Storebrand 1Q April Better pensions. Odd Arild Grefstad CEO Lars Aa. Løddesøl CFO

Transcription

1 Storebrand Q April 206 Better pensions Odd Arild Grefstad CEO Lars Aa. Løddesøl CFO

2 Highlights Q 206 Group result 29% Unit Linked premium growth 3 MNOK % Insurance written premium growth 3-33 Q 206 Result before profit sharing and loan losses Net profit sharing and loan losses,8 % growth in fee and admin income 2 8% Retail Bank lending growth 3 75% Estimated Solvency II ratio 4 2 Result before amortisation, write-downs and longevity provision. 2 Adjusted for business in run off (corporate banking and public sector) and FX. Q/Q. 3 Growth figures are from Q 205 to Q Including transitional rules. Estimated Solvency II ratio excluding transitional rules is 7 %.

3 Transformation of the business model continues Dual strategy reiterated and reinforced Manage the guaranteed balance sheet Continued growth in savings and insurance Capital optimization Risk reduction Retail customers Employees Corporate relation >30% Solvency II margin Save for < retirement Product optimization Cost reduction 3 We work hard to reach our vision: Recommended by our customers

4 Paid up policies book is the main challenge in a low interest scenario and under SII Manage guaranteed balance sheet But still manageable both short and long term Expected return paid up polices without use of buffers including reinvestment due and expected issuance of new paid up polices Q 206: Built NOK 3bn in new A rated HTM investments at 3.2% yield and 4 years average life 4,2% 4,% 3,9% 3,9% 3,8% : Longevity reserve strengthening and interest rate guarantee to be covered by expected return, buffers and planned company contribution 2 206E 207E 208E 209E 2020E : Prolonged low interest rate environment will have limited impact on results 2 Expected return paid up polices, including reinvestment and issuance of new paid up polices, without the use of buffers. Illustration is based on normal risk premiums and interest rate level as of March 3, Based on current interest rates and point estimate based on normal risk premiums. Market shocks could lead to higher use of buffers and reduced results. 4

5 Estimated SII position Storebrand Group Manage guaranteed balance sheet Economic Solvency position(%) Estimated Sensitivities Target SII margin..206 =30% Estimated economic 58 SII-margin Q Interest 69 rates -50bp Q4 205 Transitional rules Q 206 SII standard model Interest 47 rates +50 bp Key takeaways Equity -25% Negative effect from reduced interest rates partly offset by risk reducing measures Improvement in underlying SII ratio from portfolio de-risking, asset allocation and results generation **0 bn additional conversion paid-ups from Defined Benefit ** In addition to NOK 7 bn included in the projection for the rest of 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. 5

6 Solvency II movement from Q4 205 to Q 206 Manage guaranteed balance sheet Solid solvency generation in the quarter 3% 24 4% 4% ~7% solvency generation from own measures and results 7% Q4 205 Derisk/changed asset allocation Results/other Financial markets/other Q 206 6

7 Growth in Savings and Insurance continues Continued growth in Savings and Insurance Unit Linked Asset management 8% 6 25 Q 205 Q % premium growth Q 206 Weak financial markets dampens growth 2% Q 205 Q 206 Gathering assets from life company and strong sales Weak financial markets dampens growth UL reserves (BNOK) AuM (BNOK) Insurance Save for retirement Retail loans 8% 8% Premium growth from Akademikerne Cross sales to pension customers 24, 28,4 Competitive interest rates New products add growth Q 205 Q 206 Q 205 Q 206 Written Premiums (MNOK) Balance (BNOK) 7

8 Strong development in Storebrand Asset Management in the quarter Continued growth in Savings and Insurance Revenues and costs development (MNOK) Comments Turnaround in 202 with substantial cost reductions and new growth strategy +34% Profits increased by 256 MNOK (27%) since Larger share of high margin external assets Platform for further growth on near-zero marginal cost on existing business % World leading position in sustainable investments Revenues Cost 8 Revenues are excluding performance fees. Costs are adjusted for non-recurring items and excludes amortization and FM bonus.

9 Fee and administration income shifts from Guaranteed to Savings Dual strategy Income growth of.8% adjusted for business in run-off Storebrand Group income development Q 206 compared to Q 205 (NOK mill.) Fee- and admin income 2 months rolling Savings and Guaranteed pension (NOK mill.) 0,6% 2,800 2,700 Savings 24 2, ,500 2,400 2, ,200 2,00 2,000,900,800,700 Guaranteed pension,600 Q 205 Savings Guaranteed pension excl public sector Public sector Corporate banking Other Q 206,500 Q 4 Q 5 Q 6 9 Adjusted for business in run off (corporate banking and public sector) and FX

10 Key figures Group Result development Earnings per share 2 Net profit sharing and loan losses Special items Result before profit sharing and loan losses Q Q2 205 Q Q4 205 MNOK Q Q Q Q Q Q 206 Solidity capital Storebrand Life Group Solidity capital MNOK 66,052 62,293 64,020 6,0 60,53 Customer buffers development Customer buffers Norway 4 % of customer funds 3 Customer buffers Sweden 2.5% 2.4%.% 6.5% 5.7% 5.4% 5.8% 7.6% 6.6% 5.9% Q 205 Q2 205 Q3 205 Q4 205 Q 206 Q 205 Q2 205 Q3 205 Q4 205 Q Result before amortisation, write-downs and longevity provisions 2 Earnings per share after tax adjusted for amortisation of intangible assets 3 Customer buffers in Benco of NOK 2.9 bn not included 4 Solidity capital/customer buffers does not include provisions for future longevity reservations

11 Storebrand Group Group Profit Q Full year NOK million Fee and administration income Risk result life & pensions Insurance premiums f.o.a Claims f.o.a Operational cost Financial result Result before profit sharing and loan losses Net profit sharing and loan losses Result before amortisation and longevity Provision longevity Amortisation and write-downs of intangible assets Result before tax Tax Sold/liquidated business Profit after tax

12 Storebrand Group Group Profit Q Full year NOK million Fee and administration income Risk result life & pensions Insurance premiums f.o.a Claims f.o.a Operational cost Financial result Result before profit sharing and loan losses Net profit sharing and loan losses Result before amortisation and longevity Profit per line of business Q Full year NOK million Savings - non-guaranteed Insurance Guaranteed pension Other result Result before amortisation and longevity

13 Savings (non-guaranteed) - strong underlying results growth Savings Profit Q Full year NOK million Fee and administration income Risk result life & pensions Operational cost Financial result Result before profit sharing and loan losses Net profit sharing and loan losses Provision longevity Result before amortisation Profit per product line Q Full year NOK million Unit linked Norway Unit linked Sweden Asset Management segment Retail banking Result before amortisation Includes restructuring costs of -28 NOK mill. in full year 205 numbers. 3

14 BNOK MNOK BNOK Savings (non-guaranteed) - strong growth in UL premiums Savings Reserves and premiums Unit Linked 3,7 Comments 2,9 3,0 3,2 3, % premium growth in UL premiums % top line growth in Savings 3 8% retail lending growth Q 205 Q2 205 Q3 205 Q4 205 Q 206 Assets Under Management Retail bank balance and Net Interest margin (%),36,23,2,9,20 Life insurance balance sheet Banking balance sheet Q 205 Q2 205 Q3 205 Q4 205 Q 206 Q 205 Q2 205 Q3 205 Q4 205 Q Growth figures show development from Q 205 to Q Excluding transfers. 3 Adjusted for FX.

15 Insurance - results affected by increased disability rate Insurance Profit Q Full year NOK million Insurance premiums f.o.a Claims f.o.a. ) Operational cost 2) Financial result Result before amortisation Profit per product line Q Full year NOK million P&C & Individual life ) Health & Group life 2) Pension related disability insurance Nordic 3) Result before amortisation Includes disability reserve strengthening of NOK 00 mill. in full year 205 numbers. 2 Includes restructuring costs of -5 NOK mill. in full year 205 numbers. 3 Individual life and disability, property and casualty insurance 4 Group life, workers comp and 50% of result in Storebrand Health insurance 5 DC disability risk result Norwegian line of business and disability risk result from SPP

16 MNOK Insurance - reduced growth Insurance Combined ratio Claims ratio Combined ratio Comments Combined ratio and results 93% Cost ratio 90% 87% 92% 0% 92% Combined Ratio 92% 75% 72% 78% 85% 77% Results negatively affected by increased disability rate 5% 5% 4% 6% 5% Q 205 2Q 205 3Q 205 4Q 205 Q 206 Portfolio premiums P&C & Individual life Health & Group life Disability Insurance Comments premiums and growth % premium growth within P&C & Individual life 3% premium growth within Health & Group life % premium growth in Pension related disability Nordic Q 205 2Q 205 3Q 205 4Q 205 Q Growth figures show development from Q 205 to Q 206.

17 Guaranteed pension - results affected by weak financial markets Guaranteed Profit Q Full year NOK million Fee and administration income Risk result life & pensions Operational cost Financial result Result before profit sharing and loan losses Net profit sharing and loan losses Result before amortisation and longevity Provision longevity Profit per product line Q Full year NOK million Defined benefit (fee based) Paid-up policies, Norway -6 4 Individual life and pension, Norway 2-45 Guaranteed products, Sweden Result before amortisation and longevity Operational cost includes negative effect of restructuring costs of -43 NOK mill. in full year 205 numbers. 2 Net profit sharing and loan losses includes negative effects from changed interest rate curve and other assumption changes of -265 NOK mill. in 205.

18 BNOK Guaranteed pension - conversion to DC schemes continues Guaranteed Reserves guaranteed products Buffer capital NOK million Q 205 Q2 205 Defined Benefit NO Paid up policies NO Q Q 09 Q4 205 Q 206 Individual NO 4Q Change Market value adjustment reserve Excess value of bonds at amortised cost Additional statutory reserve Provisions for new mortality tables Unallocated results Provisions for new mortality tables, shareholders direct contribution Conditional bonuses Sweden Total Guaranteed products SE Comments Weak equity markets and lower interest rates negatively affect SPP financial result As companies convert to DC schemes, the migration from DB to lower-margin paid up policies continues to reduce fee income in Guaranteed pensions Guaranteed reserves in % of total reserves 7.5% Q % Q % Q % Q ,6% Q ,0% Q Life insurance reserves

19 Other Other Profit Q Full year NOK million Fee and administration income Risk result life & pensions Operational cost Financial result Result before profit sharing and loan losses Net profit sharing and loan losses Result before amortisation Profit per product line Q Full year NOK million Corporate Banking BenCo Holding company costs and net financial results in company portfolios Result before amortisation Excluding eliminations. For more information on eliminations, see Supplementary Information. 2 Operational cost includes negative effect from restructuring costs of -2 NOK mill. in full year 205 numbers. 3 Financial result includes minority share of result from real estate sale of 7 NOK mill. in full year 205 numbers.

20 Highlights Q 206 Group result 29% Unit Linked premium growth 3 MNOK % Insurance written premium growth 3-33 Q 206 Result before profit sharing and loan losses Net profit sharing and loan losses,8 % growth in fee and admin income 2 8% Retail Bank lending growth 3 75% Estimated Solvency II ratio 4 20 Result before amortisation, write-downs and longevity provision. 2 Adjusted for business in run off (corporate banking and public sector) and FX. Q/Q. 3 Growth figures are from Q 205 to Q Including transitional rules. Estimated Solvency II ratio excluding transitional rules is 7 %.

21 2 Appendix

22 Storebrand Life Insurance asset allocation 60% 50% 40% 30% 20% 0% 0% Equities Bonds Money market Bonds at amortized cost Real estate % 22% % 43% % 4% % 23% 9% 47% % 2% % 22% 0% 49% % 2% % 22% 8% 5% 2% 2% % 26% 7% 49% 2% % Other 22 The graph shows the asset allocation for all products with an interest rate guarantee in Storebrand Life Insurance Norwegian operations.

23 SPP asset allocation 00% 90% 80% 70% 60% 50% 40% 30% 20% 0% 0% Alternative investments Bonds Equities % 86% 9% % 86% 9% % 86% 8% % 87% 7% % 89% 6% The graph shows the asset allocation for all products with an interest rate guarantee in SPP. 23

24 Investor Relations contacts Lars Aa Løddesøl Sigbjørn Birkeland Kjetil R. Krøkje Group CFO Finance Director Head of IR