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Tryg Seeks Growth in Sweden, Finland Amid ‘Dull’ Danish Market

Tryg A/S, Denmark’s largest non-life insurer, plans to generate as much as 25 percent of its premium income in neighboring Sweden and Finland as it seeks to offset slower demand for insurance at home.

“Those two countries should together be tailoring for at least 20 percent to 25 percent of gross premiums five years down the road,” Chief Executive Officer Stine Bosse said in an interview at Tryg’s headquarters in Ballerup yesterday.

Tryg generated 11 percent of gross premiums in Sweden and Finland in the first half, compared with 50 percent in Denmark and 39 percent in Norway. Growth will be driven by sales channels such as call centers and the Internet, as well as through a distribution agreement with Nordea Bank AB. Tryg plans to increase its employee base in Sweden and Finland by as many as 75 people in each country within five years, Bosse said.

The insurer, which traces its roots back to 1731 when Kjoebenshavs Brand was founded after the Copenhagen Fire of 1728 destroyed almost a third of the city, expanded in Sweden last year by purchasing the non-life operations of Moderna Insurance for 1.26 billion kronor ($187 million). The Danish insurer is looking for further acquisitions in faster-growing markets.

Gross premiums in Sweden and Finland will exceed 1 billion Danish kroner ($183 million) in each country “within a short while” and represent a “significant part of volumes within three to five years,” Bosse said. In the first half, gross premiums earned in Sweden stood at 781 million kroner, an increase of 96 percent from a year earlier. In Finland, they were at 290 million kroner, up 31 percent.

‘Another Moderna’

“If you find me another Moderna in Finland or Sweden, it would be lovely,” Bosse said. While the company put a plan to expand in the Baltic countries “on hold” when the financial crisis began, it would consider opportunities in Estonia, Latvia, Lithuania and Poland, she said.

Tryg has more than 2.7 million private clients and 140,000 corporate customers in the Nordic region and 4,300 employees. It controls about 21 percent of the non-life market in Denmark and 18 percent of the market in Norway. It competes with companies including Norway’s Gjensidige Forsikring ASA, Finland’s Sampo Oyj, Denmark’s Topdanmark A/S and Sweden’s Folksam AB.

Other recent acquisitions in the region include Gjensidige Forsikring’s purchase of Nykredit Realkredit A/S’s non-life insurance division in Denmark earlier this year.

Danish Outlook

The market in Denmark will remain “pretty tough” and “very dull” in the coming two or three years, said Bosse, who started at the firm in 1987 and has been CEO since 2001.

“If you walk through a middle-sized Danish town nowadays it is pretty depressing as you see shops closing down and find smaller and medium-sized companies finding it very hard to tackle the situation,” she said. “I don’t think we’ve seen the worst yet.”

Denmark’s corporate bankruptcies rose to a record in August as mainly small and medium-sized companies went out of business, the country’s statistics agency reported on Sept. 6. Of the seasonally adjusted 606 companies that went bankrupt, 96 percent had annual revenue of less than $2.7 million, the agency said.

Tryg, which has lost market share in Denmark during the crisis as it canceled unprofitable accounts, is forecasting annual premium growth in Denmark of 3.5 percent in coming years, mainly driven by price increases, according to Bosse. The company expects to raise prices for smaller and medium-sized companies by 10 percent to 25 percent, she said.

In the second quarter, Tryg reported an 82 percent slump in net income to 128 million kroner after claims increased and it reported a loss on its equity holdings.

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