Oslo, 1th November Financial results third quarter 2013 KLP Group

Transcription

1 Oslo, 1th November 2013 Financial results third quarter 2013 KLP Group

2 Table of contents 1. Main features 2. KLP Group 3. Life and pension 4. KLP solidity and capital issues 5. KLP Non-Life Insurance 6. Banking and credits 7. KLP Asset Management and KLP Fund Management 8. Summary 2

3 Main features 3

4 KLP: financial strength and empowerment Results as per Common portfolio of life company : o Book return of 3.4 per cent o Value adjusted return of 4.5 per cent Corporate portfolio returned 4.3 per cent Group operating result NOK 4.6 billion Provisions for reserving for longevity thus far in 2013: NOK million. Ambition to complete reserving for longevity within scope of client result this year. o This might entail a degree of reduction of valuation reserves. Total solvency capital NOK 50.6 billion, equivalent to 18.3 per cent of insurance funds with interest guarantee. 4

5 KLP return on investment portfolios All figures in per cent Q Q Year 2012 Common portfolio Booked return Value adjusted return Value adjusted return incl. HTM bonds/bonds booked at amortised costs Investment options portfolio Corporate portfolio

6 Status for the retail initiative Unique* Unique* Net increase of around new customers so fare this year Unique* Bank Non-life Fund Retail customers Retail clients Retail customers Retail clients Q *Unique clients may differ from the total number of customers since a customer may have multiple customer relationships 6

7 KLP Group 7

8 KLP Group results by segment Ytd. Year NOK million Life insurance Non-life insurance Banking Asset management Other Group result

9 KLP Group main figures - results NOK million Ytd. Year Pension premiums and incoming transfers Allocated investment income Claims f.o.a Insurance provisions Operating cost Other income and cost Technical result To/from value adjustment fund life insurance To/from supplementary reserves life insurance Surplus allocated Life insurance clients Group result pre-tax Tax Other profit/loss elements Group result pre-tax

10 KLP Group assets NOK million Change Investment properties Debt instruments held to maturity Debt instruments classified as loans and receivables Lending to municipalities, enterprises and individuals Debt instruments at fair value over P/L Equity instruments at fair value over P/L Financial derivatives Share in associated companies Assets in defined contribution life insurance Immaterial assets Other assets Total assets

11 KLP Group own funds and liabilities NOK million Change Own funds Hybrid capital and subordinated loans Debt to financial institutions Covered bonds issued Debt to and deposits from clients Insurance reserves Other liabilities Total own funds and debt Insurance provisions KLP Group Premium, indemnity- and security fund prov. in non-life insur Provision in life insurance with investment options Insurance provisions in life insurance NOK billion

12 Life and pension 12

13 Life and pension Kommunal Landspensjonskasse is the operative unit for the group s core business, supplying public sector occupational pensions and group life-insurance to the municipal and health sectors as well as to enterprises with public sector type pension plans. Kommunal Landspensjonskasse is referred to as KLP in this presentation and tables. KLP Bedriftspensjon offers defined contribution and private sector type pension plans to clients not obliged to provide public sector pensions for their employees. 13

14 Liv og pensjon Stipulated Return NOK 5.0 billion to clients KLP now the only general provider of insured public sector pension scheemes in the Norwegian market 14

15 Life division KLP s competitors within insured scheemes for public sector pensions intend to withdraw from this segment of the market Clients whishing to transfer to a new provider face the choise between KLP and a proprietory or joint-pension scheeme As per more than 50 municipalities have announced the intention to change supplier in 2014 Representing reserves in excess of NOK 20 milliarder billion More than insured New tariff K2013 takes effect in 2014 KLP will base offers to new clients on full reserves according to the new tariff K2013 Clarification of rules reduces reserving required 15

16 Reserving for K2013 NOK billion Gross reserving 8.8 Reserved as per Allocated to reserving per Total 6.1 Remaining reserving required 2.7 From client s results 1.0 From company results 1.7 Revised estimate for gross reserving under new tariff 16

17 KLP presentation of accounts NOK million Pension premiums and incoming transfers Net revenues from investments in Common portfolio Claims paid and outgoing transfers Changes in valuation reserves Allocations to insurance contracts Insurance related operating costs Other insurance related costs Ytd. Year Technical result Net revenues from investments in Corporate portfolio Other revenues and expenditures Non-technical result Total result

18 KLP appropriation of results Nok million Customers Company Interest result Risk result Premium interest rate guarantee Administration result Non-technical result Return on paid-in equity to clients Total Good return on common portfolio 776 MNOK Good contribution from corporate portfolio Stipulated return of NOK 3.8 billion to clients Return on paid-in equity to clients Result to owners MNOK 18

19 KLP assets NOK million Change Ytd Total assets in corporate portfolio Total assets in common portfolio Assets in investment options portfolio Total assets

20 KLP own funds and liabilities Change NOK million Ytd Paid-in equity Retained earnings Hybrid capital and subordinated debt Insurance liabilities Other liabilities Total: own funds, provisions and debt Insurance liabilities per NOK bn Premium reserves Supplamentary reserves Value adjustment fund other provisions excl. separate investment portfolio BNOK

21 KLP growth in assets NOK bn Per cent Total assets Growth in per cent 21

22 KLP Bedriftspensjon main figures NOK million Ytd. Year Interest result Risk result Administration result Interest rate guarantee and profit element Non-technical result Total result Of which result to reserving Result to owner

23 KLP Bedriftspensjon return and solvency Per cent Common portfolio Ytd. Year Book Value adjusted Investment options portfoilio Corporate portfolio Per cent Capital coverage Solvency ratio Buffer capital employment NOK million Value adjustment fund Supplementary reserves Solvency capital

24 KLP investments and capital issues 24

25 KLP investments and capital issues 16.6 per cent Return on equity investments for the first 9 months 10 year Kingdom of Norway yields on level with KLP s guaranteed return 25

26 KLP capital adequacy Per cent Capital adequacy Core capital adequacy Statutory minimum capital adequacy Statutory minimum core capital adequacy % Capital adequacy Core capital adequacy Statutory minimum capital adequacy Statutory minimum core capital adequacy 26

27 KLP buffer capital NOK million Valuation reserve Supplementary reserve Core capital margin Income to date* Regulatory buffer capital Valuation reserve investments booked at amortised costs *Excluding preliminary reserving for longevity 27

28 KLP financial solidity NOK bn % % 20% 19% 18% 17% 16% 15% 14% NOK bn % % % % Total solvency capital - NOK bn As percentage of liabilities with interes guarantee 28

29 KLP common portfolio allocation and return Share 1) Return Return Per cent Equities Bonds Bonds held-to-maturity Lending Property Other financial assets ) Measured by exposure Balance Assets in the common portfolio Property Bonds HTM Lending Equities Bonds Other NOK million

30 Trading portfolios equities KLP common portfolio Trading portfolio equities* Value equities (NOK mill) Return equity portfolio 16.6 % 11.5 % 13.9 % Share index-tracking equities 76.6 % 77.9 % 79.3 % * This table is an overview of financial assets. The statutory reported figures differ due to difference in classification. NOK bn Trading portfolio - equities, last 5 years Return 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% Q NOK bn Return in per cent 30

31 Trading portfolios bonds KLP common portfolio Trading portfolios fixed-income * Value fixed income (NOK mill) Return trading portfolios fixed income 0.6 % 6.0 % 8.4 % Share index-tracking fixed-income 35.5 % 35.5 % 35.3 % * This table is an overview of financial assets. The statutory reported figures differ due to difference in classification. NOK bn Trading portfolio - bonds last 5 years Q Return 12% 10% 8% 6% 4% 2% 0% NOK bn Return in per cent 31

32 Bonds booked at amortised costs KLP common portfolio Book value (NOK mill) Valuation reserve (NOK mill) Return (per cent) Bonds held-to maturity, last 5 years NOK bn Return % 90 9% 80 8% 70 7% 60 6% 50 5% 40 4% 30 3% 20 2% 10 1% 0 0% Q Volume Return 32

33 Bonds booked at amortised costs KLP common portfolio AAA AA+ AA AA- A+ A A- BBB+ or lower Government bonds without rating Bonds under credit lines 0% 10% 20% 30% 40% 50% 60% 33

34 Property value NOK 35.6 billion New organization in place in Sweden Occupancy rate 97 % Purchased property this year for NOK 3 billion Purchases in Stockholm Torsplan in Hagastaden, NOK 1.5 bn Fornebu S investing NOK 1.5 bn 71 per cent occupancy rate 34

35 Property investments Total portfolio Book value (value-adjusted NOK mill) Occupancy rate (per cent) 97.0 % 96.5 % 96.8 % Average lease duration (year) NOK bn Return 30% 25% 20% 15% 10% 5% Q Value Return 0% 35

36 KLP s real-estate activities KLP Eiendom AS is part of the common portfolio, however, the company also manages the realestate portfolios of other group companies. Property value - by country 14% Stability in valuations, the property mass appreciated by NOK 318 million (0.9 per cent) in Q NOK 73 million incl. Currency hedge 10% 76% Norway Denmark Sweden New investments in 2013: - 50 % of Nordbyen Senter in Larvik - Hvaltorvet shopping mall in Sandefjord Property value - by sector Offices, education Real-estate investments constitute 11.2 per cent of the financial assets of the common portfolio 18% 8% 3% Shopping centres 10% 60% Hotels Other (leasehold land, co-properties, parking) Sites under development 36

37 KLP s real-estate investments Property value* Ytd. Year Fair value Value adjustment in per cent 1.2 % 0.9 % 0.9 % Fair value common portfolio (NOK mill) Value adjustment in per cent common portfolio 1.2 % 0.9 % 0.9 % Return Ytd. Year Total return 5.2 % 5.0 % 6.5 % Total return common portfolio 5.3 % 5.1 % 6.5 % *Figures include currency-hedging. Real-estate funds not included. 37

38 Skadeforsikring (non-life insurance) 38

39 KLP Skadeforsikring Result before tax: NOK 141 million Generally good results, and good financial returns Record growth in retail 39

40 KLP Skadeforsikring per Good pre-tax results: NOK million Good insurance results, loss ratio 79.3 per cent Good investment return, 4.6 per cent Continued good sales and in the retail market. Many tenders in the public market - positive new-sale balance Largest incident so far this year NOK 12.5 million The flood brought charges of NOK 19.6 million to the company s nature disaster fund No effect on P/L 40

41 Market development Strong position in public sector and corporate markets maintained municipalities and counties corporate clients - High tender activity Good sales inn retail market customers of which are members - NOK 205 million premium volume - Low defection rate 41

42 KLP Skadeforsikring profit & loss Q NOK Result Result Result 2012 Premium written f.o.a Allocated investment income Claims f.o.a Insurance related expenses Other insurance related income Changes in security reserves etc Result from technical activities Result from investment activities Allocated investment income Other income Result from ordinary operation Estimated tax expense Provisions for equity fund Result after provisions for equity fund

43 KLP Skadeforsikring main figures Key figures, per cent Claims ratio on own account 76.3 % 82.0 % Cost ratio on own account 25.1 % 25.7 % Combined Ratio for own account % % Return on capital 4.6 % 5.1 % Capital adequacy ratio 31.6 % 27.7 % Revenues, NOK mill Gross premium written Premium income for own account Claims paid for own account Insurance related costs for own account Results Key figure balance sheet. NOK mill Financial assets Total assets Equity Provisions in insurance funds for own account

44 Banking and credit 44

45 Banking and credit clients Deposits from corporate clients more than NOK 600 million 45

46 Lending portfolio KLP common portfolio Book value (NOK mill) Of this: fixed rate loans (NOK mill) Return year to date (in per cent) Specific and general credit loss provisions (NOK mill) * *A small loan of 3.9 million in connection with KLP's social investments has been written down NOK bn Lending portfolio, last 5 years Return 7% 6% 5% 4% 3% 2% 1% Q Total lending Return 0% 46

47 KLP banking main figures NOK million KLP Kreditt KLP Kommunekreditt KLP Banken Net interest revenues Net fee and commission income Management fees Operational costs Value adjustment financial instruments Result before taxes Total assets

48 KLP Bank-group main figures NOK million KLP Bank-group Net interest revenues Net fee and commissions income Management fees Operating cost Value changes financial instruments Pre-tax earnings Total assets

49 KLP lending and deposits NOK billion Mortage loans Public sector loans Deposits KLP Banken AS (parent) KLP Kreditt AS KLP Kommunekreditt AS KLP (under management agreement ) Total

50 KLP Banken Q3 The growth in loans and deposits at retail continues Home mortgage net growth improved. Stable public sector lending portfolio give good return Deposits from corporate clients: 608 million 50

51 Asset managment 51

52 Asset managment Result before tax NOK 22.9 million this far in 2013 Managing NOK 26 billion for external clients Net new subscribtions from external clients NOK 1.7 billion 52

53 KLP Kapitalforvaltning & KLP Fondsforvaltning KLP Kapitalforvaltning AS and KLP Fondsforvaltning AS constitute the securities management activities within the KLP Group. Assets under management totals NOK 283 billion at the end of the quarter. The major share represent funds managed for Kommunal Landspensjonskasse and its subsidiaries NOK 26 billion managed on behalf of external investors and retail clients. There are about holders of KLP funds Profit before tax per 30.09: NOK 22.9 million 53

54 Summing up 54

55 2014 positive outlook KLP has the intention of reserving for longevity to the extent allowed by regulations before year-end. KLP will endeavour to welcome all clients wishing to join the insurance community, provided neccesary comliance KLP will submit competitive bids to municipalities tendering for pension fund administration KLP maintain emphasis on effective operations and cost-consciouness in in line with municipal pension funds KLP is, and will remain, a stable and predictable supplier of public sector pensions 55

56 Contacts in KLP Position Name Phone Executive Vice President & CFO Aage E. Schaanning / SVP Finance Per Victor Nordan / Executive Vice President Communications Ole Jacob Frich /