UBS: Fast Take: Tryg A/S "Tryg's largest shareholder TryghedsGruppen..."

Research evidence excerpt

UBS: Fast Take: Tryg A/S "Tryg's largest shareholder TryghedsGruppen..."

Forecast returns

Forecast price appreciation 20.1%

Forecast dividend yield 5.6%

Forecast stock return 25.8%

Market return assumption 7.4%

Forecast excess return 18.4%

Company Description

Tryg A/S is a leading non-life insurance company in the Nordic region, offering a wide range of

insurance products and services in Denmark, Sweden and Norway. The company has a strong

focus on the retail business, which covers private customers and SMEs, though it also has a

small corporate book. Tryg is the largest insurer in its home market Denmark (c50% of 2024

revenues). Its Swedish business was materially strengthened with the RSA deal in 2021, now

top 3 in the market, contributing c30% of group revenues. The remaining revenues are

generated from Norway where it is the fourth-largest player.

Valuation Method and Risk Statement

Investors in Tryg are exposed to various insurance-specific risks beyond general economic

factors. Key risks include: (i) underwriting risks, where inadequate pricing or reserves may not

cover unexpected claims/expenses due to inflation, increased claims frequency/severity,

extraordinary events such as natural disasters and changes in policyholder behaviours; (ii)

market risks, which involve fluctuations in interest rates, foreign exchange, and credit spreads

as well as various assets classes Tryg invests in that can adversely affect earnings and solvency;

(iii) regulatory and legal risks, including stricter competition and conduct regulations and

changes to accounting, tax and capital frameworks; and (iv) additional risks such as

counterparty defaults, liquidity issues, and operational challenges, particularly related to

mergers and acquisitions.