Storebrand Capital Markets Day Compelling combination of self-funded savings growth and capital return from maturing guaranteed back-book

Transcription

1 Storebrand Capital Markets Day 2018 Compelling combination of self-funded savings growth and capital return from maturing guaranteed back-book 1

2 Important information: This document may contain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may be beyond the Storebrand Group s control. As a result, the Storebrand Group s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in these forward-looking statements. Important factors that may cause such a difference for the Storebrand Group include, but are not limited to: (i) the macroeconomic development, (ii) change in the competitive climate, (iii) change in the regulatory environment and other government actions and (iv) market related risks such as changes in equity markets, interest rates and exchange rates, and the performance of financial markets generally. The Storebrand Group assumes no responsibility to update any of the forward looking statements contained in this document or any other forward-looking statements it may make. 2

3 Agenda Topic Presenter 09:00 Accelerating Nordic Savings Platform Odd Arild Grefstad, CEO 09:40 10:00 10:20 People First Digital Always: A customer-centric digital business model enabling growth and profitability Occupational pensions: Preferred pension provider and new opportunities Digital first retail strategy: A personalised and scalable business model Heidi Skaaret, EVP Staffan Hansén, EVP Wenche A. Martinussen, EVP 10:40 Break 10:50 Fast growing Nordic asset manager with European presence Jan Erik Saugestad, EVP 11:10 Increasing return to shareholders Lars Aa. Løddesøl, CFO 11:50 Q&A Storebrand Management Team 3

4 Accelerating Nordic Savings Platform Odd Arild Grefstad, CEO 4

5 Delivered on financial targets Key Takeaways Well positioned to capture capital light and profitable savings growth Back book capital consumption has peaked: increased capital return to shareholders 5

6 Storebrand - An Integrated Financial Service Group Insurance Health, P&C and group life insurance NOK 4.4bn in portfolio premiums Pension & Savings 40k corporate customers 2m individual customers NOK 455bn of reserves of which approx. 40% Unit Linked Asset Management NOK 707bn in AuM of which 33% external assets 100% of investments subject to sustainability screening Retail Bank Internet Bank NOK 43bn of net lending Capital synergies Customer synergies Cost synergies Data synergies 6 All numbers as of 1Q2018

7 Delivered on Financial Targets as presented at CMD 2016 Return on equity 1 Target Status 2017 > 10% 11% % Dividend pay-out ratio 1 > 35% 40% Solvency II margin Storebrand Group 2 > 150% 172% 7 1 Before amortisation after tax. 2 Including transitional rules.

8 Delivered on Operational Ambitions as presented at CMD 2016 Unit Linked Asset Management Insurance Retail Bank Costs #1 market position Norway & Sweden 1 #1 Norwegian asset manager NOK 150m Revenue growth NOK 100m Profit growth ~10% Long term growth ~90-92% Combined Ratio Double Retail loan book >10% ROE 2 0% Cost increase Within segment 'Other occupational pensions'. 2 RoE Retail banking only. 3 Adjusted for SKAGEN and Silver take on

9 Solid macro environment supporting growth in Nordic pension market Norway Finland Sweden Switzerland Denmark Germany Netherlands Poland Euro area France United States Spain United Kingdom Italy Greece Government net debt ratio as % of GDP 1 Unemployment rates 1-300% 9.1% -250% -200% 6.6% -150% -100% -50% 4.3% 0% 50% Norway Sweden Euro area 9 1 OECD Economic Outlook database, November 2017.

10 Interest rates rebounding from record lows 4% 3% 2% NOK 10yr SWAP 1% SEK 10yr SWAP 0%

11 Demographic change has driven pension reforms in Norway with opportunity emerging in retail savings 1950 Workers per pensioner Public pension replacement rate 1 55 % II Occupational pension coverage 2 60 % 100 % Now 40 % I Pension pillar Before Now Before Now III Retail savings (AuM, bn NOK) Now Soon 11 1 OECD ( ) Pensions at a Glance. Gross pension replacement rates from mandatory public pensions based on average earner. 2 NOU 2005:15 Obligatorisk tjenestepensjon. Utredning nr. 13 fra Banklovkommisjonen. 3 See page 18.

12 NOK m NOK m NOK bn Successful transition with more to come Premiums Storebrand 1 Profit Storebrand 2 Shift in total Storebrand AUM % 15% 22% 16% % 28% 21% % 9% 34% 6% 37% 36% 62% 21% 15% 51% 59% 14% 23% Guaranteed Insurance Savings Guaranteed Insurance Savings External Other/internal Guaranteed Savings 12 1 Pension premiums in Guaranteed products, Insurance and Unit Linked products, Storebrand Group. 2 Profit before amortisation. "Guaranteed" includes "Other" segment. 3 Savings: Unit linked reserves, Guaranteed: Guaranteed reserves, External: External AUM in Storebrand Asset Managment, Other/internal: residual group internal AUM including company portfolio.

13 Growth in Savings and Insurance Unit Linked Asset management % % UL reserves (NOKbn) AuM (NOKbn) Insurance Retail bank % % Portfolio premiums (NOKm) Balance (NOKbn) 13 Note: All growth figures are Compound Annual Growth Rates (CAGR).

14 A holistic sustainable strategy Tangible and intangible input factors material for Storebrand - creating value for shareholders and society Financial capital and our investment universe Customers and community relations Our people and systems Financial targets Customer solutions People first.. Sustainable returns Corporate citizen..digital always Linked to UN's sustainable development goals 14

15 creates the backdrop for our financial strategy 1 Build a world class Savings business - supported by Insurance A B C D Asset manager with Uniquely positioned in Leading position strong competitive growing retail savings Occupational Pension position and clear market growth opportunities Bolt-on M&A 2 Manage balance sheet and capital A. Cost discipline 0% 3.8 ~ B. SII capital management framework C. Increased return 180% 150% 165% 1Q 2018 Manage for capital release and increased dividend pay-out ratio Compelling combination of self-funding growth and capital return from maturing guaranteed back-book 15

16 Build a world class Savings business - Supported by Insurance A B C D Leading position Occupational Pension Uniquely positioned in growing retail savings market Asset manager with strong competitive position and clear growth opportunities Bolt-on M&A Double digit pension market growth Diversified profits from insurance Double digit retail savings market growth Diversified profits from insurance and bank Strong customer synergies co-investing with life companies Scalable operating platform Strong growth in existing operational platform Selective M&A for value creating growth Selective use of balance sheet to offer capital efficient solutions and new growth corporations and 2m policyholders Customer synergies in a more individualized occupational pension market Strengthen international institutional capacity Broader commercialization of sustainable funds 16

17 A Occupational Pension Net premiums and market return drive AuM growth AuM development Unit Linked NOK bn % Drivers of expected net premiums Majority of premiums generated by active policies Growth driven by: % Expected market return Increased salaries and savings rates Population growth Age distribution of policyholders DB conversions New sales New retail savings products Positive transfer balance Market returns E 2019E 2020E 17 1 Premiums net of claims. Includes Silver in 2018

18 Moderate replacement rates and a wealthy population with an overweight in bank deposits fuel growth potential in retail market for savings B Retail Household disposable income 1 Net replacement rate 2 Household financial assets Norway 3 NOK bn Switzerland Norway Netherlands Italy 9% 6% Germany Spain France Sweden France Sweden 55% 15% Netherlands Greece United Kingdom Germany 70% Italy Norway 49% Spain Switzerland Greece United Kingdom Bank deposits Mutual funds Ind. Life & pension Stocks 18 1 OECD (2018), Household disposable income (indicator). Gross adjusted, USD OECD (2017), Pensions at a Glance 2017: OECD and G20 Indicators. Net mandatory public and private pension replacement rates, average earner. 3 Bank Deposits: SSB (2016) Formuesrekneskap for hushald Bankinnskot. Mutual funds: VFF (2017) Norske personkunder Forvaltningskapital. Stocks: VPS ASA (2017) Eierfordeling i børsnoterte selskap Aksjer Lønnstakere o.a., Ind. Life & Pensoin: see next page

19 Norwegian pension market becoming a retail market Storebrand is well positioned to capture growth B Retail Retail savings market expanding Market share, AuM Double digit growth expected (AuM, NOK bn) Individual Life and pension Savings 38 % DNB Storebrand 22% 26% ~1 000 Nordea 15% Mutual funds 62 % ODIN Danske 6% 12% Retail savings market is measured in AUM. Mutual funds: VFF (2018) Norske personkunder Forvaltningskapital. Individual Life and pension Savings: Finans Norge (2018) Forsikringsforpliktelser produkter med investeringsvalg: Individuell kapitalforsikring, Individuell pensjonsforsikring (incl. Livrenter, IPA, IPS 2008 and IPS), Fripoliser, Pensjonskapitalbevis.

20 C Asset Mgmt Increased external share in Asset Management AuM mix Revenue mix 1 16% 12% 24% 34% 36% 9% 22% 66% 7% 23% 24% 6% 3% 62% 47% 37% 37% 14% 2% 18% External Unit Linked Other Guaranteed 20 1 Revenue & AuM include Skagen from proforma

21 Sustainability at the core of our business NOK 707 bn AuM aligned to contribute to the UN Sustainability Goals C Asset Mgmt Solutions Exclusions NOK 707 bn Active ownership All assets under management are subject to sustainability screening 21 AuM 1Q 2018

22 Commercialising Sustainability Enhanced Solutions: Fossil free funds drive AuM growth C Asset Mgmt AUM Sustainability Enhanced, NOK bn Fossil free Low carbon footprint 59.8 More sustainable Solution companies

23 Ambition: Build a world class Savings business supported by Insurance Savings Insurance A Leading position Occupational Pension B Uniquely positioned in growing retail savings market C Asset manager with strong competitive position and clear growth opportunities Insurance Supported by Insurance #1 Market position Pension Norway Double digit CAGR Pension Sweden 1 Double digit CAGR retail savings Norway >10% Bank ROE 2 #1 Norwegian asset manager with European footprint ~5% Long term growth 90-92% Combined Ratio 23 1 Within segment 'Other occupational pensions'. 2 RoE Retail banking only.

24 Significant difference in capital consumption and return profile between old and new business ILLUSTRATIVE Savings Insurance Guaranteed 3 Group IFRS earnings 1 (NOKm) Allocated Equity 2 (NOKbn) Pro forma RoE adj(%) 4 31% 36% 5% 11% The equity in the Group sits within different legal units. This allocation of equity is done on a pro-forma basis to reflect an approximation to the IFRS equity consumed in the different reporting segments after group diversification. The estimated allocation is based on the capital consumption under SII and CRD IV adjusted for positive capital contribution to own funds. The Insurance segment has been allocated an increased capital level which is more in line with long-term expected diversification effects Result before amortisation and after tax, Q Q Based on solvency II position pr. Q incl. transitional rules on 165%. IFRS equity allocated on a pro forma basis. 3 Includes reporting segment "Other". 4 Allocated equity 1Q 2018, ROE calculated on 1Q 2017.

25 Ambitions Capital Base case: Release capital from the business Dividend policy 2021 Expected start of capital release as dividends when S2 ratio >180% ~NOK 10 BN Back book capital release until 2027 Dividend of more than 50% of Group result after tax. 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 intend to propose special dividends or share buybacks. 25

26 Financial Targets Target Return on equity 1 > 10% Dividend pay-out ratio 2 > 50% & nominal growth % Solvency II margin Storebrand Group 3 > 150% 26 1 Before amortisation after tax. 2 After tax 3 Including transitional rules.

27 People First Digital Always A customer-centric digital business model enabling growth and profitability Heidi Skaaret, EVP 27

28 A customer-centric digital business model enabling growth and profitability A Leading position Occupational Pension B C D Uniquely positioned in growing retail savings market Asset manager with strong competitive position and clear growth opportunities Bolt-on M&A 40k corporate customers 440k retail customers (Norway) NOK 707bn Assets under management SKAGEN 80k retail customers, NOK 80bn 2m policyholders NOK 45bn AuM individual savings 33% external assets Silver 17k retail customers, NOK 10bn 20bn NOK pension premium income Leveraging people and technology to enable growth and scale cost-efficiently 28

29 Well positioned for growth through a digitally advanced and scalable technology platform Key Takeaways Continuously adapting and developing an agile and customer-centric organization Strong record of cost control with continued ambition to keep costs nominally flat 29

30 Cutting costs while growing business volumes in a changing savings and pensions market Significant cost reductions to keep cost base flat Operational costs, NOK bn 3.8 ~3.8 Cost Base Inflation and BPO & IT financial service tax Outsourcing Automation & Digitalisation Other Initiatives Cost Base 2018 in a period with strong business growth and digital sales 442 Group AuM, NOK bn Share of retail sales in digital channels 39% 27% 17% Q1-16 Q1-17 Q Includes operational costs from SKAGEN and Silver

31 Internet banking usage A frontrunner operating in a digitally mature market in the Nordic region Digital Market Maturity 1 Digital Business Model 2 100% 90% 80% 70% 60% 50% 40% 30% 20% IT PL RU ES FR EE NO NL CH FI SE DE IS DK UK 98% 94% 97% 70% of B2B customers maintain pension contracts through digital solutions of health declarations are processed through digital channels of pension certificate transfers are processed straight-through of requests for starting pension withdrawals are processed automatically 10% 0% BG RO 50% 60% 70% 80% 90% 100% 50% of customer chat requests are handled by AI-driven robot Internet access 31 1 Deloitte Digital, EMEA Digital Banking Maturity Examples from Norway

32 A clear distinction between commodity and differentiation enabling investments and growth Commodity IT is outsourced for cost-efficiency The majority of IT spend is focused on new development Bought services Cost efficiency, market synergies and scale through partners for commodity processes Develop the business Create commercial value and customer loyalty through new and improved services 59 % 41 % 57 % 43 % Internal IT Customer-centric focus with a mix of internal FTE's and consultants 1 Run the business Operations and maintenance of a large-scale financial services platform 32 1 Where 81% is internal resources, and 19% is external consultants.

33 Digital transformation to renew the core reducing costs and enabling business growth Digitising Pension Future Savings Platform 1 2 Digital to the core Customers are selfserviced through portals Process automation Straight-throughprocessing capabilities 100% Of customer fund switches for unit link products are managed through digital solutions 85% Of maintained pension contracts processed straight through our system stack 1 2 Cost Reductions Deliver cost synergies as communicated to the market Enabler for growth Analytics-based platform for customer development 50 MNOK Yearly opex reductions >10% CAGR Business growth 3 Cost reductions Through core renewal programmes 40% Reduced cost base for Swedish processes (from 2021) 3 Development synergies Cost-sharing of developing new platform capabilities Shared platform synergies 33

34 Creating tangible business value from emerging technology within the analytics and digital space Analytics & Machine Learning Customer development and underwriting Digital & Mobile Channels Health Insurance value chain digitised on one platform Data Insight Action Digital Trust based data extraction Cloud-based advanced analytics Multi-channel customer journeys 166% Increase in # of NBA sales from 2017 to % Increase in customer interactions from 2017 to % Customer satisfaction when using NBA 72% Of all referrals are digital 68% Of all claims are digital 54% Net promoter score

35 The agile, customer-centric organization is purpose driven with new ways of working New ways of working Innovation, agility & speed 20+ Autonomous teams in Norway & Sweden Purpose Driven Employee Engagement Learning Culture 10+ Pitches made to Digital Investment Board ~10 Daily automated deploys in digital layer Digital Garden Agile Methods Sandbox Program 148 External innovation talks hosted 35

36 Cost reductions from sourcing and automation with a strong shift towards customer-oriented capabilities Reduced FTE headcount Competency shift 1-27% 48% Customeroriented FTEs 66% 52% Back-office FTEs 34% Customer-oriented FTE's: Sales, Marketing & Customer Service. Back-office FTE's: Back-office and operations. Other functions omitted.

37 Resource re-allocation from guaranteed back-book to capital-light growth products Resource allocation 1 35% 20% Capital release under Solvency II 65% 80% Allows for focus on growth initiatives Resource re-allocation will continue Guaranteed Savings 37 1 Operating costs reported for segments Guaranteed and Savings

38 Regulatory changes to protect, empower and transform are managed within the existing budget Purpose Implementation Opportunity GDPR Protect and empower customer with regards to data privacy Centralised programme to ensure compliance in all business processes Create competitive advantage through Digital Trust MiFID II & IDD Ensure right investment and insurance advice Revamped advisory tools and services to ensure compliance Analytics and roboadvisors to identify customer needs PSD 2 Open infrastructure for competition and innovation in banking Service model for banking in place platform adaptation by vendor Leverage new business ecosystems like the partnership with Dreams 38

39 The way ahead profitable growth coupled with strong cost control A range of initiatives are creating profitable growth M&A Activities Platform Programs Digitisation & Innovation Automation & Robotics Global Partnerships with the ambition to keep the cost base flat on existing business in 2020 Operational costs, NOK bn 3.8 ~3.8 1 Cost Base 2018 Inflation & financial service tax Cost reduction measures Cost Base Excluding performance related costs

40 Occupational pensions Preferred pension provider and new opportunities Staffan Hansén, EVP 40

41 Leading position in Occupational Pension A Leading position Occupational Pension B C D Uniquely positioned in growing retail savings market Asset manager with strong competitive position and clear growth opportunities Bolt-on M&A 40k corporate customers 440k retail customers (Norway) NOK 707bn Assets under management SKAGEN 80k retail customers, NOK 80bn 2m policyholders NOK 45bn AuM individual savings 33% external assets Silver 17k retail customers, NOK 10bn 20bn NOK pension premium income Generating retail customers Fuelling AuM 41

42 Strong profit growth driven by savings, insurance and cost reductions Key Takeaways Attractive structural market growth with new opportunities End-to-end digitalisation securing competitive edge 42

43 Sweden Norway Attractive and growing occupational pensions market Pension premium income - total market 1 Pension premium income - per product 1 NOK bn % NOK bn 17 Guaranteed CAGR -10% Unit Linked CAGR 16% SEK bn % SEK bn Guaranteed CAGR -2% Unit Linked and Depot CAGR 5% Norway: Guaranteed and Unit Linked written pension premiums, segment 'private occupational pensions'. Source: Finance Norway Sweden: Guaranteed, Unit Linked and Depot written pension premiums, segment 'Other occupational pensions.' Source: Insurance Sweden. Approx 40% of Avanza preimium income has been reclassified as endowment insurance.

44 Storebrand has rapidly shifted from old guarantees to capital light savings NOK bn Storebrand premium income Old Guarantees Storebrand premium income - Defined Contribution 1 NOK bn +10% 12,6 13,7 15,1 9,1 8,2-19% 10,3 10,9 6,3 4,9 3, Defined Contribution includes Unit Linked (Norway) and Unit linked and capital light low guarantees (Sweden). Capital light low guarantees are reported in the Guaranteed segment in the consolidated statement.

45 generating strong and well balanced profit growth Defined Contribution operating profit Key drivers % Increased Savings and AuM Increasingly important with insurance add-ons Cost reductions NOK m Savings Insurance 45 1 Savings: Unit linked Norway and Unit linked Sweden. Insurance: Health & Group life, Pension related disability insurance Norway (excl. finance result), Pension related disability insurance Sweden.

46 Net premiums and market return drive AuM growth AuM development Unit Linked NOK bn % Drivers of expected net premiums Majority of premiums generated by active policies Growth driven by: % Expected market return Increased salaries and savings rates Population growth Age distribution of policyholders DB conversions New sales New retail savings products Positive transfer balance Market returns E 2019E 2020E 46 1 Premiums net of claims. Includes Silver in 2018

47 Leading position in Norway and strong contender in Sweden Market share occupational pensions (Unit Linked) Norway 1 Sweden 2 31% 28% 14% 18% 17% 14% 12% 10% 9% 9% Storebrand DNB Nordea Gjensidige Sparebank 1 LF SEB Skandia SPP Avanza Storebrand with clear value proposition in the corporate market We want to be recommended by our customers through our unique Nordic pension competence and leading sustainability offering Best customer satisfaction with all time high score for large Norwegian corporates Best customer service in Sweden Norwegian fund selector of the year 47 1 Finance Norway. Gross premiums defined contribution with and without investment choice. 4Q Insurance Sweden. Segment Unit Linked pensions 'Other occupational pensions' (written premiums) 4Q 2017

48 48 How will we succeed going forward?

49 Competitive edge through end-to-end digitalisation Digitalisation enables cost-efficient scalable growth 1 2 New standardised ITplatform in Sweden 3 year digital to the core program in Norway Simplified architecture with straight-through-processing Cost reductions of approx. 100 MNOK* Full self-service customer and partner interface 49 * Full-year effect 2021

50 Best positioned for Individual Pension Account in Norway Expected market dynamics Competition for market shares Relationship with individual policyholders becoming more important Storebrand's response Leverage and maintain Storebrand's # 1 position in the corporate market Strengthen retail customer relationships through our digital first retail strategy Focused efforts on increasing customer satisfaction to retain and attract new Individual Pension Accounts Digitalise end-to-end solutions and increase cost efficiency 50

51 Capital light low guarantees provide additional opportunities in Sweden Market premiums (occupational pensions) SPP Market share SPP Capital light low guarantees New, well-received, unique individualised life cycle product Positions SPP with a complete savings offering in corporate pensions Attractive offering also in the private pension fund market 51 1 Only nominal guarantees or less offered policy holders

52 Regulatory change creates opportunities in Norwegian public sector pension market Large public sector market is closed for competition New regulation can lead to re-entry for Storebrand Annual market premium 2017, NOK bn 45 Market monopoly today 27 Expected partial end of monopoly Capital efficient product offering Expected annual premium growth 5% Private Sector Defined Contribution Public Sector Norwegian municipalities, does not include pay as you go scheme for state employees.

53 Our ambition Gross Premium income Defined Contribution 1 Leading position Occupational Pensions #1 Market position Pension Norway % 15.1 Sweden Double digit CAGR Pension Sweden Norway Deliver continued stream of employees to retail segment NOK bn e 2019e 2020e Generate asset growth in asset management 53 1 Norway: Unit linked. Sweden: Unit linked and capital light low guarantees

54 Digital first retail strategy A personalised and scalable business model Wenche Martinussen, EVP 54

55 Uniquely positioned in growing retail savings market A Leading position Occupational Pension B C D Uniquely positioned in growing retail savings market Asset manager with strong competitive position and clear growth opportunities Bolt-on M&A 40k corporate customers 440k retail customers (Norway) NOK 707bn Assets under management SKAGEN 80k retail customers, NOK 80bn 2m policyholders NOK 45bn AuM individual savings 33% external assets Silver 17k retail customers, NOK 10bn 20bn NOK pension premium income Fuelling AuM 55

56 Key Takeaways Creating a personalised customer experience for our 1.3 million customers through advanced analytics Building a digital-first, scalable platform Providing a multiproduct offering to engage our customers and build long-term customer relationships 56

57 Norway an aging, digitally mature market with changing market dynamics Demography Digitalisation Individualisation citizens Maturing population 91% used online banking last 3 months Effectively a cash-less society National infrastructure to support digital trust Pension reform shifting responsibility onto the individual Historically preference for bank account savings New tax-incentivised savings products 57 Source: Statistics Norway

58 44 % 33 % Retail customers Customers with a paid up policy or pension certificate 23 % Our 1.3 million customers Customers with occupational pension 38% higher household income 77% higher household assets 28% higher employment rate 1 +39% We have experienced strong retail growth 39% increase in number of retail customers over the past 3 years to customers. Q Q % of our savings customers are recruited from our customer base 58 1 Source: Storebrand customer analysis 2017

59 Using machine learning and AI with intelligent response has changed the way we communicate with our customers, enabling us to personalise the customer experience through relevant and engaging customer offerings Our relationship with 1.3 million customers provide us with data and insight, which means we can be personal in a digital era with one voice from all angles in a multichannel distribution 9% higher sales with NBA 29% higher customer satisfaction with NBA 59

60 60 Using data on customer activities to determine the Next Best Activity

61 10 deployments per day Storebrand has transformed from traditional IT-delivery model to continuous, incremental deployments, doubling the number of releases delivering customer experiences over two years 76% increase in digital sales 1 from 2016 to 2017 Focus on our digital customer interface is increasing our digital sales significantly and enabling rapid scaling Adapting to the digital customer by taking a digital-first approach We developed a new digital sales solution in 2017 which Bearing Point s international benchmark customer survey named the best in the industry 61 1 Measuring life insurance, P&C insurance, health insurance, bank accounts and savings agreements and deposits within retail savings

62 Customer, advisor and robot in the same digital solution ensures seamless communication A personalised and scalable business model Digitalisation, automation and robotisation to gain reduction in costs and scalability Chat robot "James" handles 50% of all chats on our website Highly skilled advisors enhancing our digital solutions, increasing loyalty and earnings 62

63 Engaging customers throughout the life cycle As each individual must take more responsibility for their retirement finances, our foundation in pensions makes us uniquely positioned to offer a breadth of products and services across the life-cycle. But most of all, building trust and creating long-term customer relationships 63

64 Achieving a double digit CAGR in retail savings 1 AUM Structural market drivers Strengthened market position and product offering Sustainability expertise as competitive advantage Market AuM NOK bn Green is good CAGR+10% ~1 000 "20% of the world's population use 80% of the world's resources. Companies that are well prepared to meet global challenges are better positioned to create profitable growth than their competitors" 380 Jan Erik Saugestad EVP Asset Management Retail savings market is measured in AUM. Mutual funds: VFF (2018) Norske personkunder Forvaltningskapital. Individual Life and pension Savings: Finans Norge (2018) Forsikringsforpliktelser produkter med investeringsvalg: Individuell kapitalforsikring, Individuell pensjonsforsikring (incl. Livrenter, IPA, IPS 2008 and IPS), Fripoliser, Pensjonskapitalbevis.

65 Profitable growth with a multi-product offering Ensuring higher customer retention and deeper customer relationships Retail savings 1 21% 22% DNB 26% Storebrand 22% 11% 13% 13% Nordea 15% Q Q Q Q Q Q Q Sparebank 1 12% Life insurance 2 P&C insurance 2 Retail bank 3 11% 9% 9% 2,4% 3,2% 3,1% 1,5% 1,6% 1,7% 1,2% Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Market shares 1 Finance Norway and The Norwegian Fund and Asset Management Association 2 Finance Norway 3 Statistics Norway and Storebrand. Loans in Storebrand Bank and Storebrand Livsforsikring is included.

66 Retail Norway Double digit CAGR 50% Profit growth >10% ROE Retail savings P&C and Individual life insurance Retail bank B2B2C fundament Well-positioned #2 player Multibrand offering Focus on profitability Automation of back office processes Increased digital sales Focus on profitability Automation of mortgage process Broadening product portfolio 66

67 Fast growing Nordic asset manager with European presence Jan Erik Saugestad, EVP 67

68 Deliver client value and growth in assets through sustainable investment solutions and a multi boutique platform A Leading position Occupational Pension B C D Uniquely positioned in growing retail savings market Asset manager with strong competitive position and clear growth opportunities Bolt-on M&A 40k corporate customers 440k retail customers (Norway) NOK 707bn Assets under management SKAGEN 80k retail customers, NOK 80bn 2m policyholders NOK 45bn AuM individual savings 33% external assets Silver 17k retail customers, NOK 10bn 20bn NOK pension premium income Sustainable investment solutions, multi strategy offering and multiple brands 68

69 Key Takeaways Strong competitive position driven by revenue growth, tight cost control and significant value to clients Clear growth opportunities enabled by leading position on sustainable investments and SKAGEN Further scale as a multi boutique platform 69

70 Fast growing Nordic asset manager with a blend of captive pension assets and external clients Main channels for AuM (NOK bn) 1 External share 1 Pension savings NO Institutional mandates and distributors 2 66% 34% External Captive 259 bn 247 bn Asset types 1 Pension savings SE AuM 721 bn 170 bn 45 bn Direct retail savings NO 8% 2% 34% 51% 4% Active share 3 33% 67% Equities Real estate Bonds Money market Other Other Active 70 1 Data as of Q Includes company capital. 3 'Active' = assets with target of outperformance and with active risk. Based on AUM in the period from Dec 31, 2017 to May 15, 2018.

71 Strong revenue growth and tight cost control has ensured our competitive position Net revenues and operational costs 1, NOKm Margin 1, bps Net revenues Operational costs 24 Net revenues Operational costs CAGR +8% CAGR -1% months rolling net revenues, excluding SKAGEN and all performance fees. Operational costs are adjusted for special items.

72 Strong fund performance across all asset classes Significant value creation for clients Average annual net returns and outperformance of selected funds since inception 1 Index/ESG Factor Selected active Alternatives Fixed income 14.7% 14.7% 18.0% 16.1% 17.6% 16.5% 13.9% 14.6% 12.2% 7.4% 7.4% 1.9% 1.0% 9.6% 4.3% 9.6% 5.0% 6.8% 5.4% 9.1% 8.8% 0.3% 3.7% 3.2% 0.5% 4.8% 4.4% 0.4% -0.1% Storebrand Global Indeks -0.1% SPP Global Plus Storebrand Global Multifactor Storebrand Global Solutions Delphi Nordic SKAGEN Kon-Tiki Storebrand Storebrand Private Equity 2 Real Estate 3 Storebrand Likviditet Storebrand Global Kreditt IG From date: Dec 22, April 18, March 31, Oct 1, March 18, April 5, January 1, Nov 18, June 16, Nov 10, Fund Index Outperformance 72 1 Annualized returns are based on monthly returns from fund inception until March 31, Exceptions: SKAGEN Kon-Tiki (from fund inception until April 27, 2018), Storebrand Global Multifactor (from start of current strategy in 2013 until March 31, 2018 (5 year period)). All returns are in NOK except SPP Global Plus (SEK). 2 Storebrand Livsforsikring DB PE portfolio (P990). 3 Storebrand Eiendomsfond Norge (SEN) KS.

73 Storebrand World Sustainability at the core of our business NOK 721 bn AUM, aligned to contribute to the UN Sustainability Goals Kyoto-protocol UN Sustainable Development Goals (2005) (2009) (2015) (2016) Sustainability team established Exclusions across Life Insurance Storebrand standard launched Decision to integrate sustainability in all funds (2010) d Rating Next generation sustainability funds - Global Solutions - Green Bond Fund - Plus fund family Fossil free More sustainable Low carbon footprint Solution companies (1995) (2001) (2005) ( ) ( ) 73

74 Strategic Priorities Strengthen international institutional capacity Broader commercialization of sustainable funds Strengthen retail position in Scandinavia Increase volume to gain cost advantages Further scale as a multi boutique platform 74

75 Potential to strengthen institutional client offering and pursue international growth Build on our strong position in Norway and Sweden Norway - No. 1 institutional asset manager 1 22% 21% 20% and pursue focused international growth Leverage our joint distribution to pursue focused international growth based on well positioned brands and sustainable solutions Key enablers: Storebrand DNB Nordea Sweden Growing market share 2 Local offices in Denmark, UK and the Netherlands ~20 International sales professionals 9,3% 8,8% 9,6% 8,2% 9,2% Luxembourg platform 3,6% 3,9% 4,0% 4,1% 4,2% Storebrand Connect Market share net flows - SPP Fonder Factor Sustainable solutions Delphi SKAGEN Market share AUM - SPP Fonder 75 1 Market share (in AUM). Source: Norwegian Mutual Fund Association statistics for active asset management/discretionary mandates as of Q Market share for SPP Fonder within net flows and AUM. Source: MoneyMate

76 Sizeable potential for sustainable solutions internationally Investor commitment Growth in sustainable AM Demand for low carbon solutions Global AUM represented in the United Nations Principles for Responsible Investment (UNPRI), $ trillion 'Sustainably invested' assets in Europe, US, Canada, Australia, New Zealand and Asia, as share of total professionally managed AUM (%) 2 26,3% Storebrand AUM in low carbon solutions, NOK bn ,5% YTD 76 1 Source: MSCI. AUM as of April in each year. 2 Source: McKinsey/Global Sustainable Investment Alliance Global Sustainable Investment Review. Percentages as of early 2012 and 2016.

77 and Storebrand is well positioned to capture growth A strong range of sustainable investment solutions Scalable solutions covering all asset classes a credible and transparent process Strategy built on in-house capabilities with a long track record and strong recognition A pioneer within sustainability, with scale Index Alternatives Fixed income Factor Active Solutions Active ownership Exclusions Sustainability team established Exclusions across Life Insurance Storebrand standard launched Integration of sustainability in all funds Sustainability rating Next generation sustainability funds Sustainability Development Goals Sustainability platform across investment boutiques Innovative sustainability impact reporting Acknowledged by clients and the industry #1 #2* fondene 77 *2017.

78 SKAGEN is an enabler to take the next step in the retail savings market beyond Norway Market Brands Market position, AUM 1 Market growth, AUM 1 30% NOKbn +15% 15% 15% 8% 6% fondene DNB Odin/SB1 Storebrand Group Nordea Danske Bank % SEKbn +13% 12% 12% 11% 5% Robur SEB Nordea Handelsbanken Storebrand Group % 18% 10% 8% No. 27 DKKbn +11% fondene Danske Bank Nordea Nykredit Jyske Bank 0,2% SKAGEN Sources: Norwegian Mutual Fund Association (Norway), SFM MoneyMate (Sweden) and Investering Danmark (Denmark). Note: Sweden includes institutional and retail clients, while Norway and Denmark show markets for retail clients only.

79 Key opportunities in the Norwegian and Danish retail markets Norway strengthening our Mutual Fund positions Denmark capturing the ESG index opportunity A large (~NOK 390 bn) market 1 for retail savings Mutual funds represent NOK 235 bn of this Three strong brands with clear value propositions Ambition: Further develop SKAGEN position Strengthen the Storebrand position Strengthen the Delphi position Approx. DKK 350 bn in Equity Retail Mutual Funds Retail Mutual Fund Market dominated by active funds, listed index share approx. 5% Higher index share in comparable markets suggests future index growth also in the Danish market Increasing market demand for sustainable funds Local expertise 105 Index share 3 5% Asset type 3 (DKKbn) Ind. Life & Pension Mutual funds 354 Storebrand 48 2,4 3,5 Delphi 28 Storebrand SKAGEN Index 95% Other 560 Equities Other 79 1 Source: Norwegian Mutual Fund Association (mutual funds category, as of Q4 2017) and Finance Norway as of Q Ind. Life & Pension includes Unit Linked (retail), pension certificates and paid-up policies with investment choice. 3 Index share and asset type refer to the total retail mutual fund market (914 DKKbn).

80 Operational synergies and tight cost control lead to improved cost efficiency Delivering cost synergies First phase SKAGEN cost synergies under implementation with a target of NOK 50 million Improved cost efficiency Operational costs as a share of AUM (bps), Asset Management Client web and reporting platform Web front for a multi brand retail platform Storebrand Connect for institutional clients 16 Cost/AUM Unit Holder Registry and Portfolio System Consolidation of Unit Holder Registries Consolidation of Portfolio Systems One process % Shared data and IT platform Common data sourcing Shared basic infrastructure

81 Market dynamics lead to further broadening of the client offering and the need for scale A changing asset mix.. Revenue and cost pressure.. And rising M&A deal sizes Global AUM split 1 Average net revenues and costs as a share of AUM (bps) 1 Global Investment Management M&A deals number of deals and deal size ($) 2 9% 6% 14% 14% 15% 20% 9% 13% 13% 19% 20% 19% 57% 47% 36% 35% 9% 11% 17% 18% % -17% Alternatives Solutions/LDI/Balanced Active specialties Active core Passive Net revenues (bps) Costs (bps) Margin (bps) Number of deals, right Average announced deal size ($m), left 81 1 Source: BCG Global Asset Management Benchmarking Database Source: Deloitte 2018 Investment Management Outlook. Note: 2017 data as of Oct 1, 2017.

82 Further scale as a multi-boutique platform Four key criteria for further structural growth Volume and cost advantages Silver SKAGEN Institutional offering and capacity Storebrand Storebrand Commercialization of sustainable funds Retail position in Scandinavia AUM, NOK bn 82

83 Our ambition Current targets on track New targets #1 Norwegian asset manager NOK 150m Revenue growth NOK 100m Profit growth #1 Norwegian asset manager with European footprint NOK 250m Profit growth Baseline: 2017 Operating profit for Storebrand Asset Management Group (pro forma, including SKAGEN) of 767 NOK million.

84 Increasing return to shareholders Lars Aa. Løddesøl, CFO 84

85 Continued growth in Savings and Insurance with strong cost control Key Takeaways Sufficient expected return to grow both solvency capital and buffers Increasing solvency capital generation Low leverage and high remittance ratio Two sources of free capital generating shareholder dividend 85

86 Holistic sustainability reporting with clear long term targets and KPIs pr. input factor Financial capital and our investment universe Customers and community relations Our people and systems Linked to UN's sustainable development goals 86

87 Regulatory developments Solvency II Standard model review Paid-up polices in Norway Public sector pension in Norway 87

88 Significant difference in capital consumption and return profile between old and new business ILLUSTRATIVE Savings Insurance Guaranteed 3 Group IFRS earnings 1 (NOKm) Allocated Equity 2 (NOKbn) Pro forma RoE adj. (%) 4 31% 36% 5% 11% The equity in the Group sits within different legal units. This allocation of equity is done on a pro-forma basis to reflect an approximation to the IFRS equity consumed in the different reporting segments after group diversification. The estimated allocation is based on the capital consumption under SII and CRD IV adjusted for positive capital contribution to own funds. The Insurance segment has been allocated an increased capital level which is more in line with long-term expected diversification effects Result before amortisation and after tax, Q Q Based on solvency II position pr. Q incl. transitional rules on 165%. IFRS equity allocated on a pro forma basis. 3 Includes reporting segment "Other". 4 Allocated equity 1Q 2018, ROE calculated on 1Q 2017.

89 Continued shift from Guaranteed to Non-Guaranteed Pension Premium income Storebrand Life Insurance 1 Storebrand Life Insurance NOKm 5% Share of reserves Guaranteed Non-guaranteed % % % 0 Guaranteed Non-guaranteed % 0% Policyholder age Premium income SPP Life Insurance 3 SPP Life Insurance SEKm 5% Share of reserves Guaranteed Non-guaranteed % % 2% 0 Guaranteed Non-guaranteed % 0% Policyholder age 89 1 Guaranteed: Defined Benefit Norway. Non-guaranteed: Unit Linked (occupational pension) Norway, Guaranteed: Defined Benefit Norway and Paid-up policies. Non-guaranteed: Unit Linked (occupational pension) Norway, Guaranteed: Guaranteed pension, Sweden. Non-guaranteed: Unit Linked Sweden, excl. transfers,

90 Net flows illustrate the shift in the business Net flows Guaranteed Pension NOK bn E 2019E 2020E 2021E Premiums -13 Claims 2022E E -13 Net flows Savings non-guaranteed NOK bn E 2019E 2020E 2021E 2022E 2023E Premiums 2 Claims 90 1 Aggregated numbers from Norwegian and Swedish pension products 2 Acquired premiums from Silver excluded

91 Majority of total AUM in Storebrand is already capital efficient Forecast assets under management (NOKbn) Implications ILLUSTRATION : 66% of AuM non guaranteed 2028e: ~85% of AuM non guaranteed Guaranteed portfolio has reached Solvency II peak capital consumption New growth in Savings and Insurance need little new capital Increased free cash flow and dividend capacity 400 Increased fee and adm. income and reduced sensitivity to financial markets External AuM Company capital and Other Non-guaranteed Life Low capital consumptive Guarantees Medium capital consumptive Guarantees High capital consumptive Guarantees 91 Company capital and Other: Company portfolios, buffer capital and BenCo. External AuM: Non-life AuM in Storebrand Asset Management. Non-guaranteed Life: Unit Linked Norway and Sweden. Low capital consumption Guarantees: Capitallight guarantees Sweden. Medium capital consumption Guarantees: Defined Benefit and medium guaranteed Sweden and paid ups with high buffers/low guarantees. High capital consumption Guarantees: Paid-up policies, Individual Norway and capital consumptive guarantees Sweden. Categories change in time due to buffer building.

92 Continued growth in Savings and Insurance with strong cost control 92

93 NOKm Shift in Earnings to Front Book Three main segments with close links between value drivers and reported results Result before amortisation Transition towards Savings and Insurance Segments' share of result before amortisation 1, , , , , , , , , , , , , % 53% 29% 14% % 26% 21% 51% 2017 Other Guaranteed Insurance Savings 93

94 NOK mil Improved quality of earnings Group result 1 Comments 1,952 2,938 3, ,762 2, , Operating earnings driven by AuM x Margin Insurance profits diversify earnings 2,032 2,066 1,943 2,416 Increased profit sharing over time Special items Financial items and risk result life Operating profit Old reporting structure 94 1 Result before amortisation and longevity reserve strengthening.

95 Illustrative P&L development NOK million Fee and administration income Insurance result Trajectory Strong Savings growth, some margin decline. Back book run off Moderate Insurance growth, stable margins Operational cost Flat nominal cost 1 Operating profit Financial items and risk result life Profit before amortisation Gradual profit split with higher rates Amortisation and write-downs of intangible assets Approx. NOK 405m per year Profit before tax Tax Approx. 20% Profit after tax 95 1 Excluding performance related costs

96 Sufficient expected return to grow both solvency capital and buffers 96

97 High quality assets with mostly fixed income backing guaranteed liabilities Asset allocation Guaranteed NOK 179 bn 7% 11% 30% Equities 80% MSCI World 20% Local Index (OMX & OBX) Real Estate Prime Location & Quality NOK 80 bn 13% 7% Amortising bonds and loans Fixed income 52% 81% Average rating AA- Average rating A Norway Sweden Equities Real estate Fixed income Amortising Bonds and Loans All assets are FX-hedged 97

98 Active risk management tailored to liability characteristics Low High Buffer level Allocation 5 18 bn. Paid up policies Norway NOK bn Allocation 4 27 bn. Allocation 3 30 bn. Allocation 2 27 bn. Equity Bonds Amortizing Bonds & Loans Real Estate Allocation 1 29 bn. Low Required book return High 98

99 Liability driven asset management with a double purpose Financial targets sets priorities Two risk management perspectives Solvency generation and preservation main priority basis for dividend capacity Solvency II margin 2 > 150% 1 Solvency II Long term perspective. Both assets and liabilities at market value Risk management of own funds and SCR Asset return > Liability return Dividend ratio 1 > 50 % 2 IFRS results Annual guarantees give annual perspective on booked returns Return on equity 1 > 10 % Risk management of IFRS financial result and buffers Asset & liabilites at book value in Norway Asset & liabilites at market value in Sweden 99 1 Before amortisation after tax. 2 Including transitional rules.

100 Liability driven investment strategy is expected to generate SII capital and increased IFRS results from profit sharing Asset return Expected excess mark to market return +0.6% SII buffer over guaranteed liabilities +6.4% SII Discount rate 1.0% 0.4% 11.0% 17.4% Capital generation Expected Risk Premium Required Risk Premium Expected excess book return IFRS buffer development Annual booked asset return +0.5% +2.9% IFRS Annual guaranteed rate 3.6% 3.1% 6.1% 9.0% Buffer/IFRS result Expected Book Return Required Book Return