Tryg experiences DKK1.1bn investment income hit as capital markets strike

Written by Adam Cadle

20/04/2020

Scandinavian non-life insurer Tryg has seen a DKK1.1bn hit on its investment income due to turbulent capital markets.

In a financial update as per 26 March and ahead of its Q1 2020 results published tomorrow, Tryg said “leading equity markets are down more than 25%, interest rate movements have been extreme, credit spreads have widened substantially and in general all asset classes have experienced unprecedented declines”.

Against the macroeconomic backdrop, Tryg’s supervisory board has decided to move to a full year dividend decision for 2020.

“Based on the current extraordinary situation we believe it is in best interest of all our stakeholders to be prudent until the macroeconomic picture has stabilised,” chairman Jukka Pertola said.

Tryg’s Q4 2019 ordinary dividend and the announced extraordinary dividend have been paid already on 27 January.

“Our business model remains resilient and our operations remain stable,” the insurer added.

“The technical result target of DKK3.3bn in 2020, driven by an expense ratio around 14% and a combined ratio at or below 86%, is repeated while the ROE target at or above 21% is suspended for the FY 2020 following the extremely negative capital markets developments in Q1 to date and continued uncertain capital markets outlook. It should be noted that Tryg has reported an average ROE for the last five years (2015-2019) of almost 23%. Tryg reports a solvency ratio of approximately 158% as per 26 March.

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