Bank of America Merrill Lynch Annual Banking & Insurance CEO Conference Odd Arild Grefstad Group CEO - Storebrand

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1 Bank of America Merrill Lynch Annual Banking & Insurance CEO Conference 2013 Odd Arild Grefstad Group CEO - Storebrand 1

2 The Storebrand Group 100% of investments assessed by sustainability criteria employees corporate customers individuals NOK 450 billion in assets under management Customer dialogues annually 2

3 Solid, profitable and growing business Group result Assets under Management MNOK 500 BNOK H H 2013 Solvency margin % 170 % 170 % 164 % 160 % 161 % 162 % 160 % 174 % Customer funds in unit linked 3 BNOK 150 % % % % H H 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 1 Unemployment rates 1 4% 14% 12% 3% 10% 2% 8% 1% 6% 4% 0% E 2014E 2% -1% Norway Sweden Euro area 0% E 2014E Norway Sweden Euro area General government net liabilities OECD Economic Outlook No. 93, June OECD Economic Outlook No. 92, December 2012

5 Attractive growing pension market in Norway Assets under Management in private sector Norway BNOK Market characteristics Defined contribution Defined benefit Paid-up policies (from DB) ,000 companies with occupational pension in private sector pension providers, of which 10 with assets above 1 BNOK Growth in defined contribution Switch to individualised pension rights H H STB Source: FNO market share life insurance insurance reserves (table 3b) 1 In 2000, market statistics included both public and private sector pensions. Figures reflect total market excluding KLP (with almost exclusively public sector pensions)

6 Future pension market Drivers for long term growth Trends Low interest rate environment Individualisation Demographics www Technology Regulations Transparency 6

7 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 7

8 Managing the balance sheet Capital optimization 2.3 BNOK converted from guaranteed to non-guaranteed products New subordinated loan of 300 million euro to SBL DB public sector close down by 2015 (6 bn tranferred) Product optimization Managing business without raising new equity capital 500 Risk reduction Optimized real-estate portfolio sold 7 shopping centers (13% of real estate portfolio) Reduced equity allocation in guaranteed portfolios Cost reduction 400 SPP electable in largest collective pension platform ITP from July Price increases in guaranteed products SPP Pension Services sold to KPA Q Q Q Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Goal Reached Q3-14 Q4-14 8

9 Interest rates are picking up 9

10 Storebrand is the market leader in the growing unit linked market Market share unit linked* (Norway private sector) 50% 40% 30% 20% 10% Market share unit linked* (Sweden open market) 30% 25% 20% 15% 10% 5% Storebrand DNB Nordea Sparebank 1 Gjensidige Danica KLP SHB Liv Frende Q3 0% SPP Skandia Länsförsäkringar SEB Trygg Liv Swedbank AMF Folksam-KPA Handelsbanken Danica Reserves and premiums Unit Linked % 2Q Q Q Q Q

11 Leveraging the corporate market place B2B2C new employees annually Corporates new former employees annually Employees Retirees and holders of pension certificates Storebrand concepts Individuals Individuals Products Pension Asset mgmt. Insurance Bank 11

12 Main focus: shifting the balance sheet - for customer and shareholders values ILLUSTRATION Guaranteed starting point Reserves BNOK Non-guaranteed starting point

13 Main focus: shifting the balance sheet - for customer and shareholders values ILLUSTRATION Guaranteed starting point Guaranteed after conversion Reserves BNOK Non-guaranteed starting point

14 Main focus: shifting the balance sheet - for customer and shareholders values ILLUSTRATION Guaranteed starting point Guaranteed after conversion Non-guaranteed starting point Reserves BNOK Non-guaranteed with growth initiatives

15 Transparent reporting to reflect strategy Result Q Full year NOK million Fee and administration income Underwriting result Operational cost Financial result Result before profit sharing and loan losses Net profit sharing and loan losses Result before amortisation and write-downs Result per line of business Q Full year NOK million Savings (non-guaranteed) Insurance Guaranteed pension Other Result before amortisation and write-downs

16 MNOK MNOK With clear value drivers Managing the balance sheet Developing the business Guaranteed business - Buffer capital Reserves and premiums Unit Linked NOK million Change in Market value adjustment reserve Excess value of bonds at amortised cost Additional statutory reserve Provisions for new mortality tables % Unallocated results Conditional bonuses SPP Total Q Q Q Q Q 2013 Guaranteed reserves in % of total reserves Written premiums Insurance P&C & Individual life Health & Group life Disability Insurance Combined ratio 81,4% 81,0% 80,4% 78,8% 77,9% 86% % % % % % Q Q Q Q Q Q Q Q Q Q

17 Summary Market leader in growth market Dual strategy: managing traditional guarantees build business leadership for the future Regulatory uncertainty, but clear action taken: cost reductions capital efficiency customer centric commercialization 17

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