Interim report Q2 and H1 2016

Contents – Management’s review

MANAGEMENT'S REVIEW	11 Commercial	FINANCIAL STATEMENTS	Financial calendar 2016
3 Highlights	12 Corporate	18 Financial statements	13 July 2016	Tryg shares trade ex-dividend
4 Income overview	13 Sweden		15 July 2016	Payment of dividend based on H1 2016 results
5 Tryg's results	14 Investment activities		11 Oct. 2016	Interim report for Q1-Q3 2016
8 Business initiatives	16 Capital
9 Private	17 Outlook

Teleconference

Tryg is hosting a teleconference on 12 July 2016 at 10.00 CET. View the audio webcast at tryg.com. Financial analysts and investors may participate on tel. +44 (0) 203 194 0545 or +45 35 44 55 83, where questions can be asked. The teleconference will be held in English and can subsequently be viewed at tryg.com.

Contact details

| Visit tryg.com
and follow us at
twitter.com/TrygIR | Tryg A/S
Klausdalsbrovej 601
2750 Ballerup, Denmark
+45 70 11 20 20
CVR no. 26460212 | Gianandrea Roberti
Investor Relations Officer
+45 20 18 82 67
[email protected] | Peter Brondt
Investor Relations Manager
+45 22 75 89 04
[email protected] | Kasper Riis
Head of Communications
+45 41 77 68 34
[email protected] |
| --- | --- | --- | --- | --- |

This report constitutes Tryg A/S' consolidated and parent financial statements and has not been audited. Unless otherwise indicated, all comparisons are made to Q2 2015. Comparative figures for Q2 2015 are generally given in brackets.

Editor Investor Relations | Publication 12 July 2016 | Layout amo design

Interim report Q2 and H1 2016 | Tryg A/S

Highlights

Semi-annual dividend of DKK 2.60 and solvency ratio of 206. Profit before tax was 31% higher than in Q2 2015, driven by a lower technical result and a higher investment return.

Financial highlights Q2 2016

Semi-annual dividend of DKK 2.60 (DKK 2.50) and a solvency ratio of 206 (193 including Skandia)
Profit before tax of DKK 934m (DKK 714m) and after tax DKK 734m (DKK 580m)
Lower technical result of DKK 770m (DKK 825m) significantly impacted by currency movements
Combined ratio of 82.6 (82.2) due to higher level of weather claims and higher underlying claims level
Lower expense ratio of 15.0 (15.2) as a result of the efficiency programme
Premiums declined by 0.6% (-1.4%) in local currencies with increase in Denmark and drop in Norway
Investment result of DKK 181m (DKK -84) boosted by very strong fixed-income returns

Financial highlights H1 2016

Profit before tax of DKK 1,497m (DKK 1,379m) and after tax DKK 1,179m (DKK 1,105m)
Technical result of DKK 1,332m (DKK 1,254m)
Combined ratio of 84.9 (86.4) due to lower level of weather claims and large claims and a higher underlying claims level
Lower expense ratio of 15.1 (15.4) as a result of the efficiency programme
Premiums declined by 0.5% (-0.9%) in local currencies
Investment result of DKK 198m (DKK 177)

Customer highlights Q2 2016

NPS at 23 (20)
Retention rate of 88.1 (88.0)
Share of customers with three or more products 56.9% (56.6%)
For the fourth year running, Moderna – Tryg's Swedish branch – was named Best Insurance Company by the brokers within the commercial and corporate segments
On 1 June 2016, TryghedsGruppen paid its member bonus to Tryg's Danish customers, 8% of the annual premiums paid to Tryg in 2015

New initiatives in Q2 2016

New property insurance product for Commercial in both Denmark and Norway
Conversion of motor, accident and house insurance products for approximately 200,000 customers
Digital self-service solutions for house, accident, pet and holiday home products in Denmark and a new design for the 'My Page' digital customer insurance universe
Moderna in Sweden launched Smart MC as the third product in the smart product line
Efficiency initiatives in the Norwegian organisation corresponding to a reduction of approximately 60 positions
Tryg was assigned an 'A2' rating with positive outlook by Moody's and consequently terminated the rating agreement with Standard & Poor's (S&P)

Financial targets 2017

Return on equity of ≥21% after tax
Combined ratio ≤87
Expense ratio ≤14

Customer targets 2017

NPS +100% ~ 22
Retention rate +1 pp ~ 88.9
Customers ≥3 products +5 pp ~ 61.3%

Contents – Management's review

Interim report Q2 and H1 2016 | Tryg A/S |

Income overview

DKKm	Q2 2016	Q2 2015	H1 2016	H1 2015	2015
Gross premium income	4,379	4,550	8,689	9,001	17,977
Gross claims	-2,823	-3,858	-5,681	-7,062	-13,562
Total insurance operating costs	-649	-681	-1,291	-1,366	-2,720
Profit/loss on gross business	907	11	1,717	573	1,695
Profit/loss on ceded business	-135	808	-381	672	710
Insurance technical interest, net of reinsurance	-2	6	-4	9	18
Technical result	770	825	1,332	1,254	2,423
Investment return after insurance technical interest	181	-84	198	177	-22
Other income and costs	-17	-27	-33	-52	-91
Profit/loss before tax	934	714	1,497	1,379	2,310
Tax	-200	-167	-318	-317	-390
Profit/loss on continuing business	734	547	1,179	1,062	1,920
Profit/loss on discontinued and divested business after tax	0	33	0	43	49
Profit/loss a)	734	580	1,179	1,105	1,969
Run-off gains/losses, net of reinsurance	280	222	649	568	1,212
Key figures
Total equity	9,534	9,861	9,534	9,861	9,644
Return on equity after tax (%) a)	31.5	23.9	24.5	21.2	20.0
Number of shares, end of period (1,000)	279,786	285,782	279,786	285,782	282,316
Earnings per share (DKK)	2.61	2.02	4.18	3.84	6.91
Dividend per share (DKK)			2.60	2.50	6.00
Premium growth in local currencies	-0.6	-1.4	-0.5	-0.9	-0.8
Gross claims ratio	64.5	84.8	65.4	78.5	75.4
Net reinsurance ratio	3.1	-17.8	4.4	-7.5	-3.9
Claims ratio, net of reinsurance	67.6	67.0	69.8	71.0	71.5
Gross expense ratio	15.0	15.2	15.1	15.4	15.3
Combined ratio	82.6	82.2	84.9	86.4	86.8
Run-off, net of reinsurance (%)	-6.4	-4.9	-7.5	-6.3	-6.7
Large claims, net of reinsurance (%)	2.5	2.8	1.8	3.1	3.4
Weather claims, net of reinsurance (%)	0.8	0.5	2.1	3.0	3.4
Combined ratio on business areas
Private	81.6	80.7	86.2	86.2	85.4
Commercial	82.4	78.1	80.0	81.4	83.6
Corporate	83.1	90.3	83.9	91.5	90.7
Sweden	85.2	78.9	90.3	85.0	83.5

a) From 1 January 2016, Tryg has implemented the Executive Order on Financial Reports of Insurance Companies and Lateral Pension Funds issued by the Danish FSA, which prescribes applying a new yield curve and a new way of calculating return on equity after tax (%). Comparative figures have been restated accordingly. See details of the new yield curve in note 10 Accounting policies on page 33.

Combined ratio

Expense ratio

Return on equity

Contents - Management's review

Interim report Q2 and H1 2016 | Tryg A/S

Tryg's results

Tryg's profit before tax was DKK 934m in Q2 (DKK 714m), driven by a slightly lower technical result, mainly dampened by the weakened Norwegian currency, and a substantially better investment income. Tryg has decided to pay a semi-annual dividend of DKK 2.60 (DKK 2.50) based on the overall results, dividend policy and a strong solvency ratio of 206.

The technical result was positively affected by efficiency increases of DKK 51m delivered by the internal efficiency programme as well as a higher run-off level, and negatively impacted by a slightly higher underlying claims level. The technical result was negatively impacted by the weakened Norwegian currency with an effect of approximately DKK 35m. The investment return totalled DKK 181m (DKK -84m) and was at a much higher level than in Q2 2015, driven by a strong return on the free portfolio (mainly driven by fixed-income assets) but also a very good performance of the match portfolio.

The combined ratio was 82.6 (82.2), and was, as mentioned above, impacted by a higher run-off level and a lower level of large claims. The run-off level was higher than in Q2 2015, but in line with previous communication and generally reflects Tryg's solid reserving position. The underlying combined ratio, adjusted for weather claims and large claims, run-off and interest rates, was 1.7 percentage points higher than in Q2 2015. For Private, the underlying claims ratio was 0.7 percentage points higher than in Q2 2015. This development was expected and in line with previous quarters' communication concerning a higher claims level within travel and property. Price and claims initiatives have been implemented, but are likely to be more visible towards the end of 2016 and the beginning of 2017. The combined ratio for Denmark improved to 83.0 (85.7) and remained at a very strong level in Norway at 77.5 (77.6) and was at a high level in Sweden at 95.2 (80.7).

The Net Promoter Score (NPS) improved from 20 in Q2 2015 to 23 on 30 June 2016. The positive development was driven by an improvement in the NPS score for all business areas with the Danish Private segment achieving an all-time high NPS score of 32 in Q2 2016. The retention rate improved slightly to 88.1, the main developments being a higher retention rate in Private Denmark and a lower retention rate in Commercial Denmark, mainly due to price adjustments. The share of private customers with three or more products was up from 56.6% to 56.9%.

In Q1 2016, TryghedsGruppen's Board of Representatives decided that a bonus equivalent to 8% of the premiums paid in 2015 would be paid out to Tryg's Danish customers. The bonus was paid out on 1 June and was very positively received by the customers. Awareness of the bonus scheme has increased significantly amongst Tryg customers, from 11% at the beginning of 2016 to 75% on 30 June 2016. Awareness of the bonus scheme stood at 32% amongst all Danish households at the end of June. This awareness is expected to have a positive impact on the sales to new customers.

In the Private organisation in both Denmark and Norway, Tryg has integrated customer service and claims handling of simple claims. We believe the potential is considerable and that this structure supports a more customer-focused organisation, which should lead to both a higher NPS score and efficiency gains.

Premiums

Gross premium income amounted to DKK 4,379m, down 0.6% (-1.4%) when measured in local currencies. This development is driven, especially, by developments in the Corporate segment, where premium income dropped by 3.7% (-1.4%). The Corporate market is generally very competitive, and the Norwegian part of Corporate is somewhat affected by the slowdown of certain sectors of the Norwegian economy. Tryg is strongly focused on profitability, which has led to a slight reduction in premium income. The premium development for Private was 0.3% (-0.3%), comprised by a continued positive trend in Denmark and negative developments in Norway. For Commercial, premiums increased by 0.4% (-4.3%), but adjusted for a lower level of premium discounts, there was a drop in premium income of 0.6%. In Sweden, premiums decreased by 1.8% (-1.8%) due to the loss of some major agreements in 2015, which was partly offset by a strong sales performance.

Claims

The gross claims ratio was 64.5 (84.8). The claims ratio, net of ceded business, was 67.6 (67.0). The

Customer targets
	Q2 2016	Q2 2015	Target 2017
Net Promoter Score (NPS)	23	20	22
Retention rate	88.1	88.0	88.9
Customers with ≥3 products (%)	56.9	56.6	61.3

Contents – Management's review

Interim report Q2 and H1 2016 | Tryg A/S | 5

higher net claims ratio level was attributable to the above-mentioned higher underlying claims level of approximately 2 percentage points. This can be ascribed to a higher level of property and travel insurance claims and a slightly higher level of medium-sized claims, which did, however, not represent an underlying trend.

The weather in Denmark, Norway and Sweden was generally benign in Q2 although there were few cloudburst which impacted the claims ratio by 0.8% (0.5%). Q2 is usually the quarter with the lowest level of weather claims. The higher claims level for travel and property insurance continued in Q2. This was in line with expectations as the initiatives which have been introduced will only have limited impact at the beginning of the period. In Sweden, the claims level for extended warranty insurance also remained high, and price hikes and claims initiatives have been introduced to ensure an acceptable claims level.

To reduce pipe claims both inside and outside properties in Denmark, Tryg recruited a number of specialist loss adjusters with expertise in this area, and we are already seeing early signs of the effect of this initiative.

The conversion of products in Denmark continued in Q2, and approximately 200,000 customers had their motor, accident and house insurance policies converted into new, updated insurance products. The conversion of house insurance will also have a positive impact on claims levels for this product due to an improved balance between risks and prices for these products.

The claims-related part of the efficiency programme is progressing as planned, and in Q2 DKK 36m of the target figure of DKK 150m for 2016 was realised. In Q2 2016, we appointed a competence team in Norway focused on helping injured policyholders to get back to work. The results from a similar structure in Denmark have been positive. In Q2 2016, positive results were also seen in Norway, which largely explained the savings realised in the quarter.

Expenses

The expense ratio was 15.0 (15.2), which represents a slight improvement, and which is in line with the plan for an expense ratio at or below 14 in 2017. The efficiency programme is progressing according to plan and improved results by DKK 15m in Q2 with a target of DKK 75m for 2016.

Tryg is strongly focused on achieving the target of an expense ratio below or at 14 in 2017. This ambition was also a strong driver for a significant cost-cutting initiative in the Norwegian part of the business. The initiative will reduce job numbers

Efficiency programme up until 2017

by approximately 60. The job cuts will affect all business areas in Norway, supported by the whole of the Norwegian management team, which also shows the advantage of having a more national management structure. The financial benefits of this decision will be very limited in 2016, but will, as mentioned above, support the expense ratio target for 2017.

On 30 June 2016, the number of employees was 3,299, down 60 since Q4 2015.

Investment return

In Q2 2016, the return of Tryg's investment activities totalled DKK 181m (DKK -84m). The result is composed of a return of DKK 122m (DKK 41m) on the free portfolio, a net return of DKK 125m (DKK -55m) on the match portfolio and other financial income and expenses of DKK -66m (DKK -70m). The result of the free portfolio was boosted by strong fixed-income returns on high-yield, emerging-markets and index-linked bonds, driven primarily by falling interest rates, while equities was broadly flat in the quarter. The match portfolio benefited from a flight to safety. As the UK referendum approached, the yield difference between Danish and Euro swap rates decreased and created a positive regulatory deviation of DKK 69m in Q2.

Profit before and after tax

The profit before tax was DKK 934 (DKK 714m). Profit for the period after tax and discontinued business was DKK 734m (DKK 580m). Tax on continuing business constituted an expense of DKK 200m (DKK 167m), corresponding to a tax rate of 21%.

Capital

In Q2 2016, own funds totalled DKK 10,449m, which means that Tryg has a solvency ratio of 206 and 169 based on the partial internal model and the standard formula, respectively. Tryg has decided to pay a semi-annual dividend of DKK 2.60 (DKK 2.50) based on the overall results, dividend policy and a strong solvency ratio of 206.

On 5 April 2016, the Danish FSA approved the 2016 share buy back of DKK 1bn. The buy back programme has been fully deducted in the solvency ratio in Q2 following the Danish FSA rules. The buy back was initiated on 6 April 2016, and by 30 June 2016, 2,601,949 shares had been acquired for a total amount of DKK 326m. Following these transactions, Tryg holds a total of 9,773,200 own shares, corresponding to 3.38%. According to the Danish FSA, the share buy back has to be fully deducted up-front in the capital position, which results in a reduction in the solvency ratio, all else being equal, of 13% as at the end of Q2 2016.

In Q2 2016, Tryg decided to terminate its rating agreement with Standard & Poor's (S&P). Subsequently, Tryg entered into a rating agreement with Moody's and on 29 April 2016, Tryg was assigned an 'A2' financial strength rating with a positive outlook from Moody's. Additionally, Moody's has assigned a 'Baa1' rating to the subordinated debt issued by Tryg Forsikring.

On 19 May 2016, Tryg issued Solvency II-compliant Tier 2 capital in the form of a subordinated, callable bond issue of SEK 1,000m. Tryg has now fully utilised its Tier 2 capacity considering the current (Q2) solvency capital requirement.

Contents - Management's review

Interim report Q2 and H1 2016 | Tryg A/S |

Contents – Management's review

Interim report Q2 and H1 2016 | Tryg A/S | 7

Other events in Q2 2016

In Q2 2016, Tryg Forsikring A/S was notified of proceedings instituted by the Finance Sector Union of Norway (Finansforbundet) on behalf of a group of pensioners. The action concerns an adjustment made to the pension schemes of Norwegian employees in 2014. The Finance Sector Union of Norway has not yet quantified its claim, but according to Tryg's preliminary calculations, the claim will not exceed a maximum of approximately DKK 0.3bn after tax for the persons affected by the adjustment. Tryg does not agree that the adjustment was wrongful. Consequently, Tryg expects an action to be resolved in court and does not expect a ruling to be made for the next eighteen months to two years.

Results H1 2016

Profit after tax was DKK 1,179m (DKK 1,105m). The combined ratio was 84.9 (86.4), primarily due to a lower level of large claims and weather claims. The investment income was DKK 198m (DKK 177m), mainly due to a high return on the free portfolio. The claims ratio, net of ceded business, was 69.8 (71.0) due to the above-mentioned lower level of large claims and weather claims, but also a higher underlying claims level. As mentioned above, Tryg has initiated price and claims initiatives to improve profitability.

In Q2 2016, Moderna launched the Moderna Small Mic app. The app records the driver's driving style, and the motorcycle insurance price is then differentiated accordingly. Driving safely triggers a price discount, the following year.

Business initiatives

Continued conversion to new products

The conversion of old products into Tryg's new, updated products is continuing. In Q2, approximately 200,000 customers had their old motor, house and accident insurance products updated to the new products. Customers have generally accepted the new products, but, as expected, the retention rate for these products was slightly lower than for the portfolio as a whole.

New products

In both Denmark and Norway, a redesigned commercial property insurance product was launched. For many customers, the property product is their main insurance product, and the new products will both support profitability and make Tryg more competitive in the most profitable segments.

Pet insurance is an area where Tryg sees growth potential. Tryg's dog insurance product was therefore made available online at tryg.dk. In Norway, a redesigned pet insurance product was introduced, and in Sweden the tariff was updated.

In Q2 2016, Moderna – Tryg's Swedish branch – launched the Moderna Smart MC app. The app records the driver's driving style, and the motorcycle insurance price is then differentiated accordingly. Driving safely triggers a price discount the following year.

Digitalisation

It is Tryg's ambition to develop and improve customer experience by offering new and better digital solutions for our customers, while at the same time improving efficiency. This is done by developing self-service solutions and advancing the 'My Page' digital customer insurance universe. As a result, it will become easier and more user-friendly for our customers to report claims online and change their insurance coverage via all digital channels. This will help us improve the customer experience at all times of the day and night and create internal processes that are more efficient.

Good results have already been achieved, and the prospects for continuing that journey are promising:

Tryg has been awarded FinansWatch's top prize as this year's digital insurance company in Denmark.
For 2017, Tryg has a target of reaching 90% customers digitally. In Denmark, 84% of our customers have accepted that all future communication will be digital, and in Norway 63% of customers are digital.
For 2017, Tryg wants to top 1,000,000 log-ins on the 'My Page' digital customer insurance overview. From January-May 2015 to January-May 2016, the number of log-ins increased by 43% for private customers in Denmark.

In Q2, we delivered self-service for a accident, house, pet and holiday home insurance in Denmark, and improved claims notifications for car, camper, MC and bike theft. Finally, we have launched a new design for the 'My Page' digital customer insurance universe.

Tryg ID campaign

A survey shows that 51% of Danes are afraid of being abused on the social media. Tryg Plus customers (private customers with several policies) are offered advice and help to prevent, discover and limit the misuse of personal information on the social media. In Q2, Tryg launched a campaign informing our private customers of this offer for Tryg Plus customers. Misuse of one's identity could take the form of a fake Facebook profile or misuse of personal pictures, for example.

Contents – Management's review

Interim report Q2 and H1 2016 | Tryg A/S | 8

Private

Financial highlights Q2 2016

Technical result of DKK 393m (DKK 434m)
Combined ratio of 81.6 (80.7)
Premium growth rose by 0.3% (-0.3%)

Results

Private had a technical result of DKK 393m (DKK 434m) and a combined ratio of 81.6 (80.7). The results are positively affected by Tryg's efficiency programme and a still slightly higher underlying claims ratio of 0.7. The initiatives for improving profitability, especially for house and travel insurance, continue and have led to a slight underlying improvement compared to Q1 2016.

Premiums

Gross premium income rose by 0.3% (-0.3%) when measured in local currencies. The positive development continued in the Danish part of Private with premium growth of 1.4% as a combination of consistently high sales levels and a high retention ratio. The member bonus paid to Danish customers on 1 June 2016 impacted premium developments positively in Q2 2016. In the Norwegian part of Private, premiums were down 0.9%, which was mainly due to a lower level of sales. The retention rate was 90.0 (89.7) for the Danish part of the business and 86.5 (86.5) in Norway. The development in premiums was generally satisfactory, when taking account of the fact that car sales are still dominated by very small cars in the Danish part of Private, which is leading to a lower average premium for the motor portfolio, as well as the conversion of products for approximately 200,000 customers in Denmark during the quarter.

Claims

The gross claims ratio was 65.9 (63.3). The claims ratio, net of ceded business, stood at 67.1 (65.4) and was influenced by a slightly higher level of weather claims, but also a higher level of run-off gains of 3.3 (3.0). The underlying claims level was 0.7 percentage points higher in Q2 2016 compared to Q2 2015. The primary reason is a consistently higher level of travel and house insurance claims, especially in the Danish part of Private. A combination of minor price adjustments and claims initiatives has been initiated, but the conversion to the newest house insurance product is also expected to improve profitability due to a more risk-adjusted price. To reduce the number of pipe claims, in particular, a number of loss adjusters with expertise in this area have been employed.

Expenses

The expense ratio for Private was 14.5 (15.3), which represents a satisfactory development that to some extent was also impacted by fluctuations in commission-related expenses.

Private encompasses the sale of insurance products to private individuals in Denmark and Norway. Sales are effected via call centres, the Internet, Tryg's own agents, franchisees (Norway), interest organisations, car dealers, estate agents and Nordea branches. The business area accounts for 49% of the Group's total premium income.

Key figures – Private

DKKm	Q2 2016	Q2 2015	H1 2016	H1 2015	2015
Gross premium income	2,148	2,226	4,285	4,420	8,803
Gross claims	-1,416	-1,408	-3,002	-3,087	-6,074
Gross expenses	-312	-340	-617	-675	-1,291
Profit/loss on gross business	420	478	666	658	1,438
Profit/loss on ceded business	-26	-47	-73	-47	-148
Insurance technical interest, net of reinsurance	-1	3	-2	4	8
Technical result	393	434	591	615	1,298
Run-off gains/losses, net of reinsurance	70	67	143	177	324
Key ratios
Premium growth in local currency (%)	0.3	-0.3	0.6	0.0	0.3
Gross claims ratio	65.9	63.3	70.1	69.8	69.0
Net reinsurance ratio	1.2	2.1	1.7	1.1	1.7
Claims ratio, net of reinsurance	67.1	65.4	71.8	70.9	70.7
Gross expense ratio	14.5	15.3	14.4	15.3	14.7
Combined ratio	81.6	80.7	86.2	86.2	85.4
Combined ratio excluding run-off	84.9	83.7	89.5	90.2	89.1
Run-off, net of reinsurance (%)	-3.3	-3.0	-3.3	-4.0	-3.7
Large claims, net of reinsurance (%)	0.4	0.0	0.2	0.0	0.3
Weather claims, net of reinsurance (%)	1.4	0.5	3.0	3.9	4.5

Contents – Management's review

Interim report Q2 and H1 2016 | Tryg A/S | 9

In the Norwegian part of the Private business, a comprehensive restructuring process was initiated in Q2. This will lead to job cuts in the administration, which will not impact results in 2016, but which will have a significant impact in 2017.

The number of employees totalled 917 at the end of the quarter against 933 at the end of 2015.

Results H1 2016

The technical result was DKK 591m (DKK 615m). The combined ratio was 86.2 (86.2) with a higher claims level and a lower expense level.

Premium growth in local currencies was 0.6 (0.0), which represented an improvement of 0.6 percentage points compared to H1 2015, primarily due to the development in the Danish part of Private.

The claims ratio, net of ceded business, was 71.8 (70.9), which represented a slightly higher underlying level of 0.8 percentage points, primarily due to developments in house and travel insurance.

In Q2, Tryg launched a campaign informing our Tryg Plus customers of our offer of advice and help to prevent, discover and limit the misuse of personal information on social media. Misuse of one's identity could take the form of a fake Facebook profile or misuse of personal pictures, for example.

Contents – Management's review

Interim report Q2 and H1 2016 | Tryg A/S | 18

Commercial

Financial highlights Q2 2016

Technical result of DKK 172m (DKK 220m)
Combined ratio of 82.4 (78.1)
Premium growth rose by 0.4% (-4.3%)

Premiums

Gross premium income totalled DKK 977m (DKK 997m), representing growth of 0.4% (-4.3%) when measured in local currencies. The quarter was positively impacted by a lower level of premium discounts corresponding to approximately 1%. The retention ratio was 87.2 (87.5) for Denmark and 87.5 (87.6) for Norway. The development in Denmark is primarily a reflection of customers' reaction to the price initiatives introduced to improve profitability.

The member bonus for Commercial customers in Denmark is expected to positively impact the retention rate going forward.

Claims

The gross claims ratio was 64.1 (55.7), and the claims ratio, net of ceded business, was 64.8 (60.9). The development in the claims ratio, net of ceded business, is attributable to a lower run-off level, a lower level of large claims and a higher underlying claims level partly due to a higher number of medium-sized claims.

The higher underlying claims level was primarily due to a higher level of property claims, which has been mitigated through a combination of repricing and pruning of the portfolio.

Expenses

The expense ratio was 17.6 (17.2), reflecting a too high expense ratio level. In the Norwegian part of Commercial, a restructuring initiative was implemented in Q2 2016. This will lead to lower expense ratio levels in 2017, but will not have any significant impact in 2016.

At the end of Q2 2016, Commercial had 497 employees, down from 527 employees at the end of Q4 2015.

Results H1 2016

The technical result was DKK 387m (DKK 375m). The combined ratio was 80.0 (81.4). The lower level was primarily due to a lower level of large claims.

Premium growth in local currencies dropped by 0.5% (-3.3%), representing an improvement of 2.8 percentage points compared to H1 2015 when taking into account the higher level of bonus and premium rebates.

The claims ratio, net of ceded business, was 62.5 (64.1), which represented a slightly higher underlying level of 2.1 percentage points, partly due to a higher level of medium-sized claims.

Commercial encompasses the sale of insurance products to small and medium-sized businesses in Denmark and Norway. Sales are effected via Tryg's own sales force, brokers, franchisees (Norway), customer centres as well as group agreements. The business area accounts for 23% of the Group's total premium income.

Key figures – Commercial

DKKm	Q2 2016	Q2 2015	H1 2016	H1 2015	2015
Gross premium income	977	997	1,944	2,000	3,992
Gross claims	-626	-555	-1,173	-1,220	-2,612
Gross expenses	-172	-171	-341	-346	-683
Profit/loss on gross business	179	271	430	434	697
Profit/loss on ceded business	-7	-52	-43	-61	-44
Insurance technical interest, net of reinsurance	0	1	0	2	5
Technical result	172	220	387	375	658
Run-off gains/losses, net of reinsurance	22	64	142	207	388
Key ratios
Premium growth in local currency (%)	0.4	-4.3	-0.5	-3.3	-2.9
Gross claims ratio	64.1	55.7	60.3	61.0	65.4
Net reinsurance ratio	0.7	5.2	2.2	3.1	1.1
Claims ratio, net of reinsurance	64.8	60.9	62.5	64.1	66.5
Gross expense ratio	17.6	17.2	17.5	17.3	17.1
Combined ratio	82.4	78.1	80.0	81.4	83.6
Combined ratio excluding run-off	84.7	84.5	87.3	91.8	93.3
Run-off, net of reinsurance (%)	-2.3	-6.4	-7.3	-10.4	-9.7
Large claims, net of reinsurance (%)	2.1	4.5	2.0	8.1	6.7
Weather claims, net of reinsurance (%)	0.3	0.2	1.1	2.1	2.8

Contents – Management's review

Interim report Q2 and H1 2016 | Tryg A/S | 11

Corporate

Financial highlights Q2 2016

Technical result of DKK 156m (DKK 99m)
Combined ratio of 83.1 (90.3)
Premium growth declined by 3.7% (-1.4%)

Results

The technical result amounted to DKK 156m (DKK 99m), and the combined ratio stood at 83.1 (90.3). The higher technical result is due to a higher run-off level.

Premiums

Gross premium income totalled DKK 921m (DKK 993m), down 3.7% (-1.4%) when measured in local currencies. The development reflects the loss of a number of large customers, especially in Norway, and a consistently competitive environment, where the brokers in Norway are particularly active. In Norway, the low oil price is also leading to a more competitive environment, especially in the western areas where the oil-related industries are very important. In Sweden, premium developments were positive. A 4% increase in premium income also reflected the company's very strong position in the broker channel,

where brokers appreciate the service and knowledge offered by the Moderna Corporate organisation. Premium developments in Denmark were more or less unchanged compared to Q2 2015. This was attributable to a positive customer reaction to the payment of customer dividend, especially for the direct distribution, which outweighed a more competitive broker sales channel.

Claims

The gross claims ratio stood at 60.6 (170.5), while the claims ratio, net of ceded business, was 72.2 (79.3). The very high gross claims level in Q2 2015 was due to one very large claim, which was, however, largely covered by Tryg's reinsurance agreements. The level of large claims and weather claims was slightly lower than in 2015. The underlying claims level was somewhat higher, but this was mainly due to a higher level of medium-sized claims, especially in Sweden, which saw a number of fire claims.

Expenses

The expense ratio was 10.9 (11.0), which represents a satisfactory improvement. Like the other business areas in Norway, Corporate also reduced the number of employees in the quarter, which will have a

positive impact on the expense ratio in 2017. The number of employees in Corporate stood at 260, down from 265 at the end of 2015.

Results H1 2016

The technical result was DKK 295m (DKK 169m). The combined ratio was 83.9 (91.5), and the lower level was primarily due to a higher run-off level. Premium in local currencies dropped 2.9 (-0.2), down 2.7 percentage points compared to H1 2015.

The claims ratio, net of ceded business, was 72.7 (80.1), and the lower level was, as mentioned above, primarily due to a higher run-off level.

Corporate sells insurance products to corporate customers under the brands 'Tryg' in Denmark and Norway, 'Moderna' in Sweden and 'Tryg Garanti'. Sales are effected both via Tryg's own sales force and via insurance brokers. Moreover, customers with international insurance needs are served by Corporate through its cooperation with the AXA Group. The business area accounts for 21% of the Group's total premium income.

Key figures – Corporate

DKKm	Q2 2016	Q2 2015	H1 2016	H1 2015	2015
Gross premium income	921	993	1,841	1,961	3,894
Gross claims	-558	-1,693	-1,066	-2,347	-3,987
Gross expenses	-100	-109	-207	-224	-420
Profit/loss on gross business	263	-809	568	-610	-513
Profit/loss on ceded business	-107	906	-273	776	877
Insurance technical interest, net of reinsurance	0	2	0	3	5
Technical result	156	99	295	169	369
Run-off gains/losses, net of reinsurance	137	42	285	112	351
Key ratios
Premium growth in local currency (%)	-3.7	-1.4	-2.9	-0.2	0.0
Gross claims ratio	60.6	170.5	57.9	119.7	102.4
Net reinsurance ratio	11.6	-91.2	14.8	-39.6	-22.5
Claims ratio, net of reinsurance	72.2	79.3	72.7	80.1	79.9
Gross expense ratio	10.9	11.0	11.2	11.4	10.8
Combined ratio	83.1	90.3	83.9	91.5	90.7
Combined ratio excluding run-off	98.0	94.5	99.4	97.2	99.7
Run-off, net of reinsurance (%)	-14.9	-4.2	-15.5	-5.7	-9.0
Large claims, net of reinsurance (%)	8.9	8.3	5.8	6.1	8.2
Weather claims, net of reinsurance (%)	0.1	0.9	1.2	1.8	2.2

Contents – Management's review

Interim report Q2 and H1 2016 | Tryg A/S | 12

Sweden

Financial highlights Q2 2016

Technical result of DKK 49m (DKK 72m)
Combined ratio of 85.2 (78.9)
Premium growth declined by 1.8% (-1.8%)

Results

Sweden posted a technical result of DKK 49m (DKK 72m) and a combined ratio of 85.2 (78.9). The weaker result can be ascribed to the fact that the claims level relating to the extended warranty insurance for electronics remains high. The result is, however, also impacted by profit sharing based on previous years' results corresponding to approximately SEK 7m. In Q2, the results were impacted by a number of fire claims, which stood out due to the size of the portfolio.

Premiums

Premium income totalled DKK 338m (DKK 342m), equating to a fall of 1.8% (-1.8%) when measured in local currencies. Adjusting for the profit-sharing agreement, premium growth was slightly negative. The development in premium income was influenced by the cancellation of the affinity agreements with ICA and a generally competitive market. The development in premium income was positively affected by a continued positive development in sales via Moderna's digital solution as well as a positive development in the retention rate.

Claims

The gross claims ratio totalled 65.7 (61.1). The increase was due to, the above-mentioned profit-sharing agreement, a number of fire claims in Q2 2016 and a higher level of extended warranty insurance claims. Initiatives to mitigate the higher level of extended warranty insurance claims have been implemented and encompass price hikes, increased excess levels and the re-negotiation of repair workshop contracts.

Expenses

The expense ratio was 19.2 (17.8), which primarily reflects the development in premium income and the profit-sharing agreement, but which also illustrates the need to cut costs. The number of employees was 333 at the end of the quarter, down 5 from 338 at the end of 2015.

Results H1 2016

The technical result was DKK 59m (DKK 95m). The combined ratio was 90.3 (85.0). The higher level was primarily ascribable to profit-sharing, fire claims and the development in claims from extended warranty insurance of electronic goods.

Premium in local currencies dropped by 1.6% (-2.6%), which – given the termination of a number of large agreements – was a satisfactory development. The claims ratio, net of ceded business, was 70.2 (65.8), which was affected by a higher underlying claims level and profit sharing.

Sweden comprises the sale of insurance products to private customers under the 'Moderna' brand. Moreover, insurance is sold under the brands Atlantica, Bilsport & MC, Securator, Moderna Barnförsäkringar and Moderna Djurförsäkringar. Sales take place through its own sales force, call centres, partners and online. The business area accounts for 7% of the Group's total premium income.

Key figures – Sweden

DKKm	Q2 2016	Q2 2015	H1 2016	H1 2015	2015
Gross premium income	338	342	627	631	1,317
Gross claims	-222	-209	-439	-417	-852
Gross expenses	-65	-61	-126	-121	-246
Profit/loss on gross business	51	72	62	93	219
Profit/loss on ceded business	-1	0	-1	2	-1
Insurance technical interest, net of reinsurance	-1	0	-2	0	0
Technical result	49	72	59	95	218
Run-off gains/losses, net of reinsurance	51	49	79	72	149
Key ratios
Premium growth in local currency (%)	-1.8	-1.8	-1.6	-2.6	-3.1
Gross claims ratio	65.7	61.1	70.0	66.1	64.7
Net reinsurance ratio	0.3	0.0	0.2	-0.3	0.1
Claims ratio, net of reinsurance	66.0	61.1	70.2	65.8	64.8
Gross expense ratio	19.2	17.8	20.1	19.2	18.7
Combined ratio	85.2	78.9	90.3	85.0	83.5
Combined ratio excluding run-off	100.3	93.2	102.9	96.4	94.8
Run-off, net of reinsurance (%)	-15.1	-14.3	-12.6	-11.4	-11.3
Weather claims, net of reinsurance (%)	0.3	0.3	1.3	2.5	1.7

Contents – Management's review

Interim report Q2 and H1 2016 | Tryg A/S | 13

Investment activities

Financial highlights Q2 2016

Investment return of DKK 181m (DKK -84m)
Gross return on free portfolio of DKK 122m (DKK 41m)
Return on match portfolio of DKK 125m (DKK -55m)

The total market value of Tryg's investment portfolio was DKK 40.6bn on 30 June 2016. The investment portfolio consists of a match portfolio of DKK 28.9bn and a free portfolio of DKK 11.7bn. The match portfolio is composed of fixed-income assets that match the insurance liabilities, so that fluctuations resulting from interest rate changes are offset to the greatest possible extent. The free portfolio is primarily the shareholders' equity, which is invested in properties, equities, fixed-income securities with a short duration, inflation-linked bonds and some high-yield bonds.

Financial markets in Q2 2016

Q2 2016 was characterised by global economic and political uncertainty, in particular in the run-up to the UK referendum on EU membership. The yield of the 10-year government bond in Germany touched a historic low of -0.1% during the quarter, and the equity market experienced temporary losses of 6% measured by MSCI All Countries. Despite markets volatility, emerging-market debt and high-yield did very well in Q2. In Q2, Tryg invested in newly selected asset classes such as inflation-linked bonds and investment-grade credit. These asset classes had a very positive quarter. The new asset classes are providing a good hedge in uncertain financial markets stemming from lower real interest rates and increasing risk on future growth.

Investment return in Q2 2016

Free portfolio

Tryg's investment portfolio maintained an unchanged share of equities in Q2, while Tryg's equity portfolio returned DKK 6m or 0.3%. The interest rate and credit exposure returned DKK 92m, or a 1.3% investment return. Emerging-market and high-yield bonds produced a good return, driven by falling rates and some credit spreads narrowing. A new asset class (DKK 537m), inflation-linked bonds, rallied, especially towards the end of the quarter, resulting in a return just below 4%. The investment property portfolio provided a return of DKK 24m, or 1.1%. Changes in currencies in Q2, for example the British pound, did not influence

DKKm	Q2 2016	Q2 2015	H1 2016	H1 2015	2015
Free portfolio, gross return	122	41	187	323	232
Match portfolio, regulatory deviation and performance	125	-55	127	1	-16
Other financial income and expenses	-66	-70	-116	-147	-238
Total investment return	181	-84	198	177	-22
DKKm	Q2 2016	Q2 2015	H1 2016	H1 2015	2015
---	---	---	---	---	---
Return, match portfolio	277	-393	704	-55	140
Value adjustments, changed discount rate	-114	401	-497	180	103
Transferred to insurance technical interest	-38	-63	-80	-124	-259
Match, regulatory deviation and performance	125	-55	127	1	-16
Hereof:
Match, regulatory deviation	69	-44	30	-14	12
Match, performance	56	-11	97	15	-28

Contents – Management's review

Interim report Q2 and H1 2016 | Tryg A/S | 14

the investment result since every change in asset prices driven by currencies is properly hedged. All in all, this implied an investment result of DKK 122m for the free portfolio.

Match portfolio

The fall in the interest rates used to discount the liabilities resulted in a negative value adjustment of DKK 114m. Adding a return on insurance provisions of DKK -38m, a total of DKK -152m is transferred to the insurance technical result. On the corresponding match portfolio, swaps and bonds generated a return of DKK 277m. The excess return of DKK 125m (difference between assets and liabilities move) is attributable to a regulatory deviation of DKK 69m and DKK 56m in performance. The regulatory deviation was highly influenced by a flight to safety. As the UK referendum approached, the yield difference between Danish and Euro swap rates decreased and created a positive regulatory deviation of DKK 69m in Q2. The result of the regulatory deviation is driven by the difference between the market-based interest rate swaps, DKK, NOK and SEK on the asset side, and the constructed EIOPA curve to discount the liabilities which is built on interest rate swaps in EUR, NOK and SEK on the liabilities.

The match portfolio also reported a DKK 56m performance result. Tryg invests primarily in Danish, Norwegian and Swedish covered bonds. If spreads narrow (vs swap rates), the overall performance is positive; otherwise it is negative. Tryg seeks to maintain stability in its covered bonds portfolio also in terms of maturity; hence spread movement should be a good indicator of overall performance.

Other financial income and expenses

Other financial income and expenses amounted to DKK -66m in Q2 2016. This item consists of a number of elements; the largest of these is the expenses from hedging the foreign currency exposure on Tryg's equity, consisting of DKK -23m, as well as expenses regarding Tryg's subordinated loans of DKK -20m. Looking forward, expenses relating to the subordinated loans will increase by DKK 20m annually due to the interest expenses on the loan issued in spring 2016.

Investment return in H1 2016

The return of Tryg's investment activities totalled DKK 198m in H1 2016. The result is composed of a return of DKK 187m on the free portfolio, a net return of DKK 127m on the match portfolio and other financial income and expenses of DKK -116m.

Return – free portfolio

DKKm	Q2 2016	Q2 2016 (%)	Q2 2015	Q2 2015 (%)	H1 2016	H1 2016 (%)	H1 2015	H1 2015 (%)	Investment assets
									30.06.2016	31.12.2015
Government bonds	0	0.0	-3	-1.0	2	0.8	1	0.4	258	265
Covered bonds	29	0.7	-61	-1.3	46	1.2	-34	-0.7	4,411	3,602
Inflation linked bonds	19	3.8	3	1.4	39	7.7	3	1.4	537	484
Investment grade credit	4	1.9	0	0.0	4	1.9	0	0.0	203	0
Emerging market bonds	19	4.3	-5	-1.2	36	8.4	4	1.0	447	412
High-yield bonds	23	2.8	0	0.0	35	4.2	21	2.1	734	837
Other a)	-2		52	6.2	-13		33	3.0	569	712
Interest rate and credit exposure	92	1.3	-14	-0.2	149	2.1	28	0.4	7,159	6,312
Equity exposure	6	0.3	32	1.1	-16	-0.6	242	8.7	2,446	2,374
Investment property	24	1.1	23	1.1	54	2.6	53	2.5	2,082	2,052
Total gross return	122	1.1	41	0.3	187	1.5	323	2.6	11,687	10,738

a) Bank deposits and derivative financial instruments hedging interest rate risk and credit risk.

Contents – Management's review

Interim report Q2 and H1 2016 | Tryg A/S | 15

Capital

Shareholder information

Based on Tryg's solvency position and dividend policy, Tryg will pay out a semi-annual dividend of DKK 2.60 (DKK 2.50) on 15 July 2016. Tryg shares will be traded ex-dividend on 13 July 2016.

On 5 April 2016, the Danish FSA approved the 2016 share buy back of DKK 1bn. The buy back was initiated on 6 April 2016, and by 30 June 2016, 2,601,949 shares had been acquired for a total amount of DKK 326m. Following these transactions, Tryg holds a total of 9,773,200 own shares, corresponding to 3.38%.

Tryg's solvency ratio (based on the approved partial internal model) was 206% at the end Q2 compared with 212% at the end of Q1. Own funds primarily increased by the reported net profit and the inclusion of the additional subordinated debt while they were reduced by the semi-annual dividend and the full effect of DKK 1bn buy backs. The solvency capital requirement in Q2 was virtually unchanged compared with Q1. The Skandia child insurance portfolio will be incorporated in Q3 2016 and will affect the solvency ratio negatively by 13%.

Moody's rating

Tryg has decided to terminate the cooperation with Standard and Poor's and instead work with Moody's. Moody's has assigned an 'A2' (positive outlook) insurance financial strength rating (IFSR) to Tryg Forsikring A/S, the main operating company of the Tryg Group. The rating reflects Tryg's leadership position in non-life insurance in the Nordic region, its strong profitability both from a return-on-capital and underwriting (combined ratio) perspective, very good asset quality and relatively low financial leverage. A public rating from one of the leading rating agencies is important for our large Corporate clients, and Tryg is therefore pleased to see that Moody's recognises its strong market position in the Nordic markets, high profitability and overall conservative balance sheet. Moody's assigns different weightings to different categories. Market position, brand and distribution, product focus and diversification, asset quality, capital adequacy and profitability are all part of the analysis, and the outcome (the rating) is based on a thorough analysis of the above factors.

Solvency capital requirement

Tryg calculates the solvency capital requirement based on a partial internal model in accordance with Solvency II. The Danish FSA approved the partial internal model in November 2015. The model is based on the structure of the standard formula, and Tryg is using an internal model to evaluate insurance risks, while the other risks are calculated using the standard model components. The solvency capital requirement calculated using the partial internal model is DKK 5,080m in Q2 2016, compared to DKK 5,098m in Q1 2016. Based on the standard formula, the solvency capital requirement is DKK 6,171m in Q2 2016, compared to DKK 6,232m in Q1 2016.

Own funds

The transition to Solvency II on 1 January 2016 has triggered a number of changes with regard to the capital eligible to cover the solvency capital requirement ('Own funds'). The most significant changes are the inclusion of expected future profits and the potential for increased utilisation of subordinated debt.

In Q2 2016, own funds totalled DKK 10,449m, which means that Tryg has a solvency ratio of 206 and 169 based on the partial internal model and the standard formula, respectively.

Solvency ratio development

Shareholder remuneration since IPO

Capital Tiers as % of SCR

a) Share buy back deducted.

Contents - Management's review

Interim report Q2 and H1 2016 | Tryg A/S | 16

Outlook

The market situation in Denmark is more or less unchanged compared to the end of 2015. Unemployment in Denmark is expected to fall slightly in 2016 from 4.8% in 2015 to 4.6% in 2016, and car sales continue to be dominated by small cars. In Denmark, total car sales for April and May were 20.5% higher than in the prior-year period. The Norwegian economy is still impacted by very low oil prices and a weakened Norwegian currency. Tryg is only to a very limited extent exposed to the oil industry – both directly and indirectly, but of course Tryg has also seen some impact from companies related to the oil industry, for example in the seismic industry. Unemployment in Norway is expected to increase further from 4.1% in 2015 to 4.4% in 2016. In April and May, car sales in Norway were 8.7% higher than in the prior-year period.

For 2016, Tryg has communicated an expected growth in premium income of between 0% and 2%. This includes the acquisition of Skandia's child insurance portfolio, which is expected to be included in Q3 2016 and to have a positive impact of approximately 0.5%. Based on the development in Q2 and especially renewals in Corporate, premium growth for 2016 will, as mentioned in the interim report for Q1 2016, probably be at the low end of the previously communicated premium growth outlook. TryghedsGruppen's member bonus scheme is also expected to support the long-term development in premium income.

Tryg has a solid reserve position, and at the Capital Markets Day in November 2014, Tryg therefore announced that the run-off level was likely to be higher than the run-off level in the pre-2015 period. Tryg expects this to be the case until the end of 2017, after which we expect a long-term run-off level of 2.5-3%.

In 2016, weather claims and large claims, net of reinsurance, are expected to be DKK 500m and DKK 550m, respectively, which is unchanged relative to 2015.

The interest rate used to discount Tryg's technical provisions is historically low. An interest rate increase will have a positive effect on Tryg's results. Generally speaking, an interest rate increase of 1 percentage point will increase the pre-tax result by around DKK 300m and vice versa.

For the purpose of realising the financial targets, Tryg launched an efficiency programme aimed at realising savings of DKK 750m, with DKK 500m relating to the procurement of claims services and administration, and DKK 250m relating to expenses. The target is DKK 225m for 2016 and DKK 375m for 2017.

The investment portfolio is divided into a match portfolio corresponding to the technical provisions, and a free portfolio. The objective is for the return on the match portfolio and changes in the technical provisions due to interest rate changes to be neutral when taken together.

The curve used to discount technical provisions has changed due to the implementation of the Solvency II directive, and this might result in slightly more volatile match portfolio net results. The new curve increases the interest rate risk of the technical provisions, thereby introducing a bigger difference between the match return and the changes in the technical provisions. Moreover, the curve introduces a component, 'Credit Risk Adjustment – or CRA', which cannot be hedged, and the impact from this component can only be negative.

The return on bonds in the free portfolio will vary, but given current interest rate levels, a low return is expected. For shares, the expected return is around 7% with the MSCI world index as the benchmark, while the expected return for property is around 6%. Investment activities also include other types of investment income and expenses, especially the cost of managing investments, the cost of currency hedges and interest paid on loans.

There has been a gradual lowering of tax rates in Denmark, Norway and Sweden in recent years. In Denmark, the tax rate was 23.5% in 2015 and will be reduced to 22% in 2016. The Norwegian tax rate was 27% in 2015 and will be reduced to 25% in 2016, while the Swedish rate was 22%. When calculating the total tax payable, account should also be taken of the fact that gains and losses on shareholdings are not taxed in Norway. All in all, this causes the expected tax payable for an average year to be reduced from around 22-23% to around 21% in 2016.

The share of equity held in NOK and SEK is continuously hedged in the financial markets.

Financial targets 2017

Return on equity of ≥21% after tax
Combined ratio ≤87
Expense ratio ≤14

Contents – Management's review

Interim report Q2 and H1 2016 | Tryg A/S | 17

Contents – Financial statements Q2 and H1 2016

FINANCIAL STATEMENTS	22 Statement of comprehensive income	34 Quarterly outline
19 Statement by the Supervisory Board	23 Statement of financial position	36 Income statement (parent company)
and the Executive Board	24 Statement of changes in equity	37 Statement of financial position
20 Financial highlights	26 Cash flow statement	(parent company)
21 Income statement	27 Notes

Tryg's Group consolidated financial statements are prepared in accordance with IFRS.

Contents – Financial statements Q2 and H1 2016

Interim report Q2 and H1 2016 | Tryg A/S | 18

Statement by the Supervisory Board and the Executive Board

The Supervisory Board and the Executive Board have today considered and adopted the interim report for Q2 and H1 2016 for Tryq A/S and Tryq Group.

The report, which is unaudited and has not been reviewed by the company's auditors, is presented in accordance with IAS 34 Interim Financial Reporting, the Danish Financial Business Act and the requirements of the NASDAQ Copenhagen for the presentation of financial statements of listed companies. The report for the parent company is presented in accordance with the Danish Financial Supervisory Authority's regulations on financial reports for insurance companies and transverse pension funds.

In our opinion, the report gives a true and fair view of the Group's and parent company's assets, liabilities and financial position at 30 June 2016 and of the results of the Group's and parent company's activities and cash flows for the period for the Group.

We are furthermore of the opinion that the management's report includes a fair review of the developments in the activities and financial position of the Group and parent company, the results for the period and of the Group's and parent company's financial position in general and describes the principal risks and uncertainties that the Group and parent company face.

Ballerup, 12 July 2016

Executive Board

Morten Hübbe
Group CEO

Christian Baltzer
Group CFO

Lars Bonde
Group Executive Vice President and COO

Supervisory Board

Jørgen Huno Rasmussen
Chairman

Torben Nielsen
Deputy Chairman

Tom Eileng

Lone Hansen

Anders Hjulmand

Jesper Hjulmand

Ida Sofie Jensen

Bill-Owe Johansson

Lene Skole

Tina Snejbjerg

Mari Thjømøe

Carl-Viggo Östlund

Contents – Financial statements

Interim report Q2 and H1 2016 | Tryq A/S | 19

Financial highlights

DKKm	Q2 2016	Q2 2015	H1 2016	H1 2015	2015
NOK/DKK, average rate for the period	79.91	87.41	79.09	85.98	83.52
SEK/DKK, average rate for the period	80.67	80.13	80.52	79.70	79.69
Gross premium income	4,379	4,550	8,689	9,001	17,977
Gross claims	-2,823	-3,858	-5,681	-7,062	-13,562
Total insurance operating costs	-649	-681	-1,291	-1,366	-2,720
Profit/loss on gross business	907	11	1,717	573	1,695
Profit/loss on ceded business	-135	808	-381	672	710
Insurance technical interest, net of reinsurance	-2	6	-4	9	18
Technical result	770	825	1,332	1,254	2,423
Investment return after insurance technical interest	181	-84	198	177	-22
Other income and costs	-17	-27	-33	-52	-91
Profit/loss before tax	934	714	1,497	1,379	2,310
Tax	-200	-167	-318	-317	-390
Profit/loss, continuing business	734	547	1,179	1,062	1,920
Profit/loss on discontinued and divested business after tax	0	33	0	43	49
Profit/loss for the period	734	580	1,179	1,105	1,969
Other comprehensive income
Other comprehensive income which cannot subsequently be reclassified as profit or loss	16	65	17	-136	-16
Other comprehensive income which can subsequently be reclassified as profit or loss	-2	-8	5	9	-24
Other comprehensive income	14	57	22	-127	-40
Comprehensive income	748	637	1,201	978	1,929
Run-off gains/losses, net of reinsurance	280	222	649	568	1,212
Statement of financial position
Total provisions for insurance contracts	32,908	34,034	32,908	34,034	31,814
Total reinsurers' share of provisions for insurance contracts	2,732	2,963	2,732	2,963	3,176
Total equity	9,534	9,861	9,534	9,861	9,644
Total assets	51,967	53,129	51,967	53,129	51,281
Key ratios
Gross claims ratio	64.5	84.8	65.4	78.5	75.4
Net reinsurance ratio	3.1	-17.8	4.4	-7.5	-3.9
Claims ratio, net of reinsurance	67.6	67.0	69.8	71.0	71.5
Gross expense ratio	15.0	15.2	15.1	15.4	15.3
Combined ratio	82.6	82.2	84.9	86.4	86.8
Gross expense ratio without adjustment*	14.8	15.0	14.9	15.2	15.1
Operating ratio	82.4	81.9	84.7	86.1	86.5

*) The gross expense ratio without adjustment is calculated as the ratio of actual gross insurance operating costs to gross premium income. The adjustment, which is made pursuant to the Danish Financial Supervisory Authority's and the Danish Society of Financial Analysts' definitions of expense ratio and combined ratio, involves the addition of a calculated expense (rent) in respect of owner-occupied property based on a calculated market rent and the deduction of actual depreciation and operating costs on owner-occupied property.

Other key ratios are calculated in accordance with 'Recommendations & Financial Ratios 2015' issued by the Danish Society of Financial Analysts.

Contents - Financial statements

Interim report Q2 and H1 2016 | Tryg A/S

Income statement

DKKm	H1	H1
		2016	2015	2015
Notes	General insurance
	Gross premiums written	10,360	10,731	18,150
	Ceded insurance premiums	-655	-735	-1,165
	Change in premium provisions	-1,514	-1,594	61
	Change in reinsurers' share of premium provisions	132	157	1
2	Premium income, net of reinsurance	8,323	8,559	17,047
3	Insurance technical interest, net of reinsurance	-4	9	18
	Claims paid	-6,750	-6,781	-13,095
	Reinsurance cover received	667	318	471
	Change in claims provisions	1,069	-281	-467
	Change in the reinsurers' share of claims provisions	-578	883	1,301
4	Claims, net of reinsurance	-5,592	-5,861	-11,790
	Bonus and premium discounts	-157	-136	-234
	Acquisition costs	-963	-1,048	-2,042
	Administration expenses	-328	-318	-678
	Acquisition costs and administration expenses	-1,291	-1,366	-2,720
	Reinsurance commissions and profit participation from reinsurers	53	49	102
	Insurance operating costs, net of reinsurance	-1,238	-1,317	-2,618
1	Technical result	1,332	1,254	2,423
DKKm	H1	H1
---	---	---	---	---
		2016	2015	2015
Notes	Investment activities
	Income from associates	6	5	42
	Income from investment property	48	46	94
	Interest income and dividends	354	427	794
5	Value adjustments	-46	-87	-510
	Interest expenses	-49	-55	-95
	Administration expenses in connection with investment activities	-35	-35	-88
	Total investment return	278	301	237
3	Return on insurance provisions	-80	-124	-259
	Total Investment return after insurance technical interest	198	177	-22
	Other income	53	41	81
	Other costs	-86	-93	-172
	Profit/loss before tax	1,497	1,379	2,310
	Tax	-318	-317	-390
	Profit/loss on continuing business	1,179	1,062	1,920
	Profit/loss on discontinued and divested business	0	43	49
	Profit/loss for the period	1,179	1,105	1,969
	Earnings per share - continuing business	4.18	3.69	6.74
	Diluted earnings per share - continuing business	4.18	3.69	6.73
	Earnings per share	4.18	3.84	6.91
	Diluted earnings per share	4.18	3.84	6.91

Contents - Financial statements

Interim report Q2 and H1 2016 | Tryg A/S | 21

Statement of comprehensive income

	H1	H1
DKKm	2016	2015	2015
Profit/loss for the period	1,179	1,105	1,969
Other comprehensive income
Other comprehensive income which cannot subsequently be reclassified as profit or loss
Adjustment to equity 1.1.2015 *	0	-175	-175
Change in equalisation reserve	15	0	21
Change in taxrates on security provisions	0	0	141
Revaluation of owner-occupied property	2	0	4
Tax on revaluation of owner-occupied property	0	0	2
Actuarial gains/losses on defined-benefit pension plans	0	53	-12
Tax on actuarial gains/losses on defined-benefit pension plans	0	-14	3
	17	-136	-16
Other comprehensive income which can subsequently be reclassified as profit or loss
Exchange rate adjustments of foreign entities	35	66	-89
Hedging of currency risk in foreign entities	-38	-74	86
Tax on hedging of currency risk in foreign entities	8	17	-21
	5	9	-24
Total other comprehensive income	22	-127	-40
Comprehensive income	1,201	978	1,929

*) New executive order from the Danish FSA on yield curves. Please refer to note 10 Accounting policies.

Contents – Financial statements

Interim report Q2 and H1 2016 | Tryg A/S | 22

Statement of financial position

DKKm	30.06.2016	30.06.2015	31.12.2015
Notes
Assets
Intangible assets	1,028	1,010	1,038
Operating equipment	56	82	62
Owner-occupied property	1,155	1,166	1,144
Assets under construction	0	12	2
Total property, plant and equipment	1,211	1,260	1,208
Investment property	1,862	1,852	1,838
Equity investments in associates	236	227	229
Total investments in associates	236	227	229
Equity investments	101	147	138
Unit trust units	3,732	4,005	3,589
Bonds	35,528	37,295	35,705
Deposits with credit institutions	300	0	0
Derivative financial instruments	1,403	998	843
Total other financial investment assets	41,064	42,445	40,275
Total investment assets	43,162	44,524	42,342
Reinsurers' share of premium provisions	305	342	173
Reinsurers' share of claims provisions	2,427	2,621	3,003
Total reinsurers' share of provisions for insurance contracts	2,732	2,963	3,176
Receivables from policyholders	1,790	1,723	1,261
Total receivables in connection with direct insurance contracts	1,790	1,723	1,261
Receivables from insurance enterprises	311	168	199
Other receivables	539	225	871
Total receivables	2,640	2,116	2,331
Current tax assets	125	0	118
Cash at bank and in hand	586	678	471
Total other assets	711	678	589
Interest and rent receivable	162	208	281
Other prepayments and accrued income	321	370	316
Total prepayments and accrued income	483	578	597
Total assets	51,967	53,129	51,281
DKKm	30.06.2016	30.06.2015	31.12.2015
---	---	---	---
Notes
Equity and liabilities
Equity	9,534	9,861	9,644
6 Subordinated loan capital	2,539	1,793	1,698
Premium provisions	6,999	7,397	5,571
Claims provisions	25,411	26,133	25,670
Provisions for bonuses and premium discounts	498	504	573
Total provisions for insurance contracts	32,908	34,034	31,814
Pensions and similar liabilities	241	265	264
Deferred tax liability	597	1,052	645
Other provisions	108	61	132
Total provisions	946	1,378	1,041
Debt relating to direct insurance	443	544	603
Debt relating to reinsurance	350	285	330
Amounts owed to credit institutions	290	483	64
Debt relating to unsettled funds transactions and repos	2,799	2,631	4,074
Derivative financial instruments	795	561	612
Current tax liabilities	314	306	357
Other debt	1,019	1,231	1,001
Total debt	6,010	6,041	7,041
Accruals and deferred income	30	22	43
Total equity and liabilities	51,967	53,129	51,281

7 Acquisition of activities
8 Related parties
9 Contingent liabilities
10 Accounting policies

Contents - Financial statements

Interim report Q2 and H1 2016 | Tryg A/S | 23

Statement of changes in equity

DKKm	Share capital	Revaluation reserves	Reserve for exchange rate adjustment	Equalisation reserve	Other reserves	Retained earnings	Proposed dividend	Total
Equity at 31 December 2015	1,448	86	-9	127	766	6,213	1,013	9,644
H1 2016
Adjustment 1.1.2016 *				-127		127		0
Profit/loss for the period					12	414	753	1,179
Other comprehensive income		2	5			15		22
Total comprehensive income	0	2	5	-127	12	556	753	1,201
Dividend paid							-1,013	-1,013
Dividend, treasury shares						25		25
Purchase and sale of treasury shares						-326		-326
Exercise of share options						1		1
Issue of share options and matching shares						2		2
Total changes in equity in H1 2016	0	2	5	-127	12	258	-260	-110
Equity at 30 June 2016	1,448	88	-4	0	778	6,471	753	9,534
*) A new executive order from the Danish FSA from 1 January 2016 has abolished the requirements of equalisation reserves in credit and guarantee insurance. The possible payment of dividend from Tryg Forsikring A/S to Tryg A/S is influenced by contingency fund provisions of DKK 1,732m (DKK 2,516m as at 31 December 2015). The contingency fund provisions can be used to cover losses in connection with the settlement of insurance provisions or otherwise for the benefit of the insured.
Equity at 31 December 2014	1,492	80	15	106	848	6,847	1,731	11,119
H1 2015
Adjustment 1.1.2015 **						-175		-175
Profit/loss for the period					-40	399	746	1,105
Other comprehensive income			9			39		48
Total comprehensive income	0	0	9	0	-40	263	746	978
Dividend paid							-1,731	-1,731
Dividend, treasury shares						65		65
Purchase and sale of treasury shares						-588		-588
Exercise of share options						14		14
Issue of employee shares						2		2
Issue of share options and matching shares						2		2
Total changes in equity in H1 2015	0	0	9	0	-40	-242	-985	-1,258
Equity at 30 June 2015	1,492	80	24	106	808	6,605	746	9,861

**) New executive order from the Danish FSA on yield curves. Please refer to note 10 Accounting policies.

Contents – Financial statements

Interim report Q2 and H1 2016 | Tryg A/S | 24

Statement of changes in equity

DKKm	Share capital	Revaluation reserves	Reserve for exchange rate adjustment	Equalisation reserve	Other reserves	Retained earnings	Proposed dividend	Total
Equity at 31 December 2014	1,492	80	15	106	848	6,847	1,731	11,119
2015
Adjustment 1.1.2015 **						-175		-175
Profit/loss for the year				22	-104	292	1,759	1,969
Other comprehensive income		6	-24	-1	22	132		135
Total comprehensive income	0	6	-24	21	-82	249	1,759	1,929
Nullification of treasury shares	-44					44		0
Dividend paid							-2,477	-2,477
Dividend, treasury shares						97		97
Purchase and sale of treasury shares						-1,044		-1,044
Exercise of share options						13		13
Issue of employee shares						2		2
Issue of share options and matching shares						5		5
Total changes in equity in 2015	-44	6	-24	21	-82	-634	-718	-1,475
Equity at 31 December 2015	1,448	86	-9	127	766	6,213	1,013	9,644

**) New executive order from the Danish FSA on yield curves. Please refer to note 10 Accounting policies.

Contents – Financial statements

Interim report Q2 and H1 2016 | Tryg A/S | 25

Cash flow statement

	H1	H1
DKKm	2016	2015	2015
Cash from operating activities
Premiums	9,479	9,898	17,721
Claims	-6,662	-6,852	-13,040
Ceded business	-15	-184	-412
Costs	-1,290	-1,379	-2,771
Change in other debt and other amounts receivable	-92	-233	-158
Cash flow from insurance activities	1,420	1,250	1,340
Interest income	467	530	807
Interest expenses	-50	-55	-95
Dividend received	19	40	47
Taxes	-261	-210	-765
Other income and costs	-33	-52	-91
Cash from operating activities, continuing business	1,562	1,503	1,243
Cash from operating activities, discontinued and divested business	0	-38	-32
Total cash flow from operating activities	1,562	1,465	1,211
Investments
Acquisition and refurbishment of real property	-14	-13	-46
Sale of real property	0	0	10
Acquisition and sale of equity investments and unit trust units (net)	-43	246	480
Purchase/sale of bonds (net)	-758	-223	1,070
Deposits with credit institutions	-300	660	641
Purchase/sale of operating equipment (net)	-5	13	0
Hedging of currency risk	-38	-74	86
Investments, continuing business	-1,158	609	2,241
Investments, discontinued and divested business	0	-37	-37
Total investments	-1,158	572	2,204
	H1	H1
---	---	---	---
DKKm	2016	2015	2015
Financing
Exercise of share options/purchase of treasury shares (net)	-325	-574	-1,031
Subordinated loan capital	800	0	12
Dividend paid	-988	-1,666	-2,380
Change in amounts owed to credit institutions	227	367	-53
Financing, continuing business	-286	-1,873	-3,452
Total financing	-286	-1,873	-3,452
Change in cash and cash equivalents, net	118	164	-37
Exchange rate adjustment of cash and cash equivalents beginning of year	-2	9	3
Change in cash and cash equivalents, gross	116	173	-34
Cash and cash equivalents, beginning of year	470	505	505
Cash and cash equivalents, end of period	586	678	471

Contents – Financial statements

Interim report Q2 and H1 2016 | Tryg A/S | 26

Notes

DKKm	Private	Commercial	Corporate	Sweden	Other	Group
1 Operating segments
H1 2016
Gross premium income	4,285	1,944	1,841	627	-8	8,689
Gross claims	-3,002	-1,173	-1,066	-439	-1	-5,681
Gross operating expenses	-617	-341	-207	-126		-1,291
Profit/loss on ceded business	-73	-43	-273	-1	9	-381
Insurance technical interest, net of reinsurance	-2	0	0	-2		-4
Technical result	591	387	295	59	0	1,332
Other items						-153
Profit						1,179
Run-off gains/losses, net of reinsurance	143	142	285	79		649
Intangible assets		31		577	420	1,028
Equity investments in associates					236	236
Reinsurers' share of premium provisions	53	52	199	1		305
Reinsurers' share of claims provisions	71	374	1,951	31		2,427
Other assets					47,971	47,971
Total assets						51,967
Premium provisions	2,700	1,755	1,672	872		6,999
Claims provisions	5,737	6,804	11,209	1,661		25,411
Provisions for bonuses and premium discounts	399	45	52	2		498
Other liabilities					9,525	9,525
Total liabilities						42,433

Amounts relating to eliminations are included under 'Other'. Other assets and liabilities are managed at Group level and are not allocated to the individual segments but are included under 'Other'.
Costs are allocated according to specific keys, which are believed to provide the best estimate of assessed resource consumption.

Contents – Financial statements

Interim report Q2 and H1 2016 | Tryg A/S | 27

Notes

DKKm	Private	Commercial	Corporate	Sweden	Other	Group
1 Operating segments
H1 2015
Gross premium income	4,420	2,000	1,961	631	-11	9,001
Gross claims	-3,087	-1,220	-2,347	-417	9	-7,062
Gross operating expenses	-675	-346	-224	-121		-1,366
Profit/loss on ceded business	-47	-61	776	2	2	672
Insurance technical interest, net of reinsurance	4	2	3	0		9
Technical result	615	375	169	95	0	1,254
Other items						-149
Profit						1,105
Run-off gains/losses, net of reinsurance	177	207	112	72		568
Intangible assets		36		604	370	1,010
Equity investments in associates					227	227
Reinsurers' share of premium provisions	58	62	221	1		342
Reinsurers' share of claims provisions	151	297	2,132	41		2,621
Other assets					48,929	48,929
Total assets						53,129
Premium provisions	2,852	1,821	1,836	888		7,397
Claims provisions	6,026	6,651	11,710	1,746		26,133
Provisions for bonuses and premium discounts	406	34	52	12		504
Other liabilities					9,234	9,234
Total liabilities						43,268

Contents – Financial statements

Interim report Q2 and H1 2016 | Tryg A/S | 28

Notes

DKKm	Private	Commercial	Corporate	Sweden	Other *	Group
1 Operating segments
2015
Gross premium income	8,803	3,992	3,894	1,317	-29	17,977
Gross claims	-6,074	-2,612	-3,987	-852	-37	-13,562
Gross operating expenses	-1,291	-683	-420	-246	-80	-2,720
Profit/loss on ceded business	-148	-44	877	-1	26	710
Insurance technical interest, net of reinsurance	8	5	5	0		18
Technical result	1,298	658	369	218	-120	2,423
Other items						-454
Profit						1,969
Run-off gains/losses, net of reinsurance	324	388	351	149		1,212
Intangible assets		33		597	408	1,038
Equity investments in associates					229	229
Reinsurers' share of premium provisions	17	16	140	0		173
Reinsurers' share of claims provisions	141	408	2,422	32		3,003
Other assets					46,838	46,838
Total assets						51,281
Premium provisions	2,342	1,318	1,062	849		5,571
Claims provisions	5,827	6,688	11,505	1,650		25,670
Provisions for bonuses and premium discounts	457	54	50	12		573
Other liabilities					9,823	9,823
Total liabilities						41,637

*) In 2015 costs and claims were negatively effected by DKK 80m and DKK 40m respectively due to provisioning for the efficiency programme.

Contents – Financial statements

Interim report Q2 and H1 2016 | Tryg A/S | 29

Notes

DKKm	Q2 2016	Q2 2015	H1 2016	H1 2015	2015
1 Geographical segments
Danish general insurance *
Gross premium income	2,337	2,299	4,671	4,630	9,346
Technical result	393	329	780	633	1,371
Run-off gains/losses, net of reinsurance	44	0	249	231	512
Key ratios
Gross claims ratio	66.1	107.1	65.2	88.0	80.5
Net reinsurance ratio	2.9	-35.8	4.2	-16.2	-9.2
Claims ratio, net of reinsurance	69.0	71.3	69.4	71.8	71.3
Gross expense ratio	14.0	14.4	13.7	14.4	13.9
Combined ratio	83.0	85.7	83.1	86.2	85.2
Number of full-time employees, end of period	1,819	1,939	1,819	1,939	1,859
Norwegian general insurance
Gross premium income	1,569	1,777	3,119	3,468	6,766
Technical result	356	403	507	458	844
Run-off gains/losses, net of reinsurance	192	171	326	229	492
Key ratios
Gross claims ratio	58.8	62.3	63.4	69.7	70.9
Net reinsurance ratio	3.8	0.3	5.2	2.0	2.1
Claims ratio, net of reinsurance	62.6	62.6	68.6	71.7	73.0
Gross expense ratio	14.9	15.0	15.4	15.5	14.9
Combined ratio	77.5	77.6	84.0	87.2	87.9
Number of full-time employees, end of period	1,098	1,164	1,098	1,164	1,113

*) Comprises Danish general insurance and Finnish guarantee insurance.

Contents – Financial statements

Interim report Q2 and H1 2016 | Tryg A/S | 30

Notes

DKKm	Q2 2016	Q2 2015	H1 2016	H1 2015	2015
1 Geographical segments
Swedish general insurance
Gross premium income	478	482	907	914	1,894
Technical result	21	93	45	163	328
Run-off gains/losses, net of reinsurance	44	51	74	108	208
Key ratios
Gross claims ratio	74.1	61.4	72.3	63.2	63.5
Net reinsurance ratio	2.9	2.1	3.5	1.1	1.7
Claims ratio, net of reinsurance	77.0	63.5	75.8	64.3	65.2
Gross expense ratio	18.2	17.2	18.9	17.8	17.5
Combined ratio	95.2	80.7	94.7	82.1	82.7
Number of full-time employees, end of period	382	392	382	392	387
Other**
Gross premium income	-5	-8	-8	-11	-29
Technical result	0	0	0	0	-120
Tryg
Gross premium income	4,379	4,550	8,689	9,001	17,977
Technical result	770	825	1,332	1,254	2,423
Investment return activities	181	-84	198	177	-22
Other income and costs	-17	-27	-33	-52	-91
Profit/loss before tax	934	714	1,497	1,379	2,310
Run-off gains/losses, net of reinsurance	280	222	649	568	1,212
Key ratios
Gross claims ratio	64.5	84.8	65.4	78.5	75.4
Net reinsurance ratio	3.1	-17.8	4.4	-7.5	-3.9
Claims ratio, net of reinsurance	67.6	67.0	69.8	71.0	71.5
Gross expense ratio***	15.0	15.2	15.1	15.4	15.3
Combined ratio	82.6	82.2	84.9	86.4	86.8
Number of full-time employees, end of period	3,299	3,495	3,299	3,495	3,359

**) Amounts relating to eliminations are included under 'Other'.
*** Adjustment of gross expense ratio included only in 'Tryg'.
*** In H2 2015 costs and claims were negatively effected by DKK 80m and DKK 40m respectively due to provisioning for the efficiency programme.

Contents – Financial statements

Interim report Q2 and H1 2016 | Tryg A/S | 31

Notes

DKKm	H1 2016	H1 2015	2015
2 Premium income, net of reinsurance
Direct insurance	8,820	9,116	18,166
Indirect insurance	24	22	44
	8,844	9,138	18,210
Unexpired risk provision	2	-1	1
	8,846	9,137	18,211
Ceded direct insurance	-513	-547	-1,103
Ceded indirect insurance	-10	-31	-61
	8,323	8,559	17,047
3 Insurance technical interest, net of reinsurance
Return on insurance provisions	80	124	259
Discounting transferred from claims provisions	-84	-115	-241
	-4	9	18
4 Claims, net of reinsurance
Claims	-6,286	-7,754	-15,063
Run-off gains/losses, gross	605	692	1,500
	-5,681	-7,062	-13,563
Reinsurance cover received	45	1,325	2,061
Run-off gains/losses, reinsurers' share	44	-124	-288
	-5,592	-5,861	-11,790
DKKm	H1 2016	H1 2015	2015
---	---	---	---
5 Value adjustments
Value adjustments concerning financial assets or liabilities at fair value with value adjustment in the income statement:
Equity investments	24	15	13
Unit trust units	53	227	57
Share derivatives	-32	52	14
Bonds	68	-358	-608
Interest derivatives	368	-137	-42
Other loans	4	0	0
	485	-201	-566
Value adjustments concerning assets or liabilities that cannot be attributed to IAS 39:
Investment property	0	1	17
Discounting	-498	180	103
Other statement of financial position items	-33	-67	-64
	-531	114	56
	-46	-87	-510
6 Subordinated loan capital
In Q2 2016 Tryg Forsikring A/S has entered into an agreement to issue Solvency II compliant Tier 2 capital in the form of a subordinated callable bond issue of SEK 1bn (DKK 789m). The bond issue has a maturity of 30 years. The interest rate is 3 months STIBOR plus a margin of 2.75% during the first 10 years. The margin after 10 years is 3.75%. After 5 years Tryg Forsikring A/S has the option to redeem the bond issue at par.
7 Acquisition of activities
In august 2015 Tryg and Skandia signed an agreement whereby Tryg acquires Skandia's activities within child and adult accident insurance and integrates them into its Swedish business, Moderna Forsakringar. The transaction is expected to be approved by the Danish FSA and implemented in H2 2016. The acquisition has no effect on the Financial statement for H1 2016.

Contents – Financial statements

Interim report Q2 and H1 2016 | Tryg A/S | 32

Notes

8 Related parties

In H1 2016 Tryg Forsikring A/S paid Tryg A/S DKK 1,450m and Tryg A/S paid TryghedsGruppen smba DKK 593m in dividends (in H1 2015 Tryg Forsikring A/S paid Tryg A/S DKK 2,400m and Tryg A/S paid TryghedsGruppen smba DKK 1,001m in dividends).

There have been no other material transactions with related parties.

9 Contingent liabilities

In May 2016, pursuant to the governing Norwegian law on disputes, Tryg Forsikring A/S has received notice of an action from Finansforbundet in Norway (the Finance Sector Union of Norway) on behalf of a group of pensioners. According to Tryg's preliminary calculations, the claim will not exceed a maximum of approximately DKK 0.3bn after tax for the persons affected by the adjustment. Tryg does not agree that the adjustment was wrongful. Consequently, Tryg expects an action to be resolved in court and does not expect a ruling to be made for the next 1.5 - 2 years.

In addition, companies in the Tryg Group are party to a number of other disputes in Denmark, Norway and Sweden, which management believes will not affect the Group's financial position significantly beyond the obligations recognized in the statement of financial position at 30 June 2016.

10 Accounting policies

Tryg's interim report for H1 2016 report is presented in accordance with IAS 34 Interim Financial Reporting and the requirements of the NASDAQ Copenhagen for the presentation of financial statements of listed companies.

The interim report of the parent company has been prepared in accordance with the executive order issued by the Danish FSA's regulations on financial reports for insurance companies and transverse pension funds.

The application of IAS 34 means that the report is limited relative to the presentation of a full annual report and that the valuation principles are in accordance with International Financial Reporting Standards (IFRS).

10 Accounting policies (continued)

Change in accounting policies

Tryg has implemented the amendments which prescribes applying a new yield curve from the Executive order on financial reports by insurance companies and lateral pension funds issued by the Danish FSA from 1 January 2016. The executive order prescribes a change from applying a yield curve issued by the Danish Financial Supervisory Authority to applying a new yield curve published by EIOPA.

For Tryg, this means applying a yield curve at a lower level. The comparative figures for 2015 are restated accordingly. Figures for previous years have not been restated as this is impracticable due to the non existence of the new yield curve published by EIOPA before 01.01.2015. Q1 2015 and Q2 2015 are only affected with the changes as of 01.01.2015 regarding equity and insurance provisions due to insignificant changes to the income statement.

The comparative figures have been restated for 2015 with the following amounts:

Income statement	1H 2015	2015
Total Investment return after insurance technical interest	0	-17
Tax	0	5
Profit and loss for the period	0	-12
Statement of financial position	1.1.2015	30.06.15
Equity	-175	-175
Insurance provisions	226	226
Deferred tax liabilities	-51	-51

It is Tryg's assessment that the amendments to the Executive Order from 2016 can be accommodated within IFRS. Except as noted above, the accounting policies have been applied consistently with last year. For a full description of the accounting policies, please refer to the annual accounts of the Tryg Group 2015.

Changes in accounting estimates

There have been no changes to the accounting estimates in H1 2016.

Contents – Financial statements

Interim report Q2 and H1 2016 | Tryg A/S | 33

Quarterly outline

DKKm	Q2 2016	Q1 2016	Q4 2015	Q3 2015	Q2 2015	Q1 2015	Q4 2014	Q3 2014	Q2 2014
Private
Gross premium income	2,148	2,137	2,172	2,211	2,226	2,194	2,249	2,289	2,275
Technical result	393	198	285	398	434	181	400	445	494
Key ratios
Gross claims ratio	65.9	74.2	71.3	65.1	63.3	76.5	65.3	64.6	69.0
Net reinsurance ratio	1.2	2.2	2.3	2.3	2.1	0.0	2.1	1.1	-2.6
Claims ratio, net of reinsurance	67.1	76.4	73.6	67.4	65.4	76.5	67.4	65.7	66.4
Gross expense ratio	14.5	14.3	13.4	14.7	15.3	15.3	15.0	15.1	12.4
Combined ratio	81.6	90.7	87.0	82.1	80.7	91.8	82.4	80.8	78.8
Combined ratio exclusive of run-off	84.9	94.1	89.3	86.5	83.7	96.8	84.5	85.3	82.4
Commercial
Gross premium income	977	967	970	1,022	997	1,003	1,050	1,045	1,053
Technical result	172	215	147	136	220	155	270	188	224
Key ratios
Gross claims ratio	64.1	56.6	62.3	77.1	55.7	66.3	55.2	63.9	72.1
Net reinsurance ratio	0.7	3.7	5.5	-6.8	5.2	0.9	3.7	0.9	-5.6
Claims ratio, net of reinsurance	64.8	60.3	67.8	70.3	60.9	67.2	58.9	64.8	66.5
Gross expense ratio	17.6	17.5	17.2	16.6	17.2	17.4	15.6	17.5	12.6
Combined ratio	82.4	77.8	85.0	86.9	78.1	84.6	74.5	82.3	79.1
Combined ratio exclusive of run-off	84.7	90.2	91.3	98.6	84.5	98.9	86.5	92.1	81.9
Corporate
Gross premium income	921	920	949	984	993	968	1,015	999	1,030
Technical result	156	139	5	195	99	70	98	130	180
Key ratios
Gross claims ratio	60.6	55.2	69.2	99.9	170.5	67.6	67.2	63.0	73.3
Net reinsurance ratio	11.6	18.0	20.5	-30.1	-91.2	13.4	12.6	13.0	0.1
Claims ratio, net of reinsurance	72.2	73.2	89.7	69.8	79.3	81.0	79.8	76.0	73.4
Gross expense ratio	10.9	11.6	9.7	10.6	11.0	11.9	10.6	11.5	9.5
Combined ratio	83.1	84.8	99.4	80.4	90.3	92.9	90.4	87.5	82.9
Combined ratio exclusive of run-off	98.0	100.9	106.2	98.1	94.5	100.1	106.4	94.9	86.8

A further detailed version of the presentation can be downloaded from
tryq.com/uk=investor>Downloads>tables

Contents – Financial statements

Interim report Q2 and H1 2016 | Tryq A/S | 34

Quarterly outline

DKKm	Q2 2016	Q1 2016	Q4 2015	Q3 2015	Q2 2015	Q1 2015	Q4 2014	Q3 2014	Q2 2014
Sweden
Gross premium income	338	289	313	373	342	289	338	386	358
Technical result	49	10	85	38	72	23	7	30	43
Key ratios
Gross claims ratio	65.7	75.1	51.8	73.2	61.1	72.0	74.6	76.2	69.3
Net reinsurance ratio	0.3	0.0	0.3	0.5	0.0	-0.7	1.5	0.8	-0.3
Claims ratio, net of reinsurance	66.0	75.1	52.1	73.7	61.1	71.3	76.1	77.0	69.0
Gross expense ratio	19.2	21.1	21.1	15.8	17.8	20.8	22.2	15.5	19.6
Combined ratio	85.2	96.2	73.2	89.5	78.9	92.1	98.3	92.5	88.6
Combined ratio exclusive of run-off	100.3	105.9	94.3	92.4	93.2	100.1	99.2	97.7	91.7
Other*
Gross premium income	-5	-3	-11	-7	-8	-3	-6	-7	-5
Technical result	0	0	0	-120	0	0	0	0	0
Tryg
Gross premium income	4,379	4,310	4,393	4,583	4,550	4,451	4,646	4,712	4,711
Technical result	770	562	522	647	825	429	775	793	941
Investment return	181	17	242	-441	-84	261	13	-1	259
Profit/loss before tax	934	563	745	186	714	665	768	782	1,150
Profit/loss	734	445	754	110	580	525	640	593	869
Key ratios
Gross claims ratio	64.5	66.3	68.0	76.6	84.8	72.0	64.1	64.9	70.7
Net reinsurance ratio	3.1	5.7	6.2	-6.8	-17.8	3.1	4.7	3.7	-2.6
Claims ratio, net of reinsurance	67.6	72.0	74.2	69.8	67.0	75.1	68.8	68.6	68.1
Gross expense ratio	15.0	15.1	14.2	16.3	15.2	15.6	14.9	15.1	12.6
Combined ratio	82.6	87.1	88.4	86.1	82.2	90.7	83.7	83.7	80.7
Combined ratio exclusive of run-off	89.0	95.7	93.9	94.9	87.1	98.5	91.0	90.0	84.1

*) Amounts relating to eliminations are included under 'Other'

Contents – Financial statements

Interim report Q2 and H1 2016 | Tryg A/S | 35

Income statement for Tryg A/S (parent company)

DKKm		H1 2016	H1 2015	2015
Notes	Investment activities
	Income from subsidiaries	1,211	1,131	2,032
	Interest expenses	0	0	1
	Investment management charges	-4	-3	-7
	Total return on investment activities	1,207	1,128	2,026
	Other expenses	-36	-31	-75
	Profit before tax	1,171	1,097	1,951
	Tax	8	8	18
	Profit on continuing business	1,179	1,105	1,969
	Profit for the period	1,179	1,105	1,969
DKKm	H1 2016	H1 2015	2015
---	---	---	---
Statement of comprehensive income
Profit/loss for the period	1,179	1,105	1,969
Other comprehensive income
Other comprehensive income which cannot subsequently be reclassified as profit or loss
Adjustment to equity 1.1.2015 *	0	-175	-175
Change in equalisation provision and other provisions	0	0	21
Change in taxes on security provisions	0	0	141
Revaluation of owner-occupied property	2	0	4
Tax on revaluation of owner-occupied property	0	0	2
Actuarial gains/losses on defined-benefit pension plans	0	53	-12
Tax on actuarial gains/losses on defined-benefit pension plans	0	-14	3
	2	-136	-16
Other comprehensive income which can subsequently be reclassified as profit or loss
Exchange rate adjustments of foreign entities	35	66	-89
Hedging of currency risk in foreign entities	-38	-74	86
Tax on hedging of currency risk in foreign entities	8	17	-21
	5	9	-24
Total other comprehensive income	7	-127	-40
Comprehensive income	1,186	978	1,929

*) New executive order from the Danish FSA on yield curves. please refer to note 10 in Tryg Group.

Contents – Financial statements

Interim report Q2 and H1 2016 | Tryg A/S | 36

Statement of financial position (parent company)

DKKm		30.06.2016	30.06.2015	31.12.2015
Notes	Assets
	Investments in subsidiaries	9,903	10,447	10,135
	Total investments in subsidiaries	9,903	10,447	10,135
	Total investment assets	9,903	10,447	10,135
	Other receivables	1	0	0
	Total receivables	1	0	0
	Current tax assets	26	22	18
	Cash in hand and at bank	0	55	1
	Total other assets	26	77	19
	Total assets	9,930	10,524	10,154
	Liabilities
	Share capital	1,448	1,492	1,448
	Revaluation reserves	2,916	3,460	3,148
	Total reserves	2,916	3,460	3,148
	Proposed dividends	753	746	1,013
	Retained earnings	4,417	4,178	4,050
	Shareholders' equity	9,534	9,876	9,659
	Debt to credit institutions	0	54	0
	Debt to subsidiaries	388	588	487
	Other debt	8	6	8
	Total debt	396	648	495
	Total liabilities and equity	9,930	10,524	10,154
DKKm	H1 2016	H1 2015	2015
---	---	---	---
1	Related parties
Please refer to note 8 in Tryq Group
2	Contingent liabilities
Please refer to note 9 in Tryq Group
3	Accounting policies
Please refer to note 10 in Tryq Group
	The executive order on application of international financial reporting standards for companies subject to the Danish Financial Business Act issued by the Danish FSA requires disclosure of differences between the format of the annual report under international financial reporting standards and the rules issued by the Danish FSA. The following is a reconciliation of differences in the profit and equity.
	Reconciliation of differences in the profit and the shareholders' equity
Profit reconciliation
	Profit - IFRS	1,179	1,105
	Change in the period in deferred tax provisions for contingency funds	0	0
	Profit - Danish FSA executive order	1,179	1,105
		30.06.2016	30.06.2015
			31.12.2015
	Equity reconciliation
	Shareholders' equity - IFRS	9,534	9,861
	Deferred tax provisions for contingency funds	15	15
	Change in the period in deferred tax provisions for contingency funds	-15	0
	Equity - Danish FSA executive order	9,534	9,876

Contents - Financial statements

Interim report Q2 and H1 2016 | Tryq A/S | 37

Disclaimer

Certain statements in this report are based on the beliefs of our management as well as assumptions made by and information currently available to management. Statements regarding Tryg's future operating results, financial position, cash flows, business strategy, plans and future objectives other than statements of historical fact can generally be identified by the use of words such as 'targets', 'believes', 'expects', 'aims', 'intends', 'plans', 'seeks', 'will', 'may', 'anticipates', 'would', 'could', 'continues' or similar expressions.

A number of different factors may cause the actual performance to deviate significantly from the forward-looking statements in this report, including but not limited to general economic developments, changes in the competitive environment, developments in the financial markets, extraordinary events such as natural disasters or terrorist attacks, changes in legislation or case law and reinsurance. Should one or more of these risks or uncertainties materialise, or should any underlying assumptions prove to be incorrect, Tryg's actual financial condition or results of operations could materially differ from that described herein as anticipated, believed, estimated or expected. Tryg is not under any duty to update any of the forward-looking statements or to conform such statements to actual results, except as may be required by law. Read more in the chapter Capital and risk management in the annual report on page 24-25, and in Note 1 on page 46, for a description of some of the factors which may affect the Group's performance or the insurance industry.

Contents - Management's review

Internis report Q2 and H1 2016 | Tryg A/S

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Tryg — Interim / Quarterly Report 2016

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