July 10, 2018 / 8:02 AM / in a month

Danish insurer Tryg sees limited impact from severe drought

COPENHAGEN, July 10 (Reuters) - Danish insurance company Tryg expects a severe drought in the Nordic region to have a limited impact on its financial performance, Chief Executive Morten Hübbe said.

* “We have seen the first cases of fire damage in Norway this summer,” Hübbe said in an interview.

* Tryg, Denmark’s largest insurance company, on average pays out 500 million Danish crowns ($78.80 million) in weather-related damages each year, typically because of rain and flooding.

* “In the summer, the damages have traditionally been due to heavy rain and floodings, which we haven’t seen much of this year. However, we expect higher expenses linked to fires because of the drought,” he said.

* “They each pull in different directions,” Hübbe said.

* Tryg’s second quarter earnings disappointed mostly due to an investment loss of 90 million crowns in the quarter, compared with an investment gain of 131 million a year ago.

* “There is an underlying trend towards higher interest rates, which is good for bond markets. But trade wars and political uncertainty in Europe is poison for financial markets in the short term, and I don’t think we’ve seen the end of that,” Hübbe said.

* Tryg shares were trading 1.1 percent lower at 151.10 crowns each by 0731 GMT, after reaching a 5-1/2 month high on Monday. ($1 = 6.3449 Danish crowns) (Reporting by Jacob Gronholt-Pedersen, editing by Louise Heavens)

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