale of Codan
Denmark to Alm. Brand for a total price of DKK
12.6bn for 100% of the share capital of Codan
Denmark, of which Tryg will receive 50% of the
sale proceeds. The sale is expected to have a
positive impact on Tryg’s previously disclosed
expectations of an ROI of approximately 7%
for the acquisition of RSA Scandinavia. Follow-
ing the closing of the sale and upon approval
from the Danish FSA, Tryg intends to carry out
a share buyback programme of approximate-
Solvency Capital Requirement
(DKKm)
Q4 2020 Q4 2021
9,866
4,855
2020 2021
Own funds
(DKKm)
Q4 2020 Q4 2021
8,884
18,559
2020 2021
Shareholder remuneration
(DKK per share)
2017 2018 2019 2020 2021*
Ordinary dividend Extraordinary dividend
1.65
6.8
6.4
3.3
6.6
7.0
4.28
* Calculated on the new 654m number of shares
following the DKK 37bn rights issue to fund the
RSA Scandinavia acquisition
Annual report 2021 | Tryg A/S | 38
Management’s review - Contents
The Tryg share started the year at a price
of DKK 192.4 and ended 2021 at DKK
161.5.
The share price development in 2021
should be adjusted for the DKK 37bn
rights issue with a subscription ratio of
7:6 and subscription price of 105 DKK
per new share launched on 1 March
2021, hence and increase of 353m
shares from 302m to 654m.
The share price was DKK 149.7 at the
beginning of 2021 after adjusting for
the rights issue. Total return (price and
dividends) on the share was a positive
11.2%.
Investor information
Investor Relations (IR) is responsible for Tryg’s
communication with the capital markets. It is
important that investors, analysts and other
stakeholders can form a true and fair view of
developments, including Tryg’s financial results.
For this reason, Tryg’s IR team strives to be as
open and transparent as possible to ensure that
stakeholders’ information requirements are met
at the highest possible level. IR is in charge of
communication with equity investors, fixed-in-
come investors and rating agencies.
After the publication of quarterly and annual
reports, Tryg’s management and IR team ordi-
narily travel extensively to meet with sharehold-
ers and potential investors. Quarterly analyst
presentations are typically held in Copenhagen
and London. Tryg also attends investor meetings
and various financial conferences on a local
and global basis. As a result of COVID-19, the
majority of the analyst and investor meetings
and financial conferences were held virtually in
2021 (as in 2020). It was a record year in terms
of analyst and investor interaction, clearly driven
by the acquisition of RSA's Scandinavian activi-
ties, with Tryg meeting 136 investors in relation
to the rights issue. At the Capital Markets Day
in November 2021, 60 investors and analysts
attended and 220 followed the presentation
online.
The Tryg share is currently covered by 19 an-
alysts, who continuously update their recom-
mendations and earnings forecasts. Tryg hosts
an annual Analyst Day with a focus on selected
aspects of the business, while a more in-depth
Capital Markets Day with the launch of new
financial targets is hosted every three years,
recently. At the Capital Markets Day, new finan-
cial targets were disclosed for the new enlarged
group. Tryg targets a technical result of between
DKK 7.0 and DKK 7.4bn, a combined ratio at
or below 82, an expense ratio around 14 and a
return on own funds at or above 25% in 2024.
The Tryg share
announcements are published in English - and in
Danish on an optional basis. Interim reports and
annual reports are published in English.
The insurance sector’s key attraction is its
dividend yield. Earnings and solvency are always
carefully scrutinised by investors. In the world
of Solvency ll, changes in solvency levels can
be more difficult to predict and often difficult to
understand. Tryg has a relatively simple business
model and a transparent capital position, which
is highly appreciated by analysts and investors.
Share capital and ownership
Tryg’s share capital totalled DKK 3,273,269,900
on 31 December 2021. It comprises one share
class (654,653,980 shares with a nominal value
of DKK 5), and all shares rank pari passu. The
majority shareholder, TryghedsGruppen smba,
owns 45% of the shares and is the only share-
holder holding more than 5% of the share cap-
ital. TryghedsGruppen invests in peace of mind
and healthcare providers in the Nordic region
and supports non-profit-making activities.
Quarterly dividends
Tryg started paying quarterly dividends in 2017.
The Tryg share has a distinct income profile due
to the business generally growing in line with
GDP, producing high margins that are mostly
returned to shareholders. The prolonged period
of very low-interest rates in the wake of the
financial crisis means that investors, all else
being equal, attach even greater importance to
dividends than in a more normal environment.
This is particularly true for insurance investors,
as insurance is one of the sectors offering the
highest dividend yield. From an investment per-
TryghedsGruppen
In 2021 and for the sixth year
running, Tryg’s majority share-
holder, TryghedsGruppen, paid
out DKK 715m in member bo-
nus to Tryg and Alka customers
in Denmark corresponding to
5% of the annual premiums
paid for 2020.
TrygFonden
TrygFonden is the leading and
best-known peace-of-mind
promoter in Denmark, sup-
porting around 800 activities
that contribute to creating
peace of mind, such as coastal
lifeguards, cuddle bears for
children in hospital and defi-
brillators. Behind TrygFonden is
45% of the shares in Tryg and
annually contributes around
DKK 650m to projects that cre-
ate peace of mind in all parts of
Denmark.
Annual report 2021 | Tryg A/S | 39
Management’s review - Contents
spective, a quarterly dividend is a clear reminder
of the high profitability of Tryg’s business and
the company’s focus on returning capital to
shareholders. Tryg’s dividend policy is based on
the following assumptions:
• An aspiration to distribute a steadily increasing
dividend in nominal terms on a full-year basis.
• A general objective of creating long-term value
for the company’s shareholders.
• A competitive dividend policy in comparison
with the policies of Tryg's Nordic competitors.
• Annual distribution of 60-90% of the operat-
ing earnings.
• The capital level must at all times reflect Tryg's
return on own funds targets and statutory cap-
ital requirements.
• The capital level may be adjusted via extraor-
dinary dividends.
Annual general meeting
Tryg’s annual general meeting will be held
virtually on 31 March 2022 at 15:00 CET. The
notice will be advertised in the daily press in
February 2022 and will be sent to shareholders
upon request.
Shareholder distribution
DKKm 2021 2020 2019 2018 2017
Dividend 2,802 2,115 2,056 1,994 1,827
Dividend per share (DKK) 4.28 7.0 6.8 6.6 6.4
Payout ratio 89% 76% 72% 115% 73%
Extraordinary share buy back
Extraordinary dividend 500 1,000
Extraordinary dividend per share (DKK) 1.65 3.31
Financial calendar 2022
26 Jan. 2022 Tryg shares are traded ex-dividend
28 Jan. 2022 Payment of Q4 dividend
31 Mar. 2022 Annual general meeting
26 Apr. 2022 Interim report Q1
27 Apr. 2022 Tryg shares are traded ex-dividend
29 Apr. 2022 Payment of Q1 dividend
08 July 2022 Interim report Q2 and H1
11 July 2022 Tryg shares are traded ex-dividend
13 July 2022 Payment of Q2 dividend
13 Oct. 2021 Interim report Q1-Q3
14 Oct. 2021 Tryg shares are traded ex-dividend
17 Oct. 2021 Payment of Q3 dividend
TryghedsGruppen
Small shareholders
Large Danish
shareholders*
Large international
shareholders*
Shareholders
at 31 December 2021
45%
12%
35%
8%
*Shareholders holding more than 10.000 shares.
Denmark
UK
USA
Others
Free float - geographical distribution
at 31 December 2021
31%
16%
32%
21%
Free float is exclusive of TryghedsGruppen.
Annual report 2021 | Tryg A/S | 40
Management’s review - Contents
Corporate governance
Tryg focuses on managing the company in
accordance with the principles of good corpo-
rate governance and generally complies with
the Danish recommendations prepared by the
Committee on Corporate Governance. The
Rec ommendations on Corporate Governance
are available at corporategovernance.dk. At tryg.
com, Tryg has published its statutory corporate
governance report based on the ‘comply-or-ex-
plain’ principle for each individual recommenda-
tion. This section on corporate governance is an
excerpt of the corporate governance report.
downloads-2021
Dialogue between Tryg, shareholders and other
stakeholdersdownloads
Tryg’s Investor Relations (IR) department main-
tains regular contact with analysts and investors.
Together with the Executive Board, the Investor
Relations team organises investor meetings,
conference calls and participates in conferences
in Denmark and abroad. Due to the outbreak of
COVID-19, the majority of meetings were held
virtually in 2021.
The Supervisory Board is regularly informed
about the dialogue with investors and other
stakeholders. Tryg has an IR policy which states
that all company announcements may be
published in English only. Tryg publishes quar-
terly interim reports in English. Furthermore,
Tryg publishes an annual profile in Danish and
Norwegian. The profile is addressed to Tryg’s
private shareholders, customers, employees and
other stakeholders and will be published on 25
January 2022.
Tryg also prepares quarterly investor pres-
entations which are used in the dialogue with
investors and analysts. Additionally, Tryg also
regularly publishes IR newsletters on relevant
topics. All announcements, financial reports,
presentations and newsletters are available at
tryg.com. This material provides all stakeholders
with a comprehensive picture of Tryg’s position
and performance. Finally, IR also communicates
with stakeholders on social media via Twitter
@TrygIR.
The consolidated financial statements are
presented in accordance with IFRS. At tryg.com,
stakeholders are invited to subscribe to press
releases, company announcements as well
as insider trading announcements. A number
of internal guidelines ensure that the disclo-
sure of price-sensitive information complies
with legis lation and stock exchange codes of
conduct. Tryg has adopted a number of policies
describing the relationship between different
stakeholders.
See the IR Policy at www.tryg.com/en/
governance/policies
Annual General Meeting
Tryg holds an Annual General Meeting (AGM)
every year. As required by the Danish Compa-
nies Act and Tryg’s Articles of Association, the
AGM is convened via a company announcement
and at tryg.com subject to at least three weeks’
notice. Shareholders may also opt to receive the
notice by post or email. The notice contains in-
formation about the time and venue or technical
requirements for attending the meeting as well
as an agenda for the meeting.
All shareholders are encouraged to attend the
general meeting. Shareholders may propose
items to be included on the agenda for the
AGM and may ask questions before and at the
meeting. Shareholders may vote at the AGM, by
post, or appoint the Supervisory Board or a third
party as their proxy. Shareholders may consider
each item on the agenda. The proxy form and
form for voting by post are available at tryg.com
before the AGM.
In light of Tryg’s responsibility for the safety of
shareholders, employees and management and
the Danish authorities’ measures to control the
risk of infection with COVID-19, Tryg decided,
for the very first time to hold a virtual general
meeting without the option of physical attend-
ance. Tryg encouraged all shareholders to partic-
ipate in the virtual general meeting or to exercise
their influence by submitting written votes or
by voting by proxy. Furthermore, prior to the
general meeting, Tryg invited shareholders to
submit written questions to be considered at the
general meeting. Information on how to exercise
shareholders’ rights at the general meeting was
clearly communicated the shareholders and
published at tryg.com.
Share and capital structure
Tryg’s share capital comprises a single share class,
and all shares rank pari passu. The largest share-
holder, T ryghedsGruppen smba , owns 45% of the
shares and is the only shareholder owning more
than 5% of the company’s shares. The Supervi-
sory Board ensures that Tryg’s capital structure is
aligned with the needs of the Group and the inter-
ests of its shareholders and that it complies with
the requirements applicable to Tryg as a financial
undertaking. Tryg has adopted a capital plan and
a contingency capital plan, which are reviewed
annually by the Supervisory Board.
Depending on how the financial results develop,
each year the Supervisory Board proposes the
distribution of quarterly dividends, and possibly
an extraordinary annual dividend if a further
adjustment of the capital structure is required.
Duties, responsibilities and composition of the
Supervisory Board
The Supervisory Board is responsible for the
central strategic management and financial con-
trol of Tryg and for ensuring that Tryg’s business
is organised robustly. This is achieved by moni-
toring targets and frameworks based on regular
and systematic reviews of strategy and risks.
The Executive Board reports to the Supervisory
Board on strategies and action plans, market
developments and Group performance, funding
issues, capital resources and special risks.
Annual report 2021 | Tryg A/S | 41
Management’s review - Contents
The Supervisory Board holds one annual
strategy seminar to decide on and/or adjust the
Group’s strategy to sustain value creation in the
company. The Executive Board works with the
Supervisory Board to ensure that the Group’s
strategy is developed and monitored. The Super-
visory Board ensures that the necessary skills
and financial resources are available for Tryg to
achieve its strategic targets. The Supervisory
Board specifies its activities in a set of rules of
procedure and an annual cycle for its work.
The current nine external members of the Su-
pervisory Board were elected by the annual gen-
eral meeting for a term of one year. Of the nine
members elected at the annual general meeting,
six, and thus the majority, are independent
persons, thus complying with recommendation
3.2.1. in the Recommendations on Corporate
Governance, while the other three members
are dependent persons as they are appointed
by Tryg’s largest shareholder, TryghedsGruppen.
See page 45-48 for information on when the in-
dividual members joined the Supervisory Board,
were re-elected and when their current election
period ends. To ensure the integration of new
talent on the Supervisory Board, members
elected by the annual general meeting may hold
office for a maximum of twelve years.
The Supervisory Board has 13 members in total,
with an overrepresentation of women, as the
board currently comprise seven women and
six men (including two male and two female
employee representatives). This complies with
legislation as well as Tryg’s policy. The Super-
visory Board has members from Denmark,
Sweden and Norway.
See details about the independent
board mem bers in the section
Supervisory Board on pages 45-48
and at www.tryg.com/en/governance/
management/supervisory-board
The Supervisory Board performs an annual
evaluation of its work and skills to ensure that
it possesses the expertise required to perform
its duties in the best possible way. In addition
to the annual self-evaluation, an assessment is
facilitated with external assistance at least every
three years to ensure objectivity in the evalua-
tion process. The Supervisory Board focuses pri-
marily on the following qualifications and skills:
business judgement, problem-solving, network-
ing, risk management, succession management,
general management, CFO/audit, people and
organisation, business development, financial
services, risk and regulatory matters, insurance
– commercial and product insurance – techni-
cal/financial modelling, IT & digitalisation, value
chain optimisation and customer journey.
As part of the evaluation, the Supervisory Board
also focuses on other executive positions and
board memberships held by the members of
the Supervisory Board, including the level of
commitment and workload associated with
each position to prevent potential overboarding.
The evaluation is based on the individual board
member’s ability to devote the necessary time
for preparation, their performance, attendance
and participation at committee and board meet-
ings in Tryg. In 2021, the Chair, Jukka Pertola,
held four board seats in publicly listed compa-
nies. As a professional board member with more
than 25 years of relevant international experi-
ence combined with a unique set of competen-
cies, the Chair, with his role as an independent
chair at Tryg, is a very valuable presence at board
and committee meetings. He has attended all
board and committee meetings with a 100%
attendance rate since he was elected as Chair of
the Supervisory Board in 2018. In line with good
corporate governance, the Chair has reduced his
obligations in listed and non-listed companies in
2021 and is continuously assessing his capabili-
ty to allocate the required time and energy to his
current Board positions.
In early 2021, an evaluation with external assis-
tance was conducted of all board members and
members of the executive management based
on a questionnaire focusing on board compe-
tencies and performance. The overall conclusion
was that Tryg has a very good, value-adding
and professional Supervisory Board that works
efficiently and in accordance with sound
governance principles. The evaluation resulted
in a continued strong focus on Trygg-Hansa
integration, long-term strategy, digitalisation,
ESG and succession. Further, the Supervisory
Board decided to arrange a board training day on
relevant matters.
See CVs and descriptions of skills in the
section Supervisory Board on pages 45-
48 and at www.tryg.com/en/governance/
management/supervisory-board
Duties and composition of the Executive Board
Each year, the Supervisory Board reviews and
adopts the rules of procedure of the Superviso-
ry Board and the Executive Board, comprising
relevant policies, guidelines and instructions
describing reporting requirements and require-
ments for communication with the Executive
Board. Financial legislation also requires the
Executive Board to disclose all relevant infor-
mation to the Supervisory Board and report on
compliance with limits defined by the Superviso-
ry Board and in legislation.
The Supervisory Board considers the composi-
tion, development, risk and succession plans of
the Executive Board in connection with the an-
nual evaluation of the Executive Board, and reg-
ularly in connection with board meetings. Each
year, the Supervisory Board discusses Tryg’s
activities to guarantee diversity at management
levels. Tryg attaches great importance to diver-
sity at all management levels. Tryg has prepared
an action plan that sets out specific targets to
ensure diversity and equal opportunities and
access to management positions for qualified
men and women. For several years, Tryg has had
a strong focus on diversity and has been aiming
to increase the number of women in manage-
ment positions to 41%. The number of women
in management positions increased from 38%
in 2020 to 40% in 2021, just short of the target.
Progress has been driven through continuous
focus in the recruitment and HR processes.
See the General action plan for diversity
including women in management at
www.tryg.com/en/governance/policies
Board committees
Tryg has an Audit Committee, a Risk Commit-
tee, a Nomination Committee, a Remuneration
Committee and an IT-Data Committee. The
frameworks for the committees’ work are de-
fined in their terms of reference.
Annual report 2021 | Tryg A/S | 42
Management’s review - Contents
The board committees’ terms of refer-
ence can be found at www.tryg.com/en/
governance/management/superviso-
ry-board/board-committees including
descriptions of members, meeting
frequency, responsibilities and activities
during the year.
See the tasks of the Board Committees
in 2021 at www.tryg.com/en/govern-
ance/management/supervisory-board/
board-committees
All members of the Audit Committee and four out
of five members of the Risk Committee, including
the committee chair, are independent persons.
Three out of the five members of the Remu-
neration Committee are independent persons,
including the committee chair. Two out of three
members of the Nomination Committee are
independent, including the committee chair. Two
out of four members of the IT-Data Committee
are independent persons, including the commit-
tee chair. Board committee members are elected
primarily on the basis of their specialist skills
considered important by the Supervisory Board.
The involvement of the employee representatives
in the committees is also considered important.
The committees exclusively prepare matters for
decision by the entire Supervisory Board.
The specialist skills of all members are
also described at www.tryg.com/en/
governance/management/superviso-
ry-board/about-board
Remuneration of management
Tryg has adopted a remuneration policy for
Tryg in general that includes specific schemes
for the Supervisory Board, the Executive Board
and other employees in Tryg whose activities
have a material impact on the risk profile of the
company - risk-takers. The remuneration policy
for 2021 was adopted by the Supervisory Board
in January 2021 and approved by the annual
general meeting on 26 March 2021.
The Chair of the Supervisory Board reports on
Tryg’s remuneration policy each year in connec-
tion with the review of the annual report at the
annual general meeting. The Board’s proposal
for the remuneration of the Supervisory Board
for the current financial year is also submitted
for approval by the shareholders at the annual
general meeting.
Remuneration of the Supervisory Board
Members of Tryg’s Supervisory Board receive
a fixed fee and are not covered by any form of
incentive or severance programme or pension
scheme. Their remuneration is based on trends
in peer companies and benchmarked against
C25, taking into account the required skills,
efforts and the scope of the Su pervisory Board’s
work, including the number of meetings held.
The remuneration received by the Chair of the
Supervisory Board is three times that received
by ordinary members, while the Deputy Chair’s
remuneration is twice that received by ordinary
members of the Supervisory Board.
Remuneration of the Executive Board
Members of the Executive Board are employed
on a contractual basis, and all terms of their
remuneration are established by the Supervisory
Total remuneration of the Supervisory Board in 2021
DKK Basic fee Audit Committee Risk Committee
Remuneration
Committee
IT-Data
Committee
Nomination
Committee
Social
contributions
(NO/SE)
3)
Total
Jukka Pertola, Chair 1,170,000 165,000 140,000 150,000 1,625,000
Torben Nielsen, Dep. Chair
1)
780,000 240,000 240,000 110,000 100,000 1,470,000
Lene Skole 390,000 160,000 160,000 710,000
Mari Thjømøe 390,000 160,000 160,000 135,610 845,610
Carl-Viggo Östlund 390,000 110,000 210,000 72,491 782,491
Ida Sofie Jensen 390,000 110,000 140,000 100,000 740,000
Tina Snejbjerg 390,000 160,000 110,000 660,000
Lone Møller Olsen
2)
292,500 120,000 120,000 532,500
Elias Bakk 390,000 140,000 104,940 634,940
Karen Bladt 390,000 390,000
Claus Wistoft 390,000 390,000
Gert Ove Mikkelsen 390,000 74,490 464,490
Charlotte Dietzer 390,000 390,000
Total 9,635,031
1)
Also received a fee as Chair of the Board of the subsidiaries Tryg Invest A/S (DKK 250,000) and Kapitalforeningen Tryg Invest Funds (DKK 200,000),
2)
Joined the Board in March 2021 as an additional member of the Board
3)
Employer contributions to social security/tax relating to board members from Sweden and Norway
The base fee received by the Chair is triple that received by ordinary members, while the Deputy Chair’s base fee is double that received by ordinary members of the Board. The chair of the various
board committees receive 1.5 times the fee received by ordinary members of the Board. Members of the Supervisory Board receive no variable salary elements or pension in addition to those
amounts.
Annual report 2021 | Tryg A/S | 43
Management’s review - Contents
Board within the framework of the approved
remuneration policy.
Tryg wants to strike an appropriate balance
between management remuneration, predict-
able risk and value creation for the company’s
shareholders in the short and long term.
The Executive Board’s remuneration consists
of a fixed basic salary, a pension contribution of
25% of the base salary and other benefits. The
base salary must be competitive and appro-
priate for the market and provide sufficient
motivation for all members of the Executive
Board to do their best to realise the company’s
defined targets.
The Supervisory Board can decide that the basic
salary should be supplemented with a variable
pay element of up to 50% of the fixed salary
including pension.
The variable pay is set out in an incentive pro-
gramme for the Executive Board. The allocation
of the variable salary components under the
incentive programme is based on a result and
performance assessment for the performance
year (financial year) in accordance with specific
weighted financial and non-fi nancial targets de-
cided at the beginning of the performance year.
The principal purpose of the incentive pro-
gramme is to ensure the congruence of the
fi nancial interest of the participants and the com-
pany’s shareholders and to create a correlation
between remuneration and performance results.
Secondly, the programme should contribute to
retaining the participants of the programme at
Tryg.
For the performance year 2021, the variable
pay element was in January 2022 allotted as
conditional shares. The cap for the incentive
programme was 32% of the fixed salary includ-
ing pension in 2021.
The allotted conditional shares are deferred for
four years from the time of allotment. After the
end of the deferral period, the participant will
receive free shares in Tryg A/S corresponding
to the numbers of conditional shares allotted.
The granting of free shares is conditional upon
the fulfilment of additional conditions such as
continued employment and back-testing (testing
prior to granting to ensure that the criteria on
which the variable salary is based are still met at
the time of the granting of free shares).
Furthermore, all members of the Executive
Board received a discretionary one-off bonus
in 2021 due to the Executive Board’s extraor-
dinary strategic efforts that led to the approval
of the acquisition of RSA Scandinavia in 2021.
The one-off bonus took the form of conditional
shares, which are deferred for four years.
Read more about remuneration at Tryg
in the Remuneration policy and in the
Remunera tion Report at www.tryg.com/
en/governance/remuneration
Independent and internal audit
The Supervisory Board ensures monitoring
by competent and independent auditors. The
Group’s internal auditor attends all board
meetings. The independent auditor attends the
annual board meeting where the annual report
is presented.
The annual general meeting appoints an inde-
pendent auditor recommended by the Super-
visory Board. At least once a year, the auditors
meet with the Audit Committee without the
presence of the Executive Board.
The Audit Committee chair deals with any mat-
ters that need to be reported to the Supervisory
Board.
Tryg’s internal audit department regularly re-
views the quality of the Group’s internal control
systems and business procedures. It is respon-
sible for planning, performing and reporting on
the audit work to the Supervisory Board.
Deviations and explanations
Tryg complies with the Recommendations on
Corporate Governance except with regards to
the number of independent members of board
committees, with which Tryg complies partially;
see recommendation 3.4.2. of the Recommen-
dations on Corporate Governance.
The deviations are explained in Tryg’s
Statutory Corporate Governance report,
which is available at www.tryg.com/en/
downloads-2021
Total remuneration of the Executive Board in 2021
DKK
Name Basic salary Pension
Car
allowance
Other
benefits
1)
Total fixed
salary
Conditional
Shares
2)
Special
allowance
3)
Total
salary
Morten Hübbe 12,159,084 3,039,771 255,000 27,000 15,480,855 4,730,949 1,200,000 21,411,804
Lars Bonde 5,779,112 1,444,778 255,000 27,000 7,505,890 2,285,794 1,200,000 10,991,684
Johan Kirstein Brammer 5,874,091 1,468,523 255,000 27,000 7,624,614 2,358,547 1,200,000 11,183,161
Barbara Plucnar Jensen 5,365,880 1,341,470 255,000 27,000 6,989,350 2,135,945 1,200,000 10,325,295
1)
The calculation of “Staff benefits” is based on the estimated capitalised value of other benefits such as insurance, mobile phone etc.
2)
The value of Conditional Shares at the time of allotment in January 2022 for the 2021 performance year.
3)
One-off award in Conditional Shares.
Annual report 2021 | Tryg A/S | 44
Management’s review - Contents
Supervisory Board
a)
Born in 1960. Joined the Supervisory Board in 2017.
Finnish citizen.
Career Professional board member. Former CEO of Sie-
mens Denmark
Education MSc in Electrical Engineering
Board seats, Chair Tryg A/S and Tryg Forsikring A/S, COWI
Holding A/S, Siemens Gamesa Renewable Energy A/S and
Asetek A/S
Board seats, Deputy Chair Gomspace Group AB incl.
GomSpace A/S, GN Store Nord A/S incl. GN Audio A/S and
GN Hearing A/S
Committee memberships Remuneration Committee
(Chair), Nomination Committee (Chair) and IT-Data Com-
mittee in Tryg A/S. Nomination Committee in COWI Hold-
ing A/S (Chair). Remuneration Committee (Chair) Asetek
A/S, Nomination Committee Asetek A/S,Remuneration
Committee, Nomination Committee and Strategy Com-
mittee in GN Store Nord A/S
Experience More than 25 years of top management ex-
perience in the IT and telecommunication industry and
electrical engineering, the latest position being CEO of
Siemens Denmark from 2002 to 2017. Broad international
experience with global and regional business responsibili-
ties in both B2C and B2B
Competencies Solid technological background in tel-
ecommunications, IT, digitalisation, business models,
strategy, and business development. Understanding of risk
management, M&A, business know-how and judgement
as well as insurance
Number of shares held 13,000
Change in portfolio since 2020 7,000
a)
Born in 1947. Joined the Supervisory Board in 2011.
Danish citizen.
Career Professional board member, Adjunct Professor at
Copenhagen Business School. Former Governor of Dan-
marks Nationalbank (Danish Central Bank)
Education Savings bank training, Graduate Diplomas in
Organisation, Work Sociology, Credit and Financing
Board seats, Chair Ny Holmegaard Værk Fund, Inves-
teringsforeningen Sparinvest, Vordingborg Borg Fund,
Museum of Southeast Denmark, Tryg Invest A/S and KTIF
(Kapitalforeningen Tryg Invest Funds)
Board seats, Deputy Chair Tryg A/S and Tryg Forsikring
A/S
Board member Sampension KP Livsforsikring A/S and a
member of the Executive Management of Bombebøssen
Committee memberships Audit Committee (Chair) and
Risk Committee (Chair), Nomination Committee and
Remuneration Committee in Tryg A/S, Audit Committee
(Chair) and Risk Committee (Chair) in Sampension KP
Livsforsikring
Experience General experience at an executive level in
banking. Micro and macro knowledge from membership
of the board of governors in the Danish Central Bank.
Knowledge of chairmanship from non-executive boards
Competencies General top management experience from
the financial sector as well as experience with risk man-
agement and regulatory requirements, business know-
how and judgement
Number of shares 52,000
Change in portfolio since 2020 24,000
a+c)
Born in 1958. Joined the Supervisory Board in 2020.
Danish citizen.
Career Professional Non-executive board member and
executive director of LMO. Former partner at Deloitte
Education MSc in Economics and Business Administration
from Copenhagen Business School (CBS), State Author-
ised Public Accountant and Strategy and Leadership at
IMD, Lausanne
Board member Tryg A/S and Tryg Forsikring A/S, BankIn-
vest, Jetpak AB, Karnov Group AB and KNI A/S
Committee memberships Audit Committee and Risk
Committee in Tryg A/S, Audit Committee (Chair) at Karnov
Group AB, Audit Committee in Jetpak AB and Audit Com-
mittee in KNI A/S
Experience More than 20 years' experience of Board work
as well as Audit Committee work. Senior management
experience from various positions in Deloitte. Extensive
experience from advising on M&A, PMI, Outsourcing, IPO
and Corporate Bond issuance
Competencies Financial insight and solid business know-
how. Understanding of risk management, accounting,
finance, tax, strategy and M&A. Broad business approach
with strong strategy and implementation experience
Number of shares 4,334
Change in portfolio since 2020 2,334
a)
Born in 1955. Joined the Supervisory Board in 2015.
Swedish citizen.
Career Former CEO of Swedish banks SBAB and Nordnet
and the insurance company SalusAnsvar. At present pro-
fessional board member and investor.
Education BSc in International Business and Finance &
Accounting, Stockholm School of Economics
Board seats, Chair FCG Fonder AB, Fondo Solutions
AB, Gladsheim Fastigheter AB, Hemdel AB, Juvinum
Food&Beverage AB, Picsmart AB, Ponture AB, Ywonn Me-
dia Group Sweden AB and Nedvi Fastigheter AB
Board member Tryg A/S and Tryg Forsikring A/S, Allert
Östlund AB, DBT Capital AB, Delimport Ltd and Havsgaard
AB
Committee memberships IT-Data Committee (Chair) and
Remuneration Committee in Tryg A/S
Experience More than 30 years as CEO and Managing
Director in local and international environments in listed
companies as well as banks. Experience in the following
industries: manufacturing, logistics, insurance, finance
and banking
Competencies Solid background from the insurance
industry, non-life as well as life. Business know-how and
judgement, banking and finance know-how, understand-
ing of digitalisation and risk management
Number of shares 7,788
Change in portfolio since 2020 4,708
Annual report 2021 | Tryg A/S | 45
Management’s review - Contents
Supervisory Board
a)
Born in 1959. Joined the Supervisory Board in 2010.
Danish citizen.
Career CEO of Lundbeckfonden (+ Lundbeck Invest A/S)
Education: The A. P. Møller Group International Shipping
Education, Graduate Diploma in Finance and various inter-
national management programmes.
Board seats, Chair LFI Equity A/S
Board seats, Deputy Chair Ørsted A/S, H. Lundbeck A/S,
ALK Abelló A/S and Falck A/S
Board member Tryg A/S and Tryg Forsikring A/S
Committee memberships Audit Committee and Risk
Committee in Tryg A/S, Audit Committee, Nomination
Committee and Scientific Committee in ALK Abelló A/S,
Scientific Committee and Remuneration Committee in H.
Lundbeck A/S, Remuneration Committee and Nomination
Committee in Falck A/S and Nomination Committee and
Remuneration Committee in Ørsted A/S, The Committee
on Foundation Governance
Experience Top management experience from various
positions in the AP Moller-Maersk Group, CFO in Coloplast
and currently CEO of Lundbeckfonden.
Competencies Solid business know-how and judgement,
risk management, business development, finance, strate-
gy, M&A and understanding of business models.
Number of shares 15,220
Change in portfolio since 2020 8,195
a)
Born in 1962. Joined the Supervisory Board in 2012.
Norwegian citizen.
Career: Professional board member and independent ad-
visor. Former CFO of KLP
Education: MSc in Economy and Business Administration,
Chartered Financial Analyst (CFA), the Senior Executive
Programme from London Business School and Effective
Board Management from Harvard Business School
Board seats, Chair: Bilington Process Technology A/S,
Seilsport Maritimt Forlag A/S and ThjømøeKranen A/S
Board member: Tryg A/S and Tryg Forsikring A/S, TF Bank
AB, FCG Fonder AB, Hafslund Eco ASA, ICE ASA, Norcon-
sult A/S and Norconsult Holding
Committee memberships: Audit Committee and Risk
Committee in Tryg A/S, Audit Committee (Chair) in Nor-
consult A/S and Audit Committee (Chair) in ICE ASA, Audit
Committees TF Bank AB and Hafslund Eco ASA
Experience: Senior management experience from large-
cap companies, insurance and real estate. Extensive expe-
rience from the boards of directors within finance, energy
and renewables and is engaged in developing sustainable
businesses and good governance. Headed the Norwegian
IR associations for many years and received the Women’s
Board Award for Norway
Competencies: Business know-how from experience
with the financial sector and energy as well as risk man-
agement, strategy, restructuring, business development,
M&A, IR and financial communication and working with
regulatory authorities
Number of shares: 14,316
Change in portfolio since 2020: 10,016
b)
Born in 1958. Joined the Supervisory Board in 2013.
Danish citizen.
Career CEO of Lif (Medicine and Healthcare Industry),
CEO of the subsidiary DLI A/S (Danish Medicine Informa-
tion) and the subsidiary ENLI ApS (Ethical Board for the
Pharmaceutical Industry)
Education MSc in Political Science (cand.scient.pol.), Eu-
ropean Health Leadership Programme INSEAD, Executive
Management Programme INSEAD, Executive Program
Columbia Business School, Executive Program Singularity
University
Board seats, Chair TryghedsGruppen smba, Dansk
Medicin Verifikation Organisation ApS
Board member Tryg A/S and Tryg Forsikring A/S
Committee memberships Remuneration Committee,
Nomination Committee and IT-Data Committee in Tryg
A/S
Experience General top management experience as CEO
of Lif since 2004 and former CEO of Herlev University
Hospital. Representative in TryghedsGruppen since 2010.
Deputy Chair 2014-2019 and Chair since 2019
Competencies Solid business know-how and judgement,
analytical approach to problem-solving and strategy,
networking, skills and the ability to evaluate succession
scenarios as well as an understanding of digitalisation
Number of shares 5,205
Change in portfolio since 2020 2,300
b)
Born in 1959. Joined the Supervisory Board in 2019.
Danish citizen.
Career 1st Deputy Mayor, Municipality of Syddjurs and
member of the finance committee. Agriculturalist, wind
energy production, tenanted properties and project devel-
opment of building sites. CEO in Demex Holding A/S and
C.W. Holding A/S
Education Agricultural education at Bygholm Agricultural
College and various business courses
Board seats, Chair Midttrafik I/S
Board member Tryg A/S and Tryg Forsikring A/S, Trygheds-
Gruppen smba, Seidelmann Holding ApS, Houmarken
A/S, Lyngfeldt A/S, Lyngfeldt Finansiering A/S, Lyngfeldt
Maskinudlejning ApS, K/S Prinz Carl Anlage l and Syddjurs
udviklingspark
Experience Top management experience from operating
his own business for 35 years
Competencies Analytical approach to problem-solving,
solid business know-how and business development, un-
derstanding of risk management and succession
Number of shares 8,716
Change in portfolio since 2020 6,216
Annual report 2021 | Tryg A/S | 46
Management’s review - Contents
Supervisory Board
b)
Born in 1967. Joined the Supervisory Board in 2019.
Danish citizen.
Career Director/owner of HASLE Refractories A/S
Education MSc. Eng. in Operations and Supply Chain Man-
agement, Aalborg University
Board member programme, Pension and Insurance, CBS
Executive
Board seats, Chair Business Center Bornholm
Board seats, Deputy Chair Erhvervshus Hovedstaden –
Bornholm
Board member Tryg A/S and Tryg Forsikring A/S, HASLE
Refractories A/S, HASLE Refractories India Pvt.Ltd., Born-
holmstrafikken Holding A/S and TryghedsGruppen smba,
Bornholms Erhvervsfond
Experience Top management experience as the owner of
HASLE Refractories A/S since 2003 as well as more than
10 years experience as a member of various supervisory
boards.
Competencies Solid business know-how and judgement,
experienced in business development with an analytical
approach to problem-solving.
Number of shares 582
Change in portfolio since 2020 313
b)
Born in 1979. Joined the Supervisory Board in 2020.
Norwegian citizen.
Career Senior investigator in Tryg A/S
Education The Norwegian Police University College (BA)
and Queensland University of Technology (Master of
Justice). Norwegian School of Economics (Business Eco-
nomics and Management Accounting). Numerous courses
in insurance-related matters and Supervisory Board edu-
cation at Forsikringakademiet
Board member Tryg A/S and Tryg Forsikring A/S
Experience Police Officer/Detective for 10 years, including
Leading Investigator at Organised Crime Unit in Oslo Nor-
way. Joined the Special Investigation Unit at Tryg in 2011
Competencies Broad experience with insurance-related
matters from most parts of the Tryg organisation. Solid
knowledge and experience with compliance/audits,
impact analyses and responsive strategies. Excellent inter-
personal and verbal communication skills
Number of shares 2,349
Change in portfolio since 2020 1,604
b)
Born in 1962. Joined the Supervisory Board in 2010.
Danish citizen.
Employed since 1987
Career Officer of Tryg’s Personnel Department
Education Insurance training
Board member The Central Board of Forsikringsforbundet,
Tryg A/S and Tryg Forsikring A/S
Committee memberships Risk and Remuneration Com-
mittees in Tryg A/S
Experience From 1987 to 2001, Tina Snejbjerg worked
with the sale of insurance to both private and commercial
customers as well as providing insurance advice to cus-
tomers. From 2001-2009, Tina Snejbjerg was the deputy
chair of the local department of Forsikringsforbundet and
since 2009, she has been the chair working with opera-
tions, strategy, negotiation agreements and engaged in
recruiting and retaining members
Competencies From many years of experience, Tina Sne-
jbjerg has acquired solid business know-how and judge-
ment, problem-solving abilities working with management
and HR-related issues in the financial sector, specifically
the insurance industry
Number of shares 2,501
Change in portfolio since 2020 1,326
b)
Born in 1975. Joined the Supervisory Board in 2017.
Swedish citizen.
Employed since 2006
Career Project Manager in Tryg A/S
Education Norra Real Gymnasium, financial services &
insurance at Företagsekonomiska Institut Stockholm. Edu-
cation at Forsikringsakademiet for new board members
Board member Tryg A/S and Tryg Forsikring A/S
Committee memberships IT Data Committee in Tryg A/S
Experience Team Manager in Moderna Affinity for 12
years, Business development in Moderna and Affinity for
2 years
Competencies Solid insurance knowledge from his years
in the industry, business know-how and judgement, expe-
rience with organisation development, business develop-
ment, customer handling and interaction.
Number of shares 2,750
Change in portfolio since 2020 1,794
Annual report 2021 | Tryg A/S | 47
Management’s review - Contents
Supervisory Board
Name
Supervisory
Board
Audit
Committee
Risk
Committee
Nomination
Committee
Remuneration
Committee
IT-Data
Committee
Jukka Pertola 17/17 5/5 11/11 4/4
Torben Nielsen 17/17 8/8 8/8 5/5 11/11
Elias Bakk 17/17 4/4
Charlotte Dietzer 17/17
Gert Ove Mikkelsen 17/17
Tina Snejbjerg 17/17 8/8 11/11
Ida Sofie Jensen 17/17 5/5 11/11 4/4
Lene Skole 17/17 8/8 7/8
Mari Thjømøe 17/17 8/8 8/8
Claus Wistoft 17/17
Karen Bladt 17/17
Carl-Viggo Östlund 17/17 11/11 4/4
Lone Møller Olsen
a)
16/17 7/8 7/8
a)
Joined the Board in March 2021 as an additional member of the Board
Commitee meeting
overview 2021
Members of the Supervisory Board are elected for a term of one year. Employee representatives are, however,
elected for a term of four years.
a)
Independent member of the Supervisory Board, as per the definition in Recommendations on Corporate Governance
b)
Dependent member of the Supervisory Board.
c)
Joined the Supervisory Board in March 2021 as an additional member of the Board
b)
Born in 1974. Joined the Supervisory Board in 2020.
Danish citizen.
Career Manager advisor in Claims Denmark, Tryg A/S
Education Insurance education at Forsikringsakademiet
(level 5) as well as various management and communica-
tion training. Supervisory Board education at Forsikring-
sakademiet.
Board member Tryg A/S and Tryg Forsikring A/S
Experience Division partner in Tryg A/S and examiner at
Forsikringsakademiet
Competencies Solid knowledge and experience within
the insurance industry. Excellent interpersonal and verbal
communication skills
Number of shares 550
Change in portfolio since 2020 412
Annual report 2021 | Tryg A/S | 48
Management’s review - Contents
Born in 1972. Joined Tryg in 2002.
Joined the Executive Board in 2003.
Education: BSc. in International Business and Modern
Languages and MSc. in Finance and Accounting, Copen-
hagen Business School, and management programme,
The Wharton School
Board seats, Chair: Siteimprove (including two holding
companies) and Conscia A/S (including four holding com-
panies)
Board seats, Deputy Chair: Simcorp A/S
Experience: Morten Hübbe is an experienced senior ex-
ecutive with a holistic and strategic leadership approach.
Morten has 25+ years of insurance experience, of which
nearly 20 years have been at top executive level - 8 years
as Group CFO and 10 years as Group CEO. In addition,
Morten has Supervisory Board experience in Banking,
Software and Real Estate development
Competencies: Morten Hübbe has specific strengths
within strategy, finance, communication and leadership.
He also has solid know-how within the fields of Investor
Relations, M&A and Financial Regulation
Number of shares held: 289,921
Number of shares held in the beginning of 2021: 230,812
Change in portfolio: +59,109
* Other Directorships in the following non-financial holding companies
CGH Invest ApS, Gusta Invest ApS and Moccau Holding ApS (including
one subsidiary). The investment companies are established for the bene-
fit of Morten Hübbe and his related family.
Born in 1971. Joined Tryg in 2019.
Joined the Executive Board in 2019.
Education: MSc. in Economics,
University of Copenhagen
Board seats, Deputy Chair: KTIF (Kapitalforeningen
Tryg Invest Funds)
Board member: Nordsøenheden and Scandi JV Co 2 A/S
Experience: Barbara Plucnar Jensen has extensive sen-
ior management experience in the financial and service
sector. Before joining Tryg, she held the position as CFO
within ISS' largest market, UK & Ireland, and several senior
positions within group treasury and risk management with
ISS. Furthermore, she has comprehensive experience in
the banking industry as she has held several senior posi-
tions within the largest financial institution in Denmark,
Danske Bank.
Competencies: Barbara Plucnar Jensen is an execu-
tion-oriented executive with an international and strategic
mindset focused on making an impact. She has a passion
for understanding the day-to-day business and the ability
to grasp complex issues quickly and generate results by
strong leadership capabilities. She has a strong financial
profile and extensive experience within finance and invest-
ments, risk management and governance, financial regula-
tion & compliance, group treasury, M&A, IT & outsourcing,
use of technology and data as well as sustainability
Number of shares held: 29,319
Number of shares held in the beginning of 2021: 13,532
Change in portfolio: +15,787
Born in 1965. Joined Tryg in 1998.
Joined the Executive Board in 2006.
Education: Insurance training, LL.M.,
University of Copenhagen
Board seats, Chair: P/F Betri Trygging, Tryg Livsforsikring
A/S and Forsikringsakademiet A/S
Board member: Danish Employers’ Association for the Fi-
nancial Sector, Erhvervsakademiet Copenhagen Business
Academy and Scandi JV Co 2 A/S
Experience: With more than 35 years experience in the
insurance industry, of which more than 15 years have
been as a top executive, Lars Bonde has extensive industry
knowledge. Throughout his tenure, he has held consec-
utive positions as leader and business responsible for
claims and all Tryg's business units, some of which were
alongside his role as a member of the Executive Board.
Lars Bonde has over 10 years of international experience
from board positions.
Competencies: Comprehensive experience from the
insurance industry. Experienced in strategy, business
development, digitalisation, innovation, legal and M&A.
Management and leadership experience, including inter-
national experience. Extensive board experience across
several countries
Number of shares held: 105,885
Number of shares held in the beginning of 2021: 81,960
Change in portfolio: +23,925
Born in 1976. Joined Tryg in 2015.
Joined the Executive Board in 2018.
Education: LL.M., University of Copenhagen, MBA Austral-
ian Graduate School of Management, and Graduate Diplo-
ma (HD-Finance) Copenhagen Business School
Board member: Insurance & Pension Denmark (IPD)
Experience: Johan Kirstein Brammer has extensive top
management experience from a range of industries. Prior
to joining Tryg’s Executive Board, Johan was heading
Tryg’s Private Lines business in Denmark. Before joining
Tryg, Johan held numerous executive roles with TDC
before joining the company’s Board as Head of Consumer
and Group Chief Marketing Officer. Prior to this, Johan
was with McKinsey & Co as a strategy consultant based in
Australia and United Kingdom. Before joining McKinsey &
Co, Johan was Attorney with Kromann Reumert in Den-
mark. This range of experiences has provided Johan with
a broad, diverse toolbox having held strategic and P&L
responsibilities across multiple industries in an interna-
tional setting
Competencies: Johan Kirstein Brammer has an interna-
tional and strategic mindset developed from his time as a
management consultant as well as a number of strategic
roles across several industries. He couples this with a
strong commercial mindset and a desire to grow the busi-
ness and improve the customer experience through inno-
vation and digitalisation. Johan has extensive experience
within transformative M&A across borders and sectors.
Number of shares held: 49,663
Number of shares held in the beginning of 2021: 37,405
Change in portfolio: +12,258
Executive Board
Annual report 2021 | Tryg A/S | 49
Management’s review - Contents
Corporate Responsibility
In addition to this section on Corporate Respon-
sibility, Tryg publishes its independent Corpo-
rate Responsibility report. The report represents
Tryg’s statutory statement on corporate social
responsibility, gender diversity at the manage-
ment level and data ethics presented in accord-
ance with Sections 132, 132a and 132d of the
Danish Executive Order on Financial Reports
for Insurance Companies and Lateral Pension
Funds (Nationwide Occupational Pension
Funds).
Tryg has been a signatory member to the UN
Global Compact since 2008. Tryg’s Corporate
Responsibility report composes Tryg’s Com-
munication on Progress (COP) report and thus
underlines Tryg’s continuous commitment to the
UN Global Compact’s Ten Principles.
Tryg’s Corporate Responsibility report includes
an ESG data overview of Tryg’s key performance
indicators, Tryg’s climate reporting in line with
Insurance & Pension Denmark’s industry recom-
mendations , Tryg’s reporting on EU Taxonomy-
eligible and non-eligible economic activities as
well as Tryg’s climate-related disclosure in line
with the TCFD (Task Force on Climate-related
Financial Disclosures) recommendations.
Tryg has pushed its Corporate Responsibility
strategy targets for 2023, now including the
activities of the acquired businesses in Norway
and Sweden, to 2024. However, the reporting
for 2021 does not include the activities of the
acquired businesses, as the integration has not
been completed.
Corporate Responsibility strategy
As the largest non-life insurance company in
Scandinavia, Tryg wants to live up to its purpose:
‘As the world changes, we make it easier to be
tryg’. Tryg's Corporate Responsibility strategy is
linked to its business model and anchored in its
corporate strategy for 2024 (pages 15-17). The
Corporate Responsibility strategy focuses on
how Tryg as a company and its employees can
contribute to a more sustainable society, and
how Tryg can influence its suppliers and help
its customers make more sustainable choices.
The strategy has three focus areas: Responsible
company, Green workplace and Sustainable
insurance, for which Tryg has targets for both
2024 and 2030.
High ethical standards, compliance with all
applicable national and international legislation
and good corporate governance are underly-
ing but fundamental elements to everything
Tryg does as a company, in the daily lives of its
employees and in its Corporate Responsibility
strategy.
Tryg conducts an annual materiality assessment
to identify the environmental, social, economic
and governance issues that are perceived to be
most important to Tryg and its stakeholders, and
this forms the basis of Tryg’s Corporate Respon-
sibility strategy and reporting.
Tryg’s Corporate Responsibility Board, chaired
by the CFO, supervises Tryg’s Corporate
Responsibility efforts, including its Corporate
Responsibility strategy.
Download Terms of reference for
Corporate Responsibility Board at
www.tryg.com/en/dokumenter/trygcom/
terms-reference-cr-board-2021.pdf
Download Corporate Responsibility
policy at www.tryg.com/en/dokumenter/
trygcom/corporate-responsibility-poli-
cy-2020.pdf
Read more on pages 9 in Tryg’s
Corporate Responsibility report
Download Corporate Responsibility
report at www.tryg.com/en/dokumenter/
trygcom/corporate-responsibility-re-
port-2021.pdf See ESG data on pages
27-29 in Tryg’s Corporate Responsibility
report
CORPORATE RESPONSIBILITY STRATEGY 2024
Annual report 2021 | Tryg A/S | 50
Management’s review - Contents
Responsible company
Responsible procurement
Making Tryg’s procurement and claims handling
processes more sustainable are inevitable steps
on Tryg’s sustainability journey. Tryg’s ambition
is to be a responsible purchaser and live up to
the highest standards of responsible procure-
ment. Tryg continuously strives to contribute
to sustainable development by entering into
agreements and collaborations with suppliers
who share its values and visions for sustainable
development. The target for 2024 is to screen
up to 90% of Tryg's contract suppliers for sus-
tainability. In 2021, Tryg added the sub-target
to screen up to 100% of its contract suppliers
within claims. In addition, up to 50% of the
screened suppliers must have achieved a high
performance rating in 2024. A sub-target that
up to 70% of Tryg's screened suppliers within
claims must achieve a high-performance rating
has also been added.
In 2021, Tryg has started to distribute its Suppli-
er Code of Conduct to its suppliers for them to
accept and comply with. 23% of Tryg’s contract
suppliers have accepted the Supplier Code of
Conduct. In order to evaluate Tryg’s suppliers’
compliance with the Supplier Code of Conduct,
Tryg has implemented a systematic screening
process to evaluate suppliers in terms of ESG
risks, the UN Global Compact principles and the
additional minimum requirements described in
Tryg’s Supplier Code of Conduct. In 2021, Tryg
has completed the screening of 18% of its con-
tract suppliers and 24% of its contract suppliers
within claims.
Download Supplier Code of Conduct
at
www.tryg.com/en/dokumenter/trygcom/
supplier-code-conduct-uk-2020.pdf
Read more on page 11 in Tryg’s
Corporate Responsibility report
Responsible investment
Tryg wants to ensure that its assets are invested
in a responsible manner. Tryg’s responsible
investment policy outlines the principles Tryg
follows to ensure that its investments are con-
ducted in accordance with Tryg’s values.
Download Responsible Investment
Policy at www.tryg.com/en/dokumenter/
trygcom/responsible-investment-poli-
cy-2021.pdf
Active ownership
Tryg’s initiatives on active ownership are primar-
ily directed towards managing and monitoring
the responsible investment processes of its
external managers. Thus, Tryg seeks to ensure
that external managers apply active ownership
to individual holdings. The process for ensuring
the compliance of external managers with Tryg’s
responsible investment policy is described in
Tryg’s Active ownership policy. Tryg’s primary
focus is to select external managers who share
its principles and have policies in place to ensure
that investments are managed responsibly.
The responsibility practices of Tryg’s external
managers are being evaluated on a variety of
metrics, including whether they are a UN PRI
signatory and also how well they implement
responsibility into their organisations.
Tryg’s active ownership statistics describe the
percentage of possible shareholder meetings
that Tryg’s managers have attended. Tryg has
set a voting target of at least 90% of the possible
shareholder meetings for its actively managed
equity holdings.
Download Active Ownership Policy at
www.tryg.com/en/dokumenter/trygcom/
active-ownership-policy-2021.pdf
Ethical screening process
Each year, Tryg screens its holdings for contro-
versial behaviour and controversial weapons to
ensure that individual holdings do not deviate
from expectations. Furthermore, Tryg has
formulated a formal escalation process that out-
lines the steps to be taken after a screening of
investments. In 2021, companies were flagged
for controversial behaviour or involvement in
controversial weapons, and no follow-up dia-
logues were necessary.
Download Process for Ethical
Screening at www.tryg.com/en/doku-
menter/trygcom/process-ethical-screen-
ing.pdf
The transition to a low-carbon economy
Tryg integrates ESG considerations into its
investment process with the primary aim of
contributing to the transition to a low carbon
economy. Tryg’s target is to reduce the carbon
intensity of its equity portfolio by at least 50%
in 2030 compared to 2020. Also, Tryg wants to
contribute to the green transition by aiming to
divest all its investments in fossil fuel produc-
tion companies with no strategy for a green
transition before 2030 in order to support Tryg’s
long-term ambition of having a low-carbon and
fossil-free investment portfolio. Tryg will begin
divesting no later than 2023.
To support Tryg’s carbon intensity reduction
target and mitigate risk in Tryg’s investment
portfolio, Tryg monitors the carbon footprint
and climate-related risks associated with its
investments using of third-party data. Tryg
currently monitors the equity portfolio and
parts of the credit bond portfolio and focuses,
in particular, on climate-related transition risks
and opportunities that arise from the transition
to a low-carbon economy. Tryg’s equity portfolio
is characterised by having low exposure to
climate-related transition risks.
Tryg provides information on its external manag-
ers, active ownership and carbon intensity in its
Corporate Responsibility report.
Read more on pages 12-13 in Tryg’s
Corporate Responsibility report
Annual report 2021 | Tryg A/S | 51
Management’s review - Contents
Diverse workplace
Tryg believes that a diverse representation of
employees and, more importantly, diversity of
thought, are key elements to the future success
of Tryg.
As part of Tryg’s diversity and inclusion strat-
egy, Tryg is focusing on increasing diversity of
thought in its management teams. The ambition
is to improve the number of management teams
that are diverse on three factors: gender, age and
industry/experience.
Tryg has had a strong focus on diversity for
several years with the aim of increasing the pro-
tions has increased from 38% in 2020 to 40% in
2021. Progress has been driven by a continuous
focus in Tryg’s recruitment and HR processes.
Tryg’s Supervisory Board is composed of six men
and seven women, and under Danish law as well
as Tryg’s own policy, there is equality among the
genders.
Download General action plan for diver-
sity, including women in management at
www.tryg.com/en/dokumenter/trygcom/
general-action-plan-diversity-includ-
ing-women-management.pdf
Working at Tryg
Providing a healthy and safe working environ-
ment and securing the well-being of its employ-
ees is vital to Tryg.
Tryg’s annual employee satisfaction survey pro-
vides a starting point for talking about well-being
in the workplace. In 2021, Tryg’s overall employ-
ee satisfaction score remained at 80.
Read more on pages 14-16 in Tryg’s
Corporate Responsibility report
Green workplace
As an insurance company, Tryg’s direct carbon
footprint is relatively limited. Yet, as a responsi-
ble company, Tryg is committed to minimising its
own negative climate and environmental impact.
Tryg’s target is to reduce its carbon emission
by 35% in 2024 and 55% in 2030 compared to
2019 and to achieve carbon neutrality in 2023
by compensating for the rest of its carbon emis-
sions deriving from Scope 1 and Scope 2 and
from waste, air and train travel in Scope 3*. The
goal is to compensate less and reduce more over
time. Tryg’s climate and environmental policy
sets out Tryg’s commitment to minimising the
carbon footprint and negative impact of its own
operations and its business activities.
Download the Climate and environmen-
tal policy at www.tryg.com/en/dokument-
er/trygcom/climate-and-environmen-
tal-policy.pdf
Carbon emissions
In 2021, Tryg’s total carbon emissions de-
creased by 59% compared to 2019, correspond-
ing to a de crease of 3,045 tonnes of CO2 in total
and 790 kg of CO2 per employee.
However, 2021 was an unusual year due to the
COVID-19 pandemic, which again significant-
ly affected Tryg’s carbon emissions. During
the year, most of our employees in Denmark,
Norway and Sweden were asked and advised to
work from home for longer periods of time. As
a result, our total electricity consumption de-
creased by 48% compared to 2019, total district
heating consumption by 29% compared to 2019
and total waste production by 52% compared
* Tryg's carbon emission reduction targets are based on the Greenhouse Gas Protocol Initiative (GHG Protocol)
Employee mix
%
Age
>50
years
Age
30-49
years
Age
<30
years
WomenMen
55%
45%
17%
52%
31%
Carbon emissions
Tonnes
Total Air travel Waste production Energy consumption Car fleet
2021202020192018
1000
2000
3000
4000
5000
6000
Employee satisfaction
(Index)
Tryg Nordic Nordic financial
market
74
72
80
2020 2021
75
73
80
Annual report 2021 | Tryg A/S | 52
Management’s review - Contents
to 2019, contributing to the decrease in Tryg’s
total carbon emissions. Except for business-crit-
ical travel, there was no business travel across
national borders during January to mid-August
and again from mid-December. This led to an
86% decrease in carbon emissions from air
travel compared to 2019. Under normal circum-
stances, air travel accounts for around 50% of
Tryg’s total carbon emissions. Thus, our limited
use of air travel during 2021 contributed to the
decrease in Tryg’s total carbon emissions.
In addition, Tryg launched several initiatives
in 2021 to reduce the negative environmental
impact of its internal operations, which have
also contributed to the decrease in Tryg’s total
carbon emissions.
Read more on pages 17-19 in Tryg’s
Corporate Responsibility report
Sustainable insurance
Tryg wants to support and motivate its customers
on their own sustainability journey by offering
sustainable products and services as well as in-
corporating sustainability into its claims handling
process. By offering products and services with
claims prevention measures, Tryg may prevent
claims from happening in the first place or mini-
mise damage. When claims do occur, Tryg wants
to ensure that the claims handling where possible
is conducted in a sustainable manner.
Sustainable products and services
Claims handling processes are often associat-
ed with the use of considerable resources and
energy as well as carbon being emitted into the
atmosphere. Thus, Tryg seeks to prevent claims
from happening in the first place by increasing
its focus on claims prevention measures in its
products and services. Tryg’s ambition is that
claims prevention products and services make
up a fourth of Tryg's top-line growth from new
products and services.
In 2021, Tryg launched its new contents insur-
ance in Denmark comprising Basis, Extended
and Super covers. The Extented contents insur-
ance as an example includes either an optional
house alarm or an optional bike safety accessory
in the form of a bike lock with or without an
alarm, a reflector with a built in GPS tracker or
an alarm box for the bike. The Super contents in-
surance includes both an optional house alarm
and an optional bike safety accessory.
Read more on pages 20-21 in Tryg’s
Corporate Responsibility report
Sustainable claims handling
The area where Tryg as an insurance company
can make the biggest impact within sustainabil-
ity is the claims handling processes. Each year,
Tryg handles more than one million claims, and
making the claims handling processes more sus-
tainable is an inevitable step on Tryg’s sustain-
ability journey and an important part of Tryg’s
contribution to a more sustainable society.
Tryg seeks to make its claims handling processes
as sustainable as possible. By encouraging its
employees, its suppliers and its business part-
ners to take a leading role exploring how Tryg
can become even better at sustainable claims
handling, Tryg will drive positive environmental
and social progress and contribute to a more
circular economy.
In order to track progress, Tryg monitors how
much of its purchasing volume is spent on
sustainable claims handling activities. In the
absence of an industry-wide standard, Tryg has
developed a method to systematically classify
parts of its spend in terms of sustainability.
Tryg’s target is to increase its sustainable claims
spend by minimum 80% in 2024 compared to
2020. To increase the claims spend that Tryg
classifies as sustainable, Tryg has intensified
the use of the claims handling methods that
historically have proven to be more sustainable.
Furthermore, Tryg has introduced new claims
handling initiatives that enable the implemen-
tion of more sustainable claims handling meth-
ods. From 2020 to 2021, we increased our share
of sustainable spend by 35%.
Carbon emissions reductions from sustainable
claims handling
To contribute to a low-carbon economy, Tryg has
set a target to achieve a total CO2 reduction ef-
fect of 20,000-25,000 tonnes through more sus-
tainable claims handling in 2024. Tryg furthers
the use of initiatives where it can document CO2
reductions and collaborate with its suppliers to
identify more opportunities to reduce CO2 in the
claims handling processes.
In 2021, Tryg has calculated the CO2 reduction
effect of a number of claims handling initiatives
such as digitising veterinarian and doctor visits,
repairing car plastic bumpers and conducting
video claim inspections rather than inspecting
the claim on site. These CO2 reduction effects
have been added to the effects of the cases
calculated in 2020.
From the existing and new cases, Tryg has
achieved a total CO2 reduction effect of 6,740
tonnes in 2021 through more sustainable claims
handling.
Read more on page 22 in Tryg’s Corpo-
rate Responsibility report
Annual report 2021 | Tryg A/S | 53
Management’s review - Contents
Ethics and compliance
Business ethics, risk management and good
corporate governance are underlying, but
fundamental elements of responsible business
conduct. Tryg is committed to running an ethical,
transparent and responsible business. Tryg’s
commitment to ethical and good corporate
governance as well as compliance with all
applicable national and international legislation
is the foundation on which Tryg builds and drives
its business forward. Tryg wants to promote
responsible business conduct throughout its
value chain and expects its employees, suppli-
ers, business partners and external investment
managers to comply with these principles.
Tryg’s Code of Conduct defines the rules, that
all employees are required to adhere to. Tryg’s
tax policy and anti-corruption guidelines further
outline its commitment to acting as a responsi-
ble company.
Download Code of Conduct at
www.tryg.com/en/dokumenter/trygcom/
code-conduct-uk.pdf
Download Tax Policy at www.tryg.com/
en/dokumenter/trygcom/tax-policy.pdf
Download Anti-corruption Guidelines at
www.tryg.com/en/dokumenter/trygcom/
anti-corruption-guidelines.pdf
Security
As an insurance company for which digitalisation
and innovation are high priorities, Tryg is exposed
to several security threats that must be mitigated.
It is vital that Tryg pays attention to security, since
a high level of security creates a safe workplace
as well as the basis for a successful and adaptive
business. This includes cyber security, as Tryg
is dependent on well-functioning IT systems to
perform its work and run its business.
To uphold the security level, Tryg tests its
employees in their knowledge of Tryg’s security
rules once a year, including rules on cyber secu-
rity, confidential material, press enquiries and
access to Tryg’s offices.
Data
As an insurance company, Tryg deals with
personal data on a daily basis, and ensuring that
its customers’ personal data are stored and han-
dled in a lawful, secure and compliant manner
is a high priority focus. Through its Privacy and
Cookies Notice, available at tryg.com, Tryg seeks
to be transparent about how it collects, process-
es and uses its customers’ personal data.
Tryg requires all new employees to undertake
a mandatory e-learning programme on GDPR
and IT security as part of their onboarding
programme. During 2021, all new employees
completed the online training.
Data ethics
The use of data, including personal data, is
essential for Tryg’s business model. Hence, using
data in a responsible and ethical way is a key
issue for us.
Tryg’s data ethical principles form part of
Tryg’s Code of Conduct, are based on industry
standards stemming from the Danish trade
association, Insurance & Pension Denmark’s
Data Ethical Codex, relevant legal requirements
as well as internationally agreed standards. They
outline three main principles.
- Through transparency we communicate our
use of data.
- We care for personalisation and prevention.
- We strive to ensure a strong data security.
Download the report at www.tryg.com/en/dokumenter/
trygcom/corporate-responsibility-report-2021.pdf
Read more on pages 23-25 in Tryg’s
Corporate Responsibility report
Climate-related risks and opportunities
The changing climate is causing harm and is a
cause of concern for Tryg’s customers and soci-
ety. Tryg is aware of how physical and transition-
al climate-related risks and opportunities may
impact Tryg as a business in the future.
As a result, Tryg progressed in how it assesses,
acts and reports on climate-related risks and
opportunities and is working towards aligning
its disclosures with the TCFD (Task Force on
Climate-related Financial Disclosures) recom-
mendations. In the coming years, Tryg plans to
continue improving data, methods and prac-
tices in order to further align its disclosures on
climate-related risks and opportunities with
TCFD recommendations. In 2022, Tryg expects
to publicly declare support for the TCFD and its
recommendations, thus demonstrating that Tryg
is taking action to build a more resilient financial
system through climate-related disclosure.
Read Tryg’s climate-related disclosure,
which is in line with the TCFD (Task Force
on Climate-related Financial Disclosures)
recommendations on pages 33-35 in
Tryg’s Corporate Responsibility report
Tryg has published an independent Corporate Responsibility report
with extended Environmental, Social and Governance (ESG) data.
Annual report 2021 | Tryg A/S | 54
Management’s review - Contents
Notes
Tryg Group
Note
Statement by the Supervisory Board
and the Executive Board 56
Independent Auditor’s Reports 57
Financial highlights 61
Income statement 62
Statement of comprehensive income 63
Statement of financial position 64
Statement of changes in equity 65
Cash flow statement 66
1 Risk and capital management 67
2 Operating segments 79
2 Geographical segments 81
3 Premium income, net of reinsurance 85
4 Insurance technical interest, net of
reinsurance 85
5 Claims, net of reinsurance 85
6 Insurance operating costs, net of reinsurance 85
6 Share-based payment - Matching shares 87
6 Share-based payment - Conditional shares 88
7 Interest and dividends 89
8 Value adjustments 89
9 Other income and costs 89
10 Tax 89
Note
11 Intangible assets 90
12 Property, plant and equipment 93
13 Investment property 94
14 Equity investments in associates 94
15 Financial assets 95
16 Reinsurer’s share 99
17 Current tax 99
18 Equity 100
19 Premium provisions 101
19 Claims provisions 101
20 Pensions and similar obligations 102
21 Deferred tax 103
22 Other provisions 103
23 Other debt and debt to group undertakings 103
24 Earnings per share 104
25 Contractual obligations, collateral
and contingent liabilities 104
26 Equity investments in associates 106
27 Related parties 107
28 Financial highlights 108
29 Accounting policies 109
Tryg A/S (parent company)
Income statement for Tryg A/S 117
Statement of financial position for Tryg A/S 118
Statement of changes in equity 119
Notes 120
Reporting for Q4
Q4 2021 Quarterly outline 123
Q4 2021 Geographical segments 125
Information
Other key figures 126
Group chart 127
Glossary, Key Ratios and
alternative performance measures 128
Product overview 130
Disclaimer 131
Contents – Financial statements 2021
Tryg’s Group consolidated financial statements are prepared in accordance with IFRS
Annual report 2021 | Tryg A/S | 55
Financial statements - Contents
55Annual report 2021 | Tryg A/S |
Financial statements - Contents
Executive Board
Morten Hübbe Barbara Plucnar Jensen Lars Bonde Johan Kirstein Brammer
Group CEO Group CFO Group COO Group CCO
Supervisory Board
Jukka Pertola Torben Nielsen Elias Bakk Gert Ove Mikkelsen Charlotte Dietzer Karen Bladt Claus Wistoft
Chairman Deputy Chairman
Ida Sofie Jensen Lene Skole Tina Snejbjerg Mari Thjømøe Carl-Viggo Östlund Lone Møller Olsen
Statement by the Supervisory
Board and the Executive Board
Annual report 2021 | Tryg A/S | 56
Financial statements - Contents
Basis for opinion
Report on the audit of the
Financial Statements
Our opinion
Independent
Auditor’s Reports
Key audit matters
Key audit matter How our audit addressed the key audit matter
Annual report 2021 | Tryg A/S | 57
Financial statements - Contents
Key audit matter How our audit addressed the key audit matter
Statement on the management’s review
Management’s responsibilities for the financial
statements
Annual report 2021 | Tryg A/S | 58
Financial statements - Contents
Auditor’s responsibilities for the audit of the
financial statements
Report on compliance with the
ESEF Regulation
As part of our audit of the Financial Statements,
we performed procedures to express an opinion
on whether the annual report of Tryg A/S for the
financial year 1 January to 31 December 2021
with the filename 213800ZRS8AC4LSTCE39-
2021-12-31-en.zip is prepared, in all material
respects, in compliance with the Commission
Delegated Regulation (EU) 2019/815 on the
European Single Electronic Format (ESEF Regu-
lation) which includes requirements related to
the preparation of the annual report in XHTML
format and iXBRL tagging of the Consolidated
Financial Statements.
Management is responsible for preparing an
annual report that complies with the ESEF Regu-
lation. This responsibility includes:
• The preparing of the annual report in XHTML
format;
• The selection and application of appropri-
ate iXBRL tags, including extensions to the
ESEF taxonomy and the anchoring thereof
to elements in the taxonomy, for all financial
information required to be tagged using
judgement where necessary;
• Ensuring consistency between iXBRL tagged
data and the Consolidated Financial State-
ments presented in human-readable format;
and
• For such internal control as Management de-
termines necessary to enable the preparation
of an annual report that is compliant with the
ESEF Regulation.
Annual report 2021 | Tryg A/S | 59
Financial statements - Contents
Our responsibility is to obtain reasonable assur-
ance on whether the annual report is prepared,
in all material respects, in compliance with the
ESEF Regulation based on the evidence we have
obtained, and to issue a report that includes
our opinion. The nature, timing and extent of
procedures selected depend on the auditor’s
judgement, including the assessment of the risks
of material departures from the requirements
set out in the ESEF Regulation, whether due to
fraud or error. The procedures include:
• Testing whether the annual report is prepared
in XHTML format;
• Obtaining an understanding of the company’s
iXBRL tagging process and of internal control
over the tagging process;
• Evaluating the completeness of the iXBRL
tagging of the Consolidated Financial State-
ments;
• Evaluating the appropriateness of the compa-
ny’s use of iXBRL elements selected from the
ESEF taxonomy and the creation of extension
elements where no suitable element in the
ESEF taxonomy has been identified;
• Evaluating the use of anchoring of extension
elements to elements in the ESEF taxonomy;
and
• Reconciling the iXBRL tagged data with the
audited Consolidated Financial Statements.
In our opinion, the annual report of Tryg A/S for
the financial year 1 January to 31 December
2021 with the file name 213800ZRS8AC4L-
STCE39-2021-12-31-en.zip is prepared, in all
material respects, in compliance with the ESEF
Regulation.
Statsautoriseret Revisionspartnerselskab
CVR No 3377 1231
Annual report 2021 | Tryg A/S | 60
Financial statements - Contents
Financial highlights
DKKm 2021 2020 2019 2018 2017
NOK/DKK, average rate for the period 72.92 69.63 75.80 77.53 79.99
SEK/DKK, average rate for the period 73.39 70.95 70.62 72.67 77.24
Gross premium income 24,137 22,653 21,741 18,740 17,963
Gross claims -16,275 -15,437 -14,857 -12,636 -11,865
Total insurance operating costs -3,394 -3,202 -3,081 -2,704 -2,516
Profit/loss on gross business 4,468 4,014 3,803 3,400 3,582
Profit/loss on ceded business -731 -499 -566 -624 -779
Insurance technical interest, net of reinsurance -29 -20 1 -10 -14
Technical result 3,709 3,495 3,237 2,766 2,789
Investment return after insurance technical interest
a)
1,008 311 579 -332 527
Other income and costs -624 -265 -188 -172 -77
Profit/loss before tax 4,093 3,541 3,628 2,262 3,239
Tax -932 -768 -783 -529 -720
Profit/loss on continuing business 3,161 2,773 2,845 1,733 2,519
Profit/loss on discontinued and divested business after tax -3 0 -2 -2 -2
Profit/loss for the period 3,158 2,773 2,843 1,731 2,517
Run-off gains/losses, net of reinsurance 963 1,145 1,194 1,221 972
Run-off gains/losses, Gross 949 1,130 1,173 1,236 939
Statement of financial position
Total provisions for insurance contracts 33,588 32,488 32,224 31,948 30,018
Total reinsurers' share of provisions for insurance contracts 1,494 1,377 1,501 1,415 1,366
Total equity 49,008 12,264 12,085 11,334 12,616
Total assets 100,580 60,916 59,059 56,545 51,367
Key ratios
Gross claims ratio 67.4 68.1 68.3 67.4 66.1
Net reinsurance ratio 3.0 2.2 2.6 3.3 4.3
Claims ratio, net of ceded business 70.5 70.3 70.9 70.7 70.4
Gross expense ratio 14.1 14.1 14.2 14.4 14.0
Combined ratio 84.5 84.5 85.1 85.1 84.4
Operating ratio 84.6 84.6 85.1 85.2 84.5
Relative run-off gains/losses 4.0 4.9 5.1 5.4 4.1
Return on equity after tax (%) 7.8 22.5 24.6 14.9 28.8
a) Trygs acquisition of RSA Scandinavia affects the Financial Statement from closing the 1 June 2021. The investment return includes income from RSA Scandinavia of DKK 1,206m. Please see the income overview.
Annual report 2021 | Tryg A/S | 61
Financial statements - Contents
DKKm 2021 2020
Note Investment activities
14 Profit/Loss from associates 1,161 -47
Income from investment property 41 49
7 Interest income and dividends 538 506
8 Value adjustments -334 110
7 Interest expenses -182 -126
Administration expenses in connection with investment activities -153 -145
Total investment return 1,070 348
4 Return on insurance provisions -62 -37
Total investment return after insurance technical interest 1,008 311
Other income 139 88
9 Other costs -763 -354
Profit/loss before tax 4,093 3,541
10 Tax -932 -768
Profit/loss on continuing business 3,161 2,773
Profit/loss on discontinued and divested business -3 0
Profit/loss for the year 3,158 2,773
24 Earnings per share 5.51 9.19
DKKm 2021 2020
Note General insurance
Gross premiums written 25,413 23,652
Ceded insurance premiums -1,564 -1,552
Change in premium provisions -44 -187
Change in reinsurers' share of premium provisions -37 85
3 Premium income, net of reinsurance 23,768 21,998
4 Insurance technical interest, net of reinsurance -29 -20
Claims paid -15,497 -15,542
Reinsurance cover received 471 987
Change in claims provisions -778 105
Change in the reinsurers' share of claims provisions 141 -187
5 Claims, net of reinsurance -15,663 -14,637
Bonus and premium discounts -1,232 -812
Acquisition costs -2,655 -2,532
Administration expenses -739 -669
Acquisition costs and administration expenses -3,395 -3,202
Reinsurance commissions and profit participation from reinsu-
rers 258 170
6 Insurance operating costs, net of reinsurance -3,137 -3,032
2 Technical result 3,709 3,495
Income statement
Annual report 2021 | Tryg A/S | 62
Financial statements - Contents
DKKm 2021 2020
Note Profit/loss for the year 3,158 2,773
Other comprehensive income
Other comprehensive income which cannot subsequently be
reclassified as profit or loss
Actuarial gains/losses on defined-benefit pension plans 0 -68
Tax on actuarial gains/losses on defined-benefit pension plans 0 6
Other comprehensive income which can subsequently
be reclassified as profit or loss
Exchange rate adjustments of foreign entities for the year 93 -51
Exchange rate adjustments of foreign material associates
for the year -52 0
Hedging of currency risk in foreign entities for the year -99 127
Tax on hedging of currency risk in foreign entities for the year 22 -28
-36 48
Total other comprehensive income -36 -14
Comprehensive income 3,122 2,759
Statement of comprehensive income
Annual report 2021 | Tryg A/S | 63
Financial statements - Contents
DKKm 2021 2020
Note Equity and liabilities
18 Equity 49,008 12,264
1 Subordinated loan capital 4,442 2,801
19 Premium provisions 6,183 6,036
19 Claims provisions 25,587 24,957
Provisions for bonuses and premium discounts 1,818 1,495
Total provisions for insurance contracts 33,588 32,488
20 Pensions and similar obligations 108 130
21 Deferred tax liability 944 851
22 Other provisions 40 57
Total provisions 1,092 1,038
Debt relating to direct insurance 819 516
Debt relating to reinsurance 77 56
Amounts owed to credit institutions 835 1,191
Debt relating to repos 2,417 3,259
15 Derivative financial instruments 879 897
17 Current tax liabilities 268 357
23 Other debt 7,084 5,979
Total debt 12,379 12,255
Accruals and deferred income 71 69
Total equity and liabilities 100,580 60,916
1 Risk and capital management
25 Contractual obligations, collateral and contingent liabilities
26 Acquisition of activities
27 Related parties
28 Financial highlights
29 Accounting policies
DKKm 2021 2020
Note Assets
11 Intangible assets 7,025 7,124
Operating equipment 158 147
Owner-occupied property 604 630
12 Total property, plant and equipment 762 777
13 Investment property 1,040 1,117
14 Equity investments in associates 37,067 16
Total investments in associates 37,067 16
Equity investments 3,625 2,611
Unit trust units 8,231 6,878
Bonds 35,611 34,339
Other lending 75 80
Derivative financial instruments 913 1,840
Total other financial investment assets 48,455 45,748
15 Total investment assets 86,562 46,881
Reinsurers' share of premium provisions 262 291
19 Reinsurers' share of claims provisions 1,232 1,087
16 Total reinsurers' share of provisions for insurance contracts 1,494 1,377
Receivables from policyholders 1,678 1,674
Total receivables in connection with direct insurance contracts 1,678 1,674
Receivables from insurance enterprises 407 270
Other receivables 946 685
15 Total receivables 3,030 2,628
17 Current tax assets 315 51
Cash at bank and in hand 802 1,390
Other 1 1
Total other assets 1,118 1,442
Interest and rent receivable 134 131
Other prepayments and accrued income 453 555
Total prepayments and accrued income 588 686
Total assets 100,580 60,916
Statement of financial position
Annual report 2021 | Tryg A/S | 64
Financial statements - Contents
Proposed dividend per share is calculated as the total
dividend proposed by the Supervisory Board after the
end of the financial year divided by the total number of
shares at the end of the year (654,653,980 shares).
The possible payment of dividend from Tryg Forsikring
A/S to Tryg A/S is influenced by contingency fund
provisions of DKK 1,735m (DKK 1,706m in 2020).
The provisions can be used to cover losses in connec-
tion with the settlement of insurance provisions or
otherwise for the benefit of the insured and are not
available for dividends.
a) Other reserves contains Norwegian Natural Perils
Pool and contingency fund provisions.
b) 352,505,989 new shares of nominal DKK 5 at a
price of 105 per share were issued. Costs related to
the issue of new shares are deducted in proceeds
recognised in retained earnings with DKK 694m.
DKKm
Share
capital
Reserve for
exchange rate
adjustment
Other
reserves
a)
Retained
earnings
Proposed
dividend
Non-
controlling
interest Total
Equity at 31 December 2020 1,511 25 1,706 8,492 529 1 12,264
2021
Profit/loss for the year 29 327 2,802 3,158
Other comprehensive income -36 0 -36
Total comprehensive income 0 -36 29 327 2,802 0 3,122
Dividend paid -2,630 -2,630
Dividend own shares 3 3
Purchase and sale of own shares -137 -137
Issue of new shares
b)
Share based payments 66 66
Total changes in equity in 2021 1,763 -36 29 34,817 172 0 36,744
Equity at 31 December 2021 3,273 -11 1,735 43,309 700 1 49,008
Equity at 31 December 2019 1,511 -23 1,677 7,906 1,013 1 12,085
2020
Profit/loss for the year 29 629 2,115 2,773
Other comprehensive income 48 -62 -14
Total comprehensive income 0 48 29 567 2,115 0 2,759
Dividend paid -2,599 -2,599
Dividend, own shares 4 4
Purchase and sale of own shares -13 -13
Share based payments 29 29
Total changes in equity in 2020 0 48 29 586 -484 0 179
Equity at 31 December 2020 1,511 25 1,706 8,492 529 1 12,264
Statement of changes in equity
Annual report 2021 | Tryg A/S | 65
Financial statements - Contents
Liabilities arising from financing activities
2021
Subordinated
loans
Amounts owed
to credit
institutions Total
Carrying amount at 1 January 2,801 1,191 3,992
Exchange rate adjustments -658 0 -658
Amortisation 2 0 2
Cash flow 2,297 -356 1,941
Carrying amount at 31 December 4,442 835 5,277
2020
Carrying amount at 1 January 2,875 711 3,586
Exchange rate adjustments -76 0 -76
Amortisation 2 0 2
Cash flow 0 480 480
Carrying amount at 31 December 2,801 1,191 3,992
DKKm 2021 2020
Note Cash flow from operating activities
Premiums 24,605 22,884
Claims -14,597 -15,400
Ceded business -906 -634
Costs -3,296 -2,961
Change in other debt and other amounts receivable -686 468
Cash flow from insurance activities 5,120 4,358
Interest income 311 359
Interest expenses -182 -126
Dividend received 112 66
Taxes -1,200 -599
Other income and costs -490 -126
Total cash flow from operating activities 3,670 3,932
Cash flow from investment activities
Sale of property 160 13
Purchase/sale of equity investments and unit trust units (net) -891 -5,502
Purchase/sale of bonds (net) -2,501 4,339
Purchase/sale of operating equipment (net) -22 -37
Acquisition of associate -36,357 0
Hedging of currency risk -36 48
Total cash flow from investment activities -39,647 -1,139
Cash flow from financing activities
Issue of new shares 36,320 0
Sharebased payments/purchase of own shares (net) -137 -13
Subordinated loan capital 2,297 0
Dividend paid -2,630 -2,599
Change in lease liabilities -137 -139
Change in amounts owed to credit institutions -356 480
Total cash flow from financing activities 35,357 -2,271
DKKm 2021 2020
Change in cash and cash equivalents, net -620 522
Exchange rate adjustment of cash and cash
equivalents, 1 January 32 0
Change in cash and cash equivalents, gross -588 522
Cash and cash equivalents at 1 january 1,390 868
Cash and cash equivalents at 31 December 802 1,390
Cash flow statement
Annual report 2021 | Tryg A/S | 66
Financial statements - Contents
Notes
• Risk appetite
• Capital
• Strategy
• Crisis
management
Supervisory Board’s
Risk Committee
• Contingency
• Control
• Risk
identification
• Risk
management
Executive Board
Systematic risk
assessment
reporting
Risk reporting
recommen-
dations
Policies
Policies
and guidelines
Supervisory
Board
Business areasRisk management environment
Insurance
risk
Model
risk
Market
risk
Compliance
risk
Operational
risk
Risk Committee
• Compliance function
• Actuarial function
• Risk management
function
2nd line of defence
• Internal audit
• Internal audit function
3rd line of defence External audit
Reporting
Right to be heard,
cf. draft for
Executive order
on Management
• Business Management
1st line of defence
Supervisory Board’s
Risk Committee
Supervisory Board’s
Audit Committee
Executive Board
Supervisory Board
Lines of defence
Tryg’s risk management environment
What risk profile does Tryg want?
- Business model
- Strategy
- Policies
How is the actual risk profile measured?
Tactically
- Risk reports
- Internal controls
- Capital model
- Stress tests
- Reassurance
How is this supported?
Tactically
- Policies
- Capital plan
- Contingency plan
Operationally
- Frameworks
- Limitations
- Instructions
- Allocated capital
- Contingency plans
1 Risk and capital management
Risk management in Tryg
The Supervisory Board defines the basis for the risk
appetite through the business model and the current
strategy. The Supervisory Board has regulated the
management of risk activities through policies and
guidelines to the business supported by underlying
business processes and a power of attorney structure.
The company’s risk management forms the basis for
the risk profile being in line with the specified risk
appetite at all times. Tryg’s risk profile is continuously
measured, quantified and reported to the manage-
ment and the Supervisory Board.
In Tryg, we have adopted a three lines of defence gov-
ernance model across the organisation. This is to en-
sure robust governance and effective communication
between the business areas, key functions and internal
audit as well as reporting to the Supervisory Board and
the Supervisory Board’s Risk Committee (“RiU”).
1st line of defence is the Business Management
2nd line of defence is Compliance-, Actuarial- and Risk
Management function
3rd line of defence is Internal Audit and Internal Audit
function
The 1st line consists of the Business Management:
The business areas are responsible for the daily risk
management and for carrying out every day work
based on Tryg’s policies and instructions regarding the
management of risks and are responsible for being
compliant with both internal and external require-
ments. This means that there must be procedures and
guidelines in place for vital areas, and that internal
controls are carried out in such a way that risks are
identified in a timely manner and necessary risk miti-
gation activities are implemented.
The 2nd line consists of the Compliance, Actuarial
and Risk Management function: The compliance
function has the overall responsibility for overseeing
and monitoring compliance with applicable laws and
legislation as well as internal policies and guidelines.
The key responsibility of the actuarial function is to
ensure and assess the adequacy of the provisions. The
risk management function is responsible for the facil-
itation, monitoring and implementation of effective
risk management practices and reporting of adequate
risk-related information throughout the organisation.
The risk management function ensures a consistent
approach to risk identification across the organisation,
risk assessment of the most significant risks at Group
level and reporting to the Supervisory Board. The risk
management function consists of a Group risk man-
agement department and decentralized risk managers
in the individual business areas. The decentralized risk
managers are anchored in the respective business are-
Annual report 2021 | Tryg A/S | 67
Financial statements - Contents
Notes
as, and also have a dotted reporting line into the Group
risk management. The decentralized risk managers are
responsible for carrying out the activities of the risk
management function in their respective business ar-
eas including the monitoring and reporting of second
line internal controls.
Furthermore, the function prepares specific rec-
ommendations in relation to capital management,
reinsurance, investment risk management and more.
Tryg’s risk management function is also responsi-
ble for determining the company’s solvency capital
requirement.
The functions in the second line of defence must have
an overview of business processes and risks across the
organisation.
The 3rd line consists of internal audit: The third line
must ensure an independent and objective audit of
the organization’s internal controls, risk management
and governance processes. Internal audit reports
independently to the Supervisory Board and to its
Audit Committee.
The Supervisory Board has organised their own Risk
Committee consisting of 4 members of the Supervi-
sory Board. In addition to these 4 members, the Chief
Financial Officer, Chief Risk Officer and the General
Counsel (in Capacity as overseeing the Compliance
function) are part of the Committee. The Supervisory
Board’s Risk Committee was established to ensure
that all risk and capital related topics are discussed
thoroughly before discussed in the Supervisory Board.
The Supervisory Board meets minimum 4 times
annually.
Capital management
Tryg’s capital management is based on the key busi-
ness objectives:
• A solid capital base, supporting both the statutory
requirements and a single ‘A’ rating from Moody’s.
• Support of a steadily increasing nominal dividend
per share, with a payout ratio in the interval 60-90%
(of operating earnings)
Tryg’s capital base currently consist of Tier 1 and 2
capital, such as shareholders’ equity and subordinated
loans.
The capital base is continuously measured against
the capital requirement calculated on the basis of
Tryg’s partial internal model, where insurance risks are
modelled using an internal model, while other risks are
described using the standard formula.
The model calculates Tryg’s capital requirement with
99.5% solvency level with a 1-year horizon, which
means that Tryg will be able to fulfil its obligations in
199 out of 200 years. The partial internal model has
been used for a number of years, and was approved
by the Danish Financial Supervisory Authority (DFSA)
in December 2015. A major model change was last
approved by DFSA in April 2020.
Monitoring of the capital base also involves capital
projections based on expected business plans within
the strategic planning period and selected stress
scenarios.
Company’s Own Risk and
Solvency Assessment (ORSA)
ORSA is the company’s own risk assessment based
on the Solvency II principles, which implies that Tryg
must assess all material risks that the company is or
may be exposed to. The ORSA report also contains an
assessment of whether the calculation of solvency
capital requirement is reasonable and is reflecting
Tryg’s actual risk profile.
Tryg’s risk activities are implemented via continuous
risk management processes, where the main results
are reported to the Supervisory Board and its Risk
Committee during the year. Therefore, the ORSA
report is an annual summary document assessing all
these processes.
Insurance risk
Insurance risk comprises two main types of risks:
Underwriting risk and reserving risk.
Underwriting risk
Underwriting risk is the risk that insurance premiums
will not be sufficient to cover the compensations and
other costs associated with the insurance business.
Underwriting risk is managed primarily through the
company’s insurance policy defined by the Super-
visory Board, and administered through business
procedures, underwriting guidelines etc. Underwriting
risk is assessed in Tryg’s capital model, determining
the capital impact from insurance products.
Reinsurance is used to reduce the underwriting risk
in situations where this cannot be achieved to a
sufficient degree via ordinary diversification. The main
components of the reinsurance programme as of
January 1, 2022 are:
• In case of major events involving damage to build-
ings and contents, Tryg’s reinsurance programme
provides protection for up to DKK 8.5bn, which
statistically is sufficient to cover at least a 250-year
event. Retention for such events is DKK 200m.
• In the event of a frequency of natural disasters, Tryg
is covered for up to DKK 600m, after total annual
retention of DKK 300m.
• Tryg has also taken out reinsurance for the risk of
large claims occurring in sectors with very large
sums insured. Tryg’s largest individual building
and contents risks are covered by up to DKK 2bn.
Retention for large claims is DKK 150m, gradually
dropping to DKK 50m. Single risks exceeding DKK
2bn are covered individually.
• Tryg has combined the minimum cover of other
sectors into a joint cover with retention of DKK
100m for the first claim, 50m for the second claim,
and DKK 25m for subsequent claims.
For the individual sectors, individual cover has
subsequently been taken out as needed. The use of re-
insurance creates a natural counterparty risk. This risk
is handled by applying a wide range of reinsurers with
a suitable rating and adequate capital level as defined
by the Supervisory Board.
Reserving risk
Reserving risk relates to the risk of Tryg’s insurance
provisions being inadequate. The Supervisory Board
lays down the overall framework for the handling of
reserving risk in the insurance policy, while the overall
risk is measured in the capital model. The uncertainty
associated with the calculation of claims reserves
affects Tryg’s results through the run-off on reserves.
Long-tailed reserves in particular are subject to inter-
est rate and inflation risk. Interest rate risk is hedged by
means of Tryg’s match portfolio which corresponds to
the discounted claims reserves. In order to manage the
inflation risk of Danish workers’ compensation claims
reserves, Tryg has bought zero coupon inflation swaps.
Tryg determines the claims reserves via statistical
methods as well as individual assessments.
At the end of 2021, Tryg’s claims reserves net of
reinsurance totalled DKK 24,355m with an average
duration of approximately 4.6 years.
Investment risk
The overall framework for managing investment risk is
defined by the Supervisory Board in Tryg’s investment
policy. In overall terms, Tryg’s investment portfolio is
divided into a match portfolio and a free portfolio. The
match portfolio corresponds to the value of the dis-
counted claims reserves and is designed to hedge the
interest rate sensitivity of these as closely as possible.
Tryg carries out daily monitoring, follow-up and risk
management of the Group’s interest rate risk.
The free portfolio is subject to the framework defined
by the Supervisory Board through the investment pol-
icy. The purpose of the free portfolio is to achieve the
highest possible return relative to risk. Tryg’s property
portfolio constitutes the company’s largest invest-
ment risk. The Property portfolio comprises primarily
well-diversified and liquid property investment funds,
but also a small proportion of directly held investment
properties, the value of which is adjusted based on the
conditions on the property market through internal
valuations backed by external valuations. At the end
of 2021, investment properties accounted for 7.9%
Annual report 2021 | Tryg A/S | 68
Financial statements - Contents
Notes
(including property funds) and Tryg’s equity portfolio
accounted for 6.3% of the total investment assets.
Tryg does not want to speculate in foreign currency,
but since Tryg invests and operates its insurance busi-
ness in other currencies than Danish kroner, Tryg is
exposed to currency risk. Tryg is primarily exposed to
fluctuations in the other Scandinavian currencies due
to its ongoing insurance activities. Premiums earned
and claims paid in other currencies create a natural
currency hedge, for which reason other risk mitigation
measures are not required in this area. However, the
part of equity held in other currencies than Danish kro-
ner will be exposed to currency risk. This risk is hedged
on an ongoing basis using currency swaps.
In addition to the above-mentioned risks, Tryg is ex-
posed to credit, counterparty and concentration risk.
These risks primarily relate to exposures in high-yield
bonds, emerging market debt exposures as well as
Tryg’s investments in AAA-rated Nordic and European
government and mortgage bonds. These risks are
also managed through the investment policy and the
framework for reinsurance defined in the insurance
policy.
For a non-life insurance company like Tryg, liquidity
risk is practically non-existent, as premium payments
fall due before claims payments. The only significant
assets on Tryg’s balance sheet, which by nature is
somewhat illiquid, are the property portfolio.
Operational risk
Operational risk relates to errors or failures in internal
procedures, fraud, breakdown of infrastructure, IT secu-
rity and similar factors. As operational risks are mainly
internal, Tryg focuses on an adequate control environ-
ment for its operations. In practice, this work is organ-
ised by means of procedures, controls and guidelines
covering the various aspects of the Group’s operations.
The Supervisory Board defines the overall framework
for managing operational risk in Tryg’s Operational risk
policy and in the Information Security Policy.
A special crisis management structure is set up to deal
with the eventuality that Tryg is hit by major crises.
This comprises a Crisis Management Team at Group
level, national contingency teams at country level and
finally business contingency teams in the individual
areas. Tryg has prepared contingency plans to address
the most important areas. In addition, comprehensive
IT contingency plans have been established, primarily
focusing on the business critical systems.
Other risks
Strategic risk
The strategic risk is the risk of loss as a result of Tryg’s
chosen strategic position. The strategic position
covers both business transactions, IT strategy, choice
of business partners and changed market conditions.
Tryg’s strategic position is determined by Tryg’s Super-
visory Board in close collaboration with the Executive
Board. Before determining the strategic position, the
strategic decisions are subject to a risk assessment,
explaining the risk of the chosen strategy to Tryg’s
Supervisory Board and Executive Board.
Compliance risk
Compliance risk is the risk of loss as a result of lack of
compliance with rules, regulations, market standards
or internal guidelines. The handling of compliance risk
is coordinated centrally via the Compliance function,
which, among other things, sits on industry commit-
tees in connection with legislative monitoring, ensures
implementation of regulation in Tryg through business
procedures, provides ongoing training in compliance
matters and performs compliance controls within the
organisation. Compliance risks and the result of the
performed compliance controls are reported to the
Supervisory Board’s Risk Committee.
Sensitivity analysis
DKKm 2021 2020
Insurance risk
Effect of 1% change in:
Combined ratio (1 percentage point) +/-241 +/-226
Major events -150 -100
Catastrophe event up to DKK 7,250m -200 -183
Reserving risk
1% change in inflation on person-related lines of business
a)
+/- 400 +/- 411
10% error in the assessment of long-tailed lines of business
(workers' compensation, motor liability, liability, accident) +/- 1,745 +/- 1,753
Investment risk
Interest rate market
Effect of 1 % increase in interest curve:
NOK:
Impact of interest-bearing securities -183 -167
Higher discounting of claims provisions 178 176
Net effect of interest rate rise -5 8
SEK:
Impact of interest-bearing securities -152 -156
Higher discounting of claims provisions 192 201
Net effect of interest rate rise 40 45
DKK, EUR and Other:
Impact of interest-bearing securities -813 -834
Higher discounting of claims provisions 734 694
Net effect of interest rate rise -78 -140
Equity market
15 % decline in equity market -516 -471
Impact of derivatives and related thereto 18 -11
Real estate market
15 % decline in real estate markets -508 -294
Currrency market
Equity:
15 % decline in exposed currency (exclusive of EUR) relative to DKK -1,237 -1,485
Impact of derivatives 1,226 1,486
Net impact of exchange rate decline -11 1
Technical result per year:
Impact of 15% change in NOK and SEK exchange rates relative to DKK +/- 183 +/- 121
a) Including the effect of the zero coupon inflation swap
Annual report 2021 | Tryg A/S | 69
Financial statements - Contents
Notes
Emerging risk
Emerging risk covers both new risks and already
known risks, with changing characteristics. The man-
agement of this type of risk is handled in the individual
business areas, which monitor the market and adapt
the products as the conditions change. In the event of
a change in insurance terms, it is ensured that Tryg’s
reinsurance cover is consistent with the new condi-
tions. Emerging risk is also a part of the systematically
implemented risk identification process in Tryg.
Liquidity risk
Liquidity risk is the risk of loss as a result of not
being able to meet payments when they fall due. In
insurance companies the liquidity risk is very limited
as premiums are paid prior to the beginning of the risk
period. The majority of Trygs investment portfolio are
placed in AAA or AA rated bonds which can be either
sold or repoed in a short time span.
Provisions for claims
Gross (DKKm) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Estimated accumulated claims
End of year 15,747 13,306 13,712 12,554 14,547 12,725 12,558 13,613 16,112 16,918 17,373
1 year later 16,126 13,382 13,974 12,874 14,488 12,602 12,682 15,377 16,127 16,734
2 year later 16,185 13,340 13,634 12,693 14,442 12,517 14,181 15,360 16,091
3 year later 16,138 13,155 13,469 12,589 14,362 14,033 14,100 15,368
4 year later 15,964 12,894 13,443 12,505 15,748 14,016 14,092
5 year later 15,997 12,812 13,319 13,760 15,731 13,983
6 year later 15,864 12,702 14,542 13,497 15,694
7 year later 15,681 13,925 14,397 13,429
8 year later 17,406 13,823 14,361
9 year later 17,109 13,766
10 year later 17,004
17,004 13,766 14,361 13,429 15,694 13,983 14,092 15,368 16,091 16,734 17,373 167,894
Cumulative payments to date -16,442 -13,032 -13,555 -12,660 -14,756 -12,907 -12,824 -13,639 -13,422 -12,362 -9,012 -144,611
Provisions before discounting,
end of year 562 734 806 769 938 1,076 1,268 1,729 2,668 4,371 8,362 23,284
Discounting -40 -36 -48 -44 -49 -57 -61 -71 -94 -121 -151 -772
Reserves from 2010 and prior years 3,075
Gross provisions for claims, end of year 25,587
The amounts in foreign currency in the table are translated to Danish kroner using the exchange rate at 31 December 2021 to prevent the impact of exchange rate fluctuations.
Annual report 2021 | Tryg A/S | 70
Financial statements - Contents
Notes
Provisions for claims (continued)
Ceded business (DKKm) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Estimated accumulated claims
End of year 1,447 220 1,131 270 2,071 201 286 625 370 733 535
1 year later 2,128 249 1,476 305 1,877 253 393 670 454 794
2 year later 2,248 286 1,258 299 1,909 245 387 698 477
3 year later 2,286 279 1,252 295 1,885 244 398 709
4 year later 2,234 267 1,269 316 1,915 241 369
5 year later 2,228 256 1,301 313 1,929 241
6 year later 2,233 269 1,350 315 1,921
7 year later 2,618 268 1,305 315
8 year later 2,611 341 1,303
9 year later 2,612 341
10 year later 2,613
2,613 341 1,303 315 1,921 241 369 709 477 794 535 9,618
Cumulative payments to date -2,614 -265 -1,247 -303 -1,902 -234 -327 -646 -314 -508 -91 -8,452
Provisions before discounting,
end of year 0 76 56 12 19 6 42 63 163 287 443 1,166
Discounting 0 0 0 0 0 0 0 0 -3 -1 -1 -5
Reserves from 2010 and prior years 71
Provisions for claims, end of year 1,232
The amounts in foreign currency in the table are translated to Danish kroner using the exchange rate at 31 December 2021 to prevent the impact of exchange rate fluctuations.
Annual report 2021 | Tryg A/S | 71
Financial statements - Contents
Notes
Provisions for claims (continued)
Net of reinsurance (DKKm) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Estimated accumulated claims
End of year 14,300 13,086 12,581 12,284 12,476 12,524 12,272 12,988 15,742 16,185 16,839
1 year later 13,997 13,133 12,498 12,569 12,611 12,350 12,290 14,707 15,673 15,939
2 year later 13,936 13,054 12,376 12,394 12,533 12,272 13,794 14,662 15,614
3 year later 13,851 12,876 12,216 12,294 12,477 13,789 13,702 14,658
4 year later 13,731 12,628 12,175 12,189 13,834 13,775 13,724
5 year later 13,769 12,556 12,018 13,446 13,802 13,742
6 year later 13,631 12,434 13,192 13,182 13,773
7 year later 13,063 13,657 13,092 13,114
8 year later 14,795 13,482 13,058
9 year later 14,498 13,425
10 year later 14,391
14,391 13,425 13,058 13,114 13,773 13,742 13,724 14,658 15,614 15,939 16,839 158,277
Cumulative payments to date -13,829 -12,767 -12,308 -12,357 -12,854 -12,672 -12,497 -12,993 -13,108 -11,855 -8,921 -136,160
Provisions before discounting,
end of year 562 658 750 757 919 1,070 1,226 1,666 2,506 4,085 7,919 22,117
Discounting -40 -36 -48 -44 -49 -57 -61 -71 -91 -120 -150 -766
Reserves from 2010 and prior years 3,004
Provisions for claims, net of reinsurance, end of the year 24,355
The amounts in foreign currency in the table are translated to Danish kroner using the exchange rate at 31 December 2021 to prevent the impact of exchange rate fluctuations.
Annual report 2021 | Tryg A/S | 72
Financial statements - Contents
Notes
Expected cash flow, not discounted
DKKm 0-1 year 1-2 years 2-3 years > 3 years Total
2021
Claims provisions, gross 8,950 4,227 2,645 10,714 26,537
Claims provisions, ceded -700 -272 -130 -137 -1,239
8,251 3,955 2,516 10,578 25,299
2020
Claims provisions, gross 8,301 3,930 2,489 10,546 25,266
Claims provisions, ceded -610 -223 -118 -135 -1,086
7,691 3,707 2,371 10,411 24,181
Annual report 2021 | Tryg A/S | 73
Financial statements - Contents
Notes
DKKm 2021 2020
Investment risk
The notes below are based on Tryg's investment portfolio without the external customers share
Bond portfolio including interest derivatives
Duration 1 year or less 17,152 14,216
Duration 1 - 5 years 11,364 13,820
Duration 5 - 10 years 5,352 6,571
Duration more than 10 years 3,698 3,152
Total 37,566 37,760
Duration 3.1 3.8
The option adjusted duration is used to measure duration. The option adjustment relates primarily to Danish
mortgage bonds and reflects the expected duration-shortening effect of the borrower's option to cause the
bond to be redeemed through the mortgage institution at any point in time.
Shares
Nordic countries 73 79
Europe ex. Nordic contries 442 314
North America 1,684 2,162
Others 1,108 643
Total 3,307 3,196
Tryg’s share exposure includes exposure from share derivatives of DKK -117 (DKK 69m in 2020) and excluding
shares related to propertiy exposure. Unlisted equity investments are based on an estimated market price. UK is
included in Europe ex. Nordic countries.
Exposure to exchange rate risk
2021 2020
Assets
and debt Hedge Exposure
Assets
and debt Hedge Exposure
USD 5,114 -5,041 74 5,318 -5,314 3
EUR
a)
2,105 -709 1,396 2,287 -2,658 372
GBP 308 -300 8 230 -221 9
NOK 2,711 -2,703 7 3,740 -3,749 9
SEK -495 484 11 497 -496 1
Other 637 -616 21 446 -454 9
Total 1,516 403
a) Due to correlation between DKK and EUR the exposure limit is higher than all other currencies.
DKKm
Credit risk 2021 2020
Bond portfolio by ratings DKKm % DKKm %
AAA 33,323 89.1 33,515 91.7
AA 764 2.0 274 0.8
A 1,036 2.8 587 1.6
BBB 736 2.0 868 2.4
BB 424 1.1 476 1.3
B or lower 1,121 3.0 828 2.3
Total 37,403 100.0 36,548 100.0
Reinsurance balances
AAA to A 1,207 86.8 969 84.5
Not rated 183 13.2 178 15.5
Total 1,390 100.0 1,147 100.0
Liquidity risk
Maturity of the Group’s financial obligations including interest
2021 0-1 year 1-5 years > 5 years Total
Subordinated loan capital 110 439 5,172 5,720
Amounts owed to credit institutions 835 0 0 835
Debt relating to unsettled funds transactions and
repos 2,417 0 0 2,417
Other debt 8,248 0 0 8,248
Total 11,609 439 5,172 17,220
2020 0-1 year 1-5 years > 5 years Total
Subordinate loan capital 95 382 3,756 4,233
Amounts owed to credit institutions 1,191 0 0 1,191
Debt relating to unsettled funds transactions and
repos 3,259 0 0 3,259
Other debt 6,907 0 0 6,907
Total 11,453 382 3,756 15,591
Interest on loans for a perpetual term has been recognised for the first fifteen years.
Annual report 2021 | Tryg A/S | 74
Financial statements - Contents
Notes
Subordinated loan capital
Bond loan
NOK 800m
Bond loan
NOK 1,400m
Bond loan
SEK 1,000m
DKKm 2021 2020 2021 2020 2021
a)
2020
Amortised cost value of the loan recognised in
statement of financial position 596 563 1,042 985 - 738
The fair value of the loan at the statement of finan-
cial position date 616 589 1,103 1,027 - 745
The fair value of the loan at the statement of finan-
cial position date is based on a price of 103 105 106 104 - 101
Total capital losses and costs at the statement of
the financial position date 1 1 2 2 - 2
Interest expenses for the year 25 26 33 36 8 21
Effective interest rate 4.1% 4.6% 3.2% 3.6% 6.9% 2.8%
Loan terms:
Lender Listed bonds Listed bonds Listed bonds
Principal NOK 800m NOK 1,400m SEK 1,000m
Issue price 100 100 100
Issue date March 2013 November 2015 May 2016
Maturity year Perpetual 2045 2046
Loan may be called by lender as from 2023 2025 2021
Repayment profile Interest-only Interest-only Interest-only
Interest structure 3.75 % above NIBOR 3M (until 2023) 2.75 % above NIBOR 3M (until 2025) 2.75 % above STIBOR 3M (until 2026)
4.75 % above NIBOR 3M (from 2023) 3.75 % above NIBOR 3M (from 2025) 3.75 % above STIBOR 3M (from 2026)
a) Cancelled in 2021
The share of subordinated loan capital included in
Own Funds totals DKK 4,453m (DKK 2,663m in
2020).
The loans are initially recognised at fair value on the
date on which a loan is entered and subsequently
measured at amortised cost.
The loans are taken by Tryg Forsikring A/S. The credi-
tors have no option to call the loans before maturity or
otherwise terminate the loan agreements. The loans
are automatically accelerated upon the liquidation or
bankruptcy of Tryg Forsikring A/S.
Prices used for determination of fair value in respect
of the loans are based on actual traded prices from
Bloomberg.
Annual report 2021 | Tryg A/S | 75
Financial statements - Contents
Notes
Subordinated loan capital (continued)
Bond loan
NOK 850m
Bond loan
SEK 1,300m
Bond loan
SEK 700m
DKKm 2021 2020 2021 2020 2021 2020
Amortised cost value of the loan recognised in
statement of financial position 633 - 942 - 506 516
The fair value of the loan at the statement of finan-
cial position date 631 - 944 - 515 521
The fair value of the loan at the statement of finan-
cial position date is based on a price of 100 - 100 - 101 101
Total capital losses and costs at the statement of
the financial position date 1 - 2 - 2 2
Interest expenses for the year 7 - 7 - 13 14
Effective interest rate 1.7% - 1.1% - 2.5% 2.6%
Loan terms:
Lender Listed bonds Listed bonds Listed bonds
Principal NOK 850m SEK 1,300m SEK 700m
Issue price 100 100 100
Issue date May 2021 May 2021 April 2018
Maturity year May 2051 May 2051 Perpetual
Loan may be called by lender as from 2027 2026 2023
Repayment profile Interest-only Interest-only Interest-only
Interest structure 1.25 % above NIBOR 3M (until 2031) 1.15 % above STIBOR 3M (until 2031) 2.5 % above STIBOR 3M
2.25 % above NIBOR 3M (from 2031) 2.15% above STIBOR 3M (from 2031)
Annual report 2021 | Tryg A/S | 76
Financial statements - Contents
Notes
Subordinated loan capital (continued)
Bond loan
SEK 1,000m
DKKm 2021 2020
Amortised cost value of the loan recognised in
statement of financial position 723 -
The fair value of the loan at the statement of financial position date 740 -
The fair value of the loan at the statement of financial position date is based on a price of 102 -
Total capital losses and costs at the statement of the financial position date 3 -
Interest expenses for the year 15 -
Effective interest rate 2.4% -
Loan terms:
Lender Listed bonds
Principal SEK 1,000m
Issue price 100
Issue date February 2021
Maturity year Perpetual
Loan may be called by lender as from 2026
Repayment profile Interest-only
Interest structure 2.4 % above STIBOR 3M
Annual report 2021 | Tryg A/S | 77
Financial statements - Contents
Notes
COVID-19
COVID-19 has continued to impact the world’s
economic trends and societies in general via
restrictions and lock-downs. From a business
perspective, Tryg’s figures were impacted es-
pecially at the beginning of the year with lower
than normal claims frequencies in travel and
motor insurance.
Towards the end of 2021, the impact was very
limited despite the outbreak of the Omicron
variant.
Valuation of investments assets
Total financial investment assets are measured
at fair value with value adjustment in the income
statement. Listed bonds and shares, parts of
unit trusts as well as part of derivative financial
instruments are measured at quoted market
prices or consolidated references prices at the
balance sheet date.
The valuation of the investment assets can be
distributed in the fair value hierarchy model,
which is determined in accordance with IFRS 13.
The model distributes the total investments as-
sets based on the price at which the investment
assets are set. Reference is made to note 15 for
further description of the fair value hierarchy.
The main part of Tryg’s investment assets are
classified as level 1 and 2 and are valuated based
on quoted market prices or consolidated refer-
ences prices. This involves the bonds portfolio,
the main part of shares and unit trust units as
well as the statement of financial instruments.
Assets, which can be classified as level 3, can be
attributed to unlisted assets, specific unlisted
unit trusts and investment property. As these
investment assets are not valued based on
observable input, there will be a discretionary
element in this hierarchy.
On 31 December 2021, the value amounts to
DKK 1,114m (DKK 1,186m on 31 December
2020).
Claims provisions
The volatility introduced by the outbreak of COV-
ID-19 affects some of Trygs claims provisions,
particularly travel insurance but also several oth-
er insurance products due to significant changes
in behavior. The effects are incorporated in Trygs
reserving models.
The statistical uncertainty related to these
changes is insignificant compared to the total
provisions and balance sheet.
Exchange rates
Tryg has business in three different Nordic
countries meaning that Tryg is exposed to fluc-
tuations in the local currencies (NOK and SEK) in
regard to the financial results.
Tryg has chosen to implement a currency hedge
strategy that focuses on mitigating the curren-
cies impact on the financial results. This means
that the impact on the P/L of changes in local
currencies is limited.
The shareholders’ equity, due to the currency
hedge strategy, is not sensitive to changes in the
local currencies.
Impairment of intangibles
COVID-19 has not have any affect on the
assumptions related to impairment of Goodwill,
Trademarks and Brand. Reference is made to
note 11 for further description on Impairment
test.
Annual report 2021 | Tryg A/S | 78
Financial statements - Contents
Notes
Description of segments
Please refer to the accounting policies for a descrip-
tion of operating segments.
a) Credit & surety insurance has been transferred from
the Corporate segment to the Commercial segment
in 2021. Comparative figures have been restated
accordingly.
b) One-off items are included under ’Other’
Other assets and liabilities are managed at Group level
and are not allocated to the individual segments but
are included under ’Other’.
Costs are allocated according to specific keys, which
are believed to provide the best estimate of assessed
resource consumption.
DKKm Private Commercial
a)
Corporate
a)
Sweden Other
b)
Group
2 Operating segments
2021
Gross premium income 13,685 5,294 3,457 1,701 0 24,137
Gross claims -9,377 -3,334 -2,423 -1,141 1 -16,275
Gross operating expenses -1,803 -913 -396 -284 1 -3,394
Profit/loss on ceded business -270 -191 -273 3 0 -731
Insurance technical interest, net of reinsurance -16 -7 -4 -2 0 -29
Technical result 2,219 850 361 277 2 3,709
Investment return and Other income and
costs 384
Profit/loss before tax 4,093
Tax and other items - 935
Profit/loss 3,158
Run-off gains/losses, net of reinsurance 136 309 282 235 1 963
Intangible assets 5,549 60 0 521 895 7,025
Equity investments in associates 37,067 37,067
Reinsurers' share of premium provisions 55 33 174 0 0 262
Reinsurers' share of claims provisions 47 377 806 1 0 1,232
Other assets 54,993 54,993
Total assets 100,580
Premium provisions 2,820 1,451 990 923 0 6,183
Claims provisions 6,906 7,573 8,249 2,859 0 25,587
Provisions for bonuses and premium discounts 1,615 102 4 97 0 1,818
Other liabilities 17,983 17,983
Total liabilities 51,572
Annual report 2021 | Tryg A/S | 79
Financial statements - Contents
Notes
Description of segments
Please refer to the accounting policies for a descrip-
tion of operating segments.
a) Credit & surety insurance has been transferred from
the Corporate segment to the Commercial segment
in Q1 2021. Comparative figures have been restat-
ed accordingly.
b) One-off items are included under ’Other’
Other assets and liabilities are managed at Group level
and are not allocated to the individual segments but
are included under ’Other’.
Costs are allocated according to specific keys, which
are believed to provide the best estimate of assessed
resource consumption.
DKKm Private Commercial
a)
Corporate
a)
Sweden Other
b)
Group
2 Operating segments (continued)
2020
Gross premium income 12,743 4,930 3,376 1,604 0 22,653
Gross claims -8,883 -3,167 -2,311 -1,067 -9 -15,437
Gross operating expenses -1,727 -831 -367 -269 -7 -3,202
Profit/loss on ceded business -76 -130 -294 1 0 -499
Insurance technical interest, net of reinsurance -12 -5 -2 -1 0 -20
Technical result 2,045 798 401 268 -16 3,495
Investment return and Other income and
costs 45
Profit/loss before tax 3,541
Tax and other items - 768
Profit/loss 2,773
Run-off gains/losses, net of reinsurance 120 348 436 249 -9 1,145
Intangible assets 5,677 60 0 533 854 7,124
Equity investments in associates 16 16
Reinsurers' share of premium provisions 50 24 216 0 0 291
Reinsurers' share of claims provisions 140 330 604 12 0 1,087
Other assets 52,398 52,398
Total assets 60,916
Premium provisions 2,747 1,364 943 983 0 6,036
Claims provisions 6,348 7,306 8,406 2,896 0 24,957
Provisions for bonuses and premium discounts 1,303 118 5 69 0 1,495
Other liabilities 16,164 16,164
Total liabilities 48,651
Annual report 2021 | Tryg A/S | 80
Financial statements - Contents
Notes
DKKm 2021 2020 2019 2018 2017
2 Geographical segments
Danish general insurance
Gross premium income 14,326 13,902 13,126 10,375 9,567
Technical result 2,448 2,694 2,595 1,986 1,767
Run-off gains/losses, net of reinsurance 644 639 717 714 451
Key ratios
Gross claims ratio 66.2 65.5 64.9 61.4 64.3
Net reinsurance ratio 2.0 1.1 1.5 5.4 3.6
Claims ratio, net of ceded business 68.2 66.6 66.4 66.8 67.9
Gross expense ratio 14.4 13.9 13.6 13.9 13.4
Combined ratio 82.7 80.4 80.0 80.7 81.3
Run-off, net of reinsurance (%) -4.5 -4.6 -5.5 -6.9 -4.7
Number of full-time employees, end of period 3,062 2,826 2,622 2,501 1,928
Norwegian general insurance
NOK/DKK, average rate for the period 72.92 69.63 75.80 77.53 79.99
Gross premium income 7,263 6,411 6,472 6,302 6,272
Technical result 938 473 469 791 770
Run-off gains/losses, net of reinsurance 215 247 283 520 422
Key ratios
Gross claims ratio 69.1 75.3 73.7 72.6 67.9
Net reinsurance ratio 5.0 3.4 5.1 1.2 5.3
Claims ratio, net of ceded business 74.1 78.7 78.8 73.8 73.2
Gross expense ratio 13.1 14.1 14.4 13.9 14.7
Combined ratio 87.2 92.7 93.1 87.7 87.9
Run-off, net of reinsurance (%) -3.0 -3.9 -4.4 -8.3 -6.7
Number of full-time employees, end of period 1,139 1,099 1,083 1,105 1,042
Annual report 2021 | Tryg A/S | 81
Financial statements - Contents
Notes
DKKm 2021 2020 2019 2018 2017
2 Geographical segments
Swedish general insurance
SEK/DKK, average rate for the period 73.39 70.95 70.62 72.67 77.24
Gross premium income 2,390 2,234 2,120 2,073 2,121
Technical result 279 331 169 94 236
Run-off gains/losses, net of reinsurance 113 274 205 -9 101
Key ratios
Gross claims ratio 71.4 65.8 74.0 82.3 69.0
Net reinsurance ratio 2.2 4.0 2.0 -1.7 5.0
Claims ratio, net of ceded business 73.6 69.9 75.9 80.6 74.0
Gross expense ratio 14.6 15.3 16.1 14.6 14.5
Combined ratio 88.3 85.1 92.0 95.2 88.5
Run-off, net of reinsurance (%) -4.7 -12.3 -9.7 0.4 -4.8
Number of full-time employees, end of period 431 441 419 402 398
Other
a)
Gross premium income 159 105 24 -10 3
Technical result 43 -3 4 -105 16
Run-off gains/losses, net of reinsurance -8 -15 -12 -4 -2
Number of full-time employees, end of period 42 33 28 19 5
Tryg (total)
Gross premium income 24,137 22,653 21,741 18,740 17,963
Technical result 3,709 3,495 3,237 2,766 2,789
Investment return 1,008 311 579 -332 527
Other income and costs -624 -265 -188 -172 -77
Profit/loss before tax 4,093 3,541 3,628 2,262 3,239
Run-off gains/losses, net of reinsurance 963 1,145 1,194 1,221 972
Key ratios
Gross claims ratio 67.4 68.1 68.3 67.4 66.1
Net reinsurance ratio 3.0 2.2 2.6 3.3 4.3
Claims ratio, net of ceded business 70.5 70.3 70.9 70.7 70.4
Gross expense ratio 14.1 14.1 14.2 14.4 14.0
Combined ratio 84.5 84.5 85.1 85.1 84.4
Run-off, net of reinsurance (%) -4.0 -5.1 -5.5 -6.5 -5.4
Number of full-time employees, end of period 4,674 4,400 4,151 4,027 3,373
a) Comprises Finnish, Dutch, Austrian, Swiss, Bel-
gium and German Credit & surety insurance and
amounts relating to one-off items.
Annual report 2021 | Tryg A/S | 82
Financial statements - Contents
Notes
2 Technical result, net of reinsurance, by line of business
DKKm Accident and health Health care
Worker's
compensation Motor TPL
Motor comprehensive
insurance
Marine, aviation and
cargo insurance
2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Gross premiums written 2,989 2,736 633 574 954 921 2,033 1,917 5,748 5,136 234 201
Gross premium income 2,751 2,565 637 543 933 934 2,010 1,874 5,458 4,897 228 219
Gross claims - 1,844 - 1,400 - 506 - 467 - 681 - 496 - 1,251 - 1,468 - 3,616 - 3,380 - 94 - 67
Gross operating expenses - 409 - 378 - 75 - 53 - 116 - 88 - 291 - 287 - 747 - 691 - 34 - 34
Profit/loss on ceded business - 11 - 7 0 0 - 14 - 22 - 29 - 36 - 88 - 53 - 33 - 37
Insurance technical interest,
net of reinsurance - 3 - 3 - 1 - 1 8 - 1 2 - 1 - 6 - 4 0 0
Technical result 484 777 55 22 130 327 441 82 1,001 769 67 81
Gross claims ratio 67.0 54.6 79.4 86.0 73.0 53.1 62.2 78.3 66.3 69.0 41.2 30.6
Combined ratio 82.3 69.6 91.2 95.8 86.9 64.9 78.2 95.6 81.6 84.2 70.6 63.0
Claims frequency
a)
4.4% 3.8% 63.2% 68.8% 16.3% 18.1% 5.7% 5.4% 23.4% 20.5% 16.6% 15.8%
Average claims DKK
b)
21,155 21,326 5,332 5,111 96,143 77,053 19,677 22,505 8,634 9,201 50,844 52,837
Total claims 89,800 78,286 103,853 94,689 10,238 10,742 87,435 79,347 423,792 364,832 2,147 1,882
DKKm
Fire and contents
(Private)
Fire and contents
(Commercial)
Change of
ownership
Liability
insurance
Credit and surety
insurance
Tourist assistance
insurance
2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Gross premiums written 6,150 5,788 2,903 2,816 0 0 1,356 1,179 651 553 1,006 996
Gross premium income 5,875 5,589 2,874 2,769 21 59 1,298 1,163 647 547 844 890
Gross claims - 4,195 - 3,976 - 1,930 - 1,568 2 - 17 - 1,006 - 968 - 308 - 384 - 360 - 788
Gross operating expenses - 759 - 791 - 465 - 430 - 6 - 7 - 212 - 192 - 96 - 81 - 120 - 125
Profit/loss on ceded business - 238 - 194 - 256 - 344 0 0 - 6 41 - 60 - 1 3 142
Insurance technical interest,
net of reinsurance - 21 - 6 - 5 - 2 0 0 - 1 - 2 - 1 0 - 2 - 1
Technical result 662 622 218 425 17 35 73 42 182 81 365 118
Gross claims ratio 71.4 71.1 67.2 56.6 -9.5 28.8 77.5 83.2 47.6 70.2 42.7 88.5
Combined ratio 88.4 88.8 92.2 84.6 19.0 40.7 94.3 96.2 71.7 85.2 56.5 86.6
Claims frequency
a)
9.9% 9.9% 16.9% 16.8% 3.7% 5.6% 10.9% 11.2% 0.0% 0.0% 9.4% 22.3%
Average claims DKK
b)
9,697 8,984 49,458 47,636 29,369 41,969 83,708 78,017 4,923,206 7,653,673 6,901 5,014
Total claims 445,872 442,157 35,556 34,352 521 1,060 11,533 11,500 63 55 63,963 156,604
a) The claims frequency is calculated as the number of claims incurred in the year in proportion to the average number of insurance contracts in the year.
b) Average claims are total claims before run-off in the year relative to the number of claims in the year.
Annual report 2021 | Tryg A/S | 83
Financial statements - Contents
Notes
a) Group Life, one-year policies related to Norwegian
Group Life and Alka Group Life.
2 Technical result, net of reinsurance, by line of business (continued)
DKKm Other insurance
Total exclusive of
Group Life
Group Life,
one-year policies
a)
Total
2021 2020 2021 2020 2021 2020 2021 2020
Gross premiums written 0 52 24,657 22,869 756 783 25,413 23,652
Gross premium income 0 54 23,576 22,103 561 550 24,137 22,653
Gross claims 0 4 - 15,789 - 14,975 - 486 - 462 - 16,275 - 15,437
Gross operating expenses 0 5 - 3,330 - 3,152 - 64 - 50 - 3,394 - 3,202
Profit/loss on ceded business 0 9 - 732 - 502 1 3 - 731 - 499
Insurance technical interest, net of
reinsurance 0 0 - 30 - 21 1 1 - 29 - 20
Technical result 0 72 3,695 3,453 13 42 3,709 3,495
Gross claims ratio 0.0 -7.4 67.0 67.8 86.6 84.0 67.4 68.1
Combined ratio 0.0 -33.3 84.2 84.3 97.9 92.5 84.5 84.5
Annual report 2021 | Tryg A/S | 84
Financial statements - Contents
Notes
DKKm 2021 2020
6 Insurance operating costs, net of reinsurance
Commissions regarding direct insurance contracts -223 -290
Other acquisition costs -2,432 -2,243
Total acquisition costs -2,655 -2,532
Administration expenses -739 -669
Insurance operating costs, gross -3,395 -3,202
Commission from reinsurers 258 170
-3,137 -3,032
Fees to the auditors appointed by the annual general meeting:
PwC (Deloitte was auditors until 26 March 2021), included in
administrative expenses -7 -9
PwC (Deloitte was auditors until 26 March 2021), included in
the balance sheet 0 -78
-7 -87
The fee is divided into:
Statutory audit -4 -5
Other audit assignments -1 0
Tax advice 0 -1
Other services -2 -81
-7 -87
Expenses have been incurred for
the Group´s Internal Audit Department. -9 -9
Fees for non-audit services provided by PricewaterhouseCoopers to the Group amount to DKK 3m
(Deloitte DKK 82m in 2020) and consist of various declaration tasks required by law, mainly related to
review of interim balances (DKK 1m) and other services related to comfort letter regarding capital no-
tes, general accounting advice and consulting services (DKK 2m).
DKKm 2021 2020
3 Premium income, net of reinsurance
Direct insurance 25,304 23,388
Indirect insurance 65 53
25,369 23,441
Unexpired risk provision 0 24
25,369 23,465
Ceded direct insurance -1,601 -1,467
23,768 21,998
Direct insurance, by location of risk 2021 2020
Gross Ceded Gross Ceded
Denmark 15,404 -762 14,606 -632
Other EU countries 2,572 -281 2,363 -282
Other countries
a)
7,328 -558 6,443 -553
25,304 -1,601 23,412 -1,467
a) Primarily Norway
2021 2020
4 Insurance technical interest, net of reinsurance
Return on insurance provisions 62 37
Discounting transferred from claims provisions -91 -57
-29 -20
5 Claims, net of reinsurance
Claims -17,224 -16,567
Run-off previous years, gross 949 1,130
-16,275 -15,437
Reinsurance cover received 598 785
Run-off previous years, reinsurers' share 14 15
-15,663 -14,637
Annual report 2021 | Tryg A/S | 85
Financial statements - Contents
Notes
DKKm 2021 2020
6 Insurance operating costs, gross, classified by type (continued)
Commissions -223 -290
Staff expenses -2,212 -1,971
Other staff expenses -126 -137
Office expenses, fees and headquarter expenses -798 -739
IT operating and maintenance costs, software expenses -247 -287
Depreciation, amortisation and impairment losses and write-downs -107 -106
Other income 318 328
-3,395 -3,202
Please refer to note 12 and 23 regarding lease recognised costs according to IFRS 16
Total staff expenses recognized in income statement:
Salaries and wages -3,167 -2,776
Commision -7 -2
Allocated conditional and matching shares -55 -38
Pension plans
a)
-427 -259
Other social security costs -7 -7
Payroll tax -623 -528
-4,286 -3,610
a) In 2021 defined benefit plans were included with DKK 0m (DKK 128m in 2020).
Remuneration for the Supervisory Board and Executive Board is disclosed in note 27 'Related parties'.
Average number of full-time employees during the year
(continuing business) 4,544 4,278
Annual report 2021 | Tryg A/S | 86
Financial statements - Contents
Notes
Matching shares
In accordance with the Group’s remuneration policy
Tryg has on agreed terms allocated matching shares
for some employees.
Executive Board, Risk-takers and Other employees are
allocated one share in Tryg A/S for each share they
acquires in Tryg A/S at market rate for liquid cash at a
contractually agreed sum over deferral period of up to
4 years.
In 2021, the recognised fair value of matching shares
for the Group amounted to DKK 15m (DKK 17m
in 2020). At 31 December 2021, total fair value for
matching shares amounted to DKK 51m.
DKKm
6 Share-based payment
Matching shares Total Numbers Fair Value
2021
Executive
Board Risk-takers Other Total
Average value
per matching
share at grant
date DKK
Total value at
time of alloca-
tion DKKm
Value per
matching
share at 31
December
DKK
Total fair
value at 31
December
DKKm
Matching shares allocated in
2021 0 2,680 74,216 76,896 149 11 162 12
Allocated in 2011-2020 295,068 89,859 206,880 591,807 133 78 162 96
Category changes and addition 0 1,097 6,000 7,097 133 1 162 1
Cancelled -14,328 -7,476 -40,572 -62,376 133 -8 162 -10
Exercised -112,806 -45,487 -139,235 -297,528 133 -39 162 -48
Total 31.12.21 167,934 37,993 33,073 239,000 133 32 162 39
2020
Executive
Board Risk-takers Other Total
Average value
per matching
share at grant
date DKK
Total value at
time of alloca-
tion DKKm
Value per
matching
share at 31
December
DKK
Total fair
value at 31
December
DKKm
Matching shares allocated in
2020 52,015 809 37,897 90,721 203 18 192 17
Allocated in 2011-2019 243,053 89,050 168,983 501,086 120 60 192 96
Cancelled -14,328 -7,476 -40,572 -62,376 120 -7 192 -12
Exercised -108,059 -12,287 -109,356 -229,702 120 -28 192 -44
Total 31.12.20 120,666 69,287 19,055 209,008 120 25 192 40
Annual report 2021 | Tryg A/S | 87
Financial statements - Contents
Notes
DKKm
6 Share-based payment
Conditional shares Total Numbers Fair Value
2021
Executive
Board Risk-takers Other Total
Average value
per condi-
tional share at
grant date
DKK
Total value at
time of alloca-
tion DKKm
Value per con-
ditional share
at 31 Decem-
ber DKK
Total fair
value at 31
December
DKKm
Conditional shares allocated
in 2021 98,776 158,233 89,662 346,671 167 58 162 56
Allocated in 2018-2020 37,173 242,856 91,775 371,804 176 66 162 60
Category changes and addition 0 3,989 30,651 34,640 176 6 162 6
Cancelled 0 0 -8,231 -8,231 176 -1 162 -1
Exercised -5,613 -33,230 -56,105 -94,948 176 -17 162 -15
Total 31.12.21 31,560 213,615 58,090 303,265 176 53 162 49
2020
Executive
Board Risk-takers Other Total
Average value
per condi-
tional share at
grant date
DKK
Total value at
time of alloca-
tion DKKm
Value per con-
ditional share
at 31 Decem-
ber DKK
Total fair
value at 31
December
DKKm
Conditional shares allocated
in 2020 27,096 128,936 3,802 159,834 173 28 192 31
Allocated in 2018-2019 10,077 113,920 87,973 211,970 169 36 192 41
Additions, cancelled & exercised -5,613 -25,494 -35,502 -66,609 169 -11 192 -13
Total 31.12.20 4,464 88,426 52,471 145,361 169 25 192 28
Conditional shares
In accordance with the Group’s remuneration policy
Tryg has on agreed terms allocated conditional shares
for some employees.
Executive Board, Risk-takers and Other employees are
allocated shares in Tryg A/S if certain conditions are
fulfilled over a period of up to 4 years.
In 2021, the recognised fair value of conditional shares
for the Group amounted to DKK 40m (DKK 31m in
2020). At 31 December 2021, total fair value of condi-
tional shares amounted to DKK 105m..
Annual report 2021 | Tryg A/S | 88
Financial statements - Contents
Notes
DKKm 2021 2020
9 Other income and costs
Include income and costs which cannot be directly ascribed to
the insurance portfolio or investment assets.
Other income
Income related to the sale of pension products and car care 108 86
Other income 31 2
139 88
Other costs
Costs related to the sale of pension products and car care -102 -124
Depreciations of customer relations and trademarks -136 -135
Integration and restructuring costs related to RSA acquisition -349 0
Other costs -176 -95
-763 -354
-624 -265
10 Tax
Tax on accounting profit/loss -900 -779
Difference between Danish and foreign tax rates -156 15
Tax adjustment, previous years 105 12
Adjustment of non-taxable income and costs 35 -56
Change in valuation of tax assets -1 53
Other taxes -15 -13
-932 -768
Effective tax rate % %
Tax on accounting profit/loss 22.0 22.0
Difference between Danish and foreign tax rates 3.5 -0.5
Tax adjustment, previous years -2.5 1.5
Adjustment of non-taxable income and costs -1.0 -1.5
Other taxes 0.5 0.0
22.5 21.5
DKKm 2021 2020
7 Interest and dividends
Interest income and dividends
Dividends 112
66
Interest income, cash at bank and in hand 0
2
Interest income, bonds 422
437
Interest income, other 4
0
538
506
Interest expenses
Interest expenses subordinated loan capital, credit institutions
and cash at bank -107
-95
Interest expenses, other
a)
-75
-30
-182
-126
356
380
a) Hereof DKK 33m related to the RSA acquisition, please refer to note 26
8 Value adjustments
Value adjustments concerning financial assets or liabilities at
fair value with value adjustment in the income statement:
Equity investments 407
-153
Unit trust units 1,095
-358
Bonds -312
-233
Derivatives (Equity and Interest)
a)
-1,750
769
-560
25
Value adjustments concerning assets or liabilities that cannot
be attributed to IAS 39:
Investment property 64
4
Discounting 527
-530
Other statement of financial position items -365
611
226
85
-334
110
Exchange rate adjustments concerning financial assets or liabilities which cannot be stated at fair value
total DKK -336m (DKK -104m in 2020)
a) Hereof value adjustment of currency hedge DKK 1,035m related to RSA acquisition, which consists
of the premium paid and exchange rate adjustments which cannot be attributed to hedge accounting.
Annual report 2021 | Tryg A/S | 89
Financial statements - Contents
Notes
DKKm
11 Intangible assets
Goodwill
Trademarks
and
customer
relations Software
a)
Assets
under con-
struction
a)
Total
2021
Cost
Cost at 1 January 4,885 1,865 2,154 222 9,127
Exchange rate adjustments -5 -2 22 4 18
Transferred from assets
under construction 0 0 208 -208 0
Additions for the year 0 0 72 249 321
Disposals for the year 0 0 -190 0 -190
Cost at 31 December 4,880 1,863 2,267 267 9,276
Amortisation and write-downs
Amortisation and write-downs
at 1 January -104 -375 -1,523 0 -2,002
Exchange rate adjustments 0 1 -12 0 -11
Amortisation for the year 0 -136 -212 0 -348
Impairment losses and
write-downs for the year 0 0 -79 0 -79
Reversed amortisation 0 0 188 0 188
Amortisation and write-downs
at 31 December -104 -510 -1,637 0 -2,251
Carrying amount at 31 December 4,776 1,353 630 267 7,025
DKKm
11 Intangible assets (continued)
Goodwill
Trademarks
and
customer
relations Software
a)
Assets
under con-
struction
a)
Total
2020
Cost
Cost at 1 January 4,876 1,861 2,099 292 9,128
Exchange rate adjustments 9 4 -26 -6 -19
Transferred from asset under
construction 0 0 249 -249 0
Additions for the year 0 0 112 188 300
Disposals for the year 0 0 -280 -3 -282
Cost at 31 December 4,885 1,865 2,154 222 9,127
Amortisation and write-downs
Amortisation and write-downs
at 1 January -104 -235 -1,425 0 -1,764
Exchange rate adjustments 0 -5 13 0 8
Amortisation for the year 0 -135 -193 0 -328
Impairment losses and wri-
te-downs for the year 0 0 -147 0 -147
Reversed amortisation 0 0 229 0 229
Amortisation and write-downs
at 31 December -104 -375 -1,523 0 -2,002
Carrying amount at 31 December 4,781 1,489 631 222 7,124
a) Hereof proprietary software and assets under construction DKK 377m (DKK 366m at 31 December
2020).
Annual report 2021 | Tryg A/S | 90
Financial statements - Contents
Notes
DKKm
11 Intangible assets (continued)
Impairment test
Goodwill
The Value-in-use method is used when testing the Goodwill for impairment.
Primary assumptions for impairment test:
When assessing the cash flow management has based its estimates of premiums earned on the insurance
portfolio adjusted to reflect the expected effect of business decisions and market development from past
experiences. The portfolio is indexed with the wage and salary index. Claims incurred are based on expect-
ed claims ratios, which corresponds to normalised large- and weather claims. Reinsurance is taken into
account when looking at the overall technical result together with the expected expense ratio. Required
returns are based on management’s requirements for returns of the individual cash generation units and
are not expected to change significantly in the near future.
COVID-19 has not had any affect on the assumptions related to impairment of Goodwill, Trademarks and
Brand.
Alka
In 2018, Tryg acquired Forsikrings-Aktieselskabet Alka. The insurance activities were incorporated into the
Tryg Group’s business structure from 8 November 2018.
Comprises the sale of insurance products to private and commercial customers under the ‘Alka’ brand.
At 31 December 2021, management performed an impairment test of the carrying amount of goodwill
based on the allocation of the cost of goodwill to the cash-generating unit.
The cash flows appearing from the latest prognosis approved by management for the next 6 quarters are
used when calculating the value in use of Private DK. The cash flows in the latest prognosis period have
been extrapolated for financial years after the prognosis periods (terminal period) and adjusted for expect-
ed growth rates determined on the basis of expectations for the general economic growth. The required
return is based on an assessment of the risk profile of the tested business activities compared with the
market’s expectations for the Group.
The impairment test shows a calculated value in use of approximately DKK 36.5bn (DKK 31.1bn) relative
to a recognised goodwill of DKK 4.2bn (DKK 4.2bn) and does not indicate any impairment in 2021.
According to the sensitivity information below a change in the required return rate will have the highest ef-
fect on the equity. An increase in the required return of approx. 4.6% will result in a write down of goodwill.
DKKm 2021 2020
11 Intangible assets (continued)
- Earned premium assumed CAGR 0 - 10 years 4% 3%
- Earned premium assumed CAGR > 10 years (terminal period) 2% 2%
- Required return before tax 6% 7%
- Expected level of combined ratio 81% 81%
Sensitivity information
Impact on the calculated present value from the following
changes:
CAGR +1.0 percentage point (0 - 10 years) 1.7bn 1.4bn
CAGR -1.0 percentage point (0 - 10 years) -1.6bn -1.3bn
Required return +1.0 percentage point -7.1bn -5.6bn
Required return -1.0 percentage point 11.6bn 8.6bn
Combined ratio +1.0 percentage point -1.8bn -1.6bn
Combined ratio -1.0 percentage point 1.8bn 1.6bn
The above changes have no impact on equity.
Obos
In 2017, Tryg acquired Obos' insurance portfolio. The insurance activities were incorporated into the
Tryg Group's business structure from 1 June 2017.
Comprises the sale of insurance products to private and commercial customers under the ‘Obos’ brand.
At 31 December 2021, management performed an impairment test of the carrying amount of goodwill
based on the allocation of the cost of goodwill to the cash-generating unit.
The cash flows appearing from the latest prognosis approved by management for the next 6 quarters
are used when calculating the value in use of Obos. The cash flows in the prognosis period have been
extrapolated for financial years after the prognosis periods (terminal period) and adjusted for expected
growth rates determined on the basis of expectations for the general economic growth. The required
return is based on an assessment of the risk profile of the tested business activities compared with
the market's expectations for the Group.
The impairment test shows a calculated value in use of approximately DKK 0.5bn (0.5bn) relative to a
recognised goodwill of DKK 48m (46m) and does not indicate any impairment in 2021. According to
the sensitivity information below a change in the required return rate will have the highest effect on the
equity. An increase in the required return of approx. 5.2% will result in a write down of goodwill.
Annual report 2021 | Tryg A/S | 91
Financial statements - Contents
Notes
DKKm 2021 2020
11 Intangible assets (continued)
- Earned premium assumed CAGR 0 - 10 years 2% 2%
- Earned premium assumed CAGR > 10 years (terminal period) 2% 2%
- Required return before tax 10% 10%
- Expected level of combined ratio 88% 90%
Sensitivity information
Impact on the calculated present value from the following
changes:
CAGR +1.0 percentage point (0 - 10 years) 92 81
CAGR -1.0 percentage point (0 - 10 years) -87 -77
Required return +1.0 percentage point -354 -337
Required return -1.0 percentage point 498 480
Combined ratio +1.0 percentage point -199 -77
Combined ratio -1.0 percentage point 199 81
The above changes have no impact on equity.
Trademarks and customer relations
As at 31 December 2021 management performed a test of the carrying amounts of customer relations
as an integral part of the Moderna, Obos and Alka portfolio goodwill test.
Software and assets under construction
As at 31 December 2021 management performed a test of the carrying amounts of software and assets
under construction.
The impairment test compares the carrying amount with the estimated present value of future cash
flows. The test did indicate an impairment of DKK 79m (DKK 147m) due to revaluation of the Groups
IT-systems. Due to higher related costs and some lower expected systems benefits, a write-down has
been recognized. The cost is recognised as write-downs under depreciation in the income statement.
Assets under construction are not depreciated but tested once a year for impairment or when there is
any indication of a decrease in value.
Amortised software is assessed for impairment at the balance sheet date or when there are indications
that the future cash flow cannot justify the carrying amount.
If the recoverable amount is lower than the carrying amount, the difference is recognised in the income
statement.
The recoverable amount is the higher of fair value less sales costs and value in use.
DKKm 2021 2020
11 Intangible assets (continued)
- Earned premium assumed CAGR 0 - 10 years 4% 5%
- Earned premium assumed CAGR > 10 years (terminal period) 2% 2%
- Required return before tax 10% 10%
- Expected level of combined ratio 87% 87%
Sensitivity information
Impact on the calculated present value from the following
changes:
CAGR +1.0 percentage point (0 - 10 years) 25 25
CAGR -1.0 percentage point (0 - 10 years) -23 -23
Required return +1.0 percentage point -88 -93
Required return -1.0 percentage point 123 135
Combined ratio +1.0 percentage point -50 -47
Combined ratio -1.0 percentage point 50 47
The above changes have no impact on equity.
Moderna
In 2016, Tryg acquired Skandia's child and adult accident insurance portfolio. The insurance activities
were incorporated into the Tryg Group's business structure from 1 September 2016.
In 2014, Tryg acquired Securator A/S, Optimal Djurförsäkring i Norr AB. The insurance activities were
incorporated into the Tryg Group's business structure and merged into Tryg in 2015.
At 31 December 2021, management performed an impairment test of the carrying amount of goodwill
based on the allocation of the cost of goodwill to the cash-generating unit. Moderna portfolio consists
from 1 January 2017 of Moderna, Securator and Skandia, which was prior to this date three separate
cash-generating units. The reasons behind the merger of Securator and Skandia into Moderna, is that
they are managed together as part of the Swedish business and reported under the segment "Sweden"
Comprises the sale of insurance products to private customers under the ‘Moderna’ brand. Moreover,
insurance is sold under the brands Atlantica, Bilsport & MC and Moderna Djurförsäkringar. Sales take
place through its own sales force, call centres and online.
The cash flows appearing from the latest prognosis approved by management for the next 6 quarters
are used when calculating the value in use of Moderna. The cash flows in the latest prognosis period
have been extrapolated for financial years after the prognosis periods (terminal period) and adjusted for
expected growth rates determined on the basis of expectations for the general economic growth. The
required return is based on an assessment of the risk profile of the tested business activities compared
with the market's expectations for the Group.
The impairment test shows a calculated value in use of approximately DKK 2.5bn (2.2bn) relative to a
recognised goodwill of DKK 0.5bn (0.5bn) and does not indicate any impairment in 2021. According to
the sensitivity information below a change in the required return rate will have the highest effect on the
equity. An increase in the required return of approx. 5.6% will result in a write down of goodwill.
Annual report 2021 | Tryg A/S | 92
Financial statements - Contents
Notes
a) Lease assets (Right of use-assets (ROU)) equipment
only consists of leases of vehicles with a lease
term of three to four years. The monthly amounts
are fixed and there is no option for purchase or
extension. Short term leases are not recognised as
Right of use-assets.
b) Lease assets (Right of use-assets), Group occupied
property consists of leases of offices buildings.
Contract terms are from 1 to 15 years and with
yearly rent adjustments. Tryg has no lease contracts
with variable lease payments based on sale or
similar.
12 Property, plant and equipment
DKKm
Operating
equipment
Leases ROU
equipment
a)
Leases ROU
Group-occupied
property
b)
Total
2021
Cost
Cost at 1 January 246 88 904 1,239
Exchange rate adjustments 2 0 11 13
Additions for the year 23 17 87 126
Disposals for the year -19 -1 -19 -40
Cost at 31 December 251 103 983 1,337
Accumulated depreciation and value adjustments
Accumulated depreciation and value adjustments at 1 January -126 -62 -274 -462
Exchange rate adjustments -1 0 -4 -5
Depreciation for the year -11 -14 -101 -125
Reversed depreciation and value adjustments 17 0 0 17
Accumulated depreciation and value adjustments at 31 December -121 -75 -379 -575
Carrying amount at 31 December 130 28 604 762
2020
Cost
Cost at 1 January 360 76 912 1,348
Exchange rate adjustments -4 0 -14 -18
Additions for the year 37 15 10 62
Disposals for the year -146 -3 -4 -153
Cost at 31 December 246 88 904 1,239
Accumulated depreciation and value adjustments
Accumulated depreciation and value adjustments at 1 January -235 -46 -182 -463
Exchange rate adjustments 3 0 3 6
Depreciation for the year -22 -18 -99 -140
Reversed depreciation and value adjustments 128 2 4 135
Accumulated depreciation and value adjustments at 31 December -126 -62 -274 -462
Carrying amount at 31 December 120 27 630 777
Annual report 2021 | Tryg A/S | 93
Financial statements - Contents
Notes
DKKm 2021 2020
13 Investment property
Fair value at 1 January 1,117 1,151
Exchange rate adjustments 25 -30
Additions for the year 3 7
Disposals for the year -166 -15
Value adjustments for the year 66 1
Reversed on sale -4 4
Fair value at 31 December 1,040 1,117
Total rental income for 2021 is DKK 64m (DKK 65m in 2020).
Total expenses for 2021 are DKK 20m (DKK 13m in 2020). External experts were involved in valuing the
majority of the investment properties.
Return percentages, weighted average 2021 2020
Business property 4.6 7.5
Office property 5.1 5.8
Residential property 4.2 2.4
Total 5.0 5.3
Sensitivity
Tryg’s property valuations are based on the market-based rental income and operating expenses of the
individual property relative to the required rate of return. The most important factors impacting the va-
luations are the applied rates of return, annual net rental income and occupancy rates. The average ra-
tes of return applied are stated above.
Impacts on the fair value of properties 2021 2020
Increase in applied rate of return of 0.25% -39 -39
Decrease in applied rate of return of 0.25% 42 42
Decrease in net rental income of 3% -31 -33
Decrease in occupancy rate of 3% -6 -7
DKKm 2021 2020
14 Equity investments in associates
Cost
Cost at 1 January 96 34
Additions for the year 35,939 62
Cost at 31 December 36,035 96
Revaluations at net asset value
Revaluations at 1 January -81 -34
Value adjustments for the year 1,112 -47
Revaluations at 31 December 1,032 -81
Carrying amount at 31 December 37,067 16
Tryg has one associate that is material to the Group, which is equity accounted.
Scandi JV Co A/S
Nature of relationship with the Group
Financial Holding company which sole
purpose is to own Codan A/S
Principal place of business / Country of incorporation Denmark
Ownership interest / Voting rights held 89.3% / 50%
Annual report 2021 | Tryg A/S | 94
Financial statements - Contents
Notes
DKKm
14 Equity investments in associates (continued)
The following is summarised financial information based on the interim report for Q3 2021 prepared in
accordance with the Danish Financial Business Act, including the Danish Financial Supervisory Authori-
ty's Executive Order on Financial Reports for Insurance Companies and Multi-Employer Occupational
Pension Funds.
The disclosed figures show the entire Scandi JV Co Group. The full-year figures for 2021 were not avai-
lable when this report was published. The company had no activities in 2020.
The holdings in Codan A/S are classified as held for sale according to IFRS 5. Consequently the holdings
are measured at the lower of its carrying amount and fair value less cost to distribute. Consequently, no
amortization on intangible assets is performed.
Total comprehensive income reported is attributable to discontinued operations.
Please refer to note 26 regarding Acquisitions of activities.
DKKm 30 Sep 2021
Assets
Other investment assets 570
Assets classified as held for sale 77,058
Other assets 140
Total assets 77,768
Equity and liabilities
Equity 41,665
Liabilities directly associated with assets classified as held for sale 36,099
Other liabilities 4
Total equity and liabilities 77,768
01 Jun 2021 - 30 Sep 2021
Income statement
Investment return -2
Income from discontinued operations 905
Other expenses -4
Profit before tax 899
Tax 12
Profit for the period 911
Other comprehensive income -7
Total comprehensive income 904
Tryg’s interest in net assets of investee at 31 Sep 2021 37,207
Value adjustments in Q4 2021 -155
Carrying amount of interest in investee at 31 Dec 2021 37,052
DKKm 2021 2020
15 Financial assets
Financial assets held for trading 19,369 18,579
Financial assets designated at fair value 29,054 27,169
Derivative financial instruments at fair value used for hedge ac-
counting with value adjustment in other comprehensive in-
come 32 0
Receivables measured at amortised cost 4,148 4,070
Total financial assets 52,603 49,819
Financial assets at amortised cost only deviate to a minor
extent from fair value,
Financial liabilities
Derivative financial instruments at fair value with value adjust-
ments in the income statement 879 990
Derivative financial instruments at fair value with value adjust-
ments in other comprehensive income 0 -93
Financial liabilities at amortised cost 15,942 14,159
Total financial liabilities 16,821 15,056
Information on valuation of subordinated loan capital at fair value is stated in note 1. Other financial lia-
bilities measured at amortised cost only deviate to a minor extent from fair value.
Annual report 2021 | Tryg A/S | 95
Financial statements - Contents
Notes
15 Financial assets (continued)
The Fair value hierarchy
"Quoted market prices and consolidated reference prices" (level 1) consists of financial instruments
that are quoted and traded in a principal and active market (markets generally accessible and with
substantial volume and trade frequency).
Valuation based on observable input (level 2) consists of financial instruments that are valued sub-
stantially on the basis of observable input other than quoted price or consolidated reference price
for the instrument itself. If a financial instrument is quoted in a market that is not active, Tryg bases
its measurement on the most recent transaction price.
Adjustment is made for subsequent changes to market conditions, for instance, by including transa-
ctions in similar financial instruments that are assumed to be motivated by normal business consi-
derations. For a number of financial assets and liabilities, no market exists.
In such cases, Tryg uses recent transactions in similar instruments and discounted cash flows or
other generally accepted estimation and valuation techniques based on market conditions at the
balance sheet date to calculate an estimated value. This category covers instruments such as deri-
vatives valued on the basis of observable yield curves and exchange rates and illiquid mortgage
bonds valued by reference to the value of similar liquid bonds.
Valuation based on significant non-observable input (level 3) consists of certain financial instru-
ments based substantially on non-observable input. Such instruments include unlisted shares, unit
trust investments, some unlisted bonds and Deal Contingent Forwards. The fair value of Investment
property is also based on non-observable input. Please refer to note 13 and accounting policies sec-
tion Investment property.
If, at the balance sheet date, a financial instrument’s classification differs from its classification at
the beginning of the year, the classification of the instrument changes. Changes are considered to
have taken place at the balance sheet date. Developments in the financial markets can result in re-
classifications between the categories. Some bonds have become illiquid and have therefore been
moved from ”Quoted prices or consolidated reference prices” to the ”Observable input” category,
while other bonds have become liquid and have been moved from ”Observable input” to the ”Quo-
ted prices or consolidated reference prices” category.
DKKm
15 Financial assets (continued)
Fair value hierarchy for financial instruments and investment property
measured at fair value in the statement of financial position
Quoted market prices
or consolidated
references prices
a)
Observable
input
Non-
observable
input Total
2021
Investment property 0 0 1,040 1,040
Equity investments 308 3,279 38 3,625
Unit trust units 7,259 935 36 8,231
Bonds 35,326 285 0 35,611
Other lendings 0 75 0 75
Derivative financial instruments, assets 9 904 0 913
Derivative financial instruments, debt 0 -879 0 -879
42,903 4,599 1,114 48,616
a) Consolidated reference prices mean Nasdaq consolidated reference prices
2020
Investment property 0 0 1,117 1,117
Equity investments 177 2,399 35 2,611
Unit trust units 6,843 0 35 6,878
Bonds 31,619 2,720 0 34,339
Other lendings 0 80 0 80
Derivative financial instruments, assets 6 1,834 0 1,840
Derivative financial instruments, debt 0 -897 0 -897
38,645 6,136 1,186 45,968
Bonds measured on the basis of observable inputs consist of Norwegian bonds issued by banks and to
some extent Danish semi-liquid bonds, where no quoted prices or consolidated reference prices based
on actual trades are available.
DKKm 2021 2020
Financial instruments transferred from "Quoted market prices or con-
solidated reference prices" to "Observable input" 138 1,021
Financial instruments transferred from "Non-observable input" to "Ob-
servable input" 1,142 878
Annual report 2021 | Tryg A/S | 96
Financial statements - Contents
Notes
DKKm 2021 2020
15 Financial assets (continued)
Financial instruments measured at fair value in the statement of finan-
cial position on the basis of non-observable input:
Carrying amount at 1 January 1,186 1,375
Exchange rate adjustments 24 -29
Gains/losses in the income statement
a)
66 48
Purchases 14 111
Sales -170 -89
Transfers to/from the group 'non-observable input' -5 -231
Carrying amount at 31 December 1,114 1,186
Gains/losses in the income statement for assets held at the statement
of financial position date recognised in value adjustments -1 44
a) Hereof realised DKK 0m (DKK 53m in 2020)
Inflation derivatives are measured at fair value on the basis of non-observable input and are included
under claims provisions at a fair value of DKK -181m (DKK -709m in 2020).
DKKm 2021 2020
15 Financial assets (continued)
Reconciliation of Tryg's Investment portfolio
Investment assets according to balance sheet 86,562 46,881
Investment assets according to investment activities
Other, hereof financial instrument in liabilities
b)
-2,634 -3,888
External customers
c)
-4,052 -2,470
Tryg's investment portfolio
c)
79,877 40,523
Match portfolio -29,674 -28,094
RSA Scandinavia -37,052 0
Free portfolio 13,151 12,429
b) Primarily debt relating to repos and derivatives.
c) The setup of Tryg invest is impacting Tryg’s balance sheet as external customers investments are
booked under “Total other financial investments” with opposing liabilities entries as “other debt”.
Annual report 2021 | Tryg A/S | 97
Financial statements - Contents
Notes
DKKm
15 Financial assets (continued)
Derivative financial instruments used in connection with hedging of foreign entities for
accounting purposes
Gains and losses on hedges charged to other comprehensive income:
2021 2020
Gains Losses Net Gains Losses Net
Gains and losses at 1 January 3,753 -3,435 318 3,291 -3,099 191
Value adjustments for the year 233 -333 -99 463 -336 127
Gains and losses at
31 December 3,986 -3,767 219 3,753 -3,435 318
Value adjustments
Value adjustments of foreign entities recognised in other comprehensive income in the amount of:
2021 2020
Value adjustments at 1 January -225 -170
Value adjustment for the year 42 -55
Value adjustments at 31 December -183 -225
Receivables
Total receivables in connection with direct insurance contracts 1,678 1,674
Receivables from insurance enterprises 407 270
Unsettled transactions 0 120
Other receivables 946 565
3,030 2,628
Specification of write-downs on receivables from insurance contracts:
Write-downs at 1 January 118 136
Exchange rate adjustments 3 -4
Write-downs and reversed write-downs for the year -9 -13
Write-downs at 31 December 112 118
Receivables are written down in full when submitted for debt collection. The write-down is reversed if
payment is subsequently received from debt collection and amounts to DKK 32m (DKK 37m in 2020).
Other receivables do not contain overdue receivables.
DKKm
15 Financial assets (continued)
Derivative financial instruments
Derivatives with value adjustments in the income statement at fair value:
2021 2020
DKKm Nominal
Fair value in
statement of
financial
position Nominal
Fair value in
statement of
financial
position
Interest derivatives 31,802 224 29,420 645
Share derivatives -117 19 69 12
Exchange rate derivatives -9,094 -209 12,562 286
Derivatives according to statement
of financial position 22,591 34 42,052 943
Inflation derivatives, recognised in
claims provisions 4,140 -181 7,280 -709
Total derivative financial instru-
ments 26,731 -147 49,331 234
Due after less than 1 year 9,363 -6,292 12,860 303
Due within 1 to 5 years 6,682 111 24,356 -693
Due after more than 5 years 10,686 6,034 12,116 624
Derivatives are used continuously as part of the cash and risk management carried out by Tryg and its
portfolio managers.
Annual report 2021 | Tryg A/S | 98
Financial statements - Contents
Notes
16 Reinsurer's share
Impairment test
As at 31 December 2021, management performed a test of the carrying amount of total reinsurers’
share of provisions for insurance contracts and receivables. The impairment test resulted in impairment
write-down totalling DKK 3m (DKK 0m in 2020).
The use of reinsurance creates a natural counterparty risk. The Risk will be handled by applying a wide
range of reinsurers with at least an ’A’ rating.
17 Current tax
Tryg recognizes the role that taxes play in society and we acknowledge that business must have a re-
sponsible approach to handling tax matters in order to ensure sustainable societies. Our tax policy is
inspired by the GRI Sustainability Reporting standard #207 regarding tax.
Tax matters are handled on a daily basis by the tax team in Tryg but is overseen by the Group CFO.
The Tryg Tax Policy is ultimately the responsibility of Tryg’s Executive Board and is approved and re-
viewed annually by the Executive Board and the Supervisory Board of Tryg.
Tryg has established a Corporate Responsibility Board with management representatives from key
departments within Tryg with Tryg’s Group CFO as chair. The adherence to the tax policy is secured
as part of the ongoing work and the existing practices of the Tryg tax team.
The Tryg Tax Policy applies to all entities within the Tryg Group and, to the extent possible, also to in-
vestments made by Tryg. For further information on the Tryg Tax Policy reference is made to our
webpage www.Tryg.com.
DKKm
2021 2020
17 Current tax (continued)
Current tax
Net current tax at 1 January -306 -73
Exchange rate adjustments -13 6
Current tax for the year -874 -907
Current tax on equity entries 22 -28
Adjustment of current tax in respect of previous years 20 97
Tax paid for the year 1,200 599
Net current tax at 31 December 47 -306
Current tax is recognised in the statement of financial position as follows:
Under assets, current tax 315 51
Under liabilities, current tax -268 -357
Net current tax 47 -306
Due to IFRIC 23, uncertain tax positions should be valuated and recognized in the tax balance.
Tryg Forsikring A/S has asked the Danish tax authorities for a repayment of tax for unused tax loss in the
closed Finnish branch in 2012. 80% of the expected tax repayment has been included in the balance of
current tax.
The figures below show Result Before Tax compared to actual tax payments.
5
31
OtherDenmark Norway Sweden
2020
(DKKm)
2,485
486
999
705
82
1,010
338
26
166
12
Denmark Norway Sweden Other
2021
(DKKm)
2,503
910
1,287 1,287
223
1,130
262
59
172
41
7
28
Result before tax Corporate tax paid Other taxes Result before tax Corporate tax paid Other taxes
Annual report 2021 | Tryg A/S | 99
Financial statements - Contents
Notes
DKKm
18 Equity
Number of shares
Shares outstanding Own shares
Number of shares of DKK 5 (1,000) 2021 2020 2021 2020
Number of shares at 1 January 301,750 301,700 398 448
Bought during the year -1,399 -535 1,399 535
Rights issue 352,506 0 0 0
Exercise of incentive programme 590 585 -590 -585
Number of shares at 31 December 653,447 301,750 1,207 398
Number of shares as a percentage of
issued shares at 31 December
99.82 99.87 0.18 0.13
Nominal value at 31 December (DKKm) 3,267 1,509 6 2
Pursuant to the authorisation granted by the shareholders, Tryg may acquire up to a total face value
151m DKK of the share capital in the period up until 31 December 2022.
Own shares are acquired for use in the Group’s incentive programme.
DKKm
17 Current tax (continued)
The overview show result before tax compared to tax payments. Other countries mainly consist of Fin-
land, Germany, Austria, The Netherlands, and Switzerland where Tryg’s Credit & Surety business, labelled
as Tryg Garanti, has some activities.
Due to local tax regulations, there may be variations in the timing of tax payment between the coun-
tries. Corporate tax payment for the year is the actual payments during the year made to the respective
countries. This can be payment for current year as well as payments for previous years.
Therefore, there may be a difference in the periodization of the result before tax for the year and the ac-
tual tax paid.
Beside corporate tax, Tryg Group also pays other taxes consisting of employer taxes, insurance pre-
mium taxes and consumption taxes, such as VAT. These are specified in the figures below.
2021 2020
Employer
Tax
Insur-
ance
duties VAT Total
Employer
Tax
Insur-
ance
duties VAT Total
Denmark 380 734 173 1,287 336 598 66 999
Norway 141 958 32 1,130 131 847 32 1,010
Sweden 69 79 24 172 68 72 27 166
Other
countries 5 24 0 28 5 26 0 31
Total 595 1,794 229 2,618 540 1,542 124 2,207
2021 2020
18 Equity (continued)
Solvency II - Own funds
Equity according to annual report 49,008 12,264
Proposed dividend -700 -529
Intangible assets -7,025 -7,124
Not eligible shares in associate -37,052 0
Eligible Own funds from shares in associate 8,283 0
Profit margin, solvency purpose 1,408 1,408
Taxes 185 201
Subordinated loan capital 4,453 2,663
Solvency II - Own funds 18,559 8,884
Annual report 2021 | Tryg A/S | 100
Financial statements - Contents
Notes
DKKm
19 Claims provisions (continued)
2020 Gross Ceded
Net of
reinsurance
Claims provisions at 1 January 24,859 -1,285 23,574
Exchange rate adjustments -402 37 -365
24,457 -1,248 23,210
Paid in the financial year in respect of the current year -8,691 199 -8,492
Paid in the financial year in respect of prior years -7,005 808 -6,197
-15,695 1,006 -14,689
Change in claims in the financial year
in respect of the current year 16,650 -711 15,940
Change in claims in the financial year
in respect of prior years -1,071 -91 -1,162
15,579 -802 14,777
Discounting and exchange rate adjustment 616 -43 573
Claims provisions at 31 December 24,957 -1,087 23,871
DKKm 2021 2020
19 Premium provisions
Premium provision at 1 January 6,036 5,996
Exchange rate adjustments 48 -52
Paid in the financial year 25,705 23,820
Change in premiums in the financial year -25,614 -23,714
Exchange rate adjustments 8 -13
Premium provisions at 31 December 6,183 6,036
19 Claims provisions
2021 Gross Ceded
Net of
reinsurance
Claims provisions at 1 January 24,957 -1,087 23,871
Exchange rate adjustments 320 -22 299
25,278 -1,108 24,170
Paid in the financial year in respect of the current year -8,935 91 -8,844
Paid in the financial year in respect of prior years -6,592 386 -6,205
-15,527 478 -15,049
Change in claims in the financial year
in respect of the current year 17,184 -535 16,649
Change in claims in the financial year
in respect of prior years -883 -78 -961
16,301 -613 15,688
Discounting and exchange rate adjustments -465 12 -453
Claims provisions at 31 December 25,587 -1,232 24,355
Annual report 2021 | Tryg A/S | 101
Financial statements - Contents
Notes
DKKm 2021 2020
20 Pensions and similar obligations
Jubilees 41 45
Compensation liability 38 51
Recognised liability 79 96
Defined-benefit pension plans:
Present value of pension obligations funded through operations 29 34
Specification of change in recognised pension obligations:
Recognised pension obligation at 1 January 34 1,190
Adjustment regarding the terminated part of the plan
termination recognised in the income statement 0 -1,059
Exchange rate adjustments 2 -84
Capital cost of previously earned pensions 0 1
Actuarial gains/losses -1 -6
Paid during the period -7 -7
Recognised pension obligation at 31 December 29 34
Change in carrying amount of plan assets:
Carrying amount of plan assets at 1 January 0 940
Adjustment regarding the terminated part of the plan termina-
tion recognised in the income statement 0 -874
Exchange rate adjustments 0 -66
Carrying amount of plan assets at 31 December 0 0
Total pensions and similar obligations at 31 December 29 34
Total recognised obligation at 31 December 108 130
Specification of pension cost for the year:
Adjustment regarding the terminated part of the plan termina-
tion recognised in the income statement 0 -128
Interest expense on accrued pension obligation 0 1
Total year's cost of defined-benefit plans 0 -128
DKKm 2021 2020
20 Pensions and similar obligations (continued)
The premium for the following financial years is estimated at 0 1
Number of pensioners 116 127
Assumptions used % %
Discount rate 1.1 1.2
Salary adjustments 2.5 2.3
G adjustments 2.3 2.0
Turnover 7.0 7.0
Employer contributions 19.1 19.1
Mortality table K2013 K2013
Description of the Swedish plan
Moderna Försäkringar, a branch of Tryg Forsikring A/S, complies with the Swedish industry pension ag-
reement, the FTP plan, which is insured with Försäkringsbranschens Pensionskassa - FPK.
Under the terms of the agreement, the Group’s Swedish branch has undertaken, along with the other
businesses in the collaboration, to pay the pensions of the individual employees in accordance with the
applicable rules.
The FTP plan is primarily a defined-benefit plan in terms of the future pension benefits. FPK is unable to
provide sufficient information for the Group to use defined-benefit accounting. For this reason, the
Group has accounted for the plan as if it were a defined-contribution plan in accordance with IAS 19.30.
This year premium paid to FPK amounted to DKK 5m (DKK 10m in 2020), which is about 1.4 % of the
annual premium in FPK(2020). FPK writes in its Annual report for 2020 that it had a solvency ratio of
141 at 31 December 2020 (Solvency ratio of 137 at 31 December 2019).
The Solvency Ratio is defined as the own funds relative to the solvency capital requirement.
Annual report 2021 | Tryg A/S | 102
Financial statements - Contents
Notes
DKKm 2021 2020
22 Other provisions
Other provisions at 1 January 57 86
Exchange rate adjustments 1 -1
Change in provisions -18 -28
Other provisions 31 December 40 57
Other provisions relate to provisions for the Group’s own insurance claims and restructuring costs.
Additions to the provision for restructuring costs and own insurance claims during the year amounts to
DKK 18m (DKK 14m at December 2020) and use of existing restructuring provisions amounts to DKK
36m (DKK 42m at December 2020).
The balance as at 31 December 2021 excluding own insurances amounts to DKK 35m (DKK 47m at 31
December 2020).
23 Other debt and debt to group undertakings
Debt related to external customers investments amounts to DKK 4,052m please refer to note 15 Tryg's
investment portfolio.
Other debt
Maturity of undiscounted lease liabilities
Due 1 year or less 138 134
Due 2 - 5 years 331 345
Due more than 5 years 402 411
Total Lease liabilities 31 December 871 890
Lease liabilities included in the statement of financial position
Hereof future cashflow options 11 66
Amounts recognised in statement of cash flow
Total cash out-flow for leases 137 139
Amounts recognised in income statement
Interest on lease liabilities -32 -36
There are no short team-leases recognised in the financial statement. Debt related to Leasing are inclu-
ded in Other debt. Please refer to note 12 for specification of ROU assets.
DKKm 2021 2020
21 Deferred tax
Tax asset
Operating equipment -128 11
Bonds 73 42
-55 53
Tax liability
Intangible rights 319 416
Land and buildings -43 79
Debt and provisions 130 -77
Contingency funds 483 487
889 905
Deferred tax 944 851
Development in deferred tax
Deferred tax at 1 January 851 911
Exchange rate adjustments 24 -29
Change in deferred tax relating to change in tax rate 0 -2
Change in deferred tax previous years -86 32
Change in deferred tax recognised in income statement 155 -82
Change in deferred tax taken to equity 0 22
Deferred tax at 31 December 944 851
Tax value of non-capitalised tax loss
Denmark 16 16
Other Countries 6 5
The loss in Tryg A/S cannot be utilised in the Danish joint taxation scheme. The loss can be carried
forward indefinitely. Loss determined according to Swedish, Finnish, German, Belgium and Austria rules
can be carried forward indefinitely. In Netherlands tax losses can be carried forward 6 years. In Switzer-
land tax losses can be carried forward 7 years.
The losses are not recognised as tax assets until it has been substantiated that the company can gene-
rate sufficient future taxable income to offset the tax loss. The total current and deferred tax relating to
items recognised in equity is recognised in the statement of financial position in the amount of DKK
27m (DKK 50m at 31 December 2020).
Annual report 2021 | Tryg A/S | 103
Financial statements - Contents
Notes
25 Contractual obligations, collateral and contingent liabilities
Contractual obligations Obligations due by period
2021 <1 year 1-3 years 3-5 years > 5 years Total
Other contractual obligations
a)
692 587 181 14 1,475
692 587 181 14 1,475
2020 <1 year 1-3 years 3-5 years > 5 years Total
Other contractual obligations
a)
581 532 303 4 1,420
581 532 303 4 1,420
a) Other contractual obligations mainly consists of investment commitments, IT and outsourcing agre-
ements. Please refer to note 12 for lease agreements recognised as ROU.
DKKm 2021 2020
24 Earnings per share
Profit/loss from continuing business 3,161 2,773
Profit/loss on discontinued and divested business -3 0
Profit/loss for the year 3,158 2,773
Depreciation on intangible assets related to Brands and Custo-
mer relations after tax 106 105
Operating Profit/loss for the year 3,263 2,878
Average number of shares (1,000) 572,688 301,678
Diluted number of shares (1,000) 572,688 301,678
Earnings per share, continuing business 5.52 9.19
Diluted earnings per share, continuing business 5.52 9.19
Earnings per share 5.51 9.19
Diluted earnings per share 5.51 9.19
Operating earings per share 5.70 9.54
DKKm
25 Contractual obligations, collateral and contingent liabilities (continued)
2021
Tryg has signed the following contracts above DKK 50m:
Tryg is comitted to invest in some investment funds. The commitment amounts to DKK 910m.
DKK 450m are expected called during 2022 and additionally DKK 450m within 5 years. Tryg has signed
IT infrastructure agreements with commitments amounting to DKK 361m within 5 years.
2020
Tryg is comitted to invest in some investment funds. The commitment amounts to DKK 934m.
DKK 265m are expected called during 2021 and additionally DKK 535m within 5 years. Tryg has signed
IT infrastructure agreements with commitments amounting to DKK 357m within 5 years.
The Danish companies in the Tryg Group are jointly taxed with TryghedsGruppen smba. The companies
and the other jointly taxed companies are liable for any obligations to withhold taxes at source on inte-
rest, royalties, dividends and income taxes etc. in respect of the jointly taxed companies.
2021 2020
Tryg Livsforsikring A/S and Forsikrings-Aktieselskabet Alka Liv II have registered the
following assets as having been held as security for the insurance provisions:
Equity investments 175 0
Bonds 1,029 1,141
Interest and rent receivable 5 4
Total 1,209 1,145
Annual report 2021 | Tryg A/S | 104
Financial statements - Contents
Notes
DKKm
25 Contractual obligations, collateral and contingent liabilities (continued)
Offsetting and collateral in relation to financial assets and obligations
Collateral which is not offset in
the statement of financial position
Gross
amount
before
offsetting Offsetting
According to
the statement
of financial
position
Further
offsetting,
master netting
agreements Collateral Net amount
2021
Assets
Derivative financial instruments
a)
1,072 -8 1,064 -800 -239 24
1,072 -8 1,064 -800 -239 24
Liabilities
Repo debt 2,417 0 2,417 0 -2,417 0
Derivative financial instruments
a)
1,220 -8 1,211 -800 -336 75
3,637 -8 3,628 -800 -2,753 75
a) Of which inflation derivatives, recognised in claims provisions:
Assets 151 0 151
Liabilities 332 0 332
2020
Assets
Derivative financial instruments
a)
1,843 0 1,843 -1,210 -595 39
1,843 0 1,843 -1,210 -595 39
Liabilities ,
Repo debt 3,259 0 3,259 0 -3,259 0
Derivative financial instruments
a)
1,610 0 1,610 -1,210 -397 3
4,869 0 4,869 -1,210 -3,656 3
a) Of which inflation derivatives, recognised in claims provisions:
Assets 3 0 3
Liabilities 712 0 712
Financial assets and liabilities are offset and the net amount reported
when the Group and the counterparty have a legally enforceable right
of set-off and have agreed to settle on a net basis or to realise the asset
and settle the liability.
Positive and negative fair values of derivative financial instruments
with the same counterparty are offset if it has been agreed to settle
contractual payments on a net basis when cash payments are made
or collateral is provided on a daily basis in case of fair value changes.
The Group’s netting of positive and negative fair values of derivative
financial instruments may be cleared through LCH (CCP clearing).
Furthermore, netting is carried out in accordance with enforceable
master netting agreements. Master netting agreements and similar
agreements entitle parties to offset in the event of default, which
further reduces the exposure to a defaulting counterparty but does not
meet the conditions for accounting offsetting in the balance sheet.
Contingent liabilities
Price adjustments 2016-2020
At the end of October (2020) Tryg received the Forbrugerombuds-
mand’s (FO or Consumer Ombudsman) assessment of the case.
In FO’s opinion Tryg was not complying with regulations on price
adjustments for residential customers when increasing prices above
indexation between March 2016 and February 2020. The case is
related to a part of the private portfolio in Denmark. Based on this
assessment the FO is concluding that certain customers may have a
recovery claim against Tryg. Tryg does not agree with the FO’s assess-
ment as the company believes it has followed the guidelines stated by
the Danish FSA in terms of price increases. Tryg is in a process with the
FO in order to gain a better understanding of the FO assessment of the
case. Management has decided not to disclose an estimated amount
but this is deemed immaterial.
Other
Companies in the Tryg Group are party to a number of other disputes
in Denmark, Norway and Sweden, which management believes will
not affect the Group’s financial position significantly beyond the
obligations recognized in the statement of financial position at 31
December 2021.
Annual report 2021 | Tryg A/S | 105
Financial statements - Contents
Notes
26 Equity investments in associates
Acquisition of activities
RSA Scandinavia (Scandi JVco)
On June 1, 2021 Tryg acquired RSA’s Swedish (Trygg-Hansa) and Norwegian (Codan Norway) busines-
ses and a co-share of RSA’s Danish business, being Codan Denmark. The transaction was performed
with Intact Financial Corporation as co-investor. Tryg’s share of purchase price amounted to £4.2 bil-
lion.
RSA shareholders were entitled to receive 685 pence per ordinary share which represents an aggre-
gate cash consideration of approximately £7.2 billion, consisting of:
• £3.0 billion for the acquisition of RSA’s Canadian, UK and International operations and the Intact’s
indirect co-share of RSA’s Danish business; and
• £4.2 billion for the acquisition of RSA’s Swedish and Norwegian businesses and Tryg’s co-share of
RSA’s Danish business.
Due to the shareholders’ agreement, Tryg will not have control of RSA´s Scandinavian businesses but
will have significant influence. Accordingly, the investment is classified as an investment in associates.
Investments in associates are accounted for by applying the equity method, whereby Trygs shares of
the current profit/loss is recognised in the investment activities as profit/loss from associates.
The equity method will be applied from closing until the Swedish and Norwegian businesses will be
separated from the Danish business through a demerger. After the demerger, the Swedish and Norwe-
gian businesses will be fully consolidated in the financial statement. Until the demerger Tryg’s invest-
ment is considered one unit of account. The demerger is estimated 1 April 2022.
Prior to the delivery of sole legal ownership of the Swedish and Norwegian businesses to Tryg pur-
suant to the demerger, Tryg will enjoy all benefits and risk of the Swedish and Norwegian businesses,
including by having sole control of their daily and long-term operations pursuant to the shareholders’
agreement.
In respect of Codan Denmark, Intact and Tryg will co-own Codan Danmark on a 50/50 economic ba-
sis. Tryg will indirectly have 50% of the voting rights. However, Tryg’s ability to exercise such voting
rights will be restricted to ensure compliance with the competition law. Intact will have sole control of
Codan Denmark, with Tryg’s rights being reduced to minority shareholder protection rights.
DKKm
26 Equity investments in associates (continued)
Initial recognition comprise:
Purchase price (GBP 4,205m) 36,357
Value adjustment from hedge of firm commitment -1,240
Costs directly attributable to the acquisition 780
Cost on initial recognition 35,897
Net profit (after tax) related to the RSA transaction June 1 – December 31 2021, amounts to DKK
1,206m.
The amount is recognized in the investment return as Profit/Loss from associates.
The net profit relates to the net income after tax for Trygg-Hansa, Codan Norway and 50% of the
share of Codan Denmark.
Tryg hedged the purchase price to foreign currency fluctuations entering into a DCF (deal contingent
forward) hedge. Premium inherent in the contract amounts to DKK 1,285m. The hedge has resulted
in a positive FX value adjustment of DKK 250m. The total effect of the DCF hedge is a negative value
adjustment of DKK 1,035m and is included in investment return. - Of which DKKm 156 was recorded
in Q1 and DKKm -1,191 in Q2 2021.
The purchase price was deposited on an Escrow account. However, the account carried negative inte-
rest. The resulting interest expense amounted to DKK 33m.
Annual report 2021 | Tryg A/S | 106
Financial statements - Contents
Notes
DKKm 2021 2020
27 Related parties
The group has no related parties with a controlling influence
other than the parent company, TryghedsGruppen smba and
the subsidiaries of TryghedsGruppen smba (other related par-
ties). Related parties include the Supervisory Board, the
Executive Board (which is considered Key Management) and
their members’ family.
Premium income
- Parent company (TryghedsGruppen smba) 0.5 0.5
- Key management 0.5 0.5
- Other related parties 2.1 3.4
Claims payments
- Parent company (TryghedsGruppen smba) 0.0 0.1
- Key management 0.1 0.2
- Other related parties 0.3 0.4
Specification of remuneration
2021
Number
of
persons
Base sal-
ary incl,
car
allowance
Share-
based
variable
salary
a)
Cash
variable
salary Pension Total
Supervisory Board 13 10 0 0 0 10
Executive Board 4 30 12 0 7 50
Risk-takers investment functions 12 16 2 2 2 22
Risk-takers staff functions 19 38 7 7 6 59
Risk-takers independent
control functions 5 9 0 0 1 11
Risk-takers other functions 18 44 11 7 7 69
71 147 32 16 25 220
a) Total expenses recognised in 2021 for matching shares and conditional shares allocated in 2021 and
previous year.
For matching shares and conditional shares allocated to Executive Board in 2021, please refer to
"Corporate governance" in Management review. For further details on remunerations of Supervisory
Board and Executive Board, please refer to “Corporate gorvernance” in Management review.
DKKm
27 Related parties (continued)
Of which retired
Number of
persons
Severance
pay
Supervisory Board 0 0
Executive Board 0 0
Risk-takers 0 0
0 0
2020
Number
of
persons
Base sal-
ary incl,
car
allowance
Share-
based
variable
salary
b)
Cash
variable
salary Pension Total
Supervisory Board 14 9 0 0 0 9
Executive Board 4 29 11 0 7 47
Risk-takers investment functions 9 13 1 2 2 18
Risk-takers staff functions 20 36 5 8 6 56
Risk-takers independent
control functions 5 9 0 1 1 11
Risk-takers other functions 20 42 7 7 7 63
72 138 25 18 24 205
b) Total expenses in 2020 for matching shares and conditional shares allocated in 2020 and previous
year.
Of which retired
Number of
persons
Severance
pay
Supervisory Board 2 0
Risk-takers 4 2
6 2
Annual report 2021 | Tryg A/S | 107
Financial statements - Contents
Notes
27 Related parties (continued)
2021
In 2021 Tryg A/S paid TryghedsGruppen smba dividends of DKK 1,224m.
TryghedsGruppen smba has exercised pre-empitive rights and subscribed for new shares in Tryg A/S to-
talling DKK 14.0bn during the subscribtion period in Q1 2021.
The transactions between TryghedsGruppen smba and Tryg A/S is conducted on an arm’s length basis.
Intra-group transactions with TryghedsGruppen smba from Tryg Forsikring A/S consists of call center
and customer support, marketing services, IT and data deliveries. The transactions amounts to DKK
4.5m. Investment management delivered from Tryg Invest A/S amounts to DKK 0.5m. All transactions
are conducted on an arm´s length basis.
The companies in the Tryg Group have entered into reinsurance contracts on market terms.
Transactions with Group undertakings have been eliminated in the consolidated financial statements in
accordance with the accounting policies.
2020
In 2020 Tryg A/S paid TryghedsGruppen smba DKK 1,599m in dividends.
The transactions between TryghedsGruppen smba and Tryg A/S is conducted on an arm’s length basis.
TryghedsGruppen smba has provided an irrevocable subscribtion undertaking to Tryg, to subscribe for
new shares in the coming Tryg Rights Issue for an amount totalling DKK 6.0bn.
Intra-group transactions with TryghedsGruppen smba from Tryg Forsikring A/S consists of call center
and customer support, marketing services, IT and data deliveries.
The transactions amounts to DKK 5,0m. Investment management delivered from Tryg Invest A/S
amounts to DKK 1,3m. All transactions are conducted on an arm´s length basis.
The companies in the Tryg Group have entered into reinsurance contracts on market terms.
Transactions with Group undertakings have been eliminated in the consolidated financial statements in
accordance with the accounting policies.
27 Related parties (continued)
Base salary are charges incurred during the financial year. Variable salary includes the charges for
matching shares and conditional shares, which are recognised over a deferral period up to 4 years. Re-
ference is made to section ’Corporate governance’ of the management’s review on the corresponding
disbursements. The Executive Board and risk-takers are included in incentive programmes. Please refer
to note 6 for information concerning this.
The members of the Supervisory Board in Tryg A/S are paid with a fixed remuneration and are not cove-
red by the incentive schemes.
The members of the Executive Board is paid a fixed remuneration, car allowance and pension.
The variable salary is awarded in the form of share-based remuneration. Please refer to ’Corporate
governance’.
Each member of the Executive Board is entitled to 12 months’ notice and severance pay equal to
12 months’ salary plus pension contribution except Group CEO who is entitled to severance pay equal
to 18 months’ salary. If a change of control clause is actioned CEO and COO are entitled to severance
pay equal to 36 months´salary.
Risk-takers are defined as employees whose activities have a significant influence on the company’s
risk profile.
The Supervisory Board decides which employees should be considered to be risk-takers.
Parent company
TryghedsGruppen smba
TryghedsGruppen smba controls 44,9% (2020: 53 %) of the shares in Tryg A/S.
28 Financial highlights
Please refer to page 61.
Annual report 2021 | Tryg A/S | 108
Financial statements - Contents
Notes
29 Accounting policies
The consolidated financial statements are prepared in
accordance with the International Financial Report-
ing Standards (IFRS) as adopted by the EU on 31
December 2021 and the additional Danish disclosure
requirements of the Danish Financial Business Act on
annual reports prepared by listed financial services
companies. The annual report of the parent company
is prepared in accordance with the executive order on
financial reports presented by insurance companies
and lateral pension funds issued by the Danish FSA.
The deviations from the recognition and measurement
requirements of IFRS are:
The Danish FSA’s executive order does not allow pro-
visions for deferred tax of contingency reserves allo-
cated from untaxed funds. Deferred tax and the other
comprehensive income of the parent company have
been adjusted accordingly on the transition to IFRS.
Change in accounting policies
Tryg has not implemented any new significant ac-
counting policies or IFRS standards in 2021.
The accounting policies have been applied consist-
ently with last year.
Accounting regulation
Implementation of changes to accounting standards
and interpretation in 2021
The International Accounting Standards Board (IASB)
has issued several changes to the international
accounting standards, and the International Financial
Reporting Interpretations Committee (IFRIC) has also
issued a number of interpretations.
No standards have been implemented for the first time
for the accounting year that began on 1 January 2021
that will have a significant impact on the group. See
below regarding IFRS 9 ‘Financial instruments’.
There has not been implemented any new or amended
standards and interpretations that have affected the
group significantly.
Future orders, standards and interpretations that
the group has not implemented, and which have
still not entered into force but could affect the group
significantly:
• IFRS 9 ‘Financial Instruments’
1
• IFRS 17 ‘Insurance Contracts’
2
1
enters into force for the accounting year commencing
1 January 2018 - Insurance companies are allowed to
postpone the implementation to 1 January 2023 if certain
criteria are met.
2
Expected to enter into force for the accounting year com-
mencing 1 January 2023.
The implementation of IFRS 9 ‘financial instruments’
is not expected to significantly change the group’s
financial position.
Regarding IFRS 9, the assessment of no significant
impact on the statement of financial position or profit
and loss is based on the assumption that Tryg already
carry all financial instruments at fair value through
profit and loss. The implementation of IFRS 9 will not
affect Tryg’s recognition and measurement. Tryg has
postponed the implementation of IFRS 9 to 1 January
2023, when IFRS 17 Insurance Contracts will be
applicable. Tryg can postpone IFRS 9 due to the fact
that our activities are predominantly connected with
insurance and that our liabilities connected with insur-
ance is relatively greater than 80 per cent of the total
liabilities. The impact of IFRS 17 (Insurance Contracts)
is currently being assessed in a structured and formal
manner and is expected to be concluded in due course
ahead of the implementation date. Whilst the Tryg
Group anticipates minor changes in certain of its key
figures, such as premiums growth and claims ratio as
a result of changes to the definitions of premiums and
costs under IFRS 17 (Insurance Contracts), Tryg Group
currently expects that the implementation of IFRS
(Insurance Contracts) will not significantly change the
Tryg Group’s financial position, including in relation to
its technical result or profit/loss after tax.
The changes will be implemented going forward from
the effective date.
Significant accounting estimates and assess-
ments
The preparation of financial statements under IFRS re-
quires the use of certain critical accounting estimates
and requires management to exercise its judgement
in the process of applying the Group’s accounting
policies. The areas involving more judgement or
complexity, or areas where assumptions and estimates
are significant to the consolidated financial statements
are:
• Liabilities under insurance contracts
• Fair value of financial assets and liabilities
• Valuation of property
• Business Combinations
• Measurement of Goodwill, Trademarks and
Customer relations
• Control of subsidiaries
Liabilities under insurance contracts
Estimates of provisions for insurance contracts repre-
sent the Group’s most critical accounting estimates, as
these provisions involve several uncertainty factors.
Claims provisions are management’s best estimate
based on actuarial and statistical projections of claims
and administration of claims, including a margin
incorporating the uncertainty related to the range of
actuarial scenarios and other short and long-term
risks not reflected in standard actuarial models. The
projections are based on Tryg’s knowledge of historical
developments, payment patterns, reporting delays,
duration of the claims settlement process and other
factors that might influence future developments in
the liabilities.
The Group makes claims provisions, in addition to
provisions for known claims, which cover estimated
compensation for losses that have been incurred but
are not yet reported to the Group (known as IBNR
reserves) and future developments in claims which are
known to the Group but are not finally settled. Claims
provisions also include direct and indirect claims set-
tlement costs or loss adjustment expenses that arise
from events that have occurred up to the statement of
financial position date, even if they have not yet been
reported to Tryg.
The calculation of the claims provisions is therefore
inherently uncertain and, by necessity, relies upon the
making of certain assumptions about factors such as
court decisions, amendments to legislation, social in-
flation and other economic trends, including inflation.
The Group’s actual liability for losses may be subject
to material positive or negative deviations relative to
the initially estimated claims provisions.
Claims provisions are discounted. As a result, initial
changes in discount rates or changes in the duration of
the claims provisions could have positive or negative
effects on earnings. Discounting affects the motor
third-party liability, general third-party liability, work-
ers’ compensation classes, including sickness and
personal accidents, in particular.
The Financial Supervisory Authority’s discount curve,
which is based on EIOPA’s yield curves, is used to
discount Danish, Norwegian and Swedish claims provi-
sions in relation to the relevant functional currencies.
Several assumptions and estimates underlying the
calculation of the claims provisions are mutually de-
pendent. This has the greatest impact on assumptions
regarding interest rates and inflation.
Fair value of financial assets and liabilities
Measurements of financial assets and liabilities for
which prices are quoted in an active market or which
are based on generally accepted models with observa-
ble market data are not subject to material estimates.
For securities that are not listed on a stock exchange,
or for which no stock exchange price is quoted that
reflects the fair value of the instrument, the fair value
is determined using a current OTC price of a similar
financial instrument or using a model calculation. The
valuation models include the discounting of the instru-
ment cash flow using an appropriate market interest
Annual report 2021 | Tryg A/S | 109
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Notes
rate with due consideration for credit and liquidity
premiums. The fair value of deal contingent deriva-
tives (DCF) that Tryg has entered into in connection
with a recommended cash offer together with Intact
(a leading Canadian Insurer), to acquire RSA Insurance
Group plc is further explained in note 26.
Valuation of property
The fair value is calculated based on a market-deter-
mined rental income, as well as operating expenses
in proportion to the property’s required rate of return
in per cent. Investment property is recognised at fair
value. The calculation of fair value is based on market
prices, considering the type of property, location and
maintenance standard, and based on a market-de-
termined rental income and operating expenses in
proportion to the property’s required rate of return. Cf.
note 12, 13 and 15.
Business Combinations
In Business Combinations, significant assessments
are made when considering the fair value of the assets
required and liabilities assumed and when identifying
intangible assets, such as Trademarks, Customer
relations and goodwill as part of the transactions.
Measurement of Goodwill, Trademarks and Customer
relations
Goodwill, Trademarks and Customer relations was ac-
quired in connection with the acquisition of business-
es. Goodwill is allocated to the cash-generating units
under which management manages the investment.
The carrying amount is tested for impairment at least
annually. Impairment testing involves estimates of
future cash flows and is affected by several factors,
including discount rates and other circumstances
dependent on economic trends, such as customer
behaviour and competition. Cf. note 11.
Control of subsidiaries
Control of subsidiaries is assessed yearly. Hence,
whether a subsidiary should still be part of the consol-
idation on line by line basis or as a single line item in
the balance sheet.
Description of accounting policies
Recognition and measurement
The annual report has been prepared under the his-
torical cost convention, as modified by the revaluation
of owner-occupied property, where increases are
recognised in other comprehensive income, and re-
valuation of investment property, financial assets held
for trading and financial assets and financial liabilities
(including derivative instruments) at fair value are
recognised in the income statement.
Assets are recognised in the statement of financial
position when it is probable that future economic
benefits will flow to the Group, and the value of such
assets can be measured reliably. Liabilities are recog-
nised in the statement of financial position when the
Group has a legal or constructive obligation as a result
of a prior event, and it is probable that future econom-
ic benefits will flow out of the Group, and the value of
such liabilities can be measured reliably.
On initial recognition, assets and liabilities are meas-
ured at cost, with the exception of financial assets,
which are recognised at fair value. Measurement
after initial recognition is affected as described below
for each item. Anticipated risks and losses that arise
before the time of presentation of the annual report
and that confirm or invalidate affairs and conditions
existing at the statement of financial position date are
considered at recognition and measurement.
Income is recognised in the income statement as
earned, whereas costs are recognised by the amounts
attributable to this financial year. Value adjustments
of financial assets and liabilities are recognised in the
income statement unless otherwise described below.
All amounts in the notes are shown in millions of DKK
unless otherwise stated.
Consolidation
Consolidated financial statements
The consolidated financial statements comprise the
financial statements of Tryg A/S (the parent company)
and the enterprises (subsidiaries) controlled by the
parent company. The parent company is regarded as
controlling an enterprise when it
i) exercises a controlling influence over the relevant
activities in the enterprise in question,
ii) is exposed to or has the right to a variable return on
its investment, and
iii) can exercise its controlling influence to affect the
variable return.
Enterprises in which the Group directly or indirectly
holds between 20% and 50% of the voting rights
and exercises significant influence but no controlling
influence are classified as associates.
Basis of consolidation
The consolidated financial statements are prepared
based on the financial statements of Tryg A/S and its
subsidiaries. The consolidated financial statements
are prepared by combining items of a uniform nature.
The financial statements used for the consolidation
are prepared in accordance with the Group’s account-
ing policies.
On consolidation, intra-group income and costs,
intra-group accounts and dividends, and gains and
losses arising on transactions between the consolidat-
ed enterprises are eliminated.
Items of subsidiaries are fully recognised in the con-
solidated financial statements.
Business combinations
Newly acquired or newly established enterprises are
recognised in the consolidated financial statements
from the date of acquisition and the date of forma-
tion, respectively. The date of acquisition is the date
on which control of the acquired enterprise actually
passes to Tryg. Divested or discontinued enterpris-
es are recognised in the consolidated statement of
comprehensive income up to the date of disposal or
the settlement date. The date of disposal is the date
on which control of the divested enterprise actually
passes to a third party.
The purchase method is applied for new acquisitions
if the Group gains control of the acquired enterprise.
Subsequently, identifiable assets, liabilities and con-
tingent liabilities in the acquired enterprises are meas-
ured at fair value at the date of acquisition. Non-cur-
rent assets which are acquired with the intention of
selling them are, however, measured at fair value less
expected selling costs. Restructuring costs are recog-
nised in the pre-acquisition balance sheet only if they
constitute an obligation for the acquired enterprise.
The tax effect of revaluations is taken into account.
The acquisition price of an enterprise consists of the
fair value of the price paid for the acquired enterprise.
If the final determination of the price is conditional
upon one or more future events, such events are rec-
ognised at their fair values at the date of acquisition.
Costs relating to the acquisition are recognised in the
income statement as incurred.
Any positive balances (goodwill) between the acqui-
sition price of the acquired enterprise, the value of
minority interests in the acquired enterprise and the
fair value of previously acquired equity investments,
on the one hand, and the fair value of the acquired
assets, liabilities and contingent liabilities, on the
other hand, is recognised as an asset under intangible
assets, and are tested for impairment at least once a
year. If the carrying amount of the asset exceeds its
recoverable amount, it is impaired to the lower recov-
erable amount.
If at the date of acquisition, there is uncertainty as to
the identification or measurement of acquired assets,
liabilities or contingent liabilities or the determination
of the acquisition price, initial recognition is based on a
preliminary determination of values. The preliminarily
determined values may be adjusted, or additional as-
sets or liabilities may be recognised up to 12 months
after the acquisition, provided that new information
has come to light regarding matters existing at the
date of acquisition which would have affected the
Annual report 2021 | Tryg A/S | 110
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Notes
determination of the values at the date of acquisition,
had such information been known.
Generally, subsequent changes in estimates of condi-
tional acquisition prices are recognised directly in the
income statement.
Currency translation
A functional currency is determined for each of
the reporting entities in the Group. The functional
currency is the currency used in the primary economic
environment in which the reporting entity operates.
Transactions in currencies other than the functional
currency are transactions in foreign currencies.
On initial recognition, transactions in foreign curren-
cies are translated into the functional currency using
the exchange rate applicable at the transaction date.
Assets and liabilities denominated in foreign curren-
cies are translated using the exchange rates applicable
at the statement of financial position date. Translation
differences are recognised in the income statement
under price adjustments.
On consolidation, the assets and liabilities of the
Group’s foreign operations are translated using
the exchange rates applicable at the statement of
financial position date. Income and expense items are
translated using the average exchange rates for the
period. Exchange rate differences arising on transla-
tion are classified as other comprehensive income and
transferred to the Group’s translation reserve. Such
translation differences are recognised as income or
as expenses in the period in which the activities are
divested. All other foreign currency translation gains
and losses are recognised in the income statement.
The presentation currency in the annual report is DKK.
Segment reporting
Segment information is based on the Group’s man-
agement and internal financial reporting system and
supports the management decisions on allocation
of resources and assessment of the Group’s results
divided into segments.
The operational business segments in the Tryg are Pri-
vate, Commercial, Corporate and Sweden. Private en-
compasses the sale of insurances to private individuals
in Denmark and Norway. Commercial encompasses
the sale of insurances to small and medium sized
businesses, in Denmark and Norway. Corporate sells
insurances to industrial clients primarily in Denmark,
Norway and Sweden. In addition, Corporate handles
all business involving brokers. Sweden encompasses
the sale of insurance products to private individuals
in Sweden as well as sale of Product insurances in the
Nordic region.
Geographical information is presented based on the
economic environment in which the Tryg Group op-
erates. The geographical areas are Denmark, Norway
and Sweden.
Segment income and segment costs as well as seg-
ment assets and liabilities comprise those items that
can be directly attributed to each individual segment
and those items that can be allocated to the individual
segments on a reliable basis. Unallocated items
primarily comprise assets and liabilities concerning
investment activity managed at Group level.
Key ratios
Earnings per share (EPS) are calculated according
to IAS 33. This and other key ratios are calculated in
accordance with Recommendations and Ratios issued
by the The Danish Finance Society and the Executive
Order on Financial Reports for Insurance Companies
and Multi-Employer Occupational Pension Funds
issued by the Danish Financial Supervisory Authority.
Income statement
Premiums
Premium income represents gross premiums written
during the year, net of reinsurance premiums and ad-
justed for changes in premium provisions, correspond-
ing to an accrual of premiums to the risk period of the
policies, and in the reinsurers’ share of the premium
provisions.
Premiums are calculated as premium income in ac-
cordance with the risk exposure over the cover period,
calculated separately for each individual insurance
contract. The calculation is generally based on the pro
rata method, although this is adjusted for an unevenly
divided risk between lines of business with strong
seasonal variations or for policies lasting many years.
The portion of premiums received on contracts that
relate to unexpired risks at the statement of financial
position date is reported under premium provisions.
The portion of premiums paid to reinsurers that
relate to unexpired risks at the statement of financial
position date is reported as the reinsurers’ share of
premium provisions.
Technical interest
Technical interest is presented as a calculated return
on the year’s average insurance liability provisions,
net of reinsurance. The calculated interest return for
grouped classes of risks is calculated as the monthly
average provision plus an actual interest from the
present yield curve for each individual group of risks.
The interest is applied according to the expected run-
off pattern of the provisions.
Insurance technical interest is reduced by the portion
of the increase in net provisions that relates to un-
winding.
Claims
Claims are claims paid during the year adjusted for
changes in claims provisions less the reinsurers’ share.
In addition, the item includes run-off gains/losses in
respect of previous years. The portion of the increase
in provisions which can be ascribed to unwinding is
transferred to insurance technical interest.
Claims are shown inclusive of direct and indirect
claims handling costs, including costs of inspecting
and assessing claims, costs to prevent, combat and
mitigate damage and other direct and indirect costs
associated with the handling of claims incurred.
Claims prevention expenses are defined in accordance
with Executive Order no. 1592 of 9/11 2020 § 37 para.
1 of the Executive Order.
Changes in claims provisions due to changes in yield
curve and exchange rates are recognised as a price
adjustment.
Tryg hedges the risk of changes in future pay and price
figures for provisions for workers’ compensation. Tryg
uses zero coupon inflation swaps acquired with a view
to hedging the inflation risk. Value adjustments of
these swaps are included in claims, thereby reducing
the effect of changes to inflation expectations under
claims.
Bonus and premium discounts
Bonuses and premium discounts represent anticipat-
ed and refunded premiums to policyholders, where
the amount refunded depends on the claims record,
and for which the criteria for payment have been de-
fined prior to the financial year or when the insurance
was taken out.
Insurance operating costs
Insurance operating costs represent acquisition costs
and administration expenses less reinsurance com-
missions received. Expenses relating to acquiring and
renewing the insurance portfolio are recognised at the
time of writing the business. Underwriting commission
is recognised when a legal obligation occurs. Admin-
istration expenses are all other expenses attributable
to the administration of the insurance portfolio.
Administration expenses are accrued to match the
financial year.
Share-based payment
The Tryg Group’s incentive programmes comprise an
employee bonus scheme and incentive programmes
for executive board, risk takers and other employees.
Employee bonus scheme
According to the remuneration policy, the Group’s
employees can be granted a bonus in the form of
free shares. When the bonus is granted, employees
can choose between receiving shares or cash. The
Annual report 2021 | Tryg A/S | 111
Financial statements - Contents
Notes
expected value of the shares will be expensed over the
performance period. The scheme will be treated as a
complex financial instrument, consisting of the right
to cash settlement and the right to request delivery
of shares. The difference between the value of shares
and the cash payment is recognised in equity and is
not remeasured. The remainder is treated as a liability
and is remeasured until the time of exercise, such that
the total recognition is based on the actual number of
shares or the actual cash amount.
Conditional shares
Conditional shares have been allocated to some em-
ployees in accordance with the incentive programme.
Equity-settled conditional shares are measured at the
fair value at the allotment date and recognised under
staff costs over the period from the allotment date
until the end of the deferral period (the transfer date),
where the holder receive free shares.
The shares are recognised at market value and are
accrued from up to four years.
Matching shares
Matching shares have been allocated to some employ-
ees in accordance with the incentive programme.
As part of the matching shares-program, employees
have bought investment shares in Tryg A/S at market
price, using taxed funds, for up to the amount decided.
The purchase of investment shares entitles the holder
to a number of matching shares, corresponding to the
number of investment shares which the holder has
bought. The shares (matching shares) are provided free
of charge, four or three years after the time of purchase
of the investment shares. The holder may not sell the
shares until six months after the matching date.
The shares are recognised at market value and are
accrued over the four and tree year maturation period,
based on the market price at the time of acquisition.
Recognition is from the end of the month of acquisition
under staff expenses with a balancing entry directly
in equity. If the holder retires during the maturation
period but remains entitled to shares, the remaining
expense is recognised in the current accounting year.
Investment activities
Income from associates includes the Group’s share of
the associates’ net profit.
Income from investment properties before fair value
adjustment represents the profit from property opera-
tions less property management expenses.
Interest and dividends represent interest earned and
dividends received during the financial year. Realised
and unrealised investment gains and losses, including
gains and losses on derivative financial instruments,
value adjustment of investment property, foreign
currency translation adjustments and the effect of
movements in the yield curve used for discounting, are
recognised as value adjustments.
Investment management charges represent expenses
relating to the management of investments including
salary and management fees on the investment area.
The external investors share of the result in Kapital-
foreningen Tryg Invest Funds and Tryg Invest Real
Estate are either deducted (in case of a profit) from or
added (in case of a loss) to the investment result.
Other income and costs
Other income and costs include income and expenses
which cannot be ascribed to the Group´s insurance
portfolio or investment assets, including the sale
of products for Velliv, Pension & Livsforsikring A/S,
Danske Bank and depreciations of intangibles assets
identified in Business combinations.
Discontinued and divested business
Discontinued and divested business is consolidated
in one item in the income statement. Discontinued
and divested business includes gross premiums, gross
claims, gross costs, profit/loss on ceded business,
insurance technical interest net of reinsurance, invest-
ment return after insurance technical interest, other
income and costs and tax in respect of the discontin-
ued business. Any reversal of earlier impairment is
recognised under other income and costs.
The statement of financial position items concerning
discontinued activities are reported unchanged under
the respective entries whereas assets and liabilities
concerning divested activities are consolidated under
one item as assets held for sale and liabilities held for
sale.
Statement of financial position
Intangible assets
Goodwill
Goodwill is acquired in connection with acquisition of
business. Goodwill is calculated as the difference be-
tween the cost of the undertaking and the fair value of
acquired identifiable assets, liabilities and contingent
liabilities at the time of acquisition. Goodwill is allo-
cated to the cash-generating units under which man-
agement manages the investment and is recognised
under intangible assets. Goodwill is not amortised but
is tested for impairment at least once per year.
Trademarks and customer relations
Trademarks and customer relations have been identi-
fied as intangible assets on acquisition. The intangible
assets are recognised at fair value at the time of
acquisition and amortised on a straight-line basis over
the expected economic lifetime of 5–15 years.
Software
Acquired computer software licences are capitalised
on the basis of the costs incidental to acquiring and
bringing to use the specific software. The costs are
amortised based on an estimated economic lifetime of
up to 8 years.
Costs for group developed software that are directly
connected with the production of identifiable and
unique software products, where there is sufficient
certainty that future earnings will exceed the costs in
more than one year, are reported as intangible assets.
Direct costs include personnel costs for software
development and directly attributable relevant fixed
costs. All other costs connected with the development
or maintenance of software are continuously charged
as expenses.
After completion of the development work, the asset is
amortised according to the straight-line method over
the assessed economic lifetime, though over a maxi-
mum of 8 years. The amortisation basis is reduced by
any impairment and write-downs.
Assets under construction
Group-developed intangibles are recorded under the
entry “Assets under construction” until they are put
into use, whereupon they are reclassified as software
and are amortized in accordance with the amortization
periods stated above.
Fixed assets
Operating equipment
Fixtures and operating equipment are measured at
cost less accumulated depreciation and any accu-
mulated impairment losses. Cost encompasses the
purchase price and costs directly attributable to the
acquisition of the relevant assets until the time when
such assets are ready to be brought into use.
Depreciation of operating equipment is calculated
using the straight-line method over its estimated
economic lifetime as follows:
• IT, 4 years
• Vehicles, 5 years
• Furniture, fittings and equipment, 5-10 years
Leasehold improvements are depreciated over the
expected economic lifetime, however maximally the
term of the lease.
Gains and losses on disposals and retired assets are
determined by comparing proceeds with carrying
amounts. Gains and losses are recognised in the
income statement. When revalued assets are sold,
the amounts included in the revaluation reserves are
transferred to retained earnings.
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Notes
Leasing
Right-of-use assets
At inception of a contract, Tryg assesses whether a
contract is, or contains, a lease. It has the following
prerequisites:
• The underlying asset is identifiable
• The group has the right to obtain substantially
all the economic benefits from use of the asset
throughout the period of use
• The group has the right to direct the use of the
asset
Tryg recognises a right-of-use asset and a correspond-
ing lease liability with respect to all lease agreements
in which it is the lessee, excluding short-term leases
(defined as leases with a lease term of 12 months or
less) and leases of low value assets.
At inception or on reassessment of a contract that
contains lease components, Tryg allocates the consid-
eration in the contract to each lease component based
on their relative stand-alone prices.
Right-of-use asset (ROU asset) and lease liability are
recognised at the lease commencement date. The
ROU asset is initially measured the cost, which com-
prises the initial amount of the lease liability adjusted
for
• lease payments made at or before the com-
mencement date
• any initial direct cost incurred
• estimate of costs to dismantle and remove the
underlying asset or to restore the underlying
asset
• lease incentives received
ROU assets are tested for impairment.
Lease liability
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted by using the rate
implicit in the lease. If this rate cannot be readily
determined, Tryg uses its incremental borrowing
rate. Subsequently, the lease liability is measured at
amortised cost using the effective interest method and
is presented as part of other debt. It is remeasured
when there is a change in future lease payments. A
corresponding adjustment is made to the carrying
amount of the ROU asset.
Land and buildings
Land and buildings are divided into owner-occupied
property and investment property. The Group sold the
owner-occupied property in Høje Taastrup and have
no longer any owner-occupied properties. All remain-
ing properties are classified as investment property.
Investment property
Properties held for renting yields that are not occupied
by the Group are classified as investment properties.
Investment property is recognised at fair value. Fair
value is based on market prices, adjusted for any
differences in the nature, location or maintenance
condition of specific assets. If this information is not
available, the Group uses alternative valuation meth-
ods such as discounted cash flow projections and
recent prices in the market.
The fair value is calculated on the basis of market-spe-
cific rental income per property and typical operating
expenses for the coming year. The resulting operating
income is divided by the required return on the proper-
ty in per cent, which is adjusted to reflect market inter-
est rates and property characteristics, corresponding
to the present value of a perpetual annuity. The value
is subsequently adjusted with the value in use of the
return on prepayments and deposits and adjustments
for specific property issues such as vacant premises or
special tenant terms and conditions. Cf. note 15.
Changes in fair values are recorded in the income
statement.
Impairment test for intangible assets, property and
operating equipment
Operating equipment and intangible assets are
assessed at least once per year to ensure that the
depreciation method and the depreciation period
that is used are connected to the expected economic
lifetime. This also applies to the salvage value. Write-
down is performed if impairment has been demon-
strated.
Goodwill is tested annually for impairment, or more of-
ten if there are indications of impairment, and impair-
ment testing is performed for each cash-generating
unit to which the asset belongs. The present value is
normally established using budgeted cash flows based
on business plans. The business plans are based on
past experience and expected market developments.
Equity investments in Group undertakings
The parent company’s equity investments in subsid-
iaries are recognised and measured using the equity
method. The parent company’s share of the enter-
prises’ profits or losses after elimination of unrealised
intra-group profits and losses is recognised in the in-
come statement. In the statement of financial position,
equity investments are measured at the pro rata share
of the enterprises’ equity.
Subsidiaries with a negative net asset value are
recognised at zero value. Any receivables from these
enterprises are written down by the parent compa-
ny’s share of such negative net asset value where the
receivables are deemed irrecoverable. If the negative
net asset value exceeds the amount receivable, the re-
maining amount is recognised under provisions if the
parent company has a legal or constructive obligation
to cover the liabilities of the relevant enterprise.
Net revaluation of equity investments in subsidiaries is
taken to reserve for net revaluation under equity if the
carrying amount exceeds cost.
The results of foreign subsidiaries are based on trans-
lation of the items in the income statement using aver-
age exchange rates for the period unless they deviate
significantly from the transaction day exchange rates.
Income and costs in domestic enterprises denomi-
nated in foreign currencies are translated using the
exchange rates applicable on the transaction date.
Statement of financial position items of foreign
subsidiaries are translated using the exchange rates
applicable at the statement of financial position date.
When it is assessed that the parent company no longer
has control over the subsidiary, it will be transferred
to either assets held for sale or unquoted shares and
when sold, it will be derecognised.
Equity investments in associates
Associates are enterprises in which the Group has sig-
nificant influence but not control, generally in the form
of an ownership interest of between 20% and 50% of
the voting rights. Equity investments in associates are
measured using the equity method and the carrying
amount of the investment represents the Group’s
proportionate share of the enterprises’ net assets.
Significant transaction costs are recognised as part of
the acquisition price.
Profit after tax from equity investments in associates
is included as a separate line in the income statement.
Income is made up after elimination of unrealised
intra-group profits and losses.
Associates with a negative net asset value are
measured at zero value. If the Group has a legal or con-
structive obligation to cover the associate’s negative
balance, such obligation is recognised under liabilities.
Investments
Investments include financial assets at fair value
which are recognised in the income statement. The
classification depends on the purpose for which the
investments were acquired. Management determines
the classification of its investments on initial recogni-
tion and re-evaluates this at every reporting date.
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Notes
Financial assets measured at fair value with recog-
nition of value adjustments in the income statement
comprise assets that form part of a trading portfolio
and financial assets designated at fair value with value
adjustment via the income statement.
The investment portfolio is divided into a match
portfolio corresponding to the technical provisions,
and a free portfolio. The objective for the return on the
match portfolio is to approximately offset the capital
gains and losses on the assets with the corresponding
developments on the insurance provisions. The free
portfolio is invested in different asset classes with a
view to obtain the best risk-adjusted return.
To avoid an accounting mismatch fixed income finan-
cial assets in the match portfolio are designated as
measured at fair value through profit or loss.
Financial assets at fair value recognised in income
statement
Financial assets are recognised at fair value on initial
recognition if they are entered in a portfolio that is
managed in accordance with fair value. Derivative
financial instruments are similarly classified as finan-
cial assets held for sale, unless they are classified as
hedging instruments.
Realised and unrealised profits and losses that may
arise because of changes in the fair value for the cate-
gory financial assets at fair value are recognised in the
income statement in the period in which they arise.
Financial assets are derecognised when the rights to
receive cash flows from the financial assets have ex-
pired, or if they have been transferred, and the Group
has also transferred substantially all risks and rewards
of ownership. Financial assets are recognised and
derecognised on a trade date basis, the date on which
the Group commits to purchase or sell the asset.
The fair values of quoted securities are based on stock
exchange prices at the statement of financial position
date. For securities that are not listed on a stock ex-
change, or for which no stock exchange price is quot-
ed that reflects the fair value of the instrument, the
fair value is determined using valuation techniques.
These include the use of similar recent arm’s length
transactions, reference to other similar instruments or
discounted cash flow analysis.
Derivative financial instruments and hedge accounting
The Group’s activities expose it to financial risks,
including changes in share prices, foreign exchange
rates, interest rates and inflation. Forward exchange
contracts and currency swaps are used for currency
hedging of portfolios of shares, bonds, hedging of
foreign entities and insurance statement of financial
position items. Interest rate derivatives in the form of
futures, forward contracts, swaps and FRAs are used
to manage cash flows and interest rate risks related to
the portfolio of bonds and insurance provisions. Share
derivatives in the form of futures and options are used
from time to time to adjust share exposures.
Derivative financial instruments are reported from
the trading date and are measured in the statement of
financial position at fair value. Positive fair values of
derivatives are recognised as derivative financial instru-
ments under assets. Negative fair values of derivatives
are recognised under derivative financial instruments
under liabilities. Positive and negative values are only
offset when the company is entitled or intends to make
net settlement of more financial instruments.
Calculation of value is generally performed based on
rates supplied by Danske Bank with relevant informa-
tion providers and is checked by the Group’s valuation
technicians. Discounting based on market interest
rates is applied in the case of derivative financial
instruments involving an expected future cash flow.
Recognition of the resulting gain or loss depends on
whether the derivative is designated as a hedging in-
strument and, if so, the nature of the item being hedged.
The Group designates certain derivatives as hedges
of investments in foreign entities. Changes in the fair
value of derivatives that are designated and qualify as
net investment hedges in foreign entities and which
provide effective currency hedging of the net invest-
ment are recognised in other comprehensive income.
The net asset value of the foreign entities estimated at
the beginning of the financial year is hedged 90-100%
by entering into short-term forward exchange contracts
according to the requirements of hedge accounting.
Changes in the fair value relating to the ineffective por-
tion are recognised in the income statement. Gains and
losses accumulated in equity are included in the income
statement on disposal of the foreign entity.
Reinsurers’ share of provisions for insurance contracts
Contracts entered into by the Group with reinsurers
under which the Group is compensated for losses on
one or more contracts issued by the Group and that
meet the classification requirements for insurance
contracts are classified as reinsurers’ share of provi-
sions for insurance contracts. Contracts that do not
meet these classification requirements are classified
as financial assets.
The benefits to which the Group is entitled under its
reinsurance contracts held are recognised as assets
and reported as reinsurers’ share of provisions for
insurance contracts.
Amounts receivable from reinsurers are measured
consistently with the amounts associated with the
reinsured insurance contracts and in accordance with
the terms of each reinsurance contract.
Changes due to unwinding are recognised in insurance
technical interest. Changes due to changes in the yield
curve or foreign exchange rates are recognised as
price adjustments.
The Group continuously assesses its reinsurance as-
sets for impairment. If there is objective evidence that
the reinsurance asset is impaired, the Group reduces
the carrying amount of the reinsurance asset to its re-
coverable amount. Impairment losses are recognised
in the income statement.
Receivables
Total receivables comprise accounts receivable from
policyholders and insurance companies as well as other
accounts receivable. Other receivables primarily contain
accounts receivable in connection with property.
Receivables that arise because of insurance contracts
are classified in this category and are reviewed for im-
pairment as a part of the impairment test of accounts
receivable.
Receivables are recognised initially at fair value and
are subsequently assessed at amortised cost. The
income statement includes an estimated reservation
for expected unobtainable sums when an objective
evidence of the asset impairment is observed. The res-
ervation entered is assessed as the difference between
the carrying amount of an asset and the present value
of expected future cash flows.
Other assets
Other assets include current tax assets and cash at
bank and in hand. Current tax assets are receivables
concerning tax for the year adjusted for on-account
payments and any prior-year adjustments. Cash at
bank and in hand is recognised at nominal value at the
statement of financial position date. Reverse repur-
chase lending to credit institutions are recognised and
measured at amortised cost, and the return is recog-
nised as interest income in the income statement.
Prepayments and accrued income
Prepayments include expenses paid in respect of
subsequent financial years and interest receivable.
Accrued underwriting commission relating to the sale
of insurance products is also included.
Equity
Share capital
Shares are classified as equity when there is no obliga-
tion to transfer cash or other assets. Costs directly at-
tributable to the issue of equity instruments are shown
in equity as a deduction from the proceeds, net of tax.
Revaluation reserves
Revaluation of owner-occupied property is recognised
in other comprehensive income unless the revaluation
offsets a previous impairment loss.
Annual report 2021 | Tryg A/S | 114
Financial statements - Contents
Notes
Foreign currency translation reserve
Assets and liabilities of foreign entities are recognised
using the exchange rate applicable at the statement
of financial position date. Income and expense items
are recognised using the average monthly exchange
rates for the period. Any resulting differences are
recognised in Other comprehensive income. When an
entity is wound up or sold, the balance is transferred
to the income statement. The hedging of the currency
risk in respect of foreign entities is also offset in other
comprehensive income in respect of the part that
concerns the hedge.
Contingency fund reserves
Contingency fund reserves are recognised as part of
retained earnings under equity. The reserves may only
be used when so permitted by the Danish Financial
Supervisory Authority and when it is for the benefit of
the policyholders. The Norwegian contingency fund
reserves include provisions for the Norwegian Natural
Perils Pool and security reserve. The Danish and
Swedish provisions comprise contingency fund pro-
visions. Deferred tax on the Norwegian and Swedish
contingency fund reserves is recognized.
Dividends
Proposed dividend is recognised as a liability at the
time of adoption by the shareholders at the annual
general meeting (date of declaration).
Own shares
The purchase and sale sums of own shares and
dividends thereon are taken directly to retained
earnings under equity. Own shares include shares
acquired for incentive programmes and share buyback
programmes.
Proceeds from the sale of own shares in connection
with the matching shares are taken directly to equity.
Subordinated loan capital
Subordinate loan capital is recognised initially at fair
value, net of transaction costs incurred. Subordinated
loan capital is subsequently stated at amortised cost;
any difference between the proceeds (net of transac-
tion costs) and the redemption value is recognised in
the income statement over the borrowing period using
the effective interest method.
Provisions for insurance contracts
Premiums written are recognised in the income state-
ment (premium income) proportionally throughout
the coverage period and, where necessary, adjusted
to reflect any time variation of the risk. The portion of
premiums written on in-force contracts that relates to
unexpired risks at the statement of financial position
date is reported as premium provisions. Premium
provisions are generally calculated according to a best
estimate of expected payments throughout the agreed
risk period; however, as a minimum as the part of the
premium calculated using the pro rata temporis princi-
ple until the next payment date. Adjustments are made
to reflect any risk variations. This applies to gross as
well as ceded business.
Claims and claims handling costs are expensed in the
income statement as incurred based on the estimat-
ed liability for compensation owed to policyholders
or third parties sustaining losses at the hands of
the policyholders. They include direct and indirect
claims handling costs that arise from events that have
occurred up to the statement of financial position date
even if they have not yet been reported to the Group.
Claims provisions are estimated using the input of as-
sessments for individual cases reported to the Group
and statistical analyses for the claims incurred but
not reported and the expected ultimate cost of more
complex claims that may be affected by external fac-
tors (such as court decisions). The provisions include
claims handling costs.
Claims provisions are discounted. Discounting is
based on a yield curve reflecting duration applied to
the expected future payments from the provision.
Discounting affects the motor liability, professional
liability, workers’ compensation and personal accident
and health insurance classes, in particular.
Provisions for bonuses and premium discounts etc.
represent amounts expected to be paid to policy-
holders in view of the claims experience during the
financial year.
Claims provisions are determined for each line of
business based on actuarial methods. Where such busi-
ness lines encompass more than one business area,
short-tailed claims provisions are distributed based
on number of claims reported while long-tailed claims
provisions are distributed based on premiums earned.
The models currently used are Chain-Ladder, Born-
huetter-Ferguson, the Loss Ratio method. Chain-Ladder
techniques are used for lines of business with a stable
run-off pattern. The Bornhuetter-Ferguson method, and
sometimes the Loss Ratio method, are used for claims
years in which the previous run-off provides insufficient
information about the future run-off performance.
The provision for annuities under workers’ compensa-
tion insurance is calculated on the basis of a mortality
corresponding to the G82 calculation basis (official
mortality table).
In some instances, the historic data used in the actuar-
ial models is not necessarily predictive of the expected
future development of claims. For example, this is
the case with legislative changes where an a priori
estimate is used for premium increases related to the
expected increase in claims. In connection with leg-
islative changes, the same estimate is used for deter-
mining the change in the level of claims. Subsequently,
this estimate is maintained until new loss history
materialises which can be used for re-estimation.
Several assumptions and estimates underlying the
calculation of the claims provisions are mutually
dependent. Most importantly, this can be expected to
be the case for assumptions relating to interest rates
and inflation.
Workers’ compensation is an area in which explicit
inflation assumptions are used, with annuities for
the insured being indexed based on the workers’
compensation index. An inflation curve that reflects
the market’s inflation expectations plus a real wage
spread is used as an approximation to the workers’
compensation index.
For other lines of business, the inflation assump-
tions, because present only implicitly in the actuarial
models, will cause a certain lag in predicting the level
of future losses when a change in inflation occurs. On
the other hand, the effect of discounting will show
immediately as a consequence of inflation changes to
the extent that such changes affect the interest rate.
Other correlations are not deemed to be significant.
Liability adequacy test
Tests are continuously performed to ensure the
adequacy of the insurance provisions. In performing
these tests, current best estimates of future cash
flows of claims, gains and direct and indirect claims
handling costs are used. Any deficiency results in an
increase in the relevant provision, and the adjustment
is recognised in the income statement.
Employee benefits
Pension obligations
The Group operates various pension schemes.
The schemes are funded through contributions to
insurance companies or trustee-administered funds.
In Norway, the Group operated a defined-benefit plan
which was closed at 01 January 20. In Denmark, the
Group operates a defined-contribution plan. A de-
fined-contribution plan is a pension plan under which
the Group pays fixed contributions into a separate
entity (a fund) and will have no legal or constructive
obligation to pay further contributions. In Sweden, the
Group complies with the industry pension agreement,
FTP-Planen. FTP-Planen is primarily a defined-ben-
efit plan as regards the future pension benefits.
Försäkringsbranschens Pensionskassa (FPK) is unable
to provide sufficient information for the Group to use
defined-benefit accounting. The plan is on that basis
accounted for as a defined-contribution plan. As part
of the termination of the defined-benefit plan in Nor-
Annual report 2021 | Tryg A/S | 115
Financial statements - Contents
Notes
way, an agreement of compensation to the employees
covered by the plan was agreed. A liability has been
established to cover the expected compensation to
be paid to the employees upon retirement from the
company. If the employee leaves before retirement
only a part of the compensation is paid. There are no
future actuarial assumptions related to the liability,
the only uncertainty is whether the employees stay to
retirement or not.
Other employee benefits
Employees of the Group are entitled to a fixed pay-
ment when they reach retirement and when they have
been employed with the Group for 25 or 40 years. The
Group recognises this liability at the time of signing the
contract of employment.
In special instances, the employee can enter into a
contract with the Group to receive compensation for
loss of pension benefits caused by reduced working
hours. The Group recognises this liability based on
statistical models.
Income tax and deferred tax
The Group expenses current tax according to the tax
laws of the jurisdictions in which it operates. Current
tax liabilities and current tax receivables are rec-
ognised in the statement of financial position as esti-
mated tax on the taxable income for the year, adjusted
for change in tax on prior years’ taxable income and for
tax paid under the on-account tax scheme.
Deferred tax is measured according to the statement
of financial position liability method on all timing
differences between the tax and accounting value of
assets and liabilities. Deferred income tax is measured
using the tax rules and tax rates that apply in the rele-
vant countries on the statement of financial position
date when the deferred tax asset is realised, or the
deferred income tax liability is settled.
Deferred income tax assets, including the tax value of tax
losses carried forward, are recognised to the extent that
it is probable that future taxable profit will be realised
against which the temporary differences can be offset.
Deferred income tax is provided on temporary differ-
ences concerning investments, except where Tryg con-
trols when the temporary difference will be realised,
and it is probable that the temporary difference will
not be realised in the foreseeable future.
Other provisions
Provisions are recognised when the Group has a legal
or constructive obligation because of an event prior
to or at the statement of financial position date, and
it is probable that future economic benefits will flow
out of the Group. Provisions are measured at the best
estimate by management of the expenditure required
to settle the present obligation.
Provisions for restructurings are recognised as
obligations when a detailed formal restructuring plan
has been announced prior to or at the statement of
financial position date at the latest to the persons
affected by the plan.
Own insurance is included under other provisions. The
provisions apply to the Group’s own insurance claims
and are reported when the damage occurs according
to the same principle as the Group’s other claims
provisions.
Debt
Debt comprises debt in connection with direct
insurance and reinsurance, amounts owed to credit
institutions, current tax obligations, debt to group
undertakings and other debt. Other liabilities are
assessed at amortised cost based on the effective
interest method.
Debt related to leasing and the external investors
share of Kapitalforeningen Tryg Invest Funds and
Kapitalforeningen Tryg Invest is included in other debt.
The external investor’s share of Kapitalforeningen
Tryg Invest relates to shares, bonds and investment
properties.
Repo deposits from credit institutions are recognised
and measured at amortised costs, and the return
is recognised as interest expenses in the income
statement.
Cash flow statement
The consolidated cash flow statement is presented
using the direct method and shows cash flows from
operating, investing and financing activities as well
as the Group’s cash and cash equivalents at the
beginning and end of the financial year. No separate
cash flow statement has been prepared for the parent
company because it is included in the consolidated
cash flow statement.
Cash flows from operating activities are calculated
whereby major classes of gross cash receipts and
gross cash payments are disclosed.
Cash flows from investing activities comprise
payments in connection with the purchase and sale
of intangible assets, property, plant and equipment
as well as financial assets and deposits with credit
institutions.
Cash flows from financing activities comprise changes
in the size or composition of Tryg’s share capital and
related costs as well as the raising of loans, repay-
ments of interest-bearing debt and the payment of
dividends.
Cash and cash equivalents comprise cash and de-
mand deposits.
Other
The amounts in the report are disclosed in whole num-
bers of DKKm, unless otherwise stated. The amounts
have been rounded and consequently the sum of the
rounded amounts and totals may differ slightly.
Annual report 2021 | Tryg A/S | 116
Financial statements - Contents
DKKm 2021 2020
Note Investment activities
1 Income from Group undertakings 3,120 2,843
Income from associates 1,206 0
Interest income 1 0
2 Value adjustments -1,015 0
Interest expenses -34 0
Administration expenses in connection with investment activities -5 -2
Total investment return 3,272 2,841
3 Other expenses -82 -88
Profit/loss before tax 3,190 2,753
4 Tax -33 20
Profit/loss for the year 3,158 2,773
Proposed distribution for the year:
Dividend 2,802 2,115
Transferred to reserve for net revaluation according to the
equity method 1,696 235
Transferred to retained earnings -1,340 423
3,158 2,773
DKKm 2021 2020
Statement of comprehensive income
Profit/loss for the year 3,158 2,773
Other comprehensive income
Other comprehensive income which cannot subsequently be
reclassified as profit or loss
Actuarial gains/losses on defined-benefit pension plans 0 -68
Tax on actuarial gains/losses on defined-benefit pension plans 0 6
0 -62
Other comprehensive income which can subsequently be re-
classified as profit or loss
Exchange rate adjustments of foreign entities for the year 93 -51
Exchange rate adjustments of foreign material associates for
the year -52 0
Hedging of currency risk in foreign entities for the year -99 127
Tax on hedging of currency risk in foreign entities for the year 22 -28
-36 48
Total other comprehensive income -36 -14
Comprehensive income 3,122 2,759
Income statement for Tryg A/S (parent company)
Annual report 2021 | Tryg A/S | 117
Financial statements - Contents
DKKm 2021 2020
Note Assets
5 Equity investments in Group undertakings 13,029 12,475
6 Equity investments in associates 37,052 1
Total investments in associates and Group undertakings 50,081 12,475
Total investment assets 50,081 12,475
7 Current tax assets 0 20
Other 1 2
Total other assets 1 21
Total prepayments and accrued income 55 326
Total assets 50,137 12,823
DKKm 2021 2020
Note Equity and liabilities
Equity 49,008 12,264
Debt to Group undertakings 1,092 513
Tax liabilities 33 0
Other debt 4 46
Total debt 1,129 559
Total equity and liabilities 50,137 12,823
8 Deferred tax assets
9 Contractual obligations, contingent liabilities and collateral
10 Related parties
11 Reconciliation of profit/loss and equity
12 Accounting policies
Statement of financial position for Tryg A/S
(parent company)
Annual report 2021 | Tryg A/S | 118
Financial statements - Contents
Proposed dividend per share is calculated as the total
dividend proposed by the Supervisory Board after the
end of the financial year divided by the total number
of shares at the end of the year (654,653,980 shares).
a) 352,505,989 new shares of nominal DKK 5 at a
price of 105 per share were issued. Cost related to
the issue of new shares are deducted in proceeds
recognised in retained earnings with DKK 694m.
Total changes in equity in DKKm
Share
capital
Revaluation
reserves
Retained
earnings
Proposed
dividend
Non-controlling
interest Total
Equity at 31 December 2020 1,511 3,458 6,765 529 1 12,264
2021
Profit/loss for the year 1,696 -1,340 2,802 0 3,158
Other comprehensive income -36 -36
Total comprehensive income 0 1,660 -1,340 2,802 0 3,122
Dividend paid -2,630 -2,630
Dividend own shares 3 3
Purchase and sale of own shares -137 -137
Issue of new shares
a)
1,763 34,557 36,320
Share-based payments 66 66
Total changes in equity in 2021 1,763 1,660 33,150 172 0 36,744
Equity at 31 December 2021 3,273 5,119 39,915 700 1 49,008
Equity at 31 December 2019 1,511 3,238 6,323 1,013 1 12,085
2020
Profit/loss for the year 235 423 2,115 0 2,773
Other comprehensive income -14 -14
Total comprehensive income 0 220 423 2,115 0 2,758
Dividend paid -2,599 -2,599
Dividend, own shares 4 4
Purchase and sale of own shares -13 -13
Share-based payments 29 29
Total changes in equity in 2020 0 220 442 -484 0 179
Equity at 31 December 2020 1,511 3,458 6,765 529 1 12,264
Statement of changes in equity (parent company)
Annual report 2021 | Tryg A/S | 119
Financial statements - Contents
Notes
(parent company)
DKKm 2021 2020
1 Income from Group undertakings
Tryg Invest A/S 8 11
Alka Fordele A/S -25 -5
Tryg Forsikring A/S 3,137 2,837
3,120 2,843
2 Value adjustments
Primarily value adjustment of currency hedge DKK 1,035m re-
lated to RSA acquisition which consists of the premium paid
and exchange rate adjustments that cannot be attributed to
hedge accounting.
3 Other expenses
Administration expenses -82 -88
-82 -88
Remuneration for the Executive Board is paid partly by Tryg A/S
and partly by Tryg Forsikring A/S and is charged to Tryg A/S via
the cost allocation. Refer to Note 6 in the Tryg Group for a spe-
cification of the audit fee.
Average number of full-time employees for the year 8 8
4 Tax
Reconciliation of tax costs
Tax on profit/loss for the year 16 20
Adjustment of non-taxable income and costs 18 0
33 20
Effective tax rate % %
Tax on profit/loss for the year 22 22.0
Adjustment of non-taxable income and costs 24.5 1.0
46.5 23.0
DKKm 2021 2020
5 Equity investments in Group undertakings
Cost
Cost at 1 January 9,005 8,995
Additions for the year 48 10
Cost at 31 December 9,053 9,005
Revaluation and impairment to net asset value
Revaluation and impairment at 1 January 3,470 3,238
Revaluations for the year 3,137 2,830
Dividend paid -2,630 -2,598
Revaluation and impairment at 31 December 3,976 3,470
Carrying amount at 31 December 13,029 12,475
Name, registered office and activity
Ownership
share in % Profit/loss Equity
2021
Tryg Invest A/S, Ballerup 100 8 39
Alka Fordele A/S, Ballerup 100 -25 28
Tryg Forsikring A/S, Ballerup 100 3,137 12,962
2020
Tryg Invest A/S, Ballerup 100 11 31
Alka Fordele A/S, Ballerup 100 -5 5
Tryg Forsikring A/S, Ballerup 100 2,837 12,438
6 Equity investments in associates
Please refer to Tryg Group's note 14 Equity
investments in associates.
Annual report 2021 | Tryg A/S | 120
Financial statements - Contents
Notes
(parent company)
DKKm 2021 2020
7 Current tax assets
Tax receivable at 1 January 20 17
Current tax for the year -33 20
Tax paid for the year -20 -17
Tax receivable at 31 December -33 20
8 Deferred tax assets
Capitalised tax losses
Tryg A/S 0 0
Tax value of non-capitalised tax losses
Tryg A/S 16 16
The loss in Tryg A/S can only be utilised in Tryg A/S.
The loss can be carried forward indefinitely.
The losses are not recognised as tax assets until it has been substantiated that the company can gene-
rate sufficient future taxable income to offset the tax losses.
9 Contractual obligations, contingent liabilities and collateral
The Danish companies in the Tryg Group are jointly taxed with TryghedsGruppen smba. The companies
and the other jointly taxed companies are liable for any obligations to withhold taxes at source on inte-
rest, royalties, dividends and income taxes etc. in respect of the jointly taxed companies.
Companies in the Tryg Group are party to a number of disputes in Denmark, Norway and Sweden.
Management believes that the outcome of these disputes will not affect the Group’s financial position
over and above the receivables and liabilities recognised in the statement of financial position at 31 De-
cember 2021.
DKKm
10 Related parties
Tryg A/S has no related parties with a controlling influence other than the parent company, Trygheds-
Gruppen smba. Related parties with a significant influence include the Supervisory Board, the Executive
Board (which is considered Key Management) and their members’ related family.
Specification of remuneration
2021
Number of
persons
Base salary
incl. car al-
lowance
Share-based
variable
salary
a)
Cash
variable
salary Pension Total
Supervisory Board 13 10 0 0 0 10
Executive Board 4 30 12 0 7 50
Risk-takers
b)
1 0 0 0 0 0
18 40 12 0 7 60
a) Total expenses recognised in 2021 for matching shares and conditional shares allocated in 2021 and
previous years.
For matching shares and conditional shares allocated to Executive Board in 2021, please refer to
”Corporate governance” in Management review. For further details on remunerations of Supervisory
Board and Executive Board, please refer to “Corporate governance” in Management review.
b) Risk-takers in Tryg A/S includes only one employee, wherefore salary and pension is not presented.
The amounts are included in note 27 for Tryg Group.
Of which retired
Number of
persons
Severance
pay
Supervisory Board 0 0
Executive Board 0 0
Risk-takers 0 0
0 0
Annual report 2021 | Tryg A/S | 121
Financial statements - Contents
Notes
(parent company)
DKKm
10 Related parties (continued)
Each member of the Executive Board is entitled to 12 months’ notice and severance pay equal to 12
months’ salary plus pension contribution (Group CEO is entitled to severance pay equal to 18 months’
salary). If a change of control clause is actioned CEO and COO are instead entitled to Severance pay
equal to 36 months’ salary.
Risk-takers are defined as employees whose activities have a significant influence on the company’s risk
profile. The Supervisory Board decides which employees should be considered to be risk-takers.
Parent company
TryghedsGruppen smba
TryghedsGruppen smba controls 44.9% (53%) of the shares in Tryg A/S.
Transactions with Group undertakings and associates
Tryg A/S exercises full control over Tryg Forsikring A/S, Alka Fordele A/S and Tryg Invest A/S.
In 2021 Tryg Forsikring A/S paid Tryg A/S DKK 2,630m and Tryg A/S paid TryghedsGruppen smba DKK
1,224m in dividends.
TryghedsGruppen smba has exercised pre-empitive rights and subscribed for new shares in Tryg A/S to-
talling DKK 14.0bn during the subscribtion period in Q1 2021.
Intra-group trading involved 2021 2020
- Providing and receiving services 11 36
- Intra-group accounts 1,092 513
The intra-group trading is primarily against Tryg Forsikring A/S.
Administration fee, etc. is settled on a cost-recovery basis.
Intra-group accounts are offset and carry interest on market terms.
11 Reconciliation of profit/loss and equity
The executive order on application of International Financial Reporting Standards for companies subject
to the Danish Financial Business Act issued by the Danish FSA requires disclosure of differences
between the format of the annual report under International Financial Reporting Standards and the
rules issued by the Danish FSA.
There is no difference in profit/loss or equity recognised after Danish FSA and IFRS.
12 Accounting policies
Please refer to Tryg Group's note 29 accounting policies.
DKKm
10 Related parties (continued)
2020
Number of
persons Base salary
Share-based
variable
salary
a)
Cash
variable
salary Pension Total
Supervisory Board 14 9 0 0 0 9
Executive Board 4 29 11 0 7 47
Risk-takers
b)
1 0 0 0 0 0
19 38 11 0 7 57
a) Total expenses recognised in 2020 for matching shares and conditional shares allocated in 2020 and
previous year. For matching shares and conditional shares allocated to Executive Board in 2020,
please refer to ”Corporate governance” in Management review.
b) Risk-takers in Tryg A/S includes only one employee, wherefore salary and pension is not presented.
The amounts are included in note 27 for Tryg Group.
Of which retired
Number of
persons
Severance
pay
Supervisory Board 2 0
2 0
Fees are charges incurred during the financial year. Variable salary includes the charges for matching
shares and conditional shares, which are recognised over 4 years.
Reference is made to section ’Corporate governance’ of the management’s review on the correspon-
ding disbursements.
The Executive Board and risk-takers are included in incentive programmes. Please refer to note 6 in the
Tryg Group for information concerning this.
The members of the Supervisory Board in Tryg A/S are paid with a fixed remuneration and are not cove-
red by the incentive schemes.
The Executive Board is paid a fixed remuneration, car allowance and pension.
The variable salary is awarded in the form of share-based remuneration and cash. see ’Corporate gover-
nance’.
Annual report 2021 | Tryg A/S | 122
Financial statements - Contents
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3
DKKm 2021 2021 2021 2021 2020 2020 2020 2020 2019 2019
Private
Gross premium income 3,433 3,450 3,431 3,371 3,245 3,167 3,169 3,162 3,059 3,055
Technical result 606 561 645 407 537 588 607 313 494 458
Key ratios
Gross claims ratio 68.8 67.7 65.2 72.5 68.1 66.8 65.0 79.1 67.9 69.2
Net reinsurance ratio 1.8 2.1 2.3 1.7 2.5 0.4 2.1 -2.7 2.5 1.8
Claims ratio, net of reinsurance 70.7 69.8 67.5 74.2 70.5 67.3 67.1 76.4 70.4 71.0
Gross expense ratio 11.5 13.9 13.6 13.6 12.8 14.1 13.7 13.7 13.4 13.9
Combined ratio 82.2 83.6 81.1 87.8 83.3 81.3 80.8 90.1 83.8 84.9
Combined ratio exclusive of run-off 83.2 84.7 82.1 88.8 83.7 82.3 82.2 91.1 84.9 85.4
Commercial
Gross premium income 1,352 1,338 1,316 1,288 1,261 1,248 1,187 1,233 1,205 1,203
Technical result 109 278 241 222 179 253 223 142 199 190
Key ratios
Gross claims ratio 67.3 56.4 65.7 62.4 61.9 55.5 61.9 77.7 65.5 65.3
Net reinsurance ratio 4.9 7.0 -0.8 3.2 5.4 7.9 3.0 -5.9 0.9 2.0
Claims ratio, net of reinsurance 72.2 63.4 64.9 65.6 67.3 63.4 64.9 71.8 66.4 67.3
Gross expense ratio 19.7 15.7 16.6 16.9 18.4 16.1 16.2 16.6 17.1 16.9
Combined ratio 91.9 79.1 81.5 82.5 85.7 79.6 81.1 88.5 83.5 84.2
Combined ratio exclusive of run-off 97.6 86.7 87.4 86.6 96.6 85.3 84.2 96.5 86.1 91.9
Corporate
Gross premium income 850 869 864 875 844 860 825 846 861 912
Technical result 36 103 174 47 -32 70 183 180 -21 168
Key ratios
Gross claims ratio 81.4 68.5 55.1 75.6 86.7 59.8 56.7 70.5 93.6 65.3
Net reinsurance ratio 0.6 8.1 14.1 8.5 4.5 21.9 10.4 -2.1 -3.1 7.7
Claims ratio, net of reinsurance 82.0 76.6 69.2 84.2 91.2 81.7 67.1 68.4 90.5 73.1
Gross expense ratio 13.7 11.5 10.5 10.2 12.5 10.0 10.7 10.4 11.8 8.4
Combined ratio 95.7 88.0 79.7 94.4 103.7 91.7 77.7 78.8 102.3 81.5
Combined ratio exclusive of run-off 102.8 93.5 89.0 105.1 113.1 104.7 86.4 99.3 112.2 95.0
A further detailed version of the
presentation can be downloaded
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Q4 2021 Quarterly outline
Annual report 2021 | Tryg A/S | 123
Financial statements - Contents
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3
DKKm 2021 2021 2021 2021 2020 2020 2020 2020 2019 2019
Sweden
Gross premium income 407 476 446 372 393 443 415 353 364 422
Technical result 74 46 85 72 96 69 67 35 90 54
Key ratios
Gross claims ratio 65.0 74.4 64.6 63.0 61.3 67.9 64.0 73.5 53.1 70.5
Net reinsurance ratio 0.1 0.2 -1.2 0.2 0.3 -0.3 1.0 -1.6 0.8 0.3
Claims ratio, net of reinsurance 65.1 74.6 63.4 63.2 61.6 67.6 65.1 71.9 53.8 70.8
Gross expense ratio 16.6 15.7 17.5 17.3 13.9 16.6 18.6 18.1 21.5 16.5
Combined ratio 81.7 90.2 80.9 80.5 75.5 84.2 83.7 90.0 75.3 87.3
Combined ratio exclusive of run-off 96.5 100.4 92.4 100.8 96.8 96.8 97.4 105.1 104.8 98.8
Other
a)
Gross premium income 0 0 0 0 0 0 0 0 -11 -9
Technical result 0 0 0 2 0 0 -18 2 0 0
Tryg total
Gross premium income 6,041 6,133 6,057 5,906 5,744 5,719 5,595 5,595 5,479 5,583
Technical result 826 988 1,144 751 780 980 1,063 672 762 870
Investment return 941 481 -757 343 513 237 541 -980 198 -29
Other income and costs -171 -267 -113 -72 -70 -67 -64 -64 -20 -62
Profit/loss before tax 1,596 1,201 274 1,022 1,223 1,150 1,539 -372 940 779
Profit/loss 1,370 1,037 -63 814 1,038 930 1,246 -442 705 599
Key ratios
Gross claims ratio 70.0 65.8 63.8 70.1 69.0 63.4 63.2 77.1 70.3 67.8
Net reinsurance ratio 2.2 3.9 3.1 2.9 3.3 5.2 3.4 -3.2 1.2 2.7
Claims ratio, net of reinsurance 72.2 69.7 66.9 73.1 72.3 68.6 66.6 73.9 71.5 70.5
Gross expense ratio 14.0 14.1 14.1 14.1 14.0 14.1 14.3 14.1 14.6 13.9
Combined ratio 86.2 83.8 81.0 87.1 86.3 82.7 80.9 88.0 86.1 84.4
Combined ratio exclusive of run-off 90.1 87.6 85.0 91.5 91.8 87.4 84.6 94.4 90.7 89.4
a) Amounts relating to eliminations
and one-off items are included under
'Other'.
A further detailed version of the
presentation can be downloaded
from tryg.com/uk>investor>
Downloads>tables
Q4 2021 Quarterly outline
Annual report 2021 | Tryg A/S | 124
Financial statements - Contents
DKKm Q4 2021 Q4 2020 2021 2020
Danish general insurance
Gross premium income 3,522 3,511 14,326 13,902
Technical result 500 707 2,448 2,694
Run-off gains/losses, net of reinsurance 133 240 644 639
Key ratios
Gross claims ratio 67.9 64.1 66.2 65.5
Net reinsurance ratio 3.1 1.9 2.0 1.1
Claims ratio, net of ceded business 71.0 66.0 68.2 66.6
Gross expense ratio 14.5 13.7 14.4 13.9
Combined ratio 85.6 79.6 82.7 80.4
Run-off, net of reinsurance (%) -3.8 -6.8 -4.5 -4.6
Number of full-time employees, end of period 3,062 2,826
Norwegian general insurance
NOK/DKK, average rate for the period 73.94 68.26 72.92 69.63
Gross premium income 1,889 1,640 7,263 6,411
Technical result 179 40 938 473
Run-off gains/losses, net of reinsurance 29 50 215 247
Key ratios
Gross claims ratio 75.4 72.6 69.1 75.3
Net reinsurance ratio 2.6 10.5 5.0 3.4
Claims ratio, net of ceded business 78.0 83.1 74.1 78.7
Gross expense ratio 12.7 14.5 13.1 14.1
Combined ratio 90.7 97.6 87.2 92.7
Run-off, net of reinsurance (%) -1.6 -3.0 -3.0 -3.9
Number of full-time employees, end of period 1,139 1,099
DKKm Q4 2021 Q4 2020 2021 2020
Swedish general insurance
SEK/DKK, average rate for the period 73.45 71.83 73.39 70.95
Gross premium income 584 564 2,390 2,234
Technical result 110 30 279 331
Run-off gains/losses, net of reinsurance 72 28 113 274
Key ratios
Gross claims ratio 67.6 90.0 71.4 65.8
Net reinsurance ratio -1.2 -9.6 2.2 4.0
Claims ratio, net of ceded business 66.4 80.3 73.6 69.9
Gross expense ratio 14.7 14.3 14.6 15.3
Combined ratio 81.1 94.6 88.3 85.1
Run-off, net of reinsurance (%) -12.2 -4.9 -4.7 -12.3
Number of full-time employees, end of period 431 441
Other
a)
Gross premium income 46 29 159 105
Technical result 36 4 43 -3
Run-off gains/losses, net of reinsurance -2 -3 -8 -15
Number of full-time employees, end of period 42 33
Tryg (total)
Gross premium income 6,041 5,744 24,137 22,653
Technical result 826 780 3,709 3,495
Investment return 941 513 1,008 311
Other income and costs -171 -70 -624 -265
Profit/loss before tax 1,596 1,223 4,093 3,541
Run-off gains/losses, net of reinsurance 232 314 963 1,145
Key ratios
Gross claims ratio 70.0 69.0 67.4 68.1
Net reinsurance ratio 2.2 3.3 3.0 2.2
Claims ratio, net of ceded business 72.2 72.3 70.5 70.3
Gross expense ratio 14.0 14.0 14.1 14.1
Combined ratio 86.2 86.3 84.5 84.5
Run-off, net of reinsurance (%) -3.8 -5.5 -4.0 -5.1
Number of full-time employees, end of period 4,674 4,400
a) Comprises Finnish, Dutch, Austrian, Swiss, Belgium and German Credit & surety insurance and amounts rela-
ting to one-off items.
Q4 2021 Geographical segments
Annual report 2021 | Tryg A/S | 125
Financial statements - Contents
Key ratios are calculated in accordance with ’’Recom-
mendations & Financial Ratios’’ issued by the Danish
Society of Financial Analysts.
2021 2020 2019 2018 2017
Share performance
Earnings per share (DKK) 5.51 9.19 9.42 5.73 9.12
Diluted earnings per share (DKK) 5.51 9.19 9.42 5.73 9.12
Earnings per share of continuing business (DKK) 5.52 9.19 9.42 5.74 9.12
Operating earnings per share (DKK) 5.70 9.54 9.82 5.84 9.12
Number of shares (1,000) 653,447 301,750 301,700 301,743 301,945
Average number of shares (1,000) 572,688 301,678 301,954 302,043 276,080
Diluted average number of shares (1,000) 572,688 301,678 301,954 302,043 276,080
Share price (DKK) 161.50 192.10 197.50 163.90 155.20
Net asset value per share (DKK) 75.00 40.64 40.05 37.56 41.78
Market price/net asset value 2.2 4.7 4.9 4.4 3.7
Ordinary dividend per share (DKK) 4.28 7.00 6.80 6.60 6.40
Extraordinary dividend per share (DKK) 0.00 0.00 1.65 0.00 3.31
Price/Earnings 29.3 20.9 21.0 28.6 17.0
Number of full-time employess, continued business, at 31 December 4,674 4,400 4,151 4,027 3,373
Other key figures
Annual report 2021 | Tryg A/S | 126
Financial statements - Contents
Group chart at 1 January 2022. Companies and branches are wholly owned
by Danish owners and domiciled in Denmark, unless otherwise stated.
Company Branch
Group chart
(Denmark)
Tryg Forsikring A/S
(Denmark)
Moderna
Försäkringar
(Branch Sweden)
Tryg Forsikring
(Branch Finland)
Tryg Forsikring
(Branch Germany)
Tryg Forsikring
incl. Enter
(Branch Norway)
Tryg
Livsforsikring A/S
(Denmark)
Forsikrings-
Aktieselskabet
Alka Liv II
(Denmark)
Tryg Invest
AIF-SIKAV
(Denmark)
Respons
Inkasso AS
(Norway)
Tryg Forsikring
(Branch Austria)
Tryg Forsikring
(Branch Netherland)
Tryg Forsikring
(Branch Switzerland)
Tryg
Ejendomme A/S
(Denmark)
Kapitalforeningen
Tryg Invest Funds
(84%)
(Denmark)
TI Short Term
Placement KL
(67%)
(Denmark)
Tryg
Invest A/S
(Denmark)
Scandi JV Co 2 A/S
(50%)
(Denmark)
Alka Fordele A/S
(Denmark)
Scandi JV Co A/S
(78,71%)
(Denmark)
Tryg Real Estate
Invest Holding A/S
(Denmark)
Tryg Real Estate
Fund 2 A/S
(Denmark)
Tryg Forsikring
(Branch Belgium)
Tryg Real Estate
Invest Denmark A/S
(Denmark)
Tryg Real Estate
Invest Norway AS
(Norway)
Annual report 2021 | Tryg A/S | 127
Financial statements - Contents
Claims ratio, net of ceded business
Gross claims ratio + net reinsurance ratio.
Combined ratio
The sum of the gross claims ratio, the net reinsurance
ratio and the gross expense ratio.
Danish general insurance
Comprises the legal entities Tryg Forsikring A/S, Tryg
Livsforsikring A/S, Forsikrings-Aktieselskabet Liv II and
excluding the Norwegian and Swedish branches).
Diluted average 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 nomi-
nal amount, as the recognised amount carries interest
until payment. The size of the discount depends on the
market-based discount rate applied and the expected
time to payment.
Dividend per share
Proposed dividend
Number of shares at year-end
Earnings per share
Profit or loss for the year x 100
Average number of shares
Earnings per share of continuing business
Diluted earnings from continuing business after tax
Diluted average number of shares
Gross claims ratio
Gross claims x 100
Gross premium income
Gross expense ratio without adjustment
Gross insurance operating costs x 100
Gross premium income
Gross premium income
Calculated as gross premium income adjusted for
change in gross premium provisions, less bonuses and
premium discounts.
Market price/net asset value
Share price
Net asset value per share
Net asset value per share
Equity at year-end
Number of shares at year-end
Net reinsurance ratio
Profit or loss from reinsurance x 100
Gross premium income
Norwegian general insurance
Comprises Tryg Forsikring A/S, Norwegian branch.
Operating ratio
Calculated as the combined ratio plus insurance tech-
nical interest in the denominator.
Claims + insurance operating costs +
profit or loss from reinsurance x 100
Gross premium income + insurance technical interest
Own funds
Equity plus share of qualifying solvency debt and profit
margin (solvency purpose), less intangible
assets, tax asset and proposed dividend.
Price/Earnings
Share price
Earnings per share
Relative run-off result
Run-off gains/losses net of reinsurance divided by
claims provisions net of reinsurance beginning of year.
Return on equity after tax (%)
Profit for the year after tax x 100
Weighted average equity
Run-off gains/losses
The difference between the claims provisions at the
beginning of the financial year (adjusted for foreign
currency translation adjustments and discounting
effects) and the sum of the claims paid during the
financial year and the part of the claims provisions at
the end of the financial year pertaining to injuries and
damage occurring in earlier financial years.
Solvency II
Solvency requirements for insurance companies is-
sued by the EU Commission. The new rules came into
force at 1 January 2016
Glossary, Key Ratios and
alternative performance measures
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 financial reports for insurance companies and multi-employer occupa-
tional pension funds, and also comply with ‘Recommendations & Ratios’ issued by the CFA Society Denmark.
Annual report 2021 | Tryg A/S | 128
Financial statements - Contents
Solvency ratio
Ratio between own funds and capital requirement.
Swedish general insurance
Comprises Tryg Forsikring A/S, Swedish branch.
Total reserve ratio
Reserve ratio, claims provisions + premium provisions
divided by premium income.
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 provision is not
recognised under claims, but under technical interest
in the income statement.
Alternative performance measures
Until the sale of certain owner occupied properties
by the Tryg Group in 2016, pursuant to the executive
order issued by the Danish Financial Supervisory Au-
thority on the financial reports for insurance compa-
nies and multi-employer occupational pension funds,
the Tryg Group has calculated the gross expense ratio,
the combined ratio and the operating ratio by adding a
hypothetical market rent to and deducting the actual
depreciation from operating expenses. Previously, in
addition the Tryg Group has in its financial statements
presented a gross expense ratio without these adjust-
ment as an alternative performance measure, howev-
er, subsequent to 2016 this alternative performance
measure is not relevant and not presented as the Tryg
Group does not have owner occupied properties.
The following financial measures included in this
Annual report are not measures of financial perfor-
mance or liquidity under IFRS, as adopted by the EU or
in accordance with the executive order issued by the
Danish Financial Supervisory Authority on the financial
reports for insurance companies and multi-employer
occupational pension funds but are defined by man-
agement as follows:
Large claims, net of reinsurance
Large claims, net of reinsurance, as calculated by the
Tryg Group, represents
Large claims, net of reinsurance is defined as single
claims or claims events gross above 10m in local
currencies adjusted for reinsurance.
Large claims, net of reinsurance
Gross Premium income
Weather claims, net of reinsurance
Weather claims, net of reinsurance, as calculated by
the Tryg Group, represents
Weather claims, net of reinsurance, is defined as
claims related to Storm, Cloudbursts, Natural perils
and Winter, adjusted for reinsurance.
Weather claims, net of reinsurance
Gross Premium income.
Run-off, net of reinsurance
Run-off, net of reinsurance, as calculated by the Tryg
Group, represents
Run-off, net of reinsurance
Gross Premium income.
Premium growth excluding Alka in local
currencies
Premium Growth excluding Alka in local currencies, as
calculated by the Tryg Group, represents
(Premium income excluding Alka in local currencies
in year X - Premium income excluding Alka in local
currencies in year X-1)
Gross Premium income excluding Alka in local
currencies in year X-1
Impact from COVID-19 claims, net of reinsur-
ance
The impact from COVID-19 on claims, net of reinsur-
ance is defined as impact from COVID-19 on claims,
gross adjusted for reinsurance.
Impact from COVID-19 claims, Gross as calcu-
lated by the Tryg Group, represents
Impact from COVID-19 claims, net of reinsurance
Gross premium income
Return On Own Funds (ROOF)
Profit for the year after tax x 100
(Own funds primo + Own Funds Ultimo)/2
Return On Tangible Equity (ROTE)
Profit for the year after tax x 100
(Tangible Equity primo + Tangible Equity Ultimo)/2
Tangible Equity
Tangible Equity is defined as Weighted average equity
excluding Intangible assets and deferred tax related to
intangible assets
Annual report 2021 | Tryg A/S | 129
Financial statements - Contents
Motor insurance
Motor insurance accounts for 31% of total premium income and comprises
mandatory third-party liability insurance providing cover for injuries to a third
party or damage to a third party’s property, and a voluntary comprehensive
insurance policy that provides cover for damage to the customer’s own vehicle
from collision, fire or theft.
In Denmark, motor insurance taken out by concept customers includes
Tryg’s roadside assistance, such as towing and battery jump-start.
Fire and contents – Private
Fire and contents insurance for private customers represents 24% of total
premium income and includes, for example, house and contents insurance.
House insurance covers damage to properties caused by, for example, fire,
storm or water, legal assistance and the customer’s liability as owner of the
property.
The contents insurance covers loss of or damage to private household con-
tents and covers in and outside of the home. Moreover, the insurance includes
liability and legal assistance, to which can be added a number of supplemen-
tary covers, for example cover of sudden damage and damage to electronic
equipment.
Personal accident insurance
Personal accident insurance accounts for 11% of total premium income and
covers accidental bodily injury and death resulting from accidents.
Compensation takes the form of a lump sum intended to help the customer
cope with the financial consequences of an accident, thereby making their
daily lives easier. The insurance can include a number of supplementary
covers, including treatment by a physiotherapist or chiropractor.
Fire and contents – Commercial
Commercial fire and contents insurance, which includes building insurance,
represents 12% of total premium income and covers the loss of or damage to
the buildings, stock or equipment of commercial customers. Moreover, Tryg
provides cover for operating losses in connection with covered claims.
Workers’ compensation insurance
Workers’ compensation insurance accounts for 4% of total premium income
and covers employees against bodily injury sustained at work (in Norway, also
occupational diseases). Workers’ compensation insurance is mandatory and
covers a company’s employees (except for public sector employees and
persons working for sole proprietors).
General third-party liability insurance
General third-party liability insurance represents 5% of total premium income
and covers various types of liability, including claims incurred by a company
arising from the conduct of its business or in connection with its products,
and third-party liability for professionals.
Health insurance
Health insurance represents 3% of total premium income. The insurance cov-
ers the costs of examinations, treatment, medicine, surgery and rehabilitation
at a private health facility.
Being one of the largest insurance companies in
the Nordic region, Tryg offers a broad range of
insurance products to both private individuals
and businesses. Tryg continuously develops
new products and adapts existing peace of
mind solutions to customer requirements and
developments in society. Also, Tryg focuses
strongly at all times on striking a better balance
between price and risk.
Tryg sells its products primarily via its own sales
channels such as call centres, the Internet, tied
agents, franchisees (Norway), interest organisa-
tions, car dealers, real estate agents, insurance
brokers and Nordea branches. Moreover, Tryg
engages in international cooperation with the
AXA Group. It is an important element of Tryg’s
distribution strategy to be available in places
where customers want it and that most
distribution takes place via the company’s own
sales channels.
Product overview
Annual report 2021 | Tryg A/S | 130
Financial statements - Contents
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 operating results, finan-
cial position, cash flows, business strategy, plans
and future objectives other than statements
of historical fact can generally be identified by
the use of words 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 environment, developments in the
financial markets, extraordinary events such as
natural disasters or terrorist attacks, changes in
legislation or case law and reinsurance.
Should one or more of these risks or uncer-
tainties 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
anticipated, 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.
Read more in the chapter Solvency and dividend
on pages 37-38, and in Note 1 on page 67-78,
for a description of some of the factors which
may affect the Group’s performance or the
insurance industry.
Disclaimer