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Investing.com -- Tryg (CSE:TRYG) shares rose Friday after the Nordic insurer posted first-quarter results that came in well ahead of expectations, though analysts at Jefferies said ”a low quality beat, driven by quarter-specific factors.”
Profit before tax came in 25.8% above consensus, driven by a combined ratio of 84.2%, which was 0.9 percentage points better than expected.
The bulk of that came from a stronger loss ratio, which improved by 0.8 points, while the expense ratio saw a modest 0.1-point gain.
Claims were a key driver of the beat. Large losses totaled DKK 172 million, below the DKK 196 million forecast, while weather-related claims came in nearly 30% lower than expected.
The underlying claims ratio was 72%, improving by just 0.1 point. Jefferies analysts said this modest improvement points to a “low quality” beat, with results lifted mainly by unusually favorable conditions during the quarter.
Insurance revenue rose 3.7% in local currencies, missing estimates by 1.3%. The insurance service result exceeded expectations by 4.8%.
Investment income was another bright spot, coming in at DKK 320 million, significantly above the DKK 78 million consensus.
Run-off gains fell short, down 9.9% versus forecasts, and other costs were 1.9% higher than expected. Net profit was 24.5% above consensus.
The company declared a quarterly dividend of DKK 2.05 per share, in line with expectations. Its Solvency II ratio stood at 195%, 3 percentage points higher than the market forecast.
In response to investor concerns, management said 80% of Tryg’s surety and trade credit exposure is covered through a quota share reinsurance program, limiting potential losses tied to ongoing tariff-related risks. The group also sold all public equity holdings in the fourth quarter of 2024.
On the regulatory front, Tryg addressed the recent Danish Consumer and Competition Authority report, saying it does not believe the findings—or any potential future investigation—will affect its ability to maintain customer satisfaction or deliver long-term shareholder returns.
Jefferies warned that the beat was not underpinned by strong fundamentals, noting that the quarter benefited from fewer large and weather-related claims rather than sustained improvements in the business.