Earnings call transcript: Tryg A/S Q1 2026 shows resilience amid volatility

Tryg A/S reported a robust financial performance for the first quarter of 2026, demonstrating resilience despite macroeconomic challenges. The company’s stock price rose by 3.32% following the earnings announcement, reflecting investor confidence in its strategic initiatives and financial stability. The stock is trading near its 52-week high, signaling strong market sentiment.

Key Takeaways

• Tryg A/S achieved a 3.5% growth in premiums, driven by strong performance in the private segment.
• The combined ratio improved to 84%, indicating effective claims management.
• Investment results remained positive despite significant market volatility.
• The company maintained a high solvency ratio of 192%, supporting future capital repatriations.

Company Performance

Tryg A/S delivered a solid performance in Q1 2026, marked by strong premium growth and improved underwriting results. The company navigated macroeconomic volatility effectively, with notable growth in the private segment driven by pricing strategies in Norway. The commercial segment faced challenges, but small and medium enterprise (SME) growth provided some offset.

Financial Highlights

• Premium Growth: 3.5% in local currencies
• Combined Ratio: 84%
• Insurance Service Result: 1.655 billion DKK
• Pre-Tax Result: 1.276 billion DKK
• Operating EPS: 1.85 DKK
• Dividend per Share: 2.15 DKK
• Solvency Ratio: 192%

Market Reaction

The market reacted positively to Tryg A/S’s earnings report, with the stock price increasing by 3.32% to approach its 52-week high. This reflects investor confidence in the company’s ability to manage claims effectively and grow its premium base despite external pressures. With a market capitalization of $14.88 billion and trading at a P/E ratio of 17.95, the stock appears attractively valued. According to InvestingPro analysis, Tryg is currently undervalued relative to its Fair Value, suggesting potential upside for investors. The company is featured on InvestingPro’s most undervalued stocks list, alongside comprehensive analysis available in the detailed Pro Research Report.

Outlook & Guidance

Tryg A/S continues to focus on its three-year strategic plan (2024-2027) aimed at sustainable growth and operational excellence. The company targets a 1 billion DKK increase in its insurance service result over the strategy period, with contributions from scale, technical excellence, and customer excellence initiatives. InvestingPro Tips highlight that Tryg has maintained dividend payments for 21 consecutive years and raised its dividend for 4 consecutive years, demonstrating strong capital discipline. The platform offers 6 additional exclusive tips for Tryg, along with a GOOD financial health score of 2.82 and a comprehensive Pro Research Report covering all key investment metrics.

Executive Commentary

CEO Morten Hübbe stated, "Our Q1 results demonstrate the strength of our business model and strategic focus. We are committed to delivering value through disciplined pricing and innovative customer solutions."

Risks and Challenges

• Macroeconomic volatility and geopolitical tensions could impact pricing and claims costs.
• Large and weather-related claims pose a risk to underwriting profitability.
• Retention pressures in the commercial segment may affect growth dynamics.

Q&A

Analysts inquired about the impact of geopolitical tensions on Tryg A/S’s claims inflation and pricing strategies. The management highlighted their proactive measures to mitigate inflation impacts through disciplined pricing and procurement strategies.

Full transcript - Tryg AS (0R78) Q1 2026:

Gianandrea Roberti, Head of Financial Reporting, Tryg A/S: Good morning, everybody. My name is Gianandrea Roberti. I’m Head of Financial Reporting at Tryg. We published our Q1 figures earlier this morning, and I have here with me Johan Brammer, our Group CEO, Allan Kragh Thaysen, our Group CFO, and Mikael Kärrsten, our Group CTO, to present the numbers. With these few words, over to you, Johan.

Johan Brammer, Group CEO, Tryg A/S: Thanks a lot, Gian, and a very good morning from me as well. This is a good day, and I will go straight to the first section of the presentation, where I’ll start by commenting on the financial highlights as usual, as well as comment a bit on the revenue development. Tryg reports a premiums growth of 3.5%, primarily driven by the Private segment and in particular by our Norwegian business, whereas the Commercial segment reports a lower growth also following a challenging 1st of January renewal. The insurance service result was a strong DKK 1.655 billion, driven by a strong combined ratio of 84%. The group underlying claims ratio improved by 40 basis points, showing an improvement compared to recent trends. This is primarily driven by profitability initiatives in Norway.

The investment result was DKK 2 million positive in a quarter that experienced the return of sharp volatility in capital markets following high geopolitical tensions in the Middle East. Equities dropped, corporate spreads widened, and interest rates moved upwards following changes to inflation expectations. As a reminder, we have a very conservative asset mix made up primarily by Danish and Scandinavian covered bonds. We have no equities. I repeat, we have no equities in the mix, and hence we did well in the midst of the storm. The pre-tax result was DKK 1.276 billion. Operating EPS was DKK 1.85, and the return on own funds was 28.6%. Finally, Tryg pays a Q1 dividend per share of DKK 2.15 and reports a solvency ratio of 192%, supportive of future capital repatriations.

Before I end my initial comments, I would like to add that we monitor closely, of course, the developments in the Middle East tensions and the potential spillover on the global economies and specifically inflation. The situation remains very volatile, and upon looking at our book, it is primarily the motor and property liabilities that are exposed to inflation in wave one. With that, I’m mainly referring to inflation on goods and spare parts and not so much on salary inflation. We remain very alert but also remain confident in our ability to price risks correctly and steer through any scenario we’ll face. With that, we are now turning to the next slide on customer highlights. The customer satisfaction score for Q1 was 82, coming from 81 at the end of 2024 and against a target of 83 for next year.

The higher satisfaction has been driven by improved online features that resulted in a better customer experience. Additionally, the new contact center platform called Puzzel is gradually being implemented successfully across the Group, and we note an improved customer satisfaction linked to this, in particular at Alka and Trygg-Hansa. Now let’s move to the next slide where we take a look at the ISR by segments. Please remember that a lot of moving items, such as large and weather claims, interest rate movements, and run-off do of course impact the ISR on a reported basis. The Private business reported a higher ISR driven by good growth and improved underlying performance together with a higher run-off, which was then partly offset by large and weather claims together being higher than in Q1 2025, despite remaining lower than normal.

The Commercial segment reported lower ISR driven by a muted top-line growth, higher large and weather claims together, a lower run-off result while an improved underlying performance was noticeable. In the next slide, we illustrate the bridge of the performance from Q1 last year to Q1 this year and take a quick look at the performance by geography. If we just start with the bridge on the right-hand side of the slide, the result this quarter was improved by the premiums growth, particularly in the Private lines, an improved underlying performance, a higher run-off, and positive currency developments. Whereas on the negative side, high large and weather claims taken together were recorded, although, and I repeat that although, these were still below normal levels. On the left-hand side, the ISR by geography saw a positive development across all countries.

As mentioned before, a lot of moving parts can impact the reported figures. However, we do notice a continuous positive development and an improved combined ratio across the board. That’s important. On the next slide, we zoom in on our Norwegian performance that continues to show improvements. It’s important to remember that Q1 is by far the more complicated quarter of the year in Norway due to often challenging winter weather. Nevertheless, Q1 2026 was the best Q1 in the last eight years, continuing the improvement seen in the last 18 months or so. The combined ratio for the quarter was 93.7%. As mentioned previously, price increases are expected to be lower starting from the spring, but we remain very vigilant to protect profitability should inflation become visible again, as discussed before with reference to the Middle East tensions.

As for the composition of our book, motor represents a bigger share of our revenues in Norway, around 40%, compared to the Group just above 30%, and therefore our attention here is of course at the highest level. With that, we turn to the next section and the first slide of the insurance revenue section.

Allan Kragh Thaysen, Group CFO, Tryg A/S: In this first slide, we illustrate that the Group premiums growth was 3.5% in local currencies, a level similar to recent quarters. As for the Private segment, it grew nicely above 5%, while the Commercial segment growth was more muted. The growth in the Private segment is still primarily driven by price increases, mainly in our Norwegian segment, although we are also seeing commercial activities starting to pay off, especially in Sweden. As for the Commercial segment, it continued the focus on SME, while some customers exited in the Corporate part of the first of January renewal. We do expect the Group top line development to improve slightly and gradually in the second half of 2026 and onwards, both in absolute terms, but also with a more sustainable composition. Obviously, the precise timing of this is also linked to the current Middle East tensions and potential inflation spillover.

With that, let’s turn to the next slide on customer retention. When looking at the retention levels, we notice a general improvement in the private segment, while pressure remains in the commercial segment. Our experiences from the past show us that it takes a little while before following periods of price increases, the retention stabilizes and bounces back. We’ve now achieved that balance in the private lines, and we expect to do so in the commercial lines during 2026. It is noteworthy in this context to mention that our main shareholder, TryghedsGruppen, has just announced its customer bonus of 7%, it was 6% last year, to Danish customers. I mentioned this here, as we believe this is helpful in terms of retention going forward. I guess with that, I’ll turn it over to you, Micke.

Mikael Kärrsten, Group CTO, Tryg A/S: Thanks, Johan, good morning from me as well. The underlying claims ratio improved 40 basis points both for the Group and the Private segment in Q1. This is an improvement compared to the most recent quarters, showing that profitability measures, especially in Norway, are paying off. Stability remains paramount for us, and as we have been mentioning at the capital market stage, we do expect the underlying claims ratio to remain broadly stable to slightly improving towards 2027. This remains unchanged today. Turning to slide 14. We are here showing the development of the most volatile items, large and weather claims, the run-off result, and the overall level of interest rates that we use to discount the claims reserves. Large claims were above normal in Q1, while weather claims were well below normal level during this quarter.

Q1 held a couple of large commercial claims, in particular in Sweden, while weather claims were low despite snow and colder weather than normal that affected Denmark and southern Sweden in the quarter. The run-off result was fairly stable at 2.5% and in line with recent experience and our guidance of a run-off around 2% towards 2027. Finally, the discount rate was 2.4%, unchanged from Q4. Please remember that this is an average of the three months, and it’s also a function of both interest rates levels and the claims mix. With this, I hand it over to you, Gian.

Gianandrea Roberti, Head of Financial Reporting, Tryg A/S: Thanks, Micke. We are now moving into the investment section of the presentation. At the end of Q1, total invested assets were DKK 62 billion, with the match portfolio being approximately DKK 48 billion and the free portfolio of DKK 14 billion. The asset mix is completely unchanged, also in light of the fact that properties exposure has remained stable in Q1 versus the end of 2025. If you look at the actual investment result in the quarter, it was DKK 2 million. As Johan mentioned, it was a quarter characterized by high volatility following renewed Middle East tensions. Equities drop, corporate bond spreads widen, and interest rates move upwards. Against this backdrop, we were quite happy about our very conservative asset mix and pleased to report a modestly positive investment result. The free portfolio posted a return close to zero.

The match portfolio returned DKK 76 million, while other financial was a slightly negative DKK 69 million, a little bit better than normal. All in all, the current asset mix is confirming downside protection at the time of high volatility, and this is what we were looking for when we did the change to the asset mix. With this, over to you, Allan.

Allan Kragh Thaysen, Group CFO, Tryg A/S: Thanks, Gian, and good morning from me as well. Let’s move into the solvency and expenses section. This first slide shows details on the development on our solvency position as per end of Q1. Tryg reports a solvency ratio of 192% against 196% at the end of last quarter. It is important to remember that Q1 is historically the quarter with the lowest normalized level of earnings, and therefore also the quarter when dividend costs are proportionally higher from a solvency perspective. As a reminder, today’s announced dividend is already deducted from the current solvency position of 192%. Own funds have been primarily impacted by the operating earnings, the dividend payment, and by the strengthening of the Norwegian kroner. On top of that, the temporary three percentage points uplift from the refinancing back in November has now been deducted from our own funds.

The solvency capital requirement has primarily been impacted by the higher level of interest rates, resulting in lower claims reserves on the balance sheet and therefore a lower capital charge. SCR is also positively impacted by a lower nominal amount of fixed income instruments. Finally, the strengthening of Norwegian kroner has impacted the capital requirement negatively.

Now please turn to the next slide. In this slide, you can see the historical development of our solvency ratio. We are very pleased to report a robust solvency ratio of one ninety-two after a quarter with significant macro shocks, while the level remains supportive of future capital repatriation. As mentioned, we expect solvency ratio to gravitate towards a less conservative level long term, and we expect to continue our year-end assessment of our solvency position also going forward. And now please turn to the next slide for updated solvency ratio sensitivities. Sensitivities are virtually unchanged from the last quarter, which should come as no surprise as the asset mix is broadly unchanged. The biggest sensitivity remains the one towards covered bond spread movements, as this is our chosen asset class and represents the vast majority of our investments.

The low sensitivities about our investment case fits our thinking well, as stability is one of the most important elements also in times with high volatility in capital markets. Now let’s move to the expense ratio development on the next slide. We are reporting an expense ratio of 13.3%, which is fully in line with the level shown in Q1 last year, and the overall number of employees remained stable in the quarter. Investments in additional commercial activities are funded internally by improvements in our operational efficiency. Finally, we continue to expect the expense ratio to be stable to slightly improving towards 2027. With this, I will hand it over to you, Johan.

Johan Brammer, Group CEO, Tryg A/S: Thanks a lot, Allan. I guess with this, we are now entering the final part of the presentation, which is on strategy and financial targets. As a reminder to all of you, we are aiming to grow the insurance service result by DKK 1 billion over the three-year strategy period. Most of you know the strategy is based on three pillars, Scale and Simplicity, that should add DKK 500 million, Technical Excellence, that should add DKK 300 million, and Customer and Commercial Excellence, that should add DKK 200 million. A number of strategic initiatives are being implemented as we speak, and we remain very confident and very pleased with the progress across all three strategic pillars. As for Scale and Simplicity, I’d like to highlight just a new partnership with Carbox in the next slide.

If we move to that next slide, I want to just highlight that we’ve entered into a new Nordic partnership with Carbox. For some of you might ask yourself, what is Carbox? Well, Carbox is a claims handling company focused solely on car repairs across all brands in a fast and very efficient manner, limiting the use of replacement parts. Carbox has a very sophisticated setup, and they can repair a wide range of dents, scratches, and cracks in just a few hours, actually in just two hours. We believe this partnership will increase our customer satisfaction. We believe it’ll allow for very effective and ultimately cheaper claims handling while also offering a more sustainable solution to our customers. We see already in our figures a sharp increase in the number of claims steered to Carbox, and we do expect this to grow substantially towards 2027.

With that, let’s turn to the next slide on our well-known financial and strategic targets towards 2027. I’ll just briefly repeat that we target an ISR between DKK 8-DKK 8.4. You should see them on a midpoint of DKK 8.2, driven by a combined around 81% and a ROE between 35% and 40%. All targets are completely unchanged, and we work relentlessly to deliver on these. With that, we go to our favorite slide, our usual slide, and our final slide with the Rockefeller words, reiterating our commitment to be a healthy dividend stock underpinned by strong earnings and a very healthy solvency position. With that, I think I’ll turn it over to you, operator.

Operator: Thank you. If you do wish to ask a question, please press five star on your telephone keypad. To withdraw your question, please press five star again. In the interest of time, we ask that you please limit yourself to one question. If you have additional questions, you may rejoin the queue. We will have a brief pause while questions are being registered. The first question is from the line of Asbjørn Mørk from Danske Bank. Please go ahead. Your line will now be unmuted.

Asbjørn Mørk, Analyst, Danske Bank: Good morning. Thanks for taking my question. I would like to ask around the contingent liabilities note. I guess you already now know what kind of topic that would be around, but of course the case on the appeal board against the Codan Denmark. I did read your note stating that you expect that it will not affect the group’s solvency position. I guess you are expecting the appeal board to win the case. Could you unwrap this note a little bit for us in terms of what would be the different potential outcomes as you see it in terms of impact for you? Should the appeal board lose the case, would that still be the case, the conclusion that it will not affect the solvency position, or is that just a probability weighted statement, and how should we think of this in terms of impact financially for you?

Johan Brammer, Group CEO, Tryg A/S: Okay, thanks a lot for that question, Asbjørn Mørk, and good morning to you. I understand, of course, that this contingent liability is a hot topic these days. I read the reports. I read the news. I follow this very closely. I think just to be very helpful to everybody who’s listening into the call today, I’ll only comment on this once during this conference call, so we don’t waste 40 minutes saying the same things 10 times. Let me be very clear with three things on that question, because it is an important question, Asbjørn Mørk. First of all, we clearly believe that the ruling will be favorable to the industry and Tryg. That’s point number one. We believe the ruling will be favorable to the industry and Tryg.

Second, should the case still end up being adverse for the sector, we are confident that a pragmatic solution will be found with the Danish state. Thirdly, in the very unlikely event that this case affects Tryg’s reserves, we do not see it significantly affecting our solvency position. Let me just underpin that word. We do not see it significantly affecting our solvency position. For those of you who don’t know the case in details, I can clearly state we have more insights into this topic than you do, and I can only reiterate this will not be significant for our solvency position. I hope that’s sufficiently clear because I think that’s the only time we’re going to answer this question in this call. Those of you who are in line with questions on this topic, find another one. Thank you so much.

Asbjørn Mørk, Analyst, Danske Bank: Thank you for that, Johan. That was very clear. I guess that means that the worst case, you don’t see any significant impact on your solvency position. If I may just ask, because obviously right now we are forming a government in Denmark these days, the whole second scenario you mentioned where you expect a pragmatic outcome, is that going to be impacted by the recent election and the forming of the government, or how do you see that?

Johan Brammer, Group CEO, Tryg A/S: I think maybe I was unclear as to how many times I would discuss this, but Asbjørn Mørk, I see your point. I think what you’re discussing is timing. It doesn’t change my confidence in the fact that a pragmatic solution will be found with the Danish state. You’re discussing timing. My confidence remains intact.

Asbjørn Mørk, Analyst, Danske Bank: All right. Very clear. Thanks a lot.

Operator: The next question is from the line of Mathias Nielsen from Nordea. Please go ahead.

Mathias Nielsen, Analyst, Nordea: Thanks a lot, and congratulations on the strong start to the year. My question is coming back to a topic we have discussed over the past quarters a few times, the 2027 targets. I know the world is a bit volatile at the moment, but when you look out the window, even consensus is now above the top of the guidance range. My question is more related to do you see anything that could make you end in the low end of the range? Related to that, have you identified or seen any signs so far from the Middle East conflict that has hit any supply chains disruption or something like that? Have you already experienced something? I know it might be only in a small part of your business, but have you seen some signs already of things that have changed so far?

Johan Brammer, Group CEO, Tryg A/S: First of all, thanks, Mathias, for those two questions I believe it was, to be honest. Let me try and answer them both. On the first, whether that’s around our 2027 targets, and I appreciate the question, and I appreciate your ambition on our behalf. I think it comes from the fact that we’ve had a very strong 2025. We’ve had a very strong start to 2026. I will say we are only five quarters into the new strategy period, going for a three-year period. It is still too early to conclude on 2027 at this stage. You are alluding to also a topic that is high on our radar. Geopolitical tensions are rising.

There are disturbances in the Middle East, and there are early signs of some rising inflation, for instance, within oil, which lowers our visibility, of course, not just us, for the whole industry and all industries. We are happy that we have reported strong developments in 2025. When you adjust that for our, let’s call it tailwind on large and weather, we’re actually bang on where we said we would be for 2025. We will stick to our 2027 targets, and I don’t see any reason why we should change them either going up or going down at this point. To your second part of your question, which is around the Middle East, I think I just want to state a few things on that is relevant to pinpoint.

If you look at it from an asset mix point of view, I think maybe I’ll pass that on to you in a second, Allan. You can talk to that in a second. So far, our conservative asset mix has been helpful. That’s one way the Middle East can affect us. Very immediate term, the Middle East has an impact on travel claims. We have helped a lot of customers already in Q1 on traveling to the Middle East, being in the Middle East or traveling through the Middle East. We’ve helped more than 11,000 customers, so we’ve been busy on the phones, but it’s very manageable from a financial point of view. That’s not something for you to worry about. That’s more an operational issue than a financial issue so far, and even going into Q2.

The second part where the Middle East can have an impact on our business is, of course, around inflation should this materialize in inflation. Just a couple of thoughts on that. The areas where the Middle East could affect us or the tensions in the Middle East is inflation driven by transportation, oil, and energy. The areas in our book where we see the most impact would be on motor spare parts and building materials. For motor, 60% of our claims costs are related to goods. For building materials, for property, it’s 35% that is related to goods. That’s where we would see sort of a midterm inflation impact. The good thing is we will see a delayed impact on our business due to fixed price procurement agreements that will sort of prolong any impact, first of all.

Second of all, and this I need to be very clear also, if inflation outlook changes for us, we will price accordingly. Of course, we are following the situation very closely, and we will, as always, take the pricing actions needed should this become necessary. I can clarify one thing. In no scenario we see our 2027 targets becoming under jeopardy.

Mathias Nielsen, Analyst, Nordea: Thanks a lot. That was very clear. The only counterargument I have, like, I think both interest rates and currency levels have moved a bit in a favorable direction since December 2024. I guess that could be the changing thing why you should upgrade your target at some point. I will leave that for you to think about until the next quarter.

Johan Brammer, Group CEO, Tryg A/S: Thanks a lot for that, Mathias. Thank you.

Operator: The next question is from the line of Vrish Musalia from Goldman Sachs. Please go ahead.

Asbjørn Mørk, Analyst, Danske Bank2: Hi. Sorry, am I audible?

Johan Brammer, Group CEO, Tryg A/S: Yes, we hear you. Sorry.

Asbjørn Mørk, Analyst, Danske Bank2: Oh, sorry. I had a question around your sort of underlying claims ratio and just basically trying to understand how that would evolve over the next year. A couple of things there. One is obviously you have said claims inflation. We are hearing claims inflation within the Scandinavian region is coming down. As a result, let’s say pricing would come down a little bit. Now when I look forward to the next 12 months, I’m just trying to think whether the earn through or the improvement in the claims ratio could be at the same level as we’ve seen in this quarter. Do you think a more fair level could be something like what we’ve seen in 2025, simply because the pricing is sort of behind us? That’s my first question, and I can come back with the second question a bit later.

Mikael Kärrsten, Group CTO, Tryg A/S: Thank you very much for that question. I think if I try to sort of unwrap this in a couple of different ways. First of all, we are very pleased around the underlying development and the improvement that we see in the quarter of 40 basis points. Just reiterating that that’s coming from personal lines and in particular from Norway. Obviously there is an earnings impact on this from the initiatives that we put through in 2025, again, most notably in Norway. Right now we are pricing lower than we did in 2025, but still ahead of inflation. You’re right in the fact that there will be an earnings impact on this going forward, with the disclaimer that Johan just mentioned, relative to Mid East that we will price for et cetera, if that happens.

Overall, this is also a balancing act of igniting more commercial initiatives, most notably in Sweden, where we will see a marginally higher core, which is very much in line with our plans, where we balance growth and the underlying improvement.

Asbjørn Mørk, Analyst, Danske Bank2: Got it. I had a second question in line of just following from something you said about pricing in line with inflation. I remember in the past you have alluded to sort of your top line is going to be 1/3 pricing, 1/3 volume, and 1/3 upselling, cross-selling. Now, there I just wanted to understand if currently you’re growing at 3.5% on a constant currency basis, which is potentially in line with the claims inflation. I’m just trying to understand where do the cross-selling, upselling, and the volume piece sort of fit in, or do you expect that to sort of come in maybe later half of this year or even in 2027? Because it just feels like currently your top line’s growing just in line with inflation.

Mikael Kärrsten, Group CTO, Tryg A/S: Thanks for that. If I start and then I’ll give it over to you, Johan, as well. First of all, I’d just like to emphasize that we are pricing ahead of inflation, just to make that clear. Sorry if that wasn’t perfectly clear before. We are pricing ahead of inflation, and again, it’s in particular in Norway where we are slightly ahead. Like you said, we are expecting a more balanced growth going forward from price increases coming down and then having a more balanced approach with these three elements that you just mentioned.

Johan Brammer, Group CEO, Tryg A/S: I agree, Micke. If I could just add to that, if we sort of zoom out a bit, profitable growth has always been and will remain our primary focus. I think that’s very important and we are pleased to see, and that’s something we see that you don’t necessarily see. We are starting to see a better balance with growth being less driven by price than in the past. That’s not obvious to everybody externally, but internally we are seeing that movement. To be fair, organic growth does take a bit longer to materialize than price-driven growth, and we are not in a hurry to grow. We’d rather grow in a very sustainable, healthy manner, and that’s what we feel we are doing. We don’t see anything in our growth numbers now that is off our expectations. We don’t see anything that gives us cause for concern.

Asbjørn Mørk, Analyst, Danske Bank2: Got it. I have a couple of more questions, but I’ll just rejoin the queue. Thank you.

Johan Brammer, Group CEO, Tryg A/S: Perfect. Thank you.

Operator: The next question is from the line of Martin Gregers Birk from SEB. Please go ahead.

Martin Gregers Birk, Analyst, SEB: Thanks, Johan. Just out of curiosity.

Since your Annual Report, you have now classified this as a contingent liability. By the way, you are the only insurance company in the Nordics that are classifying this workers’ comp case as a contingent liability, at least directly in the notes. What has changed over these past two months?

Johan Brammer, Group CEO, Tryg A/S: Thanks for that question. I think I was trying to be very clear upfront that we don’t have anything more to add to this. I can just reiterate, we believe the ruling will be favorable to the industry in Tryg. If it ends up adverse for the sector, we are confident that a pragmatic solution will be found. In the very, very unlikely event that this case affects Tryg reserves, we do not see it significantly affecting our solvency position. I cannot speak for my competitors. That’s all I have to say.

Martin Gregers Birk, Analyst, SEB: I’m not asking about that. I’m asking about why this is now all of a sudden a contingent liability when it wasn’t two months ago.

Johan Brammer, Group CEO, Tryg A/S: Nothing has changed.

Martin Gregers Birk, Analyst, SEB: Okay. All right. Thanks.

Gianandrea Roberti, Head of Financial Reporting, Tryg A/S: I can just add that the note was general before, so there was that note before. We just added the word on workers’ comp now because there’s so much discussion. The note was there in the previous quarter, from last year as well. It was referred in a general basis. Just to be clear.

Johan Brammer, Group CEO, Tryg A/S: Nothing has changed from our view.

Martin Gregers Birk, Analyst, SEB: Okay. All right. Thanks.

Operator: The next question is from the line of Michele Ballatore from KBW. Please go ahead, your line will now be unmuted.

Michele Ballatore, Analyst, KBW: Yes. Thank you for taking my question. My question is more related to the growth, let’s say, initiatives. I mean, now that, let’s say, pricing is less of a tailwind if we look at the growth in top-line earnings and everything, can you remind us the key growth initiatives you are putting in place, especially in Sweden, where, of course, the underwriting profitability is significantly better than the other geographies? Thank you.

Johan Brammer, Group CEO, Tryg A/S: Thanks for that question, and I think it’s a very important topic, the growth component. You’re rightly saying that pricing as it looks right now, tapering off, and we need the commercial engines up and running. We are confident that we have sufficient commercial activities launched in the market. We have actually launched more than 20 different activities that will drive growth and loyalty in the markets over the coming quarters. Specifically to your question around Sweden, I think it’s important to mention the fact that we have entered in. Just to give you an example, we’ve launched more than 10 different motor partnerships in Sweden last year that will increase our sales into motor with more than SEK 130 million this year. That is part of the initiatives that will drive growth, both from a top line and pricing, but also from an inflow of new customers.

There’s plenty of organic initiatives that will drive organic growth. As I said, and I think you of course know this, right, organic growth takes a bit longer that time to materialize than the price-driven growth. Our plan is, and we are currently following plan, is for these organic initiatives to take over as pricing tapers off.

Michele Ballatore, Analyst, KBW: Thank you. We can assume that, let’s say, the bulk of these growth initiatives will probably be something related to the next strategic phase rather than this strategic phase?

Johan Brammer, Group CEO, Tryg A/S: No, I must say, I believe that we will see the impact of these commercial activities gradually coming into the numbers as we go through the year. Don’t expect things to change dramatically overnight. That’s not how we operate. We are expecting the commercial initiatives to kick in gradually as we go.

Michele Ballatore, Analyst, KBW: Fantastic. Thank you.

Operator: The next question is from the line of Nadia Claressa from J.P. Morgan. Please go ahead.

Nadia Claressa, Analyst, J.P. Morgan: Hi. Morning, all. I just had a quick one for me, please, more to clarify, perhaps, on the comment earlier that you are pricing ahead of inflation. Could you maybe elaborate more on the pricing versus inflation trends across each of the three markets? I understand that in Norway it’s still ahead, but from memory, for example, in Denmark, I believe the messaging was, for example, that nine out of the 10 customers are not getting price increases above inflation. Any further elaboration on that would be helpful.

Mikael Kärrsten, Group CTO, Tryg A/S: Absolutely. If we go through the pricing a bit more on the individual country perspective, you’re right to say first we state that we are pricing somewhat ahead of inflation still, although that it’s at a lower level than in 2025. If I sort of unpick that into the different regions, you’re quite right that Norway is where we are pricing the highest in this. It’s also the country where we see the highest inflation if we compare across the Scandi region. Nevertheless, still sort of a bit higher than the Norwegian inflation. Sweden and Denmark is a bit more balanced, and like you referred to in your note of the indexation part. We are pricing, also in these countries, pretty much on inflation or just a tad above.

Nadia Claressa, Analyst, J.P. Morgan: Okay. In Norway, if I could, is mid to high single digits still the right indicator of roughly where pricing is at the moment?

Gianandrea Roberti, Head of Financial Reporting, Tryg A/S: I think you should read into it that we are pricing a couple of percentage points ahead of inflation in Norway as we speak. The inflation in Norway is a couple of percentage points or one or two percentage points higher than in the rest of Scandinavia.

Nadia Claressa, Analyst, J.P. Morgan: Okay, sure. Thank you so much.

Operator: Before we take the next question, let me just remind you that if you wish to ask a question, please press five star on your telephone keypad. With that, we’ll pick up again. Vrish Musalia from Goldman Sachs, please go ahead. Your line will now be unmuted.

Asbjørn Mørk, Analyst, Danske Bank2: Hi, thank you for the opportunity again. The other two questions I had, one was just trying to unpack your market shares. Just looking at the slides that you provide at the end of the deck, this quarter versus last quarter, it appears that you have lost a little bit of share in Denmark and Sweden. I was hoping you could sort of unpack that potentially where is it coming from, and I appreciate there’s some rounding in there. To what extent is that sort of ignorable? That’s the first question. Second question was just on the reserve release. Obviously we have your guidance of 2%, but it seems like for a few quarters now you have been ahead of that.

Just trying to understand the driver of reserve release, at least in this quarter, which is somewhat higher than what we’ve seen in the recent past, and how we should probably think of it going forward.

Gianandrea Roberti, Head of Financial Reporting, Tryg A/S: Vrish Musalia, this is Gianandrea Roberti. I can take easily the first question. There is an around sign in our background slide in the investor presentation. I think it say around 17% at Q4, and it’s around 16% now. One should be a little bit careful to draw conclusion precisely because there is an around sign. I think the market share fall in Denmark, if I remember correctly, is around 40 basis points-50 basis points. That is statistical variation in data coming from the Danish Insurance Association. This is not an issue for us. A similar thing is valid for Sweden. I’ll give the word to Allan Kragh Thaysen.

Allan Kragh Thaysen, Group CFO, Tryg A/S: Yeah, thank you. On the second question, we have continued our very conservative reserving practice for many years now. Our reserving strength remains very strong, and you should expect some fluctuations quarter-to-quarter in terms of run-offs, and not as such any trend over from this quarter. We stick to the guidance that we’ve given to the market that we will print around two percentage points for this strategy period.

Asbjørn Mørk, Analyst, Danske Bank2: Are you able to share with us what was the driver in this quarter?

Allan Kragh Thaysen, Group CFO, Tryg A/S: There’s no such special things this quarter. You should expect some fluctuations quarter-to-quarter. I mean, 2.5%, 2.3%.

Asbjørn Mørk, Analyst, Danske Bank2: Okay.

Allan Kragh Thaysen, Group CFO, Tryg A/S: We print around 2%, and you should expect that to be continued towards 2027.

Asbjørn Mørk, Analyst, Danske Bank2: Got it. That’s very clear. Thank you so much.

Operator: The next question is from the line of Qian Lu from UBS. Please go ahead.

Asbjørn Mørk, Analyst, Danske Bank0: Quick one on the SCR. Hello, can you hear me?

Gianandrea Roberti, Head of Financial Reporting, Tryg A/S: We hear you now.

Asbjørn Mørk, Analyst, Danske Bank0: Hey, morning, everyone. Thanks for taking my question. This is Qian Lu from UBS. Just a quick one on the SCR bridge. Business evolution appears to be a capital release rather than a drag, which feels a bit counterintuitive given growth. Could you please talk through the main drivers behind this, please?

Allan Kragh Thaysen, Group CFO, Tryg A/S: Yeah. Thank you so much. You’re right, we have a positive development in the SCR bridge. It is relatively small movements. That’s just to make that clear, and it’s pretty much driven by the higher interest rates resulting in lower claims reserves. That is the read off from this one. You should expect also going forward that growing the business also means that we need to grow the capital requirement linked to it going forward. In this particular quarter, we have relatively small movements linked to the interest rates movements.

Asbjørn Mørk, Analyst, Danske Bank0: Very clear. Thanks.

Operator: The next question is from the line of Vinit Malhotra from Mediobanca. Please go ahead.

Asbjørn Mørk, Analyst, Danske Bank1: Good morning. Thank you. My one question will be on slide 24, please, and the growth topic, just looking a little bit, maybe it’s minor coincidence, but both second and third pillar have a commercial product initiative. I just obviously don’t want to read too much into it, but I know Private lines growing 5% is great. Is it some thinking that maybe you might lean a bit more on the Commercial lines to produce some offsetting, some growth more? Is that too much to read? Just a little bit more thoughts on that business mix as we keep talking about quality of growth. Just a little thought on that would be very helpful. Thank you very much.

Johan Brammer, Group CEO, Tryg A/S: Thanks a lot, Vini, for that question. I don’t think you’re reading too much into it. As we said initially, the growth in the private segment was around 5%, a little bit up from the full-year growth last year, which was 4.7%. Within commercial, growth was in positive territory within the SMEs, but negative around the corporate space. That is also why we are over-indexing right now on growth initiatives, not just in private lines, but also in commercial lines. A few specific initiatives. We mentioned one here for Commercial Denmark around being the preferred insurer in agriculture. That will be a growth engine in Denmark. We are also launching initiatives. As I mentioned before, we have more than 20 commercial initiatives. One of them is on the online distribution in commercial lines in Sweden.

Allan Kragh Thaysen, Group CFO, Tryg A/S: A third one, just to mention here, would be a focus on housing associations in Norway. There is a broad range of different growth initiatives. You’re right, also as you’re highlighting, we are targeting some of them into the commercial space also.

Asbjørn Mørk, Analyst, Danske Bank1: Okay, thank you.

Operator: The next question is from the line of Mathias Nielsen from Nordea. Please go ahead.

Mathias Nielsen, Analyst, Nordea: Thanks a lot. Patrick, my follow-up question is more of a technical one maybe, but could you please put a few words on the discounting impact going forward? Now it was 2.40% this quarter, and at Fortune, at least I heard it something like it was an average over the quarter. Given where interest rate expectations are at the moment, how should we think about the discounting impact in the rest of the year? Could you maybe say a few words on the mechanism there so it’s a bit easier for us to understand? Thanks a lot.

Allan Kragh Thaysen, Group CFO, Tryg A/S: Yeah. Mathias, as a starting point, as Mikael Kärrsten was mentioning, it is a combination of the interest rate curves and the claims mix that is underneath. You’re right that we are printing 2.4% in this quarter. We also did that in the last quarter. Some volatility out there in interest rates curves at the moment. I think that we have been very precisely been describing this in our reports. That’s higher discounting of insurance liabilities. The normal rule of thumb is that if you take a 100 basis points parallel shift to the yield curve, that will correspond to a 100 basis points impact on the Group combined ratio. That is the overall guidance, so to speak. What we have seen lately is a movement in the short part of the curve.

The biggest impact, you will see that from the more longer tail the business, so to speak, coming back to the claims mix. It is hard to predict the coming quarters.

Mathias Nielsen, Analyst, Nordea: Sure. When I think about it, I think about it being slightly up to this current impact in the coming quarters, but not much. Is that a fair assumption given what you’re also seeing, that short rates, yes, they have moved up, but not the really short rates? It’s been the one-year-five-year that’s basically moved, but not the three months. Is that a fair assumption that it’s going to be minor, but small tailwind unless the long end of the curve also moves up?

Allan Kragh Thaysen, Group CFO, Tryg A/S: Yeah.

Mathias Nielsen, Analyst, Nordea: Is that a fair way to think of it?

Allan Kragh Thaysen, Group CFO, Tryg A/S: Exactly. All else being equal and as of today, I fully agree.

Mathias Nielsen, Analyst, Nordea: Thanks a lot.

Operator: The next question is from Asbjørn Mørk from Danske Bank. Please go ahead.

Asbjørn Mørk, Analyst, Danske Bank: Yeah, thank you. One follow-up question from me as well. Looking at the underlying improvement in the 40 basis points that you’ve printed for this quarter, the second-order derivative obviously improving. If I look at the mix, it seems to be quite a solid improvement both for private and for the commercial business. Considering the sort of stability and predictability you like as a company, I was just wondering, when I look at consensus expects 30 basis points improvement for the full year 2026, and only 10 basis points for 2027 and 2028. Are you seeing anything out there, leaving aside the short-term impacts from Middle East and how that could spur into inflation, but is there any reason to expect the 40 basis points to deteriorate from here for the rest of the year and into next year?

Would you be satisfied with 10 basis points improvement in 2027 given where we are today?

Mikael Kärrsten, Group CTO, Tryg A/S: Thanks for that question, Asbjørn. I think I’ll start with the very boring part of my answer, and that is to say that we expect the underlying claims ratio to be stable to slightly improving. I think if I elaborate a little bit on that, as we’ve said before, we are pricing somewhat ahead of inflation still. We have priced in 2025, significantly ahead of inflation in Norway. We do expect an earnings impact of that. Obviously you can come into different parts of medical inflation increases, but very much as Johan was mentioning before, that is something that affects part of the portfolio, not the entire portfolio. It’s also something that we have procurement initiatives towards, and will price for accordingly if something happens.

I hope that gives a little bit more meat on the bone on what we expect and how we see underlying going forward.

Asbjørn Mørk, Analyst, Danske Bank: Well, I guess that means, because if you go back a few years, your improvement was driven basically by the Commercial business, and you had the issues in Private. Now both your businesses are improving, and it seems to be quite structured. You’re repricing above claims inflation. Why should we end up at around 10 basis points improvement in 2027? Wouldn’t you expect something more than that, unless we get some very unfavorable inflation hit from the Middle East situation?

Johan Brammer, Group CEO, Tryg A/S: Asbjørn, just on that point, with the risk of sounding depressive or crashing the party, right? 10 basis points up and down. Of course, we are happy to see an improvement with 40 basis points, but the difference between 30 and 40 or between 40 and 50, it’s very minor if you look at it in absolute terms. I don’t think you should read too much into 10 basis points up or down in that sense. Although we are, of course, happy to see that all our repricing, all our streamlining of the book, and all the efficiency we’re taking out is actually paying off on the underlying, I wouldn’t read too much into whether it’s 10 basis points up or down.

Asbjørn Mørk, Analyst, Danske Bank: No, I fully agree. I’m just thinking if you should improve your underlying by 30 basis points-40 basis points next year and not the 10 basis points that consensus is expecting, then it becomes quite meaningful. I just can’t see why it would only be 10 basis points next year, considering what you’re repricing by now and how confident you seem to be that you’re repricing above claims inflation.

Johan Brammer, Group CEO, Tryg A/S: I don’t think we wanted comments and guide specifically on the underlying. What we can say is that coming out of Q1, we have a very strong position on our ability to earn. We are in a very strong position right now, but we’re not guiding on underlying in the next few quarters. We’ve never done. I think Micke started off exactly where I want to finish off. We have a stable to slightly improving, and that’s sort of what we stick to.

Asbjørn Mørk, Analyst, Danske Bank: All right, fair enough. Thanks a lot.

Operator: The next question is from the line of Martin Gregers Birk from SEB. Please go ahead, your line will now be unmuted.

Martin Gregers Birk, Analyst, SEB: Thanks. Just maybe following up on your Commercial premium growth. As you also previously said that you’re still seeing a growth within SME and then sort of the whole Corporate group is still a drag on total growth, where do you actually want to be in this on sort of a reported basis for the Commercial division in terms of premium growth?

Johan Brammer, Group CEO, Tryg A/S: I don’t think we have a specific target on growth because the second we as a Group set a specific target on growth on Corporate, we will get into trouble. We will do the renewals as we go through it. We will price accordingly and when we at this particular 1st of January renewal, when we exit certain Corporate clients, that’s because the underwriting and the willingness to pay doesn’t match. That’s how we want to guide on this. I think fundamentally it is true that we have a 60%, more than 60% Private book. Our Commercial lines is around 30%. Our Corporate is a small component of that, and that means that we will see big impact when large Corporate clients do exit or enter. I don’t think we don’t get hung up on the quarterly growth numbers.

We just, of course, communicate them to you, but we don’t want to run our business on quarterly growth.

Martin Gregers Birk, Analyst, SEB: How much is left of sort of the old corporate book pruning?

Johan Brammer, Group CEO, Tryg A/S: We have alluded to previously around 6%, and that’s still the case.

Martin Gregers Birk, Analyst, SEB: Okay. All right, thanks.

Johan Brammer, Group CEO, Tryg A/S: Just to maybe.

Operator: There are no further questions.

Johan Brammer, Group CEO, Tryg A/S: Yes.

Operator: There are no further questions, so I’ll hand it back to speakers for any closing remarks.

Gianandrea Roberti, Head of Financial Reporting, Tryg A/S: Thank you, everybody, for all the questions. As always, the Investor Relations team here at Tryg is available for any follow-up. Otherwise, I’m sure we will see you around the next few days. Thanks a lot again.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.