April 7, 2017 / 9:52 AM / 7 months ago

UPDATE 1-Denmark's Tryg drops 3.4 pct as Q1 insurance result disappoints

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April 7 (Reuters) - Danish insurance company Tryg’s core business grew more slowly than expected in the first quarter, sending its shares down 3.4 percent.

* The technical result rose to 568 million Danish crowns ($81.29 million) from 562 million in the same quarter last year, missing the 612 million expected by analysts in a Reuters poll.

* Pretax profit rose to 779 million from 563 million, beating the 706 million expected by the analysts, but this was mainly driven by a strong investment return of 223 million.

* “Investors are not willing to reward Tryg for the better than expected result as it was mainly driven by the strong investment return, something you can’t expect to continue going forward,” Sydbank analyst Mikkel Emil Jensen said.

* Tryg has focused on developing insurances for start-up companies in the growing sharing economy -- it has insured six sharing services and is negotiating with a number of others, chief executive Morten Hubbe told Reuters.

* “We believe that the sharing economy market is going to develop fast,” Hubbe said in a telephone interview.

* Tryg announced the acquisition of Norway’s Obos Forsikring in February, and has also said it will take over Denmark’s FDM’s insurance portfolio from LB Forsikring from the beginning of 2018.

* “We are keeping an eye open for new acquisitions. The most important thing is that it complements our business. To be interesting it needs to strengthen our business, product development and solutions for our customers,” Hubbe said.

* Tryg said it would start paying out a quarterly dividend in 2017

* Q1 combined ratio was 87.3 (Reuters poll 86.5)

* Q1 dividend was 1.60 crowns per share and was underpinned by a strong solvency ratio of 202 percent

* Q1 gross premium income 4.46 billion crowns (Reuters poll 4.45 billion crowns)

* The company maintains its financial targets of return on equity above or equal to 21 percent, an expense ratio less than or equal to 14 percent and a combined ratio of less than or equal to 87. Source text for Eikon: Further company coverage: ($1 = 6.9876 Danish crowns) (Reporting by Julie Astrid Thomsen and Gdynia Newsroom, editing by Teis Jensen and Terje Solsvik)

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