Storebrand 2Q July Better pensions. Odd Arild Grefstad CEO Lars Aa. Løddesøl CFO

Transcription

1 Storebrand 2Q July 205 Better pensions Odd Arild Grefstad CEO Lars Aa. Løddesøl CFO

2 Highlights 2Q 205 Group result 6% Insurance written premium growth 2 MNOK Q2 205 Result before profit sharing and loan losses Net profit sharing and loan losses/longevity provision,5 % growth in fee and admin income Longevity strengthening prioritized over short term results 23% Unit Linked premium growth 2 65% of longevity strengthening completed 54% Estimated Solvency II ratio 3 2 Adjusted for business in run off (corporate banking and public sector) and FX. Result before amortisation. 2 Growth figures are H204-H Including transitional rules.

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 Estimated SII position Life Group and sensitivities Manage guaranteed balance sheet Economic Solvency position(%) Estimated Sensitivities after Target SII margin..206 =30% Estimated economic SII-margin Q Interest rates -50bp 34 Q 205 Transitional rules Q2 205 SII standard model Interest rates +50 bp 68 Key takeaways Equity -25% 30 Rising interest rates since Q leads to increased solvency ratio **0 bn additional conversion paid-ups from Defined Benefit 47 On track to improve underlying Solvency II ratio with 0% points during 205 ** In addition to NOK 8 bn included in the projection for 205. The estimated Economic solvency position of Storebrand Life Group is calculated using the current Storebrand implementation of the Solvency II Standard model with the company's interpretation of the suggested 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. 4 2 Indicative sensitivities after the implementation of Solvency II in 206. Market movements in 205 and until the introduction of Solvency II in 206 will have a smaller effect than stated in the sensitivities because of the mitigating effects of the transition rules.

5 Longevity - 65% of reserve strengthening completed Manage guaranteed balance sheet Reserve strengthening Norwegian guaranteed products 203-2Q 205 (BNOK) (BNOK) Negative result impact in the quarter 2Q 205 (MNOK) NOK 02 Indirect negative result contribution NOK 5 Direct negative result contribution 2.0 Total reserve strengthening need Net surplus allocated to longevity Prel booked Remaining YTD 205 reserve requirement Available buffers and reserves Excess value Bond at Amortised Cost Market value adjustment reserve Est. direct result contribution Foregone profit sharing Foregone risk result Charge to convert to non guaranteed Normal charge to results 5 2 Buffers that are available to cover the longevity reserve strengthening. Some buffers may not be available if they belong to contracts without reserve strengthening need or are used to cover interest rate guarantee.

6 Paid up policies 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 4,7% 4,3% 4,2% 4,% 4,% 4,0% : Longevity reserve strengthening and interest rate guarantee to be covered by expected return, buffers and planned company contribution : Prolonged low interest rate environment will have limited impact on results 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 June 30, 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 6

7 Growth in Savings and Insurance continues Continued growth in Savings and Insurance Unit Linked Asset management 26% 0% 93 Q Q % Premium growth H Paid-up policies w/investment choice adds growth 502 Q Q2 205 Gathering assets from life company Strong sales UL reserves (BNOK) AuM (BNOK) Insurance Save for retirement Retail loans 6% 3.0% Premium growth from Akademikerne Sales to large customers Growth from introduction of new product Q2 204 Q2 205 Q2 204 Q2 205 Written Premiums (MNOK) Balance (BNOK) 7

8 IT/Operations Asset Management Finance & BC New operating model facilitates improved customer orientation and increased profitability Continued growth in Savings and Insurance New operating model implemented July Commercial Areas Norway & Sweden Customer Service Product Established unified Customer Service and Product areas Enables a holistic customer experience Enables operational cost discipline through further process improvement, offshoring and automation 8

9 Storebrand makes further commitments to sustainable development Continued growth in Savings and Insurance Storebrand has committed to disclose our portfolio carbon footprint.. Storebrand signed the Montreal Carbon Pledge in 2Q Commitment to measure and publicly disclose the investment portfolio carbon footprint on an annual basis and is in the process of committing to gradually decarbonize our portfolios The Portfolio Decarbonization Coalition targets a USD 00bn commitment from institutional investors before the 205 Paris Climate Conference Co-founders: Storebrand is in the process of joining the coalition 9

10 Strong sales and continued growth in Insurance Continued growth in Savings and Insurance Development written premiums Key takeaways MNOK 4 74 Milestone reached during 2Q: > P&C customers Double-digit written premium growth further strengthened by 'Akademikerne' contract Q 203 2Q 204 2Q 205 P&C & Individual life Health & Group life Disability Insurance 0

11 Key figures Group Result development Earnings per share Net profit sharing and loan losses Sale discontinued business/change in pension plan MNOK Result before profit sharing and loan losses Longevity provision Q Q Q4 204 Q Q2 205 Q2 204 Q3 204 Q4 204 Q 205 Q2 205 Solvency ratio Storebrand Life Group Solidity capital MNOK Solvency ratio Customer buffers development Customer buffers Norway 3 % of customer funds 2 Customer buffers Sweden 78% 60,850 82% 6,904 75% 64,664 73% 66,052 83% 62,293 5.% 5.0%.7% 2.5% 2.4% 4.6% 4.8% 6.6% 6.5% 5.7% Q2 204 Q3 204 Q4 204 Q 205 Q2 205 Q2 204 Q3 204 Q4 204 Q 205 Q2 205 Earnings per share after tax adjusted for amortisation of intangible assets 2 Customer buffers in Benco of NOK 2.0 bn not included 3 Solidity capital/customer buffers does not include provisions for future longevity reservations

12 Storebrand Group Group Profit 2Q 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 Provision longevity Profit before amortisation Amortisation and write-downs of intangible assets Result before tax Tax Sold/liquidated business Profit after tax

13 Storebrand Group Group Profit 2Q 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 Profit before profit sharing and loan losses Net profit sharing and loan losses/provision longevity Profit before amortisation Profit per line of business 2Q Full year NOK million Savings - non-guaranteed Insurance Guaranteed pension Other result Profit before amortisation

14 Cost control Group Cost/Income below 60% target 2-month rolling MNOK Operational cost 3.43 = 58.8% Fee and admin income Underwriting result Operational cost and risk result life & pensions are adjusted for special items in 4Q Underwriting result consists of insurance premiums f.o.a., claims f.o.a. and risk result life & pensions.

15 Savings (non-guaranteed) - strong results growth Savings Profit 2Q 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 Profit before amortisation Profit per product line 2Q Full year NOK million Unit Linked Storebrand Unit Linked SPP Asset Management segment Retail Banking Profit before amortisation

16 BNOK BNOK Savings (non-guaranteed) - strong growth in UL premiums Savings Reserves and premiums Unit Linked 3,0 2,9 2,6 2,5 2,3 +29% 6 7 Comments 29% premium growth in UL premiums % 2% top line growth in Savings Strong result development in Asset Management continues Q2 204 Q3 204 Q4 204 Q 205 Q2 205 Assets Under Management Net Interest margin retail banking (%) +0%,44,39,35,36, Q 204 Q3 204 Q4 204 Q 205 Q2 205 Q2 204 Q3 204 Q4 204 Q 205 Q Growth figures show development from 2Q 204 to 2Q Excluding transfers.

17 Insurance - continued P&C growth Insurance Profit 2Q Full year NOK million Insurance premiums f.o.a Claims f.o.a Operational cost Financial result Profit before amortisation Profit per product line Individual life and disability, property and casualty insurance 2 Group life, workers comp and 50% of result in Storebrand Health insurance 3 DC disability risk result Norwegian line of business and disability risk result from SPP 2Q Full year NOK million P&C & Individual life ) Health & Group life 2) Pension related disability insurance Nordic 3) Profit before amortisation

18 MNOK Insurance - strong financial results Insurance Combined ratio Claims ratio Cost ratio Combined ratio Comments Combined ratio and financial result 90% 89% 93% 90% 87% Combined Ratio 87% 73% 73% 76% 6% 75% 72% Investment portfolio co-invested with common portfolio. Strong booked results 7% 6% 5% 5% Q Q 204 4Q 204 Q 205 2Q 205 Portfolio premiums P&C & Individual life Health & Group life Disability Insurance Comments premiums and growth 2 20% premium growth within P&C & Individual life 22% premium growth within Health & Group life % premium growth in Pension related disability Nordic Q Q 204 4Q 204 Q 205 2Q Combined- and cost ratios adjusted for special items. Unadjusted cost ratio is % and unadjusted combined ratio is 78% in 4Q Growth figures show development from 2Q 204 to 2Q 205

19 Guaranteed pension - lower results is the new normal Guaranteed Profit Q Full year NOK million Fee and administration income Risk result life & pensions Operational cost Financial result Profit before profit sharing and loan losses Net profit sharing and loan losses Provision longevity Profit before amortisation Profit per product line Q Full year NOK million Defined benefit (fee based) Storebrand Paid-up policies Storebrand Individual life and pension SPP Guaranteed products Profit before amortisation

20 BNOK Guaranteed pension - reserves below 70% of total reserves Guaranteed Reserves guaranteed products Comments Reversal of profit sharing due to low returns leads to weaker financial result in Sweden 257 Increased allocation to bonds at amortised cost Q Q 204 4Q 204 Q 205 2Q 205 Buffer capital Guaranteed reserves in % of total reserves 205 NOK million 2Q Q Change Market value adjustment reserve Excess value of bonds at amortised cost % 73.9% 73,3% Additional statutory reserve Provisions for new mortality tables Unallocated results ,5% 69,3% 68,8% Provisions for new mortality tables, shareholders direct contribution Conditional bonuses Sweden Total Q 204 Q2 204 Q3 204 Q4 204 Q 205 Q Life insurance reserves

21 Other Other Profit 2Q 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 Profit before amortisation Profit per product line 2Q Full year NOK million Corporate Banking BenCo Holding company costs and net financial results in company portfolios Profit before amortisation Figures shown exclude eliminations. For full disclosure on eliminations, see Table 46b in Supplementary Information.

22 Highlights 2Q 205 Group result 6% Insurance written premium growth 2 MNOK Q2 205 Result before profit sharing and loan losses Net profit sharing and loan losses/longevity provision,5 % growth in fee and admin income Longevity strengthening prioritized over short term results 23% Unit Linked premium growth 2 65% of longevity strengthening completed 54% Estimated Solvency II ratio 3 22 Adjusted for business in run off (corporate banking and public sector) and FX. Result before amortisation. 2 Growth figures are H204-H Including transitional rules.

23 23 Appendix

24 Storebrand Life Insurance asset allocation 50% 45% 40% 35% 30% 25% 20% 5% 0% 5% 0% Equities Bonds Money market Bonds at amortized cost Real estate % 2% 0% 43% % 5% % 20% 0% 44% % 6% % 20% 2% 45% % 5% % 22% % 43% % 4% % 23% 9% 47% % 2% Other 24 The graph shows the asset allocation for all products with an interest rate guarantee in Storebrand Life Insurance Norwegian operations.

25 SPP asset allocation 00% 90% 80% 70% 60% 50% 40% 30% 20% 0% 0% Alternative investments Bonds Equities % 82% 2% % 82% 2% % 84% 0% % 86% 9% % 86% 9% The graph shows the asset allocation for all products with an interest rate guarantee in SPP. 25

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