250 Years of Risk Management - Steering to capital efficient growth - PowerPoint PPT Presentation

250 Years of Risk Management - Steering to capital efficient growth INVESTOR PRESENTATION Q2 2017 Established in 1767

Key takeaways Consistent strategy since 2012: Active management of the guaranteed balance sheet and A create the new Storebrand through growth within Savings, Insurance and retail bank. Doubled equity and delivered stable solvency margin above 150%. First dividend B payout since 2011 and the back book is projected to release capital over time. Significant cost reductions in the period 2012-2018 with C projected more than NOK 800m in cost savings. Successful growth platform with occupational pensions as core has strong operational D and financial synergies between savings, insurance and bank. Growth with >20% ROE. Predictable framework for capital management and distribution of E increasing dividends. 2

Storebrand – the world's most sustainable insurer Storebrand was named the world's most sustainable insurance company, and the second most sustainable company in any category, at the World Economic Forum 2017. We are proud and humbled. Proud, because sustainability is at the core of our business. Humbled, because we work hard every day to give our 1.9m pension customers a future to look forward to. 3

Storebrand – an Integrated Financial Services Group Life and pensions Asset management  40k corporate customers  NOK 621bn in AuM of which 26%  1.9m individual customers external assets  NOK 408bn of reserves of which  100% of investments assessed by approx. 40% Unit Linked sustainability criteria Insurance Retail bank  Health, P&C and group life  Direct retail bank insurance  NOK 39bn of net lending  NOK 4.4bn in portfolio premiums 4

Storebrand Group Structure (simplified) Legal structure (simplified) Storebrand ASA Storebrand Asset management Storebrand Livsforsikring AS Storebrand Bank ASA Storebrand Forsikring AS AS Reporting structure Storebrand Holding AB Benco Storebrand ASA Savings (non- Guaranteed Insurance Other guaranteed) pension SPP Pension & Försäkring AB 5 Source: Supplementary information Storebrand ASA

Our strategy Manage the guaranteed Continued growth in Savings 1 2 balance sheet and Insurance >150% SII margin Capital-light and profitable growth Cost reductions through automation and Market leading asset gatherer with strong Insurance   outsourcing offering Manage for future capital release and Continued retail growth with low capital   increased dividend capacity requirements Lower capital requirements and higher quality of earnings We work hard to reach our vision: Recommended by our customers 6

Manage guaranteed 1 balance sheet Growth in Savings 2 Healthy growth in nordic pension market and Insurance supported by solid macro environment Unit Linked pension premium growth 1 Norway , NOK bn Sweden , SEK bn 56 52 46 42 37 23 20 CAGR 17% 17 15 13 33 CAGR 9% 32 29 27 25 2012 2013 2014 2015 2016 Inverted government net debt ratio Unemployment rates 2 as % of GDP 2 12% 300% 250% 10% 200% 150% 8% 100% 50% 6% 0% 4% -50% -100% 2% -150% Norway Finland Sweden Denmark Switzerland Poland Germany Netherlands Total OECD Euro area France UK Spain United States Italy Greece 2010 2011 2012 2013 2014 2015 2016 Norway Sweden Euro area 7 1 Norway: Finance Norway statistics - written pension premiums (table 2b) Unit linked. Sweden: Insurance Sweden statistics - segment Other occupational pensions, includes Unit linked and Depot. 2 OECD Global Interim Economic Outlook March 2017. 2017 estimated.

Manage guaranteed 1 balance sheet Growth in Savings 2 Interest level stabilised and structurally higher than the euro and Insurance zone 4,00 3,50 3,00 2,50 2,00 % 1,50 1,00 0,50 - ( 0,50) ( 1,00) 01.01.2013 01.07.2013 01.01.2014 01.07.2014 01.01.2015 01.07.2015 01.01.2016 01.07.2016 01.01.2017 01.07.2017 NOK swap 10y Key policy rate Norway SEK swap 10y Key policy rate Sweden 8

Manage guaranteed 1 balance sheet Growth in Savings 2 Transition Into a Solvency II Based Regime has Required Discipline and Insurance and Targeted Measures Transfer out of guaranteed products.. .. Strong cost reduction.. ... And strengthened reserves for longevity 39,886 NOK mil Operational cost, NOK mil 3 NOK bn 3,305 -98% 12,4 7,729 3,228 3,212 CAGR -1% 14,823 9,955 4,074 0,3 2012 2013 2014 2015 2016 Sum 2013 2016 2012 2016 9 1 Operational costs, adjusted for special items.

Manage guaranteed 1 balance sheet Growth in Savings 2 and Insurance Storebrand is Well Capitalized for Growth and Dividends Tangible equity near doubled since 2010 Strong solvency position NOKbn +96% 163% 23 Requirement 100% 12 2010 2016 Q2 2017 Tangible equity Solvency II margin 10

Manage guaranteed 1 balance sheet Growth in Savings 2 Targeted nominal flat costs 2012-2018/ and Insurance NOK 800m cost reduction 1 Operational cost 2012-2018 2 NOKm 3,228 3,212 <3,200 2012 2016 2018e Cost reduction completed 2012 – 2016 Further Cost Reductions to be Realized by 2018 Cost programme Cognizant  2014 target reached  Transfer of additional ~250FTEs 2012 - 2014 partnership (>NOK 400m) to partner Baltic offshoring  From 150 to 370 Baltic empl. ~60%  Cognizant partnership 2012 - 2016 3.171 ~25% ~15% Market & sales  Reduction of 70 FTEs (NO and SE) restructuring 2015  Closed agent channel Other key  New bank platform initiatives  New IT infrastructure 1 Real cost reduction 2012-18 assuming 2.5% inflation. Operational costs are adjusted for restructuring costs in 2012 (NOK 195m). 11

Manage guaranteed 1 balance sheet Growth in Savings 2 and Insurance Cost Target on Track Target to reduce costs nominally… …on track despite strong business growth 3 728 1 New investments in fast growing business 60 Increased investments in new digital growth ~400 3 268 2 Financial tax in Norway + NOK 60m in increased costs annually 3 General inflation Salary growth and general inflation 2015 Wage Financial 2018 Cost TARGET cost base Inflation service tax base 2018 without cost cost base measures 12

Manage guaranteed 1 balance sheet Growth in Savings 2 and Insurance Balance sheet shifts to capital efficient products Forecast assets under management (NOKbn) Implications for capital ILLUSTRATION 2016: 2027e: 54% of AuM >80% of AuM non guaranteed non guaranteed 900 800 1. Guaranteed portfolio has reached 700 Solvency II peak capital consumption 600 2. New growth in Savings and Insurance 500 need little new capital 400 300 3. Will increase free cash flow and dividend capacity 200 100 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Company capital and Other Low capital consumptive Guarantees External AuM Medium capital consumptive Guarantees Non-guaranteed Life High capital consumptive Guarantees 13 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: Capital-light guarantees Sweden. Medium capital consumption Guarantees: Defined Benefit and medium guaranteed Sweden. High capital consumption Guarantees: Paid-up policies, Individual Norway and capital consumptive guarantees Sweden. .

Manage guaranteed 1 balance sheet Growth in Savings 2 and Insurance Defined Contribution Pension Savings - Leading Position in Norway and Strong Contender in Sweden Norway – market leader defined contribution Sweden – growing in defined contribution (private sector) 1 (private sector) 2 34% 28% 17% 17% 14% 13% 11% 13% 9% 8% Storebrand DNB Nordea Gjensidige Spareb. 1 LF SEB Avanza Skandia SPP 14 1 Finance Norway. Gross premiums defined contribution with and without investment choice. 4Q 2016 2 Insurance Sweden. Segment Unit Linked pensions 'Other occupational pensions' (written premiums) 4Q 2016

Manage guaranteed 1 balance sheet Growth in Savings 2 Norway: Continued growth in Unit Linked reserves driven by and Insurance premiums and expected market return Development Unit Linked reserves Drivers net premiums Majority of premiums come  CAGR ~19% 110 000 2016-18 from existing Unit Linked 100 000 business 90 000 Underlying growth through 80 000  salary inflation and increased 70 000 savings rates CAGR 25% 60 000 2011-16 50 000 Conversion from guaranteed  40 000 pension and new sales further 30 000 boost growth 20 000 10 000 0 2011 2012 2013 2014 2015 2016 2017E 2018E 2019E Net premiums Expected market return 1 Historical development 15 1 Assumed market return defined by Finance Norway industry standard.