Storebrand Q3 2018 24 October 2018 Odd Arild Grefstad – CEO Lars Aa. Løddesøl – CFO
Storebrand Global Solutions - Investing in companies contributing to the UN Sustainable Development Goals ISIN NO0010657273 Storebrand Global Solutions Management fee: 0,75 % • Fund size: 2,6 BN NOK • • Fund benchmark: MSCI All Countries Launch date: 1.October 2012 •
Highlights Q3 2018 18% Unit Linked growth 2 Group result 1 16% AuM growth Asset Management 2 853 168 11% Retail Bank lending growth 2 MNOK 685 Q3 2018 169% Solvency II ratio 3 Financial items and risk result life Operating profit 'A-' rating Storebrand Livsforsikring & Storebrand Bank 4 3 Including transitional rules. 3 1 Result before amortisation and write-downs. 2 Growth figures are from YTD 2017 to YTD 2018. 4 S&P rating
Our strategy 1 A B C D Asset manager with Uniquely positioned in Build a world class Leading position strong competitive growing retail savings Bolt-on M&A Savings business Occupational Pension position and clear market - supported by growth opportunities Insurance A. Cost discipline B. SII capital management framework C. Increased return 2 0% 180% 3.8 ~3.8 169 % Manage balance Q3 2018 sheet and capital 150% Manage for capital release and increased dividend pay-out ratio 2018 2020 Compelling combination of self-funding growth and capital return from maturing guaranteed back-book 4
Report on paid up polices: Positive direction, but proposals should have gone further Primary Target group Solves Does s not solv lve hasing power er DCC not part of (fully or partly) y) the Active polices Arbitrage lapse risk for life Market limitations (lack of long contra ract upon moving g to new and suppliers insurers bonds in NOK) prov ovide der rchasi nt purc Policies Lack of risk capacity for Lapse risk for life insurers ment Annual guarant ntee ee to be cover ered d with deferred ed w/mid/high customers with long al developme capital al contribut bution on (DCC=equi quity y with claw guarantees investment horizon (50-60 %) back oppo portuni nity) y) nual ted annu Policies w/low Lack of risk capacity for Lack of risk capacity for customers guarantees customers with high buffers with low buffers versus market Flexibl ble e buffers to cover er nega gative ve (20 %) versus guarantee value of liability returns Expecte Pensioners Higher pensions in payment, Lack of risk capacity and high cost (10 %) more buffer building capacity of capital coming years Indivi vidu dual al buffer buildi ding ng pr. contrac act in long duration policies - 2 % Todays s regulati ations Part of the proposals ls Not part of proposals ls 5
Growth in Savings continues Unit Linked Asset management +18% +16% Good relative returns vs. Strong sales and returns 187 725 626 158 peers in Norwegian drive growth Defined Contribution 31% annual growth in Norwegian Unit Linked Q3 2017 Q3 2018 Strong sales in Sweden Q3 2017 Q3 2018 AuM (BNOK) UL reserves (BNOK) Insurance Retail loans -1% +11% 4 474 46 4 408 Improved profitability NOK 18bn placed on life 41 insurance balance sheet Steps implemented to improve competitiveness Q3 2017 Q3 2018 Q3 2017 Q3 2018 Balance (BNOK) Annual Portfolio Premiums (MNOK) 6
Skagen launches Norway’s largest fund platform for ASK Approx. 600 funds – Norway’s largest fund platform for ASK 20-30 recommended funds – SKAGEN and Storebrand’s fund experts select the funds they think are the best in each category Switch to SKAGEN – Consolidate all your equity funds on one platform with full flexibility and oversight in addition to the experts’ selection of funds 30 October 2018 – launch date in Norway
Storebrand Global Multifactor – over NOK 20bn in AUM & 1.3% annual excess return Assets under management 20.6 BNNOK 15.6 9.8 7.6 3.1 1.4 2013 2014 2015 2016 2017 2018 8
Awards Gajda – An interac activ tive Chabot t that t talks s pensio ions ns in a new exciti iting ng way y with th emplo loyees. s. Dev evelo loped ed in co cooperatio tion with th a grou oup of large ge corporate customer co ers. s. Interactive, quick, fun and intuitive. Through Availa labl ble as a subs bscr crip iptio tion n se servic ice to all individually tailored information, 'Gajda' is the co corporatio tions. new guide to pensions. We get help, we understand and most importantly – it is so easy that we just want to continue the dialogue!
Key figures Group Earnings per share 2 Result development 1 Financial items and risk result life Special items Operating profit MNOK 1.77 1.69 1.56 931 1.46 853 618 812 1.33 773 147 15 168 167 149 177 40 792 635 645 645 596 -189 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Customer buffers development SII Own funds and SCR 4 BNNOK % of customer funds 3 SII Own Funds SII Capital Requirement Customer buffers Norway 4 Customer buffers Sweden 172% 169% 167% 165% 9.5% 9.3% 9.0% 9.0% 8.8% 160% 166% 155% 7.2% 6.5% 6.6% 163% 6.2% 150% 160% 5.2% 43.6 43.4 42.5 42.8 42.9 28.4 27.6 26.7 26.0 25.7 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 1 Result before amortisation, write-downs. 3 Customer buffers in Benco not included. Surplus values of bonds held at amortized cost excluded. 10 2 Earnings per share after tax adjusted for amortisation of intangible assets. 4 Without the use of transitional capital
Solvency movement from Q2 2018 to Q3 2018 Group Storebrand ASA 3% 169% +1.4% 166% 163% +3.2% -1.4% +0.1% Q2 2018 Model and Increased VA Market changes Operating Q3 2018 Transitionals Q3 2018 incl. assumptions and increased earnings* transitionals changes equity stress 11 * After proposed dividend
SII position Storebrand Group Group Solvency position(%) 1 Estimated sensitivities Target SII margin 150% 169 167 3 5 Estimated economic 166 3 169 SII-margin Q3 2018 166 163 Interest 157 12 169 rates -50bp Interest 170 3 173 rates +50 bp Q2 2018 Q3 2018 Transitional rules SII standard model 155 2 157 Equity -25% 161 3 163 Key takeaways Spread +50 bp, VA +15bp 164 Good returns and higher interest rates lifts the solvency position 3 167 UFR = 3.90% Strong operating earnings 162 3 165 UFR = 3.65% Transitional on technical provisions now zero due to higher interest rates 1 The estimated Economic solvency position of Storebrand Group is calculated using the current Storebrand implementation of the Solvency II Standard model with the company's 12 interpretation of the transition rules from the NFSA. Output is sensitive to changes in financial markets, development of reserves, changes in assumptions and improvements of the calculation framework in the economic capital model as well as changes in the Solvency II legislation and national interpretation of transition rules.
Storebrand Group Group Profit 1 Q3 01.01-30.09 Full year NOK million 2018 2017 2018 2017 2017 Fee and administration income 1 246 1 116 3 710 3 240 4 771 Insurance result 316 320 1 009 885 1 146 Operational cost -877 -840 -2 755 -2 501 -3 490 Operating profit 685 596 1 965 1 624 2 427 Financial items and risk result life 168 177 631 698 513 Profit before amortisation 853 773 2 595 2 322 2 940 Amortisation and write-downs of intangible assets -98 -101 -261 -299 -536 Profit before tax 755 672 2 335 2 023 2 404 Tax -229 27 -494 -111 2 Profit after tax 526 698 1 841 1 912 2 405 1 The result include special items. Please see storebrand.com/ir for a complete overview. Numbers from Q3 2017 do not include Skagen. 13
Storebrand Group Group Profit Q3 01.01-30.09 Full year NOK million 2018 2017 2018 2017 2017 Fee and administration income 1 246 1 116 3 710 3 240 4 771 Insurance result 316 320 1 009 885 1 146 Operational cost -877 -840 -2 755 -2 501 -3 490 Operating profit 685 596 1 965 1 624 2 427 Financial items and risk result life 168 177 631 698 513 Profit before amortisation 853 773 2 595 2 322 2 940 Profit per line of business Q3 01.01-30.09 Full year NOK million 2018 2017 2018 2017 2017 Savings - non-guaranteed 336 314 940 872 1 511 Insurance 214 221 651 576 608 Guaranteed pension 292 244 925 735 766 Other profit 10 -5 81 140 55 Profit before amortisation 853 773 2 595 2 322 2 940 14
Savings (non-guaranteed) Savings Profit Q3 01.01-30.09 Full year NOK million 2018 2017 2018 2017 2017 Fee and administration income 905 761 2 702 2 205 3 394 Operational cost -563 -443 -1 745 -1 337 -1 891 Operating profit 342 318 957 868 1 503 Financial items and risk result life -5 -4 -17 4 8 Profit before amortisation 336 314 940 872 1 511 Income earned not booked 1) -45 22 53 58 0 Profit per product line Q3 01.01-30.09 Full year NOK million 2018 2017 2018 2017 2017 Unit linked Norway 72 82 188 220 284 Unit linked Sweden 63 53 196 182 252 Asset Management segment 145 132 382 353 823 Retail banking 56 46 174 117 152 Profit before amortisation 336 314 940 872 1 511 1 'Income Earned not booked' refers to performance fees to be booked at the end of the year given the investment performance in Skagen and Delphi. 15
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