Gjensidige Forsikring ASA

Quarterly Report • Apr 22, 2020

Gjensidige Pensjonsforsikring AS

1

Highlights First quarter 2020 report

In the following, the figures in brackets indicate the amount or percentage for the corresponding period in the previous year.

First quarter

• Profit/loss before tax expense: NOK 35,7 million (53,4)
• Operating income: NOK 105,4 million (97,7)
• Operating expenses: NOK 74,5 million (63,0)
• Operating margin: 29,31 per cent (35,48)
• Return on equity, annualised: 11,7 per cent (20,6)
• Solvency capital (SF): NOK 2.286,8 million (2.501,1)
• Solvency margin (SF): 151,7 per cent (138,2)
• Assets under management: NOK 33.463,5 million (33.680,6)

Profit performance

NOK millions	1.1.-31.3.2020	1.1.-31.3.2019	1.1.-31.12.2019
Administration fees	38.9	37.5	152.3
Insurance income	23.0	21.4	111.4
Management income etc.	43.5	38.7	167.2
Operating expenses	(74.5)	(63.0)	(275.6)
Net operating income	30.9	34.6	155.3
Net financial income	4.8	18.7	41.5
Profit/(loss) before tax expense	35.7	53.4	196.9
Operating margin 1	29.31%	35.48%	36.05%

¹ Operating margin = net operating income/total income

A troubled financial market and increased costs lowered profit before tax

Development during the quarter

Earnings performance

The profit before tax expense was NOK 35.7 million (53.4). The decline was due to lower net financial income and higher operating expenses. The Covid-19 pandemic had a negative impact on the segment's results, related to lower financial returns and subdued growth in management income.

Operating income

Total operating income amounted to NOK 105.4 million (97.7).

Administration fees and insurance income were NOK 38.9 million (37.5) and NOK 23.0 million (21.4) respectively. The growth was somewhat subdued following the loss of one large client during the quarter. Management income increased to NOK 43.5 million (38.7) as a result of higher assets under management during the first two months of the quarter, compared with the same period last year. The growth in management income was somewhat subdued due to decrease in assets under management towards the end of the quarter, as a result of the financial turmoil.

Operating expenses

Operating expenses increased to NOK 74.5 million (63.0), mainly driven by increased depreciation following a shortened depreciation timeframe for IT-investments. Higher head counts in response to the growth in business volume also had an impact on operating expenses.

Net financial income

Net financial income, including returns on both the group policy portfolio and the corporate portfolio, amounted to NOK 4.8 million (18.7). The decline was due to non-recurring gains from

divestments last year and modest returns this year due to the financial turmoil in the wake of the Covid-19 situation.

Paid-up policy portfolio

The recognised return on the paid-up policy portfolio was minus 0.2 per cent (plus 0.9). The average annual interest guarantee was 3.4 per cent.

Assets under management

Assets under management decreased by NOK 3,871.6 million since year end 2019. This was due to the loss of one large account and the negative development in the financial markets. Total pension assets under management amounted to NOK 33,463.5 million (33,680.6) including the group policy portfolio of NOK 7,256.4 million (6,798.5).

Solvency position

The solvency margin reported at the end of the period was 151.7 per cent, up from 140.3 per cent in the last quarter. The increased margin was due to conclusion of a reinsurance agreement that covers loss of margin if lapse for defined contribution pensions exceeds a defined level which contributes to a robust solvency position for handling possible negative Covid-19 impacts.

Events after the balance sheet date

No significant events have occurred after the end of the quarter.

Outlook

Gjensidige Pensjonsforsikring AS offers occupational pension and disability pension products to individuals. The defined contributions market remains competitive but highly active, creating ample business opportunities. The results achieved over the last few years substantiate the fact that the company is well positioned to further develop its business.

Oslo, 21 April 2020

The Board of Gjensidige Pensjonsforsikring AS

Income statement

NOK millions	1.1.-31.3.2020		1.1.-31.3.2019 1.1.-31.12.2019
Technical account
Gross written premium	1,036.3	983.1	3,938.9
Ceded reinsurance premiums	(25.7)	(18.2)	(65.4)
Transfer of premium reserves from other insurance companies/pension funds	437.0	928.3	1,684.1
Total premiums for own account	1,447.6	1,893.2	5,557.6
Income from investments in associates	29.4	16.9	73.7
Interest income and dividends etc. from financial assets	42.7	40.4	170.4
Unrealised gains and losses on investments	(31.9)	11.7	17.7
Realised gains and losses on investments	(48.8)	13.6	18.3
Total net income from investments in the group policy portfolio	(8.6)	82.7	280.2
Income from investments in associates	39.7	13.0	66.2
Interest income and dividends etc. from financial assets	19.5	19.1	19.1
Unrealised gains and losses on investments	(4,138.8)	1,347.9	2,709.9
Realised gains and losses on investments	431.4	308.0	989.4
Total net income from investments in the investment portfolio	(3,648.2)	1,688.1	3,784.7
Other insurance related income	43.5	38.7	167.2
Gross claims paid	(155.8)	(148.1)	(635.5)
- Paid claims, reinsurers' share	(0.4)	2.0	19.2
Transfer of premium reserve and statutory reserves to other insurance companies/pension funds	(1,463.7)	(469.6)	(2,143.7)
Total claims	(1,619.9)	(615.6)	(2,760.0)
Change in premium reserve, gross	(112.3)	(178.5)	(513.5)
Change in premium reserves, reinsurers' share	22.4	15.3	63.1
Change in statutory reserves		(1.3)	(42.5)
Change in value adjustment fund	21.2	(9.5)	(15.5)
Change in premium fund, deposit fund and the pension surplus fund	1.6	1.6	1.5
Total changes in reserves for the group policy portfolio	(67.2)	(172.4)	(506.9)
Change in premium reserve	2,686.9	(3,120.2)	(7,455.2)
Change in other provisions	1,237.7	340.9	1,426.5
Total changes in reserves for investment portfolio	3,924.6	(2,779.3)	(6,028.7)
Profit on investment result	40.2	(10.9)	(3.9)
Risk result allocated to insurance contracts	1.4	(9.4)	(22.1)
Total funds allocated to the insurance contracts	41.5	(20.3)	(26.0)
Management expenses	(1.9)	(3.9)	(14.7)
Sales expenses	(5.8)	(4.8)	(19.7)
Insurance-related administration expenses (incl. commissions for reinsurance received)	(66.8)	(54.3)	(241.2)
Total insurance-related operating expenses	(74.5)	(63.0)	(275.6)
Profit/(loss) of technical account	38.9	52.1	192.6
Interest income and dividends etc. from financial assets	9.4	1.2	11.1
Unrealised gains and losses on investments	(8.9)	2.1	3.2
Realised gains and losses on investments	0.1	1.2	3.4
Total net income from investments in the company portfolio	0.6	4.4	17.7
Other expenses	(3.7)	(3.2)	(13.4)
Profit/(loss) on non-technical account	(3.1)	1.3	4.3
Profit/(loss) before tax expense	35.7	53.4	196.9
Tax expense	(8.9)	(13.3)	(48.6)
Profit/(loss) before other comprehensive income	26.8	40.0	148.3
Remeasurement of the net defined benefit liability/asset			(0.8)
Tax on items that are not reclassified to profit or loss			0.2
Total items that are not reclassified to profit or loss			(0.6)
Total comprehensive income	26.8	40.0	147.7

Statement of financial position

NOK millions	31.3.2020	31.3.2019	31.12.2019
Assets
Other intangible assets	40.6	58.9	48.1
Total intangible assets	40.6	58.9	48.1
Buildings and other real estate
Right-of-use property	9.6	27.0	10.3
Financial assets at amortised cost
Loans and receivables	261.4	236.0	225.9
Financial assets measured at fair-value
Shares and similar interests	27.6	99.3	6.3
Bonds and other securities with fixed income	691.9	699.7	751.5
Cash and cash equivalents		0.1
Total financial assets	990.5	1,062.1	993.9
Receivables related to direct operations	17.4	5.8	7.8
Other receivables	157.4	74.7	232.3
Total receivables	174.8	80.5	240.1
Cash and cash equivalents	204.2	138.4	118.3
Pension assets	2.4	1.4	2.4
Total other assets	206.6	139.8	120.7
Prepaid expenses and earned, not received income	2.6	21.4	1.2
Total assets in the company portfolio	1,415.1	1,362.6	1,404.0
Subsidiaries and associates
Shares in associates	982.5	920.6	958.2
Financial assets measured at amortised cost
Loans and receivables	5,173.1	4,841.9	5,020.4
Financial assets measured at fair-value
Bonds and other securities with fixed income	571.9	649.3	824.0
Cash and cash equivalents	130.0	28.2	23.9
Total investments in the group policy portfolio	6,857.4	6,440.1	6,826.5
Reinsurers' share of insurance-related liabilities in general insurance, gross	476.6	401.2	454.2
Subsidiaries and associates
Shares in associates	1,546.2	826.6	1,290.3
Financial assets measured at fair value
Shares and similar interests	20,862.2	22,165.3	24,502.5
Bonds and other securities with fixed income	3,731.4	3,653.3	4,196.5
Receivables in the investment option portfolio	32.9	47.5	73.3
Cash and cash equivalents	34.4	189.4	68.2
Total investments in the investment option portfolio	26,207.1	26,882.1	30,130.9
Total assets in the customer portfolio	33,541.1	33,723.5	37,411.6
Total assets	34,956.2	35,086.1	38,815.6

NOK millions	31.3.2020	31.3.2019	31.12.2019
Equity and liabilities
Paid in capital
Share capital	39.0	39.0	39.0
Other paid-in capital	82.6	81.3	82.3
Total paid-in equity	121.6	120.3	121.3
Retained equity
Risk equalisation fund	38.0	15.3	38.0
Other earned equity	769.8	658.0	743.0
Total earned equity	807.7	673.2	780.9
Total equity	929.3	793.5	902.2
Subordinated debt	299.8	299.7	299.8
Premium reserves	7,012.6	6,518.9	6,896.1
Additional statutory reserves	284.0	242.8	284.0
Market value adjustment reserves		15.2	21.2
Premium fund, deposit fund and the pension surplus fund	1.3	1.3	2.9
Unallocated surplus fond	(41.5)	20.3
Total insurance obligations in life insurance - the group policy portfolio	7,256.4	6,798.5	7,204.2
Premium reserves	25,927.2	26,575.7	29,843.5
Premium fund, deposit fund and the pension surplus fund	279.9	306.5	287.4
Total insurance obligations in life insurance - the investment option portfolio	26,207.1	26,882.1	30,130.9
Pension liabilities etc.	2.5	2.5	2.5
Tax liabilities
Period tax liabilities	53.6	10.1	57.5
Provisions for deferred taxes	39.4	48.8	39.4
Total provisions for liabilities	95.6	61.4	99.5
Liabilities related to direct insurance	65.1	64.9	52.7
Liabilities related to reinsurance	38.5	38.3	32.9
Other liabilities	49.1	134.9	76.9
Total liabilities	152.7	238.1	162.5
Accrued expenses and deferred income	15.3	12.8	16.5
Total equity and liabilities	34,956.2	35,086.1	38,815.6

Statement of changes in equity

			Remeasure
			ment of the
			net defined	Risk	Other
NOK millions	Share capital	Other paid in capital	benefit liab./asset	equalisation fund	earned equity	Total equity
Equity as at 31.12.2018	39.0	81.8	(0.4)	15.3	618.4	754.0
1.1.-31.12.2019
Comprehensive income
Profit/(loss) before comprehensive income					148.3	148.3
Total components of other comprehensive income			(0.6)			(0.6)
Total comprehensive income			(0.6)		148.3	147.7
Risk equalisation fund				22.7	(22.7)
Transactions with owners of the company
Equity-settled share-based payment transactions		0.5				0.5
Equity as at 31.12.2019	39.0	82.3	(1.0)	38.0	743.9	902.2
1.1.-31.3.2020
Comprehensive income
Profit/(loss) before comprehensive income					26.8	26.8
Total comprehensive income					26.8	26.8
Transactions with owners of the company
Equity-settled share-based payment transactions		0.3				0.3
Equity as at 31.3.2020	39.0	82.6	(1.0)	38.0	770.7	929.3
1.1.-31.3.2019
Comprehensive income
Profit/(loss) before comprehensive income					40.0	40.0
Total comprehensive income					40.0	40.0
Transactions with owners of the company
Equity-settled share-based payment transactions		(0.5)				(0.5)
Equity as at 31.3.2019	39.0	81.3	(0.4)	15.3	658.4	793.5

Statement of cash flows

NOK millions	1.1.-31.3.2020	1.1.-31.3.2019	1.1.-31.12.2019
Cash flow from operating activities
Premiums paid, net of reinsurance	1,496.8	2,053.0	4,927.2
Claims paid, net of reinsurance	(156.2)	(146.7)	(616.3)
Net receipts/payments of premium reserve transfers	(1,463.7)	(657.2)	(2,143.7)
Net receipts/payments from financial assets	368.2	(1,185.4)	(1,895.7)
Operating expenses paid, including commissions	(75.1)	(26.4)	(261.3)
Taxes paid	(6.4)	(8.3)	(12.5)
Net cash flow from operating activities	163.5	29.0	(2.4)
Cash flow from investing activities
Net receipts/payments on sale/acquisition of owner-occupied property, plant and equipment	(0.8)	(25.3)	(27.1)
Dividend between Group companies			(100.0)
Net cash flow from investing activities	(0.8)	(25.3)	(127.1)
Cash flow from financing activities
Net receipts/payments on subordinated debt	(3.7)	(3.1)	(13.3)
Repayment of lease liabilities	(0.6)	(0.6)	(2.4)
Payment of interest related to lease liabilities	(0.1)	(0.2)	(0.7)
Net cash flow from financing activities	(4.4)	(4.0)	(16.4)
Net cash flow	158.3	(0.3)	(145.9)
Cash and cash equivalents at the start of the period	210.4	356.3	356.3
Cash and cash equivalents at the end of the period	368.6	356.0	210.4
Net cash flow	158.3	(0.3)	(145.9)
Specification of cash and cash equivalents
Cash and deposits with credit institutions	368.6	356.0	210.4
Total cash and cash equivalents	368.6	356.0	210.4

Notes

1. Accounting policies

The financial statements as of the first quarter of 2020, concluded on 31 March 2020, comprise Gjensidige Pensjonsforsikring AS (GPF) and associated companies. Except of the changes described below, the accounting policies applied in the interim report is the same as those used in the annual report for 2019.

The financial statements as of the first quarter of 2020 have been prepared in accordance with the Norwegian Accounting Act and Norwegian Financial Reporting Regulations for Insurance Companies (FOR 2015-12-12-1824). The interim report does not include all the information required in a complete annual report and should be read in conjunction with the annual report for 2019.

New standards and interpretations not yet adopted

A number of new standards, changes to standards and interpretations have been issued for financial years beginning after 1 January 2020. They have not been applied when preparing these consolidated financial statements. Those that may be relevant to GPF are mentioned below. GPF does not plan early implementation of these standards.

IFRS 9 Financial instruments (2014) in the insurance operations

IFRS 9 addresses the accounting for financial instruments and is effective for annual periods beginning on or after 1 January 2018. The standard introduces new requirements for the classification and measurement of financial assets, including a new expected loss model for the recognition of impairment losses, and changed requirements for hedge accounting.

IFRS 9 contains three primary measurement categories for financial assets: amortised cost, fair value through other comprehensive income, and fair value through profit or loss. Financial assets will be classified either at amortised cost, at fair value through other comprehensive income, or at fair value through profit or loss, depending on how they are managed and which contractual cash flow properties they have. IFRS 9 introduces a new requirement in connection with financial liabilities earmarked at fair value: where changes in fair value that can be attributed to the liabilities' credit risk are presented in other comprehensive income rather than over profit or loss.

Amendments to IFRS 4 Applying IFRS 9 Financial

Instruments with IFRS 4 Insurance Contracts (2016) The amendments to IFRS 4 permit entities that predominantly undertake insurance activities the option to defer the effective date of IFRS 9 until 1 January 2023. The effect of such a deferral is that the entities concerned may continue to report under the existing standard, IAS 39 Financial Instruments. In addition, the insurance sector of a financial conglomerate is allowed to defer the application of IFRS 9 until 1 January 2023, where all of the following conditions are met:

• no financial instruments are transferred between the insurance sector and any other sector of the financial conglomerate other than financial instruments that are measured at fair value with changes in fair value recognised through the profit of loss account by both sectors involved in such transfers
• the financial conglomerate states in the consolidated financial statements which insurance entities in the group are applying IAS 39
• disclosures requested by IFRS 7 are provided separately for the insurance sector applying IAS 39 and for the rest of the group applying IFRS 9

GPF is an entity that predominantly undertake insurance activities and has therefore decided to make use of this exception.

IFRS 17 Insurance Contracts (2017)

IFRS 17 establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts issued. IFRS 17 is a complex standard that includes some fundamental differences to current accounting for liability measurement and profit recognition. Insurance contracts will be recognised at a risk-adjusted present value of the future cash flows plus an amount representing the unearned profit in the group of contracts (the contractual service margin). If a group of contracts is or become loss-making, the loss will be recognised immediately. Insurance revenue, insurance service expenses and insurance finance income or expenses will be presented separately. IFRS 17 is effective from 1 January 2023. The standard is expected to have an effect on the group's financial statements, significantly changing the measurement and presentation of income and expenses.

Based on our preliminary assessments and on the basis of current operations, other amendments to standards and interpretation statements will not have a significant effect.

The preparation of interim accounts involves the application of assessments, estimates and assumptions that affect the use of accounting policies and the amounts recognised for assets and liabilities, revenues and expenses. The actual results may deviate from these estimates. The most material assessments involved in applying the accounting policies and the most important sources of uncertainty in the estimates are the same in connection with preparing the interim report as in the annual report for 2019.

All amounts are shown in NOK millions unless otherwise indicated. Due to rounding-off differences, figures and percentages may not exactly add up to the exact total figures.

A complete or limited audit of the interim report has not been carried out.

2. Financial assets and liabilities

Fair value

Financial assets and liabilities measured at fair value are carried at the amount each asset/liability can be settled to in an orderly transaction between market participants at the measurements date at the prevailing market conditions.

Different valuation techniques and methods are used to estimate fair value depending on the type of financial instruments and to which extent they are traded in active markets. Instruments are classified in their entirety in one of three valuation levels in a hierarchy on the basis of the lowest level of input that is significant to the fair value measurement in its entirety.

The different valuation levels and which financial assets/liabilities that are included in the respective levels are accounted for below.

Quoted prices in active markets

Quoted prices in active markets are considered the best estimate of an asset/liability's fair value. A financial asset/liability is considered valued based on quoted prices in active markets if fair value is estimated based on easily and regularly available prices and these prices represent actual and regularly occurring transactions at arm's length principle. Financial assets/liabilities valued based on quoted prices in active markets are classified as level one in the valuation hierarchy.

The following financial assets are classified as level one in the valuation hierarchy

• Listed shares
• Norwegian government/government backed bonds and other fixed income securities
• Exchange traded funds

Valuation based on observable market data

When quoted prices in active markets are not available, the fair value of financial assets/ liabilities is preferably estimated on the basis of valuation techniques based on observable market data.

A financial asset/liability is considered valued based on observable market data if fair value is estimated with reference to prices that are not quoted, but are observable either directly (as prices) or indirectly (derived from prices).

The following financial assets/liabilities are classified as level two in the valuation hierarchy

• Currency futures, equity options, forward rate agreements and currency swaps, in which fair value is derived from the value of underlying instruments. These derivatives are valued using common valuation techniques for derivatives (option pricing models etc.).
• Equity funds, bond funds, hedge funds and combination funds, in which fair value is estimated based on the fair value of the underlying investments of the funds.
• Bonds, certificates or index bonds that are unlisted, or that are listed but where transactions are not occurring regularly. The unlisted instruments in this category are valued based on observable yield curves and estimated credit spreads where applicable.
• Interest-bearing liabilities (banking activities) measured at fair value. These liabilities are valued based on observable credit spreads.
• Listed subordinated notes where transactions are not occurring regularly.

Valuation based on non-observable market data

When neither quoted prices in active markets nor observable market data is available, the fair value of financial assets/liabilities is estimated based on valuation techniques which are based on non-observable market data.

A financial asset/liability is considered valued based on nonobservable market data if fair value is estimated without being based on quoted prices in active markets or observable market data. Financial assets/liabilities valued based on non-observable market data are classified as level three in the valuation hierarchy.

The only financial assets classified as level three in the valuation hierarchy are share in Norsk Pensjon.

Gjensidige Pensjonsforsikring AS

NOK millions	Carrying amount as at 31.3.2020	Fair value as at 31.3.2020	Carrying amount as at 31.3.2019	Fair value as at 31.3.2019
Financial assets
Financial assets at fair value through profit or loss, designated upon initial recognition
Shares and similar interests	27.6	27.6	99.3	99.3
Bonds and other fixed income securities	1,263.8	1,263.8	1,349.0	1,349.0
Shares and similar interests in life insurance with investment options	20,862.2	20,862.2	22,165.3	22,165.3
Bonds and other fixed income securities in life insurance with investment options	3,731.4	3,731.4	3,653.3	3,653.3
Loans and receivables
Bonds and other fixed income securities classified as loans and receivables	5,434.4	5,677.0	5,077.9	5,227.9
Receivables related to direct operations and reinsurance	50.2	50.2	53.4	53.4
Other receivables	157.4	157.4	74.7	74.7
Cash and cash equivalents	368.6	368.6	356.0	356.0
Total financial assets	31,895.7	32,138.2	32,829.0	32,978.9
Financial liabilities
Financial liabilities at amortised cost
Subordinated debt	299.8	294.3	299.7	301.2
Other liabilities	49.1	49.1	134.9	134.9
Liabilities related to direct insurance and reinsurance	103.6	103.6	103.2	103.2
Total financial liabilities	452.5	447.0	537.8	539.3
Gain/(loss) not recognised in profit or loss		248.1		148.5

Valuation hierarchy 2020

The table shows a valuation hierarchy where financial assets/liabilities are divided into three levels based on the method of valuation.

	Level 1	Level 2	Level 3
			Valuation
		Valuation	techniques
	Quoted prices	techniques based on	based on non
	in active	observable	observable
NOK millions	markets	market data	market data	Total
Financial assets
Financial assets at fair value through profit or loss, designated upon initial recognition
Shares and similar interests		27.4	0.2	27.6
Bonds and other fixed income securities		1,263.8		1,263.8
Shares and similar interests in life insurance with investment options		20,862.2		20,862.2
Bonds and other fixed income securities in life insurance with investment options		3,731.4		3,731.4
Financial assets at amortised cost
Bonds and other fixed income securities classified as loans and receivables		5,677.0		5,677.0
Financial liabilities at amortised cost
Subordinated debt		294.3		294.3

Investments in funds have been reclassified from level 1 to level 2 in the valuation hierarchy from 4Q2019

Valuation hierarchy 2019

The table shows a valuation hierarchy where financial assets/liabilities are divided into three levels based on the method of valuation.

	Level 1	Level 2	Level 3
NOK millions	Quoted prices in active markets	Valuation techniques based on observable market data	Valuation techniques based on non observable market data	Total
Financial assets
Financial assets at fair value through profit or loss, designated upon initial recognition
Shares and similar interests	99.1		0.2	99.3
Bonds and other fixed income securities		1,349.0		1,349.0
Shares and similar interests in life insurance with investment options	22,131.7	33.6		22,165.3
Bonds and other fixed income securities in life insurance with investment options	3,636.9	16.4		3,653.3
Financial assets at amortised cost
Bonds and other fixed income securities classified as loans and receivables		5,227.9		5,227.9
Financial liabilities at amortised cost
Subordinated debt		301.2		301.2

Reconciliation of financial assets valued based on non-observable market data (level 3) 2020

								Amount of net
								realised/
								unrealised gains
		Net						recognised in
		realised/						profit or loss
		unrealised						that are
		gains						attributable to
		recognised				Transfers		instruments
	As at	in profit or	Purch		Settle	into/out	As at	held as at
NOK millions	1.1.2020	loss	ases	Sales	ments	of level 3	31.3.2020	31.3.2020
Shares and similar interests	0.2						0.2
Total	0.2						0.2

Reconciliation of financial assets valued based on non-observable market data (level 3) 2019

								Amount of net
								realised/
								unrealised gains
		Net						recognised in
		realised/						profit or loss
		unrealised						that are
		gains						attributable to
		recognised				Transfers		instruments
	As at	in profit or	Purch		Settle	into/out	As at	held as at
NOK millions	1.1.2019	loss	ases	Sales	ments	of level 3	31.3.2019	31.3.2019
Shares and similar interests	0.2						0.2
Total	0.2						0.2

3. Related parties

There have not been any significant transactions with related parties other than ordinary current agreements conducted at arm's length distance.

4. Contingent liabilities

We have no contingent liabilities.

Alternative performance measures and key figures

		1.1.-31.3.2020		1.1.-31.3.2019 1.1.-31.12.2019
Assets under management pension, at the end of the period	NOK millions	33,463.5	33,680.6	37,335.1
of which the group policy portfolio	NOK millions	7,256.4	6,798.5	7,204.2
Operating margin 1,9	%	29.31	35.48	36.05
Recognised return on the paid-up policy portfolio 2	%	(0.22)	0.92	4.34
Value-adjusted return on the paid-up policy portfolio 3	%	(0.73)	1.24	4.72
Share of shared commercial customers 4	%	67.8	69.7	67.5
Return on equity, annualised 5,9	%	11.7	20.6	17.9
Solvency capital (SF) 6	NOK millions	2,286.8	2,501.1	2,678.6
Solvency margin (SF) 7	%	151.7	138.2	140.3
Minimum capital requirement 8	NOK millions	675.1	633.5	670.2

¹ Operating margin = net operating income/total income

²Recognised return on the paid-up policy portfolio = realised return on the portfolio

³Value-adjusted return on the paid-up policy portfolio = total return on the portfolio

⁴Shared customers = customers having both pension and general insurance products with Gjensidige

5 Return on equity, annualised = Shareholders' share of net profit for the period/average shareholders' equity for the period, annualised

6 Solvency capital (SF) = Solvency capital /Capital requirement under the Solvency II standard formula

7 Solvency margin (SF) = Solvency capital available under the Solvency II standard formula

8 Minimum capital requirement under the Solvency II standard formula

9 Defined as alternative performance measure (APM). APMs are described on www.gjensidige.no/reporting in document named APMs Gjensidige Forsikring Group Q1 2020

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Gjensidige Pensjonsforsikring AS