Morgan Stanley European Financial Conference

Transcription

1 Morgan Stanley European Financial Conference Odd Arild Grefstad Storebrand CEO

2 The Storebrand Group Life and pension Asset Management Insurance Bank 00% of investments assessed by sustainability criteria employees corporate customers individuals NOK 450 billion in assets under management yearly customers dialogues 2

3 Solid, profitable and growing business Group result Assets under Management MNOK 500 BNOK Solvency margin 80 % 70 % 70 % 60 % 60 % 64 % 6 % 62 % Customer funds in defined contribution and unit linked BNOK 50 % 40 % % % Storebrand Life Group 2 Total funds under Management 3 Includes customer funds in DC and UL for Storebrand Life Insurance and SPP

4 Sound Nordic macro environment enables growth in pension savings GDP growth Unemployment rates 4% 4% 3% 2% 0% 2% 8% 6% % 4% 0% -% E 204E Norway Sweden Euro area 2% 0% E 204E Norway Sweden Euro area General government net liabilities OECD Economic Outlook No. 92, December 202

5 Strong growth in saving and pension market Premiums written in occupational Retail savings Norway pension private sector Norway 4 BNOK MNOK Premiums written in occupational pension private sector Sweden 3 BSEK Retail savings Sweden 4 MSEK Unit Linked Guaranteed Mutual funds Stocks and bonds 5 FNO's report; market shares and accounting, insurance liabilities 2 Sum reduced with 5 KLP (83 BNOK) 3 Svensk försäkring; statistics on life insurance 4 Statistics Norway and Statistics Sweden, Sector balances households Life insurance savings Bank deposits

6 Storebrand has a strong market position in fast growing DC/UL market Market share defined contribution Norway Market share Unit Linked 2 Sweden 50 30% 40 25% SEB Trygg Liv 30 30% 20% Skandia Länsförsäkringar 5% 20 0% SPP 0 5% Q3 0% Storebrand DNB Nordea Sparebank Gjensidige Danica KLP SHB Liv Frende SPP Länsförsäkringar Swedbank Folksam-KPA Danica Skandia SEB Trygg Liv AMF Handelsbanken Source: * FNO. Gross premiums defined contribution with and without investment choice 2 Svensk Försäkring, February 203

7 Actively managing the business towards defined contribution Insurance reserves 00 % 2% 2% 2% 6% 7% 9% 2% 80 % 60 % 40 % Key takeaways Continuous shift in business from guaranteed to non-guaranteed over the last six years 20 % 0 % Premiums VIF 2 00 % 80 % 60 % 40 % 20 % 26% 24% 3% 39% 44% 4% 43% 00 % 80 % 60 % 40 % 20 % 0 % 22% 33% 2% 77% 5% 70% 0% 0 % % Traditional profit sharing Fee based guaranteed business Fee based Unit Linked and risk products 7 Premiums and reserves includes SPP figures from before acquisition in 2007 for comparison 2 Value of in-force

8 Important regulatory changes www Longevity New tariffs Come in force Reserve strengthening Occupational pension product framework Act proposed Act passed Come in force 3 yr transition Pension certificates w/ investment choice Act proposed Act passed Come in force Insurance & risk coverage Act proposed Act passed Come in force Transition Solvency II Come in force 8 Currently paid-up policies with investment choice

9 Changing regulatory framework: - shifting to non-guaranteed New legal product framework in Norway Corporate view Individual view Defined contribution Pension certificates Defined benefit Paid-up policies Hybrid Pension certificates with investment choice All new pension premiums in nonguaranteed products Pension rights are continued in pension certificates All guaranteed products available for transfer to nonguaranteed 9 Currently paid-up policies with investment choice

10 Guaranteed savings: - managing low interest rate environment 4,0 3,5 3,0 2,5 2,0,5 Interest level Norwegian swap 0y Swedish swap 0y Bonds at amortized cost Interest rate Average rating 6 AAA 5,2 4,4 3,6 2,8 0 AA 2 Tradedates: Jan 20 - Mar 203 Average last three trades, YTM Average rating in portfolio 0

11 Projected balance sheet development, if no measures are put in place ILLUSTRATION Guaranteed starting point Non-guaranteed starting point Reserves BNOK

12 Storebrand has ambitions to reduce guaranteed business ILLUSTRATION Guaranteed starting point Guaranteed after conversion Reserves BNOK

13 and grow non-guaranteed savings ILLUSTRATION Reserves BNOK Conversion SPP Conversion of paid-ups SBL New Occ Pension savings equals today's fee based level %-p increased savings in DC New Occ Pension savings equals today's DC level DC Norway Conversion Savings in new DC/hybrid instead of DB %-p increased saving in DC 00 Unit Linked SPP Starting point

14 Possible to speed up shift in the balance sheet substanstially ILLUSTRATION Guaranteed starting point Guaranteed after conversion Non-guaranteed starting point Reserves BNOK Non-guaranteed with growth initiatives

15 Revenue management in transistion period ILLUSTRATION Revenue management. Maintain revenue from traditional business Price increases Conversion period Reserves BNOK Guaranteed starting point Non-guaranteed starting point 2. Optimize revenue in conversion phase Cost reduction Margin management Increase revenue from new business Sales X-sale Conversion

16 Our strategic response to changing market conditions We work hard to reach our vision: Recommended by our customers Managing the balance sheet Developing the business Capital optimization Risk reduction Concepts Employees Corporate relation Managing business without raising new equity capital Product optimization Cost reduction Save for < retirement 6

17 Measures implementer last 6 months: Capital optimization 2,5 BNOK converted from guaranteed to non-guaranteed products Risk reduction Reduced equity allocation in guaranteed portfolios DB public sector close down by 205 Product optimization Managing business without raising new equity capital Cost reduction Price increases in guaranteed products Introduced new capital light pension solutions SPP electable in largest collective pension platform ITP from July 203 Launched a 400 MNOK cost cut program to be completed by 204 Annual savings of 37 MNOK, achieved in 6 months 7

18 Our business logic employees in business How to get businesses to buy occupational pensions and services from us? 8

19 Our business logic new employees each year employees in business new former employees each year retirees and holders holders of pension certificates 2 How to get businesses to buy occupational pensions and services from us? How to get employees and former employees to buy individual products from us? 9

20 Leveraging the corporate market place B2B2C new employees annually Corporates new former employees annually Employees Storebrand concepts Retirees and holders of pension certificates Individuals "Save for life" "House and Home" "Storebrand Pluss" + additional offerings Individuals Products Pension Asset mgmt. Insurance Bank 20

21 Shift in the balance ILLUSTRATION Guaranteed starting point Guaranteed after conversion Reserves BNOK Non-guaranteed starting point Managing business without raising new equity capital

22 Shift in the balance ILLUSTRATION Guaranteed starting point Guaranteed after conversion Non-guaranteed starting point Reserves BNOK Non-guaranteed with growth initiatives 350 Save for < retirement

23 We work hard to reach our vison: Recommended by our customers 23