Earnings call transcript: Tryg A/S beats expectations in Q2 2025

Tryg A/S reported a strong Q2 2025 performance, with earnings per share (EPS) of 2.8, surpassing the forecast of 2.43. The company’s insurance service results reached €2.3 billion, contributing to a 0.49% rise in its stock price, which closed at 162.7. This performance reflects Tryg’s ongoing strategic focus and operational efficiency. According to InvestingPro data, Tryg maintains a perfect Piotroski Score of 9, indicating exceptional financial strength, while offering a substantial 4.88% dividend yield to shareholders.

Key Takeaways

• Tryg A/S reported an EPS of 2.8, beating the forecast by 15.23%.
• Insurance service results were strong at €2.3 billion.
• The stock price increased by 0.49% following the earnings announcement.
• The company maintains a high solvency ratio of 199%.
• Strategic initiatives in AI and underwriting tools are set to enhance future performance.

Company Performance

Tryg A/S demonstrated robust financial performance in Q2 2025, with significant growth in its insurance services and a solid combined ratio of 77.2%. The company’s strategic focus on technical excellence and customer satisfaction has positioned it well in the Nordic market, outperforming many of its competitors. InvestingPro analysis suggests the stock is currently undervalued, with strong financial health metrics including a current ratio of 1.86 and an impressive return on equity of 13%. Discover more insights about Tryg and other undervalued opportunities with InvestingPro’s comprehensive research tools.

Financial Highlights

• Revenue: €2.3 billion, reflecting growth in insurance services.
• Earnings per share: 2.8, up from forecasted 2.43.
• Combined ratio: 77.2%, indicating strong operational efficiency.
• Return on owned funds: 44.7%, showcasing high profitability.

Earnings vs. Forecast

Tryg A/S exceeded its EPS forecast of 2.43, achieving an actual EPS of 2.8. This represents a 15.23% beat, underscoring the company’s effective cost management and strategic initiatives. The significant beat highlights Tryg’s ability to navigate market challenges successfully.

Market Reaction

Following the earnings call, Tryg’s stock price rose by 0.49%, closing at 162.7. This positive movement reflects investor confidence in the company’s financial health and strategic direction. The stock remains within its 52-week range, indicating stability and continued investor interest.

Outlook & Guidance

Looking ahead, Tryg A/S aims to achieve a combined ratio of around 81% by 2027, with an insurance service result target of €8-8.4 billion. The company plans to continue its focus on profitability improvements and gradual organic growth, leveraging technological advancements and strategic pricing. InvestingPro reports that two analysts have recently revised their earnings estimates upward for the upcoming period, while the company has maintained dividend payments for 20 consecutive years, demonstrating consistent shareholder returns. Get access to 8 more exclusive ProTips and detailed valuation metrics with an InvestingPro subscription.

Executive Commentary

Johan Brahmer, Group CEO, emphasized the company’s strong performance, stating, "We are seeing very strong improvement both in Norway and on Motor." Mikael Karsten, Group CTO, added, "We are concentrated on the things that we can affect and pricing and driving profitability initiatives accordingly."

Risks and Challenges

• Inflationary pressures, though decreasing, could impact future profitability.
• Competition in the Nordic markets necessitates strategic pricing actions.
• The Danish Consumer Council investigation poses potential reputational risks.
• Market saturation in certain segments could limit growth opportunities.
• Macroeconomic pressures may affect consumer spending and insurance demand.

Q&A

During the earnings call, analysts inquired about Tryg’s pricing strategies and market performance, particularly in Norway. The company confirmed improvements in the Norwegian market and reiterated its commitment to maintaining pricing discipline and strategic investments in commercial initiatives.

Full transcript - Tryg A/S (TRYG) Q2 2025:

Gianandrea Roberti, Head of Financial Reporting, Trek: Good morning, everybody. My name is Gianandrea Roberti. I’m Head of Financial Reporting at Trek. We published our Q2 figures earlier this morning, and I have here with me Johan Brahmer, our Group CEO Alan Tyssen, our Group CFO and Mikael Karsten, our Group CTO, to present the figures. And with these words, over to you, Johan.

Johan Brahmer, Group CEO, Trek: Thanks a lot, Gendrej, and good morning from me as well. And I will move straight to Slide four in the deck and the financial highlights. And I’ll start by commenting on our insurance service result that exceeded EUR 2,300,000,000.0 in the second quarter, driven by a strong combined ratio of EUR 77,200,000,000.0. I’ll repeat that a strong combined ratio of EUR 77.2 And in that context, it is probably important to remind you all that we restated our quarterly figures for 2024 due to an accounting change for our inflation hedge and that you can find all restated figures for 2024 published in the newsletter we sent out in March. The restatement impacts primarily the runoff result in a negative manner and therefore the ISR and the investment result in a positive manner.

Moving on from that, our insurance revenue grew 4%, primarily driven by good growth in the private segment, which grew 4.4%. And as for our ISR in the quarter, it increased by 4.3% compared to the reported figures, which is roughly in line with the top line development. It increased more against the restated figures, but this is, as mentioned, driven by a lower runoff in 2024 as per the accounting change and hence less relevant. Our underlying claims ratio improved by 30 bps, while the private segment improved by 20 bps, up from the 10 basis points in the previous quarter. From a geographical perspective, the quarter was strong across the board, and we see improvements in line with our expectations in the Norwegian business.

Motor claims costs have been a headache for a while, but we are pleased to see these stabilizing while at the same time, we also noticed a generally positive trend in our Norwegian business. Nevertheless, I can assure you that we remain alert and price accordingly. The overall investment result was EUR 110,000,000 with a good performance from our conservative covered bond portfolio. Please note that the result last year still included EUR 7,000,000,000 of risky assets that had a good return in 2024. But as you know, the asset mix was changed during Q4 as disclosed at our CMD in December.

So to sum it up, we are reporting a pretax result above €2,000,000,000 We are reporting an operating EPS, which is our favorite earnings metric of 2.8 and a return on owned funds of 44.7%. And I’m also, therefore, pleased to announce that Treuk pays a Q2 dividend per share of 2.05, in line with Q1 and a healthy solvency ratio of 199. And with that, I move to Page five on the customer satisfaction. Customer satisfaction remains very important for us. At Teugen, we are satisfied to achieve a Q2 level of 82 against an overall CMD target of 83 in 2027.

And in that context, I’d like to remind everybody that we now have fully included our Swedish business in the baseline of 81 for 2024. And in fact, the main driver of the improvement is indeed our Swedish business, where there’s an intensified focus on customer satisfaction following the full integration of Turkensa. In general, we see a strong link between customer satisfaction and customer retention, which remains supportive of our low distribution costs and our level of profitability. With that, let’s move to Slide six, where we comment on the recent developments following the publication on April 1 from the Danish Consumer Council of a report on the Danish private insurance market. The DCCA has, at the June, announced that it is starting an investigation into the Danish private market, with a particular focus on indexation practice, exactly as expected.

Price indexation is a general market practice in Denmark and has been so for many decades. Any proposed changes to this, should that happen, will be an industry move affecting all players. And please note, and this is important, that we have experience navigating in markets without price indexation as it is not used in Norway and only partially in Sweden. I would also like to remind you in this context that Private Denmark is an important part of our Danish business, but it is in fact a smaller part of our diversified group following the acquisition of RSA Scandinavia. I also think it’s important to remember that we run an efficient business characterized by a low expense ratio and a highly efficient setup.

We focus a lot on procurement to keep the cost of claims under control, and we have a high customer satisfaction, which is a significant differentiating factor compared to quite a lot of other geographies. So finally, just to sum it up, we are confident that our ability to continue to run a healthy business with a strong customer satisfaction and attractive shareholders’ return will not change. And with that, I’ll move on to Slide seven, where we show the developments for the Insurance Services result for the Private and Commercial segments. As mentioned at the beginning of this call, the restated figures include the accounting change related to the new inflation hedge methodology. This impacts the runoff result and therefore the overall ASR level.

We’re therefore showing you in this chart both the reported and the restated figures for the comparison quarter last year. Zooming in, the Private segment benefited from good growth, a higher runoff result and a generally improved underlying performance, especially in our Norwegian business. We’ll get back to that. And the Commercial segment reported very strong figures with a headwind from almost 100,000,000 additional large claims compared to Q2 twenty twenty four, while the underlying performance actually improved. In general, we’re pleased to see that the private segment is contributing more to the overall group underlying performance improvement, and we expect this to remain the case also going forward.

On Slide eight, the next slide, we show as usual the development in our results by geography and the overall ISR bridge to the right hand side in this chart. The figures by geographies are strong across the board, but I’d like to comment specifically on Norway as we are reporting a Q2 combined ratio of 82.1%, while the first half performance sees a combined ratio below 89. We need to continue our ongoing actions, and we already see clear evidence that price increases and additional profitability actions are improving their financial performance. As for Sweden, we are reporting an excellent combined ratio of 69%, while Denmark is reporting a healthy 80.5%. When we look at the bridge for the group ISR, leaving aside the mentioned restatement as displayed in the chart, we’d like to highlight a good growth, higher large and weather claims taken together and a generally improved underlying performance.

And with that, I will move into the next section on the insurance revenue development and go to Slide 10. And in this slide, we are showing the group growth of 4% split between private and commercial. As you can see, we continue to report a growth primarily driven by price increases to offset inflationary pressures and improve the underlying performance. And the price adjustments continue to be higher in Norway, where we have more need of improving the profitability. By the rebalancing exercise conducted in what was previously called the Corporate segment, although the impact of this is smaller than previously and gradually tapering off.

Long term, we expect a more balanced growth profile, but we have deliberately remained very disciplined in the last few years following the sudden return and stubbornness, I might add, of high inflationary levels. With that, let’s move to the next slide on the combined ratio performance with a focus only on Norway. We are pleased to report a Q2 combined ratio of 82.1%, a significant improvement compared to last year. It is important to remember when looking at past performance in this chart that figures for Q2 in 2021 and 2022 were indeed impacted by the COVID outbreak, so it is quite complicated comparison. In first half this year, the combined ratio is below 89%.

It is more specifically at 88.5%, so it is trending clearly in the right direction. We continue to focus on improving our financial performance in Norway and expect this to further improve in 2026. It’s also important to remember that especially in Norway, the performance of the quarters in the middle of the year, be it Q2 and Q3, tend to be significantly stronger than Q1 and Q4 as weather patterns, especially Norway, can create quite a lot of noise in the figures. With that, let’s turn to the next slide on the customer retention. And on Page 12 here, we are showing you an updated picture of the customer retention for the two main segments.

And as mentioned in many calls before, we continue to see small drops, which are in line with our expectations and driven by our profitability initiatives. However, please note that in Sweden, we do actually see slight improvements across both segments. It’s not unusual to see customers reacting to price adjustments. This is just a proof point of the fact that we work in very well functioning markets, where there’s a healthy competition between the providers in the market. We’ll continue to increase our efforts and expect the situation to stabilize as we move into 2026.

In this context, it’s important to remember that history sometimes has a tendency to repeat itself. When we go back in time, retention rates in private Denmark actually dropped somewhat post 2029 to 2030 on the back of significant price increases to restore profitability. And in fact, after a couple of years, these were back at similar levels again. And with this, I’ll pass the word on to you, Micky.

Mikael Karsten, Group CTO, Trek: Thanks, Johan. And I now turn to Slide 14 and comment on the development in the underlying claims ratio. This has improved 30 basis points for the group, which is unchanged versus last quarter. For Personal Lines, the improvement is 20 basis points, up from 10 basis points in Q1. Profitability initiatives, especially Norway, are contributing primarily to the improvements in the private segment.

We also note that the development within Motor, both in terms of claims frequency and claim severity, is in line with our expectations. As Johan stated previously, motor will always be a key focus area for us with nearly onethree of our premium income and the motor market that has changed in recent years. But all this is business as usual for us. As a reminder, we have guided for an underlying claims ratio to be broadly stable to slightly improving towards 2027. Turning to Slide 15.

Here we, as usual, show the level of large and weather claims in the quarter, the runoff result and the discounting level. Q2 was a relatively benign quarter in terms of large and weather claims experience as both were somewhat below the normalized expectations for the quarter. The runoff result was broadly in line with recent quarters and the guidance for 2027. Importantly, when you look at the Q2 twenty twenty four level, you ought to remember that this is impacted by the accounting change related to hedging inflation, which has lowered the runoff result by approximately 200 basis points, improving the investment results equally. Finally, our discount rate is unchanged compared to Q1.

And remember that discounting is a function of both the level of interest rates and claims mix, meaning that small discrepancies can be observed from time to time. And with this, I hand it over to you, Gian.

Gianandrea Roberti, Head of Financial Reporting, Trek: Thanks, Mick. I’m now commenting on Slide 17, where we show the usual split of our invested asset of SEK 60,000,000,000 in the Match and the Free portfolio. There’s very little news here as the Match portfolio represents €45,000,000,000 of the total asset or 75%. The Free portfolio, it’s €15,000,000,000 or some 25%. The asset mix, it’s largely unchanged.

On Slide 18, we comment on the overall investment result, which was €110,000,000 in the quarter, virtually aligned with our normalized expectation with our chosen asset mix. The free portfolio benefited from good returns on Scandinavian covered and government bonds, also helped by a slight fall in interest rates. Properties produced a 1% return in the quarter. The matched portfolio result included the return on the premium provision, but was also helped by lower interest rates in general. Other financial income and expenses was minus 114,000,000 slightly worse than normal, primarily driven by currency adjustment to balance sheet items and related hedges cost.

As mentioned previously, the asset mix is unchanged for the quarter, but long term real estate is not expected to be part of the asset mix. We mentioned these at our CMDs, so there’s nothing new here. And with this over to you, Alan.

Alan Tyssen, Group CFO, Trek: Thanks, Jian, and good morning from me as well. Please turn to the first slide in the solvency and expenses section. In this slide, we’re showing details on our solvency position as per end of Q2. TURK reports a solvency ratio of 1.99% as per end of the quarter, which is up from 1.95% at the end of last quarter. The group capital generation before dividend payment was 20% in Q2, which is a very robust level.

We would like to repeat that modeling truck’s solvency ratio is fairly simple. Owned funds is mainly a function of operating earnings and capital distribution, while the SCR remains relatively stable as this is primarily impacted by the overall business growth. Now please turn to Slide 21. Here, you can see the long term development of our solvency ratio. As mentioned, we expect the solvency level to gravitate towards a less conservative level in the long term.

During the last period of macroeconomic turbulence, we believe a robust solvency position has been a positive for our investment case. We will review our solvency position at year end. And at that time, we may consider extraordinary capital repatriation if found appropriate. And as always, we prefer a gradual approach, benefiting our shareholders with balanced actions. Please turn to the next slide for updated solvency sensitivities.

Solvency sensitivities are virtually unchanged since Q1, and we generally have very low sensitivities, especially after the asset de risk carried through during last autumn. The vast majority of our fixed income exposure is represented by Scandinavian covered bonds, and therefore, it is not surprising that spread risk against this asset class is our biggest sensitivity. The sensitivity to interest rates movement is very low, taking into consideration our matching strategy and generally low sensitivities due to a strong and hedged balance sheet. And now please turn to the next and last slide in this section for details on the expense ratio development. The expense ratio was 13.5% in Q2, helped by good top line growth and a tight cost control in general.

The total number of employees increased slightly this quarter, driven by investments in some of our strategic initiatives. The total cost base remains fully in line with our recent guidance that we expect a stable to slightly improving expense ratio development towards 2027. Finally, we see our low expense ratio as a key competitive advantage and we are very pleased to be able to run our business with such a strong level of efficiency. And with this, I will hand it over to you, Johan.

Johan Brahmer, Group CEO, Trek: Thanks a lot, Alan. And we’re now entering the final part of this presentation and I’ll take you to slide 25. In this slide, I’m just recapping essentially our three strategic pillars supporting our ambition of growing the insurance service result by DKK 1,000,000,000 from the full year of 2024 to the full year of 2027. As you remember, 500,000,000 will come from scale and simplicity, 300,000,000 from technical excellence and DKK 200,000,000 from customer and commercial excellence. We’ve shown these pillars at the CMD in December, and we continue to work on implementing all the initiatives behind each of them in order for us to secure our 2027 targets.

As for the first pillar on scale and simplicity, we are seeing strong traction on the strategy execution. One particular example to highlight today on simplicity is an AI model developing claims Denmark. This particular model can automate the process of assessing who is liable when two cars collide. And this AI model automates 85% of these particular claims, providing faster customer journeys and as a result, customer satisfaction. And just to put this in context, this model this AI model is applicable to more than 50,000 claims per year in Denmark and is therefore also very relevant for scaling to Sweden and Norway.

As for the second pillar on the technical excellence, I will highlight the progress on an underwriting tool that we mentioned on the CMD in December 24. I’ll unfold that further in the next slide. But as for the last strategy pillar on customer and commercial excellence, I’d like to highlight an example from Denmark regarding patient insurance for dentists. In December 2024, new legislation was improved was imposed in Denmark requiring dentists to hold patient liability insurance from 01/01/2025. And as a result, Trich launched in record time the product through strong cross functional collaboration and was the first in the market to sell these patient liability insurances to dentists starting first of Jan.

We benefited from this commercial speed and were able to take a strong share of the market above 50% before the demand was fulfilled by the deadline in April 2025. That brings me to the next slide where I’ll unfold the mentioned underwriting tool example, one of the many initiatives part of the technical excellence pillar that Megan mentioned already at the CMD in December. Our underwriting tool enables more consistent and technically sound underwriting for individual customers across markets by actually applying a uniform methodology and shared data foundation. The underwriting tool supports our ambition to become more data driven by actually incorporating internal and external data sources systematically. The tool is built as a shared Nordic platform and the underwriting tool leverages best practices across countries.

The key to achieve impact from this underwriting tool is increasing the adoption rate as we see a clearly improved combined ratio of somewhere of 2% to 3% when the tool is applied. In 2024, the adoption rate was 30%, but already now by the end of first half twenty twenty five, we’ve increased the adoption rate to 45%. The tool is fully adopted in Norway, where all underwriting cases are registered and processed through the tool, ensuring consistent documentation and improved traceability. In Denmark, the adoption is gaining traction as a result of a strong rollout of this initiative in Commercial Lines Denmark with the expansion of the tool usage beyond underwriters to include sales, who can now initiate cases when underwriting support is needed. Full adoption is still in progress.

And as for Sweden, the final market, the initial rollout is scheduled for second half this year, starting with the Motor portfolio. And with that, I move to Slide 27, where we show our financial and customer targets toward 27. As a reminder, we target a combined ratio of around 81. We target an insurance service result between EUR 8,000,000,000 and EUR 8,400,000,000.0, zooming in on the midpoint together with a return on own funds between 3540%. Additionally, we promised shareholders to return DKK 17,000,000,000 to 18,000,000,000 in the three years between ordinary dividends and the recently concluded buyback of DKK 2,000,000,000.

Our strategic KPIs are also completely unchanged, of course. And as mentioned earlier in today’s presentation, we’re seeing a noteworthy improvement in our customer satisfaction, now including the entire Swedish business, and we see this already in the middle of twenty twenty five. And as always, on the last page, I conclude this presentation repeating our intense focus on being a very good and disciplined dividend payer. We run a long term profitable business, as you know, and we like to return most of our profits to shareholders in the form of dividends.

Gianandrea Roberti, Head of Financial Reporting, Trek: Operator, we are now ready to take questions. Please everybody remember just ask one question at a time. Thanks.

Operator: Thank you. We’ll now start the Q and A session. Our first question will be from the line of Estriane Murk from Danske Bank. Please go ahead. Your line will now be unmuted.

Esbjorn Murk, Analyst, Danske Bank: Hi, and good morning. Thanks for taking my question. I’ll try to merge two, three questions into one then. So I stick to the one question rule. But basically, just looking at the Norwegian slide, the six percentage point improvement to your combined ratio in Norway and looking at what one of your main peers reporting this morning is telling us about Norway, it seems like there is quite a repricing still going on in Norwegian market, but also that there’s been, I guess, some benign weather in the quarter and I guess some year over year tailwinds from fire claims.

So maybe if you could just give us a little bit more sort of granularity to that improvement in Norway in Q2 and what you see sort of going forward also looking at your retention drop in Norway? I would have expected that to sort of stabilize given how much your peers are repricing. So sort of what you are seeing there? And then in addition to that, considering the repricing effects that we should expect going forward from price hikes already sort of announced initiated, is it fair to assume we’ll get four, six quarters of tailwinds on your insurance business, both in Norway and Denmark from those kind of trends if we see sort of a more normalized claims picture from here? Thank you.

Mikael Karsten, Group CTO, Trek: Morning, Esbjorn, and thanks for that question. So if I start with the improvements in Norway. I mean, as you said, we improved by six percentage points in our core for Norway. We think that is really strong. We improved by seven percent in the first quarter, but actually, we deemed the six basis points in this quarter to be even stronger given that we had some more weather if we look back on Q1 twenty twenty four when we do that comparison.

And as for the situation going forward, we continue to price in Personal Lines in the same way that we have done year to date. And as a result of that, obviously, since that is clearly above inflation, we expect to drive further profitability improvements as a result of that. And obviously, at some point in time, there will be a gradually lowered price increase when we deem that to be appropriate. But no doubt, we will see improvements from the medicine that we’re taking, and we’re very comfortable with that medicine because we see that it’s working.

Johan Brahmer, Group CEO, Trek: And maybe if I can just add to that, Miggy, I absolutely agree. I think if we take a sort of strategic stance on what’s going on right now, I think we’re demonstrating the strength of the new Trich group with having three strong legs. We’ve been talking about the profitability in Norway for a while. Now it’s coming into a territory where we can really fully stretch our legs here in all three markets, which is giving us a competitive advantage in the region. And as for your retention questions, I think it’s fair to your comment is fair.

We are seeing some caving in on the retention levels across all markets also in Norway. That being said, it’s rather benign. It’s better than we expected. And when we take a historic stance on this, this is what happens when you have stubborn inflation. The price increases need to flow through and retention rates tend to bounce back.

We are not concerned.

Esbjorn Murk, Analyst, Danske Bank: But if I may just follow-up on that one, because if I look at your Nordic peer repricing maybe even a little bit more than you are and actually seems to be gaining market share. It seems a little bit peculiar that your retention continues to drop in Norway. Is that something that will limit you sort of in your price actions going forward? Or I mean, is sort of the acceptable level from your side when it comes to retention in Norway?

Mikael Karsten, Group CTO, Trek: So if I follow-up on that, Asbjorn, the slight drop in retention rate should also be read against that there are specific agreements that we’re also looking into that has specific profitability challenges. And in specific cases, we have chosen not to continue with those agreements. So you shouldn’t read too much into slight retention sort of decreases with a couple of 10 bps in this. I think we should read this more from a strategic point of view, where we’re very much driving the actions that we want to do and get the benefits accordingly.

Vinny, Analyst, Mediobanca: Okay. Thanks a lot.

Operator: Thank you. The next question will be from Autonomous Research. Please go ahead. Your line will now be unmuted.

Yudis, Analyst, Autonomous Research: Good morning, everyone. So my question is on severity inflation. I think last time you said you put that at around 6% across all your markets on average. So could you just give us an update on what you’re expecting going forward, especially in light of one of your peers lowering their expectation this morning? Thank you very much.

Mikael Karsten, Group CTO, Trek: Good morning. So commenting on that as well, I mean, an overall point of view, we see that inflation severity inflation is coming somewhat down relative to what we’ve seen before. That’s also very much in line with our expectations. And obviously, we’re pricing accordingly and feel very comfortable with that. Having said all this, there are pockets, again, especially in motor, where we see higher levels of claim severity inflation.

But again, this is something that we are accounting for and something that we’re pricing for.

Yudis, Analyst, Autonomous Research: All right. And no surprise on frequency either, right?

Mikael Karsten, Group CTO, Trek: On frequency, we have seen definitely a normalization in this quarter. I mean, we can see in some of the public figures also available in the Danish market. Obviously, claims frequency is down quite a bit. When reading these numbers, one should keep in mind that there was some weather events in 2024. But overall, again, claims frequency is very much in line with our expectations, and we feel very comfortable with that development.

Johan Brahmer, Group CEO, Trek: I guess just to supplement that.

Yudis, Analyst, Autonomous Research: In

Johan Brahmer, Group CEO, Trek: general, we had in the last three, four, five, six quarterly calls discussed two areas of improvement for Trek, which has been Motor and it has been Norway. And I think it’s fair to summarize that we are seeing very strong improvement both in Norway and on Motor. So some of the headaches are disappearing as we speak.

Yudis, Analyst, Autonomous Research: Great. Thank you very much.

Operator: Thank you. The next question will be from the line of Matthias Nielsen from Nordea. Please go ahead. Your line will now be unmuted.

Matthias Nielsen, Analyst, Nordea: Thank you very much, and congratulations on the strong results. So if we come back a bit to like the revenue growth and the retention rates, so like when I look at private lines on revenue growth, it’s now down to 4.4% year on year, which, as I understand, is offset by some client loss. So it’s 100% price, a little more than that actually. So when you look at the client mix that you lose over the quarters, it’s like can you say a bit on like what’s the share of clients that are okay to lose? I guess in Norway, there’s been quite a few above 100% combined ratio, which is okay to say goodbye to.

And then there’s also some other clients, which is good clients where they’re quite profitable that doesn’t accept the that do not accept the higher price? Like can you tell us a bit about like the split and if that has changed and how that has changed over the past year or one point five years maybe?

Johan Brahmer, Group CEO, Trek: It’s a good question. And maybe if I could just stop at a high level and then I’ll zoom in on exactly what we’re seeing. I think in general, in times of inflation as we’ve seen in the last two years, it’s not worthwhile debating whether you’re losing one customer or gaining one customer. It’s around protecting your margins. We are not seeing any significant changes to our customer stock.

We are seeing some of the trends you’re alluding to that when we see when we do the price increases we’re doing at the moment as are the rest of the industry, We are seeing the customers with the fewest products leaving us first. So there’s a tendency for people for the price seekers and the one who only have one products to leave us first. But honestly, we are seeing a 4.4% growth. It is very acceptable in these times and we’re not seeing any massive changes at all to our customer stock. So we are quite pleased with the current growth levels in private.

I believe as we exit an inflationary scenario where we’ve been in the last few years, I expect to have more organic growth going forward, but this is a very acceptable level for us to be at.

Matthias Nielsen, Analyst, Nordea: Thank you very much.

Johan Brahmer, Group CEO, Trek: Thank you.

Operator: Thank you. The next question will be from the line of Michele Bartowen from KBW. Please go ahead. Your line will now be unmuted.

Michele Bartowen, Analyst, KBW: Yes. Thank you for taking my question. Just on Sweden, can you sorry if I missed this. Can you give more granularity about the performance in general, the underwriting performance in Sweden, please? Thank you.

Mikael Karsten, Group CTO, Trek: I think if I start on that and then Johan can complete with some more strategic measures. I mean I think if we just sort of start looking at the big KPIs with the top line and combined ratio, I think it’s fair to say that, that is really, really, really strong. I mean, obviously, this is a place where we have a very solid profitability. It’s somewhere where we look to gain more traction on growth going forward, but that very much relates back to Johan’s point before of sort of how we like to accelerate organic growth going forward. But in terms of the development, it’s really solid.

Johan Brahmer, Group CEO, Trek: If we just unfold some of the commercial initiatives going on in Sweden at the moment, I’ll just give you a few sound bites to give you a flavor for the fact that we actually have a very attractive brand proposition in Tropicana in Sweden. We’re seeing our online sales to commercial customers for motor has gone up with 10% Q on Q. And we are also in the Private Lines business in Sweden, we’re seeing good growth in personal accident sales, which has been up 7% Q on Q. So the brand is vibrant as ever and we’re seeing a good traction also not just financially, but also commercially.

Michele Bartowen, Analyst, KBW: Okay. Thank you. So basically the deterioration in the combined ratio quarter on quarter was led by like a trade off with growth that you are trying to do?

Johan Brahmer, Group CEO, Trek: I think when you speak about a deterioration, I think I just want to reemphasize that for Sweden, we are printing a combined of SEK 69,000,000 for Q2. And I think that’s a stellar performance for our Swedish market.

Mikael Karsten, Group CTO, Trek: Yes. And in addition to that, when comparing the quarters, I mean, obviously, we should take into account the volatile items of large and weather. And in this case, especially the large, which was at a slightly better level still at a good level this quarter, but at an even better level in Q2 twenty twenty four. So you shouldn’t read too much into that quarter on quarter deterioration or you should actually read nothing at all into that So

Michele Bartowen, Analyst, KBW: you mentioned launch claims?

Mikael Karsten, Group CTO, Trek: Correct.

Operator: Thank you.

Johan Brahmer, Group CEO, Trek: Just to that, on a group level, we are taking in last claims of around DKK 100,000,000 more in Q2 this year than compared to Q2 last year for on a group level, not on Sweden but on a group level. So we are taking in the numbers we are printing today, have €100,000,000 more large claims than same quarter last year.

Michele Bartowen, Analyst, KBW: Thanks a lot.

Operator: Thank you. The next question will be from the line of Nadia Clarissa from JPMorgan. Please go ahead. Your line is now unmuted.

Johan Brahmer, Group CEO, Trek0: Hi, good morning. I had another question relating to Norway, please. I mean, it’s pleasing to see that the pricing actions are coming through, and I think you stated yourself that the combined ratio there is still not at a satisfactory level. So how far off are you from the levels you’re happy with? And could you perhaps provide some more color on the magnitude of rate increases you’re putting through there as well, please?

Thank you.

Johan Brahmer, Group CEO, Trek: So maybe I’ll start with answering your questions on sort of the ambition levels. And I think for the first half for Norway this year, we are printing a combined of around 89%. I think that would be an acceptable level for the full year also. Going forward, coming to the end of this strategy period of 2027, I would assume and target a combined ratio hovering somewhere in the mid-80s to high-80s for Norway. And as for the specific rate increases, Mikael, maybe you’ll comment.

Mikael Karsten, Group CTO, Trek: Yes. So we have previously stated that we are putting through rate increases of mid- to high teens, and that is very much what we’re continuing to do. And as I said before, this is something that will drive profitability improvements. And at some point, those increases is something which will become more modest as we go forward. But that’s very much sort of when we feel comfortable to do so and feel that we have all the profitability improvements very much in line with what Johan said.

Johan Brahmer, Group CEO, Trek0: Thank you.

Operator: Thank you. The next question will be from the line of Vinny from Mediobanca. Please go ahead. Your line will now be unmuted.

Vinny, Analyst, Mediobanca: Better improved. Yes. Good morning. I hope you can hear me. Congratulations again on the underlying on the Norwegian business.

Just just one query, you know, based also on the commentary from your Norwegian peer. The if they are taking pricing a bit I would say taking the foot off, if they are taking pricing foot off the accelerator a little bit in Norway, and your message is you continue to keep the similar pricing. Then I mean, where do you think is the difference? I mean, do you think that your inflation outlook is a bit more cautious in Norway, and then you might you’re happy to give up some business for this objective of targets or actually you think in Norway inflation, labor costs, frequencies are all now have peaked and now are getting better. So I’m just curious on that.

And also, just in the same line on Norway, in six points mentioned, how much was just the fact there were lower fires or such naturally occurring things? Thank you.

Mikael Karsten, Group CTO, Trek: Good morning, Vinny. So I’ll start on that and we’ll see if Johan adds something to it as well. I think without commenting on our competitors, we can just conclude that we are on an improvement journey in Norway. We are seeing that improvement coming through, six basis points for the core in this quarter, seven basis points last quarter. But still very much, as Johan was saying, it’s still cores that should improve going forward.

And as a result, we’re still pricing on the same level as we’ve done year to date. And obviously, again, repeating, that is something that will come down at some point in time. Again, I would not like to comment on what the competitors are doing, but I can conclude that we probably have different companies have different starting points, and we are very much sort of committed to the improvements that Johan just stated. And as for the last thing regarding sort of fires and etcetera, I mean, there will always be some volatility in Klaves development from one quarter to another. We know that there has been a quarter where there has been sort of more severe weather.

This quarter, there is a bit less, especially in Norway. But again, that’s the name of the game in the market. We are concentrated on the things that we can affect and pricing and driving profitability initiatives accordingly.

Vinny, Analyst, Mediobanca: Okay. Thank you. Good to know. Thank you very much.

Operator: Thank you. The next question will be a follow-up from Autonomous Research. Please go ahead. Your line will now be unmuted.

Yudis, Analyst, Autonomous Research: Hi there again. It’s Yudis from Autonomous Research again. So I have another question, which is on the DCCA pricing investigation. Would it be fair to say that contrary to initial expectations, scope is quite narrow and very limited? And therefore, any outcome of this would be more rather benign?

Would that be a fair characterization? Thank you.

Johan Brahmer, Group CEO, Trek: I think that’s a fairly accurate description. I think they’ve launched the investigation as we expected. They have, as expected, zoomed in on the automatic price indexation practice in Denmark. And you’re right in that we assume that this will not be a hindering for our ability to create good customer satisfaction and strong shareholders return out of Denmark. If it should change, it will it might impact transparency, which we of course salute and we’ll of course work with authorities to promote.

Yudis, Analyst, Autonomous Research: Great. Thank you very much.

Operator: Thank you. And the next question will be a follow-up from Matthias Dilsson from Nordea. Please go ahead. You are now unmuted.

Matthias Nielsen, Analyst, Nordea: Thank you very much for taking my question again. So I have a bit detailed question maybe, but on your cost, like on your operating expenses, like it seems like they increased by SEK 70,000,000 quarter on quarter after having been flat for almost six quarters in a row. So like even adjusting for the FX, which is around EUR 20,000,000 to 25,000,000 or something like that, it seems like it’s got even higher. So is there any structured changes or front loading of investments? Or is it like something that we should expect that this is a sign that you’re turning more aggressive and want to staff up to be prepared for organic growth?

Or how should we see it?

Alan Tyssen, Group CFO, Trek: Hi, Matthias. Thank you very much for this question on the expense ratio. We’re printing 13.5%. That is pretty stable. And for towards 27%, we expect it to be stable to slightly improving.

And you’re right that’s in nominal numbers. It is increasing a bit. As you can see from the presentation, we have a few more FTEs. We are within this cost base investing in our strategic initiatives, but also in the commercial activities that you’re alluding to and especially in Sweden. But there’s not any particular read of the nominal increase that is fully in line with what we have been expecting.

Matthias Nielsen, Analyst, Nordea: So it’s fair to say that you start off a bit to be a bit more commercial and get what you’re setting out in your strategy. Is that fair to conclude it that way?

Alan Tyssen, Group CFO, Trek: Yes. Well, fully in line with our strategy, we are investing in people in sort of the right strategic initiatives, but also in the commercial activities at the moment.

Johan Brahmer, Group CEO, Trek: And I think if you take a step back and look at our three strategic pillars, one of them is called customer and commercial excellence. And as we are now seeing holistically that inflation is tapering off, we feel now is a better timing for us to lean into the market. And we are deploying new products, new distribution into various parts of the business. And you’ll hopefully see the benefits of that in the quarters to come.

Matthias Nielsen, Analyst, Nordea: Thank you very much. That was very clear.

Mikael Karsten, Group CTO, Trek: Thank you.

Operator: You. As we have no further questions, I will hand it back to the speakers for any closing remarks.

Gianandrea Roberti, Head of Financial Reporting, Trek: Yes. Thanks a lot to all of you for the good dialogue and always good question. Just to remind you, the Investor Relations team here at Trig will, as always, will be able to help you today and in the next few days. Otherwise, thanks again, and we’ll speak to you soon.

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