Glossary

The financial highlights and key ratios of TrygVesta have been prepared in accordance with the executive order issued by the Danish Financial Supervisory Authority on the presentation of financial reports by insurance companies and profession-specific pension funds and also comply with “Recommendations & Financial Ratios 2005” issued by the Danish Society of Financial Analysts. 

Gross earned premiums
Calculated as gross premiums written adjusted for change in gross provisions for unearned premiums, less bonuses and premium rebates.

Gross claims ratio
Calculated as the ratio of gross claims incurred to gross earned premiums.

Gross claims incurred x 100
Gross earned premiums

Business ceded as a percentage of gross premiums
Calculated as the ratio of the net result of business ceded to gross earned premiums.

Net result of business ceded x 100
Gross earned premiums

Gross expense ratio
Calculated as the ratio of gross insurance operating expenses to gross earned premiums.

Gross insurance operating expenses x 100
Gross earned premiums

Adjusted gross expense ratio
Calculated as the ratio of gross insurance operating expenses including adjustment to gross earned premiums. The adjustment involves the deduction of depreciation and operating costs on the owner-occupied property and the addition of a calculated cost (rent) concerning the owner-occupied property based on a calculated market rent. 

Gross insurance
operating expenses incl. adjustment x 100
Gross earned premiums

Combined ratio
Calculated as the sum of the gross claims ratio, the net result of business ceded as a percentage of gross earned premiums and the gross expense ratio.

Operating ratio
Calculated like the combined ratio but adding technical interest in the denominator.

Claims incurred + insurance
Operating expenses + result of reinsurance x 100
Gross earned premiums + technical interest

Provisions for claims to earned premiums
Calculated as the ratio of provisions for claims relative to earned premiums.

Relative run-off gains/losses
Run-off result relative to provisions insurance contract, beginning of year.

Discounting
Expresses recognition in the financial statements of expected future payments at a value below the nominal amount, as the recognised amount carries interest until payment. The size of the discount depends on the market based discount rate applied and the expected time to payment.

Unwinding
Unwinding of discounting takes place with the passage of time as the expected time to payment is reduced. The closer the time of payment, the smaller the discount. This gradual increase of the provision is not recognised under claims, but in technical interest in the income statement.

Return on equity
Calculated as the profit for the year as a percentage of the average shareholders’ equity.

Profit for the year x 100
Average equity

Net asset value per share
Calculated as year-end shareholders’ equity divided by the average number of shares.

Year-end equity
Average number of shares

Earnings per share
Calculated as the profit for the year divided by the average number of shares. 

Profit for the year x 100
Average number of shares

Dividends per share
Calculated as the total dividend proposed divided by the average number of shares.

Proposed dividend
Number of shares year end

Price/net asset value
Calculated as the quoted price of the share divided by the net asset value per share. 

Quoted price
Net asset value per share

Price/earnings
Calculated as the ratio of the price per share to earnings per share.

Quoted price
Earnings per share

Danish general insurance
Comprises the legal entities in TrygVesta Forsikring A/S (excluding the Norwegian, Finnish and Swedish branches) and TrygVesta Garantiforsikring A/S.

Norwegian general insurance
Comprises TrygVesta Forsikring A/S, Norwegian branche, the Norwegian subsidiaries and the Norwegian branche of TrygVesta Garantiforsikring A/S. 

Finnish general insurance
Comprises TrygVesta Forsikring A/S, Finnish branche and the Finnish branche of TrygVesta Garantiforsikring A/S. 

Swedish general insurance
Comprises TrygVesta Forsikring A/S, Swedish branche and the Swedish branche of TrygVesta Garantiforsikring A/S. 

Individual Solvency
New Danish solvency requirements for insurance companies. With effect from the 1 January 2008, companies are required to make their own determination of their capital requirements applied with own methods. The Individual Solvency shall be reported four times a year.

Solvency II
New solvency requirements for insurance companies issued by EU Commisison. The new rules are expected to com into effect in 2012.