Scandinavian insurance company Tryg has announced strategic and structural changes – including the merging of two lines and the redundancy of hundreds of employees – aimed to enhance the company’s competitiveness and resilience both short and long-term.
This move follows the recent growth Tryg has experienced as it has undergone a transformation in size and geographical footprint in the past few years, following two important acquisitions and a general positive top-line development.
This has resulted in the Group becoming the biggest non-life insurer in Scandinavia, creating an opportunity to capitalise on this new position of strength.
The core business is in good shape and synergies of DKK 547m from the RSA acquisition have been delivered at Q2-2023 in line with the total targeted DKK 900m in Q4 2024.
However, the macroeconomic environment across the Group’s Scandinavian markets has changed significantly since the launch of the 2024 strategy in November 2021, including financial targets.
The Tryg Group has more than half of its total business in Norway and Sweden, where inflation rates remain high, and currencies have devaluated considerably.
To navigate these unprecedented times, and leverage the full potential from size and scalability, the Executive Board has announced a number of strategic and structural changes.
Group CEO Johan Kirstein Brammer, commented: “The changes underpin our commitment to deliver on our 2024 financial targets while we gear up for a new strategy period. By making these changes, we are future-proofing the enlarged Group and adapting the organisation to the current macroeconomic environment.”
The changes include Tryg’s Commercial and Corporate lines as they are to be merged in Denmark and Norway from 1 October 2023.
Leading these newly formed Commercial units is SVP Hans Arnum, who has been appointed Head of Commercial Lines Denmark, while SVP Michael Kolbæk has been appointed Head of Commercial Lines Norway.
From a reporting perspective Commercial and Corporate Lines will remain separate entities.
The Group also noted that, as synergies from the RSA integration being delivered slightly ahead of schedule, its next “natural” step is to align the organisational design of the Group’s Swedish business, Trygg-Hansa, with the organisational structure of the Tryg Group.
By 1 January 2024 VD Mats Dahlquist will leave Trygg-Hansa and hand over to the continuing management team, who will report to Tryg Group’s Executive Board.
In the light of the Group’s recent expansions and the challenging macroeconomic environment, the Group must continuously ensure that its size and scale are used in the most optimal way, Tryg highlighted.
“We must ensure that our organisational setup, our cost level and our ways of working are supporting our commitment to deliver on our 2024 targets, while preparing Tryg for the future,” Kirstein Brammer stated.
He added: “A future where we take advantage of our scale and structure while we navigate through macroeconomic uncertainty. As a consequence of the announced changes, particularly driven by the merger of Commercial and Corporate Lines, we will reduce the number of employees across the Group in the range of 250-270.
“We have worked diligently with vacancy management, to minimise the number of affected people, and will continue to do so. It saddens me to have to say goodbye to highly skilled employees, but these are necessary actions.”
According to the announcement, while RSA related synergies have been targeting primarily the Norwegian and Swedish organisations thus far, the majority of the announced redundancies today have been in Denmark.
The remaining redundancies will take place in the Danish and Norwegian organisations following the merger of the Commercial and Corporate segments.
Tryg noted that its financial guidance for 2024 remains unchanged and we reiterate the insurance service result target of DKK 7.2-7.6bn driven by a combined ratio target at or below 82% and an unchanged expense ratio target of around 13.5%.