Storebrand 4Q Feb Odd Arild Grefstad CEO Lars Aa. Løddesøl CFO. Storebrand celebrated 250 years in 2017

Transcription

1 Storebrand 4Q 2017 Storebrand celebrated 250 years in Feb 2018 Odd Arild Grefstad CEO Lars Aa. Løddesøl CFO

2 Highlights 2017 Group result 1 20% Unit Linked growth 2 2, % AuM growth Asset Management 2 MNOK , % Solvency II ratio Q 2017 FY 2017 Financial items and risk result life Operating profit 2 major acquisitions 2 1 Result before amortisation and write-downs. 2 Growth figures are from YTD 2016 to YTD Including transitional rules. NOK 2.5 dividend and new dividend policy

3 Our strategy 1 Manage the guaranteed 2 balance sheet Continued growth in Savings and Insurance >150% SII margin Capital-light and profitable growth Cost reductions through automation and outsourcing Market leading asset gatherer with strong Insurance offering Manage for future capital release and increased dividend capacity Continued retail growth with low capital requirements Lower capital requirements and higher quality of earnings 3 We work hard to reach our vision: Recommended by our customers

4 Strong capital generation and robust balance sheet +16% +172% +4% +159% +11% +155% -4% +144% +2% +7% -8% Model and assumption changes IR, VA, Equity stress levels and Changes in FX Asset return & Business mix* Operating earnings Sub.deb/Skagen before dividend Proposed dividend excl. transitionals Transitionals incl. transitionals 4 * Includes the acquisition of Skagen

5 Proposed dividend 2017 Dividend per share Special dividends Ordinary dividends Cash dividend of 40% of profit after tax (adj for amortization) NOK 2.10 per share in ordinary dividend and a NOK 0.40 in special dividend is payed based on strong financial results and strong post tax results Dividend of NOK 1.3 billion from Storebrand Livsforsikring AS will reduce net debt, strengthen group liquidity and dividend paying capacity 5

6 New Dividend Policy Storebrand's objective is to create attractive and competitive returns for shareholders through dividends and value creation in the business. Our ambition is to pay stable and growing base dividends combined with special dividends to reflect financial markets volatility and capital release. The expected capital release will lead to increased pay out ratio over time. New dividend policy: Storebrand aims to pay a dividend of more than 50% of Group result after tax. The Board of Directors ambition is to pay ordinary dividends per share of at least the same nominal amount as the previous year. Ordinary dividends are subject to a sustainable solvency margin of above 150%. If the solvency margin is above 180%, the Board of Directors intends to propose special dividends or share buy backs. 6

7 Growth in Savings continues, Insurance growth paused by changes in distribution Unit Linked Asset management % % growth in Sweden % 721 Growth driven by non-guaranteed and external mandates 23% growth in Norway Includes consolidation of Skagen UL reserves (BNOK) AuM (BNOK) Insurance Retail loans % Changes in distribution and new disability product reduces growth 35 19% 42 NOK 15,2bn placed on life balance sheet as of Portfolio Premiums (MNOK) Balance (BNOK) 7

8 Positioned to capture growth in market for individual savings Market for long term indivudual savings NOK 380bn 2017 Market share pre and post SKAGEN + Silver Pension certificates 18 % PUP 4 % 21% Indivdual pension 5 % 11% Individual capital 10 % Mutual funds 62 % 2017 Est

9 Strengthened market position within private savings with launch of new products IPS and ASK Individual Pension Savings (IPS) #1 with 24 % market share 1 Aksjesparekonto (ASK) #2 with 22 % market share 2 20 % 4 % 17 % IPS 4 % ASK Storebrand Life Skagen Others Storebrand AM Skagen Others 9 1 Est. based on AUM Source: "Kjempesuksess for ny IPS-ordning", , Finans Norge and "Solgte bare halvparten så mye IP S som ventet", , Finansavisen. 2 Based on AUM Limited to mutual funds. Source: "Ny statistikk: 52 milliarder fondskroner på aksjesparekonto", , Verdipapirfondenes forening.

10 Key figures Group Result development 1 Earnings per share 2 Financial items and risk result life Special items Operating result MNOK Q Q Q Q Q Q Solidity capital Storebrand Solidity capital Life Group MNOK Customer buffers development Customer buffers Norway 4 % of customer funds 3 Customer buffers Sweden 8.9% 9.3% 7.9% 6.7% 5.7% 5.4% 5.3% 5.2% 7.2% 9.0% Q Q Q Q Q Q Result before amortisation, write-downs. 2 Earnings per share after tax adjusted for amortisation of intangible assets. 3 Customer buffers in Benco not included. In addition there are unallocated investment results of NOK 4.3 billion in Norwegian guaranteed that will be allocated at year end. 4 Solidity capital/customer buffers does not include provisions for future longevity reserves.

11 Storebrand Group Solvency movement from Q to +16% +172% +150% +2% +2% +2% +2% +155% -2% 2017 Q3 Model Interest rate curve, Operating earnings Asset return Sub debt/skagen excl. improvements and VA and Equity stress business mix change transitionals assumption changes Transitionals incl. transitionals 11

12 Estimated SII position Storebrand Group Solvency position(%) Estimated sensitivities Estimated economic SII-margin Target SII margin 150% Interest rates -50bp Interest rates +50 bp Q Transitional rules SII standard model Equity -25% Key takeaways Retained earnings, issuance of subordinated debt and strong investment results strengthens the Solvency ratio Model improvements on investment strategy and lapse, leads to increased transitional rules and increases the sensitivities to market movements Spread +50 bp, VA +15bp UFR = 4.05% UFR = 3.65% The estimated Economic solvency position of Storebrand Group is calculated using the current Storebrand implementation of the Solvency II Standard model with the company's interpretation of the transition rules from the NFSA. Output is sensitive to changes in financial markets, development of reserves, changes in assumptions and improvements of the calculation framework in the economic capital model as well as changes in the Solvency II legislation and national interpretation of transition rules.

13 Storebrand Group Group Profit 1 4Q Full year NOK million Fee and administration income Insurance result Operational cost Operating profit Financial items and risk result life Profit before amortisation Amortisation and write-downs of intangible assets Profit before tax Tax Profit after tax Affected by consolidation of Skagen (p.14) Cost effects (p.15) Swedish financial result, changed discount rate (p.22) Q4 Interim report (p.4) 13 1 The result includes special items. Please see storebrand.com/ir for a complete overview.

14 SKAGEN Q4 effects and 2017 results Skagen results consolidated into Storebrand NOK million 4Q 2017 Comments Fee and administration income 294 Income December Operational cost -41 Cost December Operating profit 253 Financial items -45 Earn out/financial result Profit before amortisation 208 Amortisation and write-downs of intangible assets -136 Fees earned before closing Result before tax 72 Tax/Minority -28/-18 Adj 90,95% ownership share Profit after tax 33 Profit 2017 Illustrative IFRS figures NOK million Q1 Q2 Q3 Q4 Full year Fee and administration income Operational cost Operating profit Financial items Profit before amortisation Not audited

15 Normalised Quarterly Operational Cost Comments Special items Transaction fees for Skagen and Silver Restructuring costs SPP Additional Q4 operational costs, not expected to be repeated in Costs associated with the launch of new savings products Refurbishing of head office in order to reduce rental cost Div. items of non recurring nature Skagen operational costs post closing Q4 Cost base Eliminations 1 Special items Additional Q4 costs Skagen post closing 15 1 A change has been made to align elimination principles in the Group, this has led to an increase in costs and income of NOK 14m (7m) in the quarter and NOK 58m (59m) for the full year. The change has no impact on results. For more information, see brand.no/ir for overview of special effects related to costs and eliminations.

16 Storebrand Group Group Profit 4Q Full year NOK million Fee and administration income Insurance result Operational cost Operating profit Financial items and risk result life Profit before amortisation Profit per line of business 4Q Full year NOK million Savings - non-guaranteed Insurance Guaranteed pension Other profit Profit before amortisation

17 Savings (non-guaranteed) - continued growth Savings Profit 4Q Full year NOK million Fee and administration income Operational cost Operating profit Financial items and risk result life Profit before amortisation Profit per product line 4Q Full year NOK million Unit linked Norway Unit linked Sweden Asset Management segment Retail banking Profit before amortisation

18 BNOK MNOK BNOK Savings (non-guaranteed) - strong growth in assets and retail lending Savings Reserves and premiums Unit Linked 3,5 3,7 3,6 3, ,0 168 Comments 6% premium growth in UL premiums 1 19% retail lending growth 2 25% growth in assets under management 2 Q Q Q Assets under management Retail bank balance and net interest margin (%) 1,03 1,09 1,22 1,23 1, Life insurance balance sheet Banking balance sheet Q Q Q Q Q Q Excluding transfers. Growth from YTD 2016 to YTD Growth figures from YTD 2016 to YTD Includes consolidation of Skagen. Growth figures from YTD 2016 to YTD 2017.

19 Insurance Insurance Profit 4Q Full year NOK million Insurance premiums f.o.a Claims f.o.a Operational cost Operating profit Financial result Profit before amortisation Profit per product line 4Q Full year NOK million P&C & Individual life Health & Group life Pension related disability insurance Nordic Profit before amortisation

20 MNOK Insurance - Implemented measures to reduce costs Insurance Combined ratio Comments Combined ratio and results Claims ratio Combined ratio 91% 89% Cost ratio 88% 85% 93% Combined Ratio 93% 74% 71% 70% 68% 73% Reduced premiums due to on-going shift to more cost-effective distribution and new disability product 18% 18% 18% 18% 20% Q Q Q Portfolio premiums Comments premiums and growth 1 P&C & Individual life Health & Group life Disability Insurance Flat premium development within P&C & Individual life 4% premium growth within Health & Group life -8% premium decline in Pension related disability Nordic Q Q Q Growth figures show development from 2016 to 2017 YTD.

21 Guaranteed pension - NOK 200m provision in anticipation of a regulatory reduction of the ultimate forward rate in SPP Guaranteed Profit 4Q Full year NOK million Fee and administration income Operational cost Operating profit Risk result life & pensions Net profit sharing and loan losses Profit before amortisation Profit per product line 4Q Full year NOK million Defined benefit (fee based) Paid-up policies, Norway Individual life and pension, Norway Guaranteed products, Sweden Profit before amortisation

22 BNOK Guaranteed pension - reserves in long term decline and robust buffer situation Guaranteed Reserves guaranteed products Comments As companies convert to DC schemes, the migration from DB to lower-margin paid up policies continues to reduce fee income in Guaranteed pensions Q Q Q NOK 200m provision in anticipation of a regulatory reduction of the ultimate forward rate in SPP Defined Benefit NO Paid up policies NO Individual NO Guaranteed products SE Buffer capital Guaranteed reserves in % of total reserves NOK million Q 4Q Change 64,9% Market value adjustment reserve ,9% Excess value of bonds at amortised cost ,2% Additional statutory reserve ,4% Conditional bonuses Sweden Total ,2% 1) The term Buffer capital in this table is not consistent with the definition of buffer capital made in the IFRS accounting Q Q Q

23 Other 1 Other Profit 4Q Full year NOK million Fee and administration income Operational cost Operating profit Financial items and risk result life Profit before amortisation Profit per product line 4Q Full year NOK million Corporate Banking BenCo Holding company costs and net financial results in company portfolios Profit before amortisation Excluding eliminations. For more information on eliminations, see Supplementary Information.

24 24 Appendix

25 Defined Contribution Returns - Standard Profiles Norway 1 year 3 years Since inception % 19.3% 12.7% 14.6% 10.7% 11.3% 6.8% 8.0% 7.1% 8.4% 4.9% 5.3% 2.9% 2.4% 3.2% Extra low risk Low risk Balanced High risk Extra high risk 25 Gross annualised returns as of Low, Balanced and High risk profiles established in march Extra Low and High risk established in December 2011.

26 Storebrand Life Insurance asset allocation 60% 50% 40% 30% 20% 10% 0% Equities Bonds Money market Bonds at amortized cost Real estate Other % 27% 4% 52% 11% 1% % 25% 4% 53% 11% 1% % 25% 5% 52% 11% 1% % 25% 4% 53% 11% 1% % 24% 5% 52% 10% 1% 26 Note: The graph shows the asset allocation for all products with an interest rate guarantee in Storebrand Life Insurance Norwegian operations. Category bonds includes loans on life insurance balance sheet.

27 SPP asset allocation 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Alternative investments Bonds Equities % 87% 5% % 86% 6% % 85% 6% % 84% 6% % 80% 8% 27 Note: The graph shows the asset allocation for all products with an interest rate guarantee in SPP.

28 Investor Relations contacts Lars Aa Løddesøl Kjetil R. Krøkje Group CFO Head of IR This document contains Alternative Performance Measures as defined by the European Securities and Market Authority (ESMA). An overview of APMs used in financial reporting is available on storebrand.com/ir.