Tryg's Q3 Insurance Service Result and Strategic Implications for the Nordic P&C Market

In the third quarter of 2025, Tryg A/S, the largest non-life insurer in Scandinavia, reported an insurance service result of DKK 2,181 million, a 6.5% increase compared to DKK 2,048 million in Q3 2024, according to Tryg's interim report. This growth was driven by a 3.4% rise in local currency revenues and continued improvements in underlying profitability, despite a challenging macroeconomic environment. The combined ratio for the quarter improved to 78.6%, down from 79.1% a year earlier, underscoring the company's disciplined underwriting and operational efficiency.

Financial Resilience in a High-Interest-Rate Environment

Tryg's performance in Q3 2025 reflects its strategic adaptation to a high-interest-rate environment, a critical factor for Nordic property and casualty (P&C) insurers. Unlike European peers, who often rely heavily on investment income, Nordic insurers like Tryg prioritize underwriting discipline and net written premium growth, as highlighted in a Nordic Edge report. This structural advantage has allowed Tryg to maintain financial resilience even as interest rates remain elevated.

The company's investment portfolio, which emphasizes Scandinavian government and covered bonds, as well as real estate, has benefited from the high-rate environment, according to Moody's report. Tryg's capital generation and risk management practices have earned the company a positive outlook, with its A1 credit rating affirmed. This stability is further bolstered by a derisked free portfolio, which minimizes exposure to volatile assets.

However, the high-interest-rate environment is not without challenges. Tryg's "Other financial income and expenses" line is projected to remain negative at around DKK -90 million quarterly, driven by costs related to currency hedges and balance sheet management, as noted in Tryg's Q3 2025 pre-silent newsletter. These expenses highlight the delicate balance insurers must strike between leveraging higher yields and mitigating financial costs.

Competitive Positioning in the Nordic P&C Market

Tryg's Q3 results position it as a leader in the Nordic P&C market, where it holds a top-three market share in Denmark, Sweden, and Norway. The company's 2027 strategic targets-aiming for a combined ratio of ~81%, an insurance service result of DKK 8.0–8.4 billion, and a Return on Own Funds (ROOF) of 35–40%-are outlined on its Strategy page. These goals are supported by strategic pillars such as IT simplification, customer satisfaction initiatives, and partnerships designed to reduce distribution costs.

Comparatively, other Nordic insurers are also adapting to high-interest-rate environments. Alm. Brand, for instance, has focused on integrating Codan Forsikring to achieve DKK 600 million in annual synergies by 2025, according to Alm. Brand's guidance, while Länsförsäkringar AB has maintained a strong balance sheet with a Common Equity Tier 1 capital ratio of 15.3% as noted in the Länsförsäkringar report. Despite these efforts, Tryg's diversified revenue base-50% from Denmark, 30% from Sweden, and 20% from Norway-provides a buffer against regional regulatory or economic shocks.

Risks and Regulatory Uncertainties

A key risk for Tryg lies in Denmark, where regulatory scrutiny of pricing practices and customer loyalty policies has intensified. The Danish Consumer and Competition Authority (DCCA) is reviewing reforms to price indexation and differential pricing between new and existing customers, a topic also covered in the Nordic Edge analysis. Such changes could pressure Tryg's margins, given its significant Danish exposure. Meanwhile, Nordic peers like Alm. Brand and Länsförsäkringar face similar regulatory headwinds but appear less immediately vulnerable due to their smaller market shares or diversified operations.

Conclusion

Tryg's Q3 2025 results underscore its ability to navigate a high-interest-rate environment through disciplined underwriting, strategic capital allocation, and operational efficiency. While regulatory uncertainties in Denmark pose a near-term risk, the company's strong balance sheet, ambitious strategic targets, and leadership in the Nordic P&C market position it to outperform peers in the long term. As Nordic insurers collectively benefit from structural advantages over European counterparts, Tryg's focus on customer satisfaction and IT-driven cost reductions could further solidify its competitive edge.