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Tryg Norway

Analyst Day

Bergen, 13 June 2018

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Agenda

14:45 Welcome by Group CEO, Morten Hübbe

15:00 Understanding Norway and Tryg Norway, SVP and Head of Norway, Espen Opedal

15:15 Retail and Corporate Norway - Operational and Financial review,

SVP and Head of Norway, Espen Opedal and SVP Commercial Norway Director, Espen Strømme

16:00 Digitalization & Claims Management, Espen Opedal & Espen Strømme

16:30 OBOS and Troll integrations and opportunities, Espen Opedal

16:45 Q&A

Welcome by Group CEO, Morten Hubbe

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Why are we here today?

Organisation chart

• Organizational change in February 2016

• Country based organization, closer to local markets

• Enabling a more agile decision making

• Empowered organization with increasedaccountability

CFOChristian Baltzer

CEOMorten Hübbe

COOLars Bonde

CCOJohan

Kirstein Brammer

Executive Board

Private DK

Commercial DK

Corporate DK & Tryg Garanti

Claims DK

Private NO

Commercial NO

CorporateNO

ClaimsNO

Sweden Private & Affinity

Corporate SE

Tryg Norway key numbers

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Gross premium by products 2017 Norway, Combined ratio 2013 - 2017

• Norway reported DKK 6.3bn of premiums income at end of 2017 or approximately 35% of Group premiums

• Motor & Property key products, Accident & Health and Liability to follow

• In the last five years the reported Combined ratio for the Norwegian business averaged approx 85%

• Norwegian Expense ratio moved from 15.3% in 2013 to 14.7% (including Obos) in 2017 driven by increased efficiency

and a reduced number of employees (from 1,199 in 2013 to 1,042 in 2017)

Bolt-on acquisitions in Private/Commercial & Rates increases in Corporate

6

Norway Corporate rates* under pressure

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

2015 2016 2017 2018 (Q1)

Motor Property Sickness etc. Workers' compensation Health

Source: FNO statistics, average premium development

Tryg Corporate Norway price increases implemented, Q1 2018

Motor 6.1%

Property 5.3%

Fish farming 23.1%

Health 13.5%

Sickness 7.1%

Workers’ Comp 4.3 % 7%

• Portfolio of 170mNOK

• 10 years old company, 35 employees

• 10.000 private customers, 1050 housing associations

• One owner – OBOS BBL

• 5 year exclusive distribution agreement – private

members

• Portfolio expected to produce returns in line with

“Retail” Norway in a couple of years

OBOS Forsikring

• Portfolio of 120mNOK

• Portfolio is 40% Oslo/Akershus

• 12.000 customers – private only

• Distribution through web and inbound

• Purchase price NOK 72m, including a year-end 2017 equity of

NOK 44m and a tax asset of NOK 40m (i.e. no goodwill)

Troll Forsikring

Claims Excellence

DKK 600m in claims cost reduction

Digital Empowerment

of Customers

DKK 100mSTP on claims: 50%Self-service: 70%

Tryg 2018 – 2020:

Strengthening the core, while embracing the futureProduct & Service

Innovation

+DKK 1bn in new products by 2020+

Distribution Efficiency

DKK 150m in technical result impact

Financial targets 2020 a)

• Technical result: DKK 3.3bn

• Combined ratio: ≤86

• Expense ratio: ~14

• ROE: ≥21%

Customer targets 2020

• TNPS: 70

• Number of products per customer: +10%

Dividend policy

• Targeting a nominal stable increasing dividend

• Extraordinary dividend to further adjust the capital structure

Long term profitable growth and attractive shareholder value creation

Tryg’s equity story – a leading Scandinavian non-life insurer

a) The targets are conditional upon the authorities’ approval of the Alka acquisition

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Understanding Norway

Macroeconomics Norway

Map as watermark, Nordic

Macroeconomics

% 2018 2019

GDP Growth (mainland) 2.5 2.2

Inflation 1.7 1.6

Unemployment 3.7 3.2

Current account balance in % of GDP 7.2 7.1

Budget balance in % of GDP 2.5 2.7

Public debt in % of GDP 0.0 0.0

Source: Economic Outlook, Nordea Markets, January 2018

Population projections

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Source: SSB, June 2016

NOK more correlated to USD dollar than EUR

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Key indicators for the Norwegian insurance market

Stable profitmargins

2013

102

2002

2003

87

2015

2014

2005

2016*

2006

2007

2010

95

2009

2004

24 Expense ratio

78

2012

2011

Claims ratio

2008

68

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• A sustainable claims ratio for the industry

• Solid cost control and efficiency driven by themain players in the market.

High retention

• Customer loyalty is higher within insurance than many comparable industries, despite a slight decline the last3-4 years.

• Smaller players have increased pressure on price in the market over the last 3-4 years, but due to their current poor financial performance we expect this to ease.

Mature market

• Stable market over time, while now entering a phaseof faster changes, digitalization and innovation

• Expected market and population growth.

• Demographic challenges might give new opportunitiesin insurance

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Tryg Norway

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• Market share 13.3%

• 1.050 employees + ~ 400 franchise sales

• Premium income 8,1 billion NOK

• 3rd largest in general insurance Norway

• 2 brands (Tryg & Enter)

• Part of Tryg group

Tryg Norway in brief

Geography

Trondheim

Haugesund

Tromsø

Bergen

Bodø

Oslo TønsbergDrammen

Fredrikstad

Førde

Hamar

Harstad

Kristiansand

Stavanger

Ålesund

Tryg Norway

Tryg Norway is an ambitious player in the Norwegian insurance market with it’sNorwegian head office located in Bergen, and wide geographical presence.

Claims handling and Customer Service located in Bergen and Tønsberg.Strong sales- and underwriting presence for the Commercial- and Corporate market in Oslo and Bergen.

Tryg Norway- Operational and Financial highlights

Gross premium by products 2017

PercentagePrivate Commercial Corporate

Distribution channels 2017

0

1,000

2,000

3,000

4,000

5,000

Private Commercial Corporate

Portfolio split 2017 Combined ratio 2013 - 2017mNOK

14

15

40.0

50.0

60.0

70.0

80.0

90.0

100.0

110.0

120.0

130.0

140.0

2010 2011 2012 2013 2014 2015 2016 2017

Corporate

Corporate COR as reported Linear (Corporate COR as reported)

40

50

60

70

80

90

100

110

120

130

140

2010 2011 2012 2013 2014 2015 2016 2017

Retail(Private & Commercial)

Retail COR as reported Linear (Retail COR as reported)

Norway – Combined ratio

Trendline (Retail COR as reported) Trendline (Corporate COR as reported)

Seasonal variance in CR higher in Norway

100

Q2

91

Q4

106

101

Q3

97

98

Q1

107

100

Norway

Denmark

Index (FY=100) (2015-2017)

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15.3

14.7

2013 2017 *

Driving costs down – focusing on continuous improvement

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Expense Ratio, Tryg Norway

• Staff reductions of 100FTE in 2016.

• Sourcing agreements with low cost partners.

• Automate processes, utilizing robotics, application development and new solutions

• Procurement processes

Cost Reduction Programme

* Including Obos

Tryg Norway contribution to Group results

50.9%38.5%

10.6%

Average % of Group Premiums* 2010 - 2017

DK NO SE

55.7%40.7%

3.6%

Average % of Group Technical result* 2010 - 2017

DK NO SE

* Currency: DKK * Currency: DKK

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4.7%

4.4%

3.0%

3.4%

2.6%

2.9%

2.0%

2.4%

4.3%

0%

1%

1%

2%

2%

3%

3%

4%

4%

5%

5%

Market share Norwegian Insurance Market

25.6%

21.2%

13.0%

10.5%

29.7%

0%

5%

10%

15%

20%

25%

30%

Gjensidige If Tryg SpareBank 1 Other

Market share traditional players Market share smaller competitors

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Front page slide

Retail and Corporate Norway

- Operational and Financial review

Retail - Private

Private

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Market position #3 Direct v. Partner Balance Key Strengths

Split by Products

1. A healthy, profitable

Business

2. Strong multichannel

distribution

3. Strong partner distribution

4. Two brands

50%Partner

15%

Nordea8%

27%Direct

Enter

2%

Fire & Contents

6%

Other

Travel

30%

Accident & Health

Motor

7%

Group Life

6%

49%

A strong multichannel distribution- Both push and pull

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32%

25%

22%

9%

6%6%

Car channel

Online

Outbound

Bank

Inbound

Franchise

With a pricing diversification strategy

CAR CHANNEL

ONLINE

BANK

PARTNER

FRANCHISE

INBOUND

OUTBOUND

Online sales at ~20% if initiated sales from

online/web to inbound is included

The future of insurance is digitalFranchise -Our most important distribution

channel

Distribution Efficiency – Both push and pull

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Digital Sales and Self service

Digital contact ~70% in 2020Digital Sales 150 MNOK in 2020*

“My Page” log-in: 2016-2018

Months

Tryg NO has already more

digital touchpoints than analogue* Fully automated, non-assisted sales

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Strong Partner Distribution

Large and growing partner business Success criteria

Strong relations and common goals

Relevant and unique products

Strong distribution network locally

Tailored web solutions

Higher customer life time value (CLTV)

Strong marketing push by Tryg & Partner

Examples;

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Two Brands, strong presence within new car sales

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0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Enter Enter/Tryg IF Gjensidige Spb 1 Andre

Forhandlersalg vs porteføljePersonbil privat

2017 Portfolio

Share of new car sales insurance vs marketshare

Motor-insurance – Cost of claims

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3.0%1.0%

4.0%

Inflation 2018 Repair costsTechnology

3%

4%

1%

Retail - Commercial

Commercial Norway

Barriers to entry

Being a full-service insurance carrier for SME’s requires: • A large product offering • Knowledge• …and a lot of data

Estimated market share by industry

Construction 25%

Retail 18%

Transportation 13%

Manufacturing 20%

…

34%

29%

25%

9%

3%Property

Workers comp and

HealthMotor

Liability

Other

Portfolio Product mix Q1 2018

Portfolio development

• Growth in Property due to the acquisition of OBOS Forsikring• 16% YoY growth in Health insurance last three years• Decline in Motor insurance driven by portfolio pruning

Market position

• Third in Norway• Estimated market share of ~10%• Big in Construction and Manufacturing, low on Professional Services and

Commercial Property• Strong position in Hordaland (Bergen) and the Southern region, largest

remaining potential is in big cities (Oslo, Trondheim and Stavanger)30

Segmentation and Analytics as profitability driver

Segmentation• Profitability varies between products, but the variation is

bigger between different commercial segments

• By identifying customer characteristics that predict customer lifetime value we are targeting “the right” customers to attract and retain

Case in point:

Churn• Through Machine Learning we are able to predict 70%

of customer churn, allowing us to focus our retention efforts on a smaller customer base

• Retention YTD is up by 0.8%

Cross-sales• External registries and internal customer data helps us

to identify existing customers with the highest cross-sales potential

• By some measures our share of wallet is only 50%

Prize optimization• Price sensitivity models helps us to find the optimal

balance between price increases and retention• Which segments are outliers?

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Outlook for Commercial Norway

Business Area development• Better market due to economic recovery• New product offerings• Greater distribution power• Sharing economy

0

0.5

1

1.5

2

2.5

3

2015 2016 2017 2018e 2019e 2020e

GDP growth (onshore)

GrowthManaged growth in carefully selected segments• Low-risk industries• Partnerships• And better leads management

Profitability and Efficiency• Lower cost of sales (mainly through online sales and self service

solutions)• Claims reduction, with a particular focus on

• Fraud• Large claims management• Risk prevention• Automated claims processes

The digital small business customer journey

31,812 34,767

+706 +1,197 +1,075-23

CB 2016 2016 2017 organic 2017 OBOS 2018 YTD CB 2018(May)

# of customers

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33

Corporate

Corporate Norway

Distribution broker / direct

57/43 Main competitors

Other important players

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Corporate Norway

Market rates* under pressureCompetitors now increase rates

Source: FNO statistics, average premium development

Tryg Corp. NO price increases

implemented, Q1 2018

Motor 6,1%

Property 5,3%

Fish farming 23,1%

Health 13,5%

Sickness 7,1%

Workers’ Comp 4,3 %

7%

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-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

2015 2016 2017 2018 (Q1)

Motor Property Sickness etc. Workers' compensation Health

Front page slide

Digital Empowerment of Customers - Digitalization & Analytics

IT investment supporting 2020 target

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Investment supporting infrastructure, digitalization and data analytics

CORE

Modularized set-up

The Digital Future of Insurance

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ANALYTICS & BIG DATA

CHANGING CUSTOMER

PREFERENCES

INTERNET OF THINGS

Customer increasingly request- Convenience- Transparency- Empowerment

That’s why Tryg Developed «My Page» based on

consumer testing, eye tracking and customer analytics

Have more digital touchpoints vs. analogue

Customer increasingly request- Tailored solutions- Relevance- Better pricing

That’s why Tryg Create individual actions for each

customer based on data from customer behavior, market segmentation and predictive analytics

Customer increasingly request- More temporary solutions or a

more sophisticated bundle of products (all-in-one)

That’s why Tryg Offer a new car product,

SideKick to young customers Focus from insurance to

gamification

Customer Analytics - Tryg invest heavily in data analytics and machine learning

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Proactive holdback

Up-sale in specific customer segments

Segment specific up-sale

Increase hit rate

New customer prospecting

Increase number of 3+ customers

Cross-sell prospecting

“Baby churn”

Successful onboarding

Market segmentation

Managing prospects

Claims Excellence

DKK 600m

25%

25%

What will improve claims excellence?

New efficiency programme 2018 – 2020: DKK 600m

50%

Procurement: Continuous leverage of scale

Fraud: Automating detection and broadening

competences

Steering & Administration: Claims steering

and administration of compensation

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How fraud and claims steering supports claims excellence

Fraud

Only ~20% of claims employees excel in fraud detection

Potential: Targeted 2020 detection level

Concept: Broadening competences and introducing automation

Claims steering

Evidence: Employees generated improvement in fraud detection

Concept: Better steering of claims to Tryg partners for lower cost

Evidence: Improved steering of car glass claims

Potential: Targeted 2020 cost reductions

DKKm

DKK 300m; ∆ DKK 150m

Tryg

partner

Local

workshop

Repair 60%

of claims

Repair 18%

of claims

40%

cheaper!

2017:

DKK -5m

Claim

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Fire in the ventilation at Tine’s cheese factory in Sømna, Norway

Production

Tryg on site Cause of fire/smoke

Cheese during maturation

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Digital empowerment - Cost & Efficiency by claims management

Super fast claims handling - straight trough processing (STP) in 3 seconds

Our customers' time is valuable …… therefore, we make it faster and easier to be a Tryg customer

No. 1 in europe withclaims handling STP

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Status straight trough processing June 2018

Digital target 2020

50 % straight trough processing on claims

Total benefit 2020 =~DKK 100m*

* Tryg DK+NO+SE

Travel insurance

Pet insurance

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OBOS and Troll integrations and opportunities

Acquisition of OBOS Forsikring in 2017

• Portfolio of 170mNOK

• 10 years old company, 35 employees

• 10.000 private customers, 1050 housing associations

• One owner – OBOS BBL

• 5 year exclusive distribution agreement – private

members

• Portfolio expected to produce returns in line with Retail

Norway in a couple of years

OBOS Forsikring

Strengthen market position in central eastern Norway

400.000 private members, 200.000 managed “Andelsboliger”

Strong cooperation with strategic partner

$

Strategic rationale –Stronger Tryg in Norway

• Very strong cooperation and relationship established between the two organizations

• Privat portfolio nearly tripled since take-over

• Continuous development and looking at new opportunities, e.g. extension to Sweden

Partnership and growth

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Acquisition of Troll Forsikring in 2018

• Portfolio of 120mNOK

• Portfolio is 40% Oslo/Akershus

• 12.000 customers – private only

• Distribution through web and inbound

• Purchase price NOK 72m, including a year-end 2017

equity of NOK 44m and a tax asset of NOK 40m (i.e.

no goodwill)

Troll Forsikring

Strengthen market position in central eastern Norway

Low acquisition cost vs value

Strategic rationale –Stronger Tryg in Norway

• Transaction finalized in April 2018

• Tryg purchase price 72 mNOK, incl. year-end 2017 equity of 44 mNOK and tax asset of 40 mNOK. Troll investors input ~ 250 mNOK.

• Good customer selection and risk profile but overproportioned cost for e.g. marketing and claims/claims handling

Favorable and speedy acquisition

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Consolidation in the Norwegian Insurance Industry?

50

Dialogue & Questions

Thank you