Our strategy is that value must be created mainly by acceptance of insurance risk and to a lesser extent investment risk. This approach is reflected in our investment policy.

We strive to hedge against business risks thus we will be able to maintain normal operations even in the case of highly unfavourable events in the outside world. Consequently, for several years, we have reduced the risks which potentially could cause unacceptable losses. Thus, major strategic shareholdings have been sold, and the catastrophe cover for storm or terror has been increased significantly. Just as we have reduced the financial risk.

Topdanmark's shareholders' equity should be sufficient to support its current operations. We constantly focus on the factors that influence the capital structure: Finance and investment policy.

Finance

Our objective for the capital structure is to ensure that its capital base by way of shareholders' equity and supplements is exactly sufficient cover regulatory requirements plus an appropriate management buffer to ensure day-to-day operations and the ability to withstand fluctuations - but not larger. An example of a conservative level of solvency cover could be 170-190%. Excess capital is sought to be paid to the shareholders as dividends. 

Investment policy

The primary source of value creation should be from accepting insurance risk. We also believe that Topdanmark can supplement the value creation from the primary business activities by utilising the significant capital strength to accept a certain amount of financial risk thus increasing the expected return on the invested funds. Insurance risks are an inevitable consequence of the core business, which could be attractive to those investors who want to diversify the risk profile of their equity portfolios.