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1. Company Snapshot

1.a. Company Description

Topdanmark A/S, together with its subsidiaries, offers life and non-life insurance products and services in Denmark.The company operates through Private and SME segments.It offers illness and accident, health, workers' compensation, motor, fire and property, liability, tourist assistance, and other insurance products, as well as life insurance and pension fund schemes to individual households, agricultural and SME businesses, and private customers under the Topdanmark brands.


The company also provides IT, investments, and property services.Topdanmark A/S was founded in 1728 and is headquartered in Ballerup, Denmark.

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1.b. Last Insights on TOP

Topdanmark A/S's recent developments have been driven by Sampo's increased stake to over 92%, with intentions to eventually delist the company. This move is expected to be finalized by September 16, 2024. The insurer's recent Q2 earnings release showed a strong combined ratio of 84.4%, beating consensus estimates. Additionally, Topdanmark's solvency ratio remained stable at 183%, indicating a solid capital position. The company's disciplined underwriting and cost control measures have contributed to its favorable operating performance.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Sampo raises stake in Danish insurer Topdanmark to over 92%

Sep -11

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Finnish insurer Sampo's bid for rival Topdanmark "sensible" - Bank of America

Jun -17

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Sampo to Buy Topdanmark in $4.73 Billion All-Share Deal

Jun -17

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Topdanmark A/S's Dividend Analysis

Apr -23

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.64%)

6. Segments

Small Medium Enterprise

Expected Growth: 3.5%

Topdanmark A/S's 3.5% growth in the Small Medium Enterprise (SME) segment is driven by increasing demand for digital insurance solutions, expansion into new markets, and strategic partnerships. Additionally, the company's focus on customer-centricity, innovative product offerings, and efficient claims processing have contributed to its growth in this segment.

Private

Expected Growth: 3.8%

Topdanmark A/S's private segment growth of 3.8% is driven by increasing demand for non-life insurance products, particularly motor and home insurance, due to rising disposable income and a growing middle class in Denmark. Additionally, the company's digitalization efforts and expansion into new distribution channels have improved customer reach and retention, contributing to the segment's growth.

Reclassification

Expected Growth: 3.2%

Topdanmark A/S's 3.2% growth driven by increasing demand for non-life insurance products, expansion into new markets, and strategic partnerships. Additionally, improved underwriting practices, enhanced digital capabilities, and a favorable regulatory environment contribute to the growth.

Eliminated

Expected Growth: 2.9%

Topdanmark A/S's 2.9% growth is driven by increasing demand for non-life insurance products, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digitalization and cost savings initiatives have contributed to its growth. Furthermore, the Danish economy's stable growth and low interest rates have created a favorable business environment, supporting Topdanmark's growth momentum.

7. Detailed Products

Home Insurance

Comprehensive insurance coverage for homeowners, including buildings, contents, and personal liability

Motor Insurance

Insurance coverage for vehicles, including cars, motorcycles, and commercial vehicles

Travel Insurance

Insurance coverage for travelers, including trip cancellations, medical emergencies, and luggage loss

Life Insurance

Insurance coverage for individuals, including term life, whole life, and pension insurance

Pension and Savings

Long-term savings and pension plans for individuals and businesses

Business Insurance

Insurance coverage for businesses, including liability, property, and employee insurance

8. Topdanmark A/S's Porter Forces

Forces Ranking

Threat Of Substitutes

Topdanmark A/S operates in the Danish insurance industry, where substitutes are limited. However, customers may opt for self-insurance or alternative risk management strategies, posing a moderate threat.

Bargaining Power Of Customers

Topdanmark A/S has a large customer base, but individual customers have limited bargaining power due to the company's strong market position and diversified product offerings.

Bargaining Power Of Suppliers

Topdanmark A/S has a diversified supply chain, and suppliers have limited bargaining power due to the company's large scale and market presence.

Threat Of New Entrants

The Danish insurance industry has high barriers to entry, including regulatory requirements and capital requirements, making it difficult for new entrants to join the market.

Intensity Of Rivalry

The Danish insurance industry is highly competitive, with several established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 30.29%
Debt Cost 4.83%
Equity Weight 69.71%
Equity Cost 4.83%
WACC 4.83%
Leverage 43.44%

11. Quality Control: Topdanmark A/S passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Gjensidige Forsikring

A-Score: 6.8/10

Value: 2.5

Growth: 4.2

Quality: 8.2

Yield: 7.5

Momentum: 9.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Alm. Brand

A-Score: 6.5/10

Value: 4.8

Growth: 1.8

Quality: 7.6

Yield: 8.1

Momentum: 8.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Tryg

A-Score: 6.3/10

Value: 4.1

Growth: 3.1

Quality: 7.9

Yield: 7.5

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Baloise Holding

A-Score: 6.1/10

Value: 4.7

Growth: 1.6

Quality: 5.3

Yield: 8.1

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Direct Line Insurance

A-Score: 5.9/10

Value: 6.5

Growth: 2.6

Quality: 6.6

Yield: 5.0

Momentum: 10.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Topdanmark

A-Score: 4.0/10

Value: 3.3

Growth: 2.0

Quality: 7.2

Yield: 4.4

Momentum: 4.0

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

363.4$

Current Price

363.4$

Potential

-0.00%

Expected Cash-Flows