Strategic Insights Ahead of Q2 2025 Results
As the time approaches for Tryg A/S to release their Q2 2025 results on July 11, excitement in the financial community is building. The company is gearing up to conduct analyst calls and meetings starting on June 26, offering valuable insights into the influences shaping its recent performance.
Insurance Revenue Growth Overview
Insurance revenue at Tryg is well-distributed across Scandinavia, with about 50% originating from Denmark, 30% from Sweden, and 20% from Norway. In Q2 2024, the company reported impressive insurance revenue totaling DKK 9,545 million.
Looking ahead, the commercial segment is anticipated to feel a minor spillover effect into 2025 due to the derisking strategies implemented within the corporate portfolio in 2024. Revenue growth has shown positive signs, reflected in a growth rate of 3.7% in local currencies for Q1 2025.
When converting earnings from local currencies to DKK, Tryg’s reporting metrics indicate an expected average exchange rate of DKK 68.5 for SEK 100 and DKK 64.5 for NOK 100.
Understanding the Claims Environment
Recent trends in Tryg's claims development are promising, offering reliable indicators for short-term expectations. In Q2 2024, the underlying claims ratio stood at 66.8%. During the Capital Markets Day held on December 4, 2024, Tryg projected a largely stable to slightly improving underlying performance through to 2027. The Group's underlying claims ratio saw an improvement of 30 basis points in Q1 2025, with private sector claims improving by 10 basis points.
Regarding weather claims, expectations for Q2 indicate that normalised claims may account for approximately 10% of the annual guidance of DKK 800 million, equating to DKK 80 million. Weather claims are anticipated to follow a quarterly distribution of 40% in Q1, 10% in Q2, 20% in Q3, and 30% in Q4.
Guidance for large claims is set at DKK 800 million annually, which is evenly distributed across quarters. Information about potential large claims is sometimes accessible through local media.
The expected discount rate for Q2 is approximately 2.5%, a slight increase from 2.3% in Q1 2025.
Investment Activities and Financial Expectations
In terms of investments, Tryg has categorised its portfolio into a match portfolio (approximately DKK 46 billion as of Q1 2025) and a free portfolio (around DKK 16 billion). Following the December strategy announcement, the free portfolio was derisked during Q4 2024, now mostly comprising Scandinavian covered bonds and government bonds, alongside a real estate portfolio valued at approximately DKK 3 billion.
The anticipated return on the bonds can be modelled using Bloomberg tickers, especially NYKRCMB2 and NYKRCMG2. Meanwhile, a normalised annual return of 6.5% is expected from the real estate portfolio.
Regarding the match portfolio, the return is expected to be around DKK 75 million per quarter at current interest rates. Additionally, the segment ‘Other financial income and expenses’ is anticipated to report around DKK -90 million each quarter, encapsulating costs associated with currency hedges and investment operations.
In a broader financial context, other income and costs are guided at DKK -350 million to -370 million quarterly, largely due to the amortisation associated with the acquisition of RSA Scandinavia. Fluctuations in SEK this year have positively influenced the insurance service result but negatively impacted this expense line, with an additional expected FX-related adjustment of approximately DKK 15 million.
Share Buyback Program Updates
As of the end of Q1 2025, Tryg reported a total of 607,059,826 outstanding shares. During Q2, the company participated in a share buyback, purchasing a total of 4,091,106 shares, thus reducing the number of outstanding shares during this period. The buyback program, valued at DKK 2 billion, concluded on June 19, 2025.
Future Outlook and Expectations
In the most recent annual report, Tryg conveyed an optimistic outlook with an adjusted insurance service result target of around DKK 7.2 billion for 2024. The company is poised for its highest anticipated insurance service result ever, aiming for DKK 8.0 to 8.4 billion by 2027, with expectations for gradual growth during this strategic period.
Confirmation of the restated financials due to changes in inflation hedging, as announced in the March 2025 newsletter, highlights the shifting landscape within which the company operates.
Upcoming Conference Call Details
On July 11, 2025, at 10:00 CET, Tryg will host a conference call for the release of the Q2 results. Top executives including CEO Johan Kirstein Brammer and CFO Allan Kragh Thaysen will present a brief overview of the results, followed by a Q&A session. This call, conducted in English, will be accessible to all stakeholders.
You can sign up for an email reminder on Tryg's website, and the call will be broadcast live, with an on-demand version available shortly after it concludes. All Q2 2025 materials will also be downloadable shortly after release.
Frequently Asked Questions
What are the key dates for Tryg's Q2 2025 results?
Tryg's Q2 results will be announced on July 11, 2025, with a conference call scheduled for 10:00 CET on the same day.
How has Tryg's insurance revenue growth been trending?
Tryg's insurance revenue has shown stable growth, with 50% from Denmark, 30% from Sweden, and 20% from Norway, reporting DKK 9,545 million in Q2 2024.
What are the expectations for claims in Q2 2025?
The normalized weather claims for Q2 are anticipated to be around DKK 80 million, based on the annual guidance of DKK 800 million.
How does Tryg plan to handle its investment portfolio?
Tryg's investment activities are divided into a match portfolio and a free portfolio, with continued focus on Scandinavian bonds and a strong real estate strategy.
What is the outlook for Tryg's insurance service results?
Tryg aims for a record insurance service result of DKK 8.0 to 8.4 billion by 2027, reflecting gradual growth throughout its strategic planning.
