Storebrand ASA — Earnings Release 2017

Apr 27, 2017

Storebrand 1Q 2017

27 Apr 2017

Odd Arild Grefstad – CEO Lars Aa. Løddesøl – CFO

Storebrand celebrates 250 years in 2017

Highlights 1Q 2017

Our strategy

Manage the guaranteed
balance sheet

>150% SII margin

• Cost reductions through automation and outsourcing
• Manage for future capital release and increased dividend capacity

1 2 Continued growth in Savings and Insurance

Capital-light and profitable growth

• Market leading asset gatherer with strong Insurance offering
• Continued retail growth with low capital requirements

From high to low capital requirements and higher quality of earnings

We work hard to reach our vision: Recommended by our customers

Solvency position Storebrand Group

Key takeaways

• Strong asset return allow for longevity reserve strengthening and increased buffer capital levels
• Investment portfolios further adopted to Solvency II
• Small changes in value of transitional measures

¹The solvency position of Storebrand Group is calculated using the current Storebrand implementation of the Solvency II Standard model with the company's 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.

Solvency movement from Q4 2016 to Q1 2017

¹Improved modelling of investments (+), reduced lapse fees Sweden (-), Increased equity stress (-), Reduced Volatility Adjustment (-)

² Operating earnings refers to increased own funds from operations and expected normalised return, and implementation of investment strategy (+)

³ Investments return above normal risk premiums and changes in liabilities (+)

Balance Sheet Shifts to capital efficient products

1. Guaranteed portfolio has reached

Implications for capital

1. New growth in Savings and Insurance need little new capital

peak capital consumption

1. Will increase free cash flow and dividend capacity

6 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.

Growth in Savings continues, Insurance growth paused by changes in distribution

Innovating the customer journey

Individuals change mortgage provider more frequently - Storebrand Bank fastest growing in 2016

• 25% of Norwegian mortgage customers have changed provider or negotiated terms during the last year¹
• Storebrand's customer offer and capital advantages have led to strong growth

Increased customer awareness Fastest growing mortgage banks 2016 (%)

¹ Finance Norway: Forbruker- og finanstrender 2017 – Bank.

² Growth in retail mortgages Norway. https://www.dn.no/nyheter/2017/03/19/1020/Finans/sterk-utlansvekst-i-bankene.

Key figures

¹Result before amortisation, write-downs.

²Earnings per share after tax adjusted for amortisation of intangible assets.

³ Customer buffers in Benco not included.

⁴Solidity capital/customer buffers does not include provisions for future longevity reserves.

Q2 2016 Q3 2016 5.7% Q4 2016 5.6% 5.4% Q1 2017 Q1 2016 5.9%

Storebrand Group

Profit1
		1Q	Full year
NOK million	2017	2016	2016
Fee and administration income	1 019	1 052	4 235
Insurance result	275	219	945
Operational cost2	-831	-812	-3 191
Operating profit	463	459	1 989
Financial items and risk result life	208	78	924
Result before amortisation	671	537	2 913
Amortisation and write-downs of intangible assets	-98	-106	-406
Result before tax	573	430	2 506
Tax	-109	-120	-364
Profit after tax	465	311	2 143

¹ The result includes special items. Please see storebrand.com/ir for a complete overview.

2 The operational cost in Q1 2017 includes around NOK 30 million of costs either related to 2016 or of a one-time nature.

Storebrand Group

		1Q	Full year
NOK million	2017	2016	2016
Fee and administration income	1 019	1 052	4 235
Insurance result	275	219	945
Operational cost	-831	-812	-3 191
Operating profit	463	459	1 989
Financial items and risk result life	208	78	924
Profit before amortisation	671	537	2 913

Profit per line of business

		1Q	Full year
NOK million	2017	2016	2016
Savings - non -guaranteed	240	273	1 063
Insurance	171	120	575
Guaranteed pension	201	15	870
Other profit	59	129	405
Profit before amortisation	671	537	2 913

Savings (non-guaranteed) - continued growth

		1Q	Full year
NOK million	2017	2016	2016
Fee and administration income	700	697	2 758
Operational cost	-459	-419	-1 700
Operating profit	241	279	1 058
Financial items and risk result life	-2	-6	5
Profit before amortisation	240	273	1 063

Profit per product line

	1Q		Full year
NOK million	2017	2016	2016
Unit linked Norway	69	84	242
Unit linked Sweden	46	27	175
Asset Management segment	98	127	518
Retail banking	26	34	127
Profit before amortisation	240	273	1 063

Savings (non-guaranteed) - strong growth in retail lending

¹Excluding transfers. Growth from YTD 2016 to YTD 2017. ² Growth figures from YTD 2016 to YTD 2017.

Insurance

	1Q		Full year
NOK million	2017	2016	2016
Insurance premiums f.o.a.	940	947	3 828
Claims f.o.a.	-665	-728	-2 883
Operational cost	-172	-146	-602
Operating profit	103	73	342
Financial result	68	47	233
Profit before amortisation	171	120	575

Profit per product line

	1Q		Full year
NOK million	2017	2016	2016
P&C & Individual life	96	104	293
Health & Group life	66	39	149
Pension related disability insurance Nordic	9	-23	133
Profit before amortisation	171	120	575

Insurance - combined ratio on target level

Guaranteed pension - strong quarter but long term run off

Profit
	1Q		Full year
NOK million	2017	2016	2016
Fee and administration income	358	404	1 566
Operational cost	-221	-271	-981
Operating profit	137	132	585
Risk result life & pensions	34	4	-37
Net profit sharing and loan losses	30	-122	322
Profit before amortisation	201	15	870

Profit per product line

	1Q		Full year
NOK million	2017	2016	2016
Defined benefit (fee based)	67	89	340
Paid-up policies, Norway	27	-6	46
Individual life and pension, Norway	2	2	147
Guaranteed products, Sweden	105	-70	336
Profit before amortisation	201	15	870

Guaranteed pension - reserves in decline

Other¹

	1Q		Full year
NOK million	2017	2016	2016
Fee and administration income	21	17	145
Operational cost	-39	-42	-141
Operating profit	-18	-25	4
Financial items and risk result life	77	154	401
Profit before amortisation	59	129	405
Profit per product line	1Q		Full year
	2017	2016	2016
Banking	14	-13	76
	5	30	44
NOK million Corporate BenCo Holding company costs and net financial results in company portfolios	40	113	285

¹Excluding eliminations. For more information on eliminations, see Supplementary Information.

Economic capital (EC) measures the present value of the Group

Growth in the value of Storebrand EC driven by operating earnings - Increase of 3.7 bn in available economic capital

NOKm
------	--

				46,801
43,064		Movement reconciliation reserve 2015-20161		7,198
6,780	- 600 mill NOK	+3 500 mill NOK	-200 mill NOK	2,729
2,434 14,302	Assumption & model changes + More accurate modelling of fee on capital certificates (PKB)	Operating earnings + Increased AuM in non guaranteed business + Decreased costs + Asset returns and longevity reserve	Economic variances Norway: Increased interest rates and increased VA Sweden: Decreased interest rates and decreased VA	16,827
19,548	− Improved modelling of Risk Margin − "New" ESG that allows negative interest rates and increased volatility − Increased lapse assumption on UL	strengthening − Increased volumes of paid-up-policies − Margin pressure	Changed volatility	20,046
Storebrand Economic Capital 2015	Subordinated loans	Look through Reconciliation reserve	Shareholder surplus	Storebrand Economic Capital 2016

Storebrand Economic Capital - NOK 88.4 per share

• Storebrand group Group Economic Capital of NOK 46.8bn (NOK 43.1 bn in 2015)
• Storebrand Group Economic Capital, excluding subordinated loans of NOK 39.6 bn or NOK 88.4 per share (NOK 37.1 bn or NOK 83.1 per share in 2015)
• Value of new business of NOK 0.5bn

Appendix

The Solvency Calculation – moving to a market consistent balance sheet and risk sensitive capital requirements

¹Including transitional rules.

Calculating Market Value of Liabilities under Solvency II

Market value of liabilities

Solvency II balance sheet

• Both assets and liabilities are mark to market
• For assets this means using observable market prices
• For insurance liabilities there is a standardised methodology for estimating the value of insurance customers contracts
• Own funds is the difference between the market value of assets and liabilities

Solvency II Ratio Storebrand Group Q1 2017

¹Contribution to Own Funds from products = NPV of future profit – Risk margin. Including LKT for Guaranteed products SPP. ² Shareholder surplus at market value. ³Includes effect of transitionals on equity of NOK -613m.

Solvency Capital Requirements (SCR)

From IFRS Values to Solvency II Own Funds

High quality capital base

CRD IV capital Tier 3 Tier 2 Tier 1 restricted Tier 1 unrestricted

Solvency Capital allocation pr segment – most of the capital allocated to the guaranteed segment

ILLUSTRATIVE PRO FORMA ALLOCATION BASED ON 159% SOLVENCY RATIO PR Q1 2017¹

¹The equity and debt in the Group sits within different legal units. This allocation of solvency capital is done on a pro-forma basis to reflect an approximation to the solvency II capital consumed in the different reporting segments after group diversification. The estimated allocation is based on the capital consumption under SII and CRD IV adjusted for positive capital contribution to own funds. Storebrand has a target of a solvency ratio above 150%. The pro forma allocation of capital is based on the actual solvency ratio pr. Q1 2017 of 159%. Hard capital is defined as paid in and earned equity, subordinated debt and other tangible capital elements. Products contribution to own funds in Guaranteed includes positive contribution from deferred capital contribution (DCC) in the Swedish business.

Strong Returns on IFRS Equity in Savings and Insurance

ILLUSTRATIVE

The equity in the Group sits within different legal units. This allocation of equity is done on a pro-forma basis to reflect an approximation to the IFRS equity consumed in the different reporting segments after group diversification. The estimated allocation is based on the capital consumption under SII and CRD IV adjusted for positive capital contribution to own funds. The Insurance segment has been allocated an increased capital level which is more in line with long-term expected diversification effects.

Storebrand Life Insurance asset allocation

Note: The graph shows the asset allocation for all products with an interest rate guarantee in Storebrand Life Insurance Norwegian operations.

SPP asset allocation

Note: The graph shows the asset allocation for all products with an interest rate guarantee in SPP.

Investor Relations contacts

Lars Aa Løddesøl Kjetil R. Krøkje Group CFO Head of IR

lars.loddesol@storebrand.no kjetil.r.krokje@storebrand.no +47 9348 0151 +47 9341 2155

This document contains Alternative Performance Measures as defined by the European Securities and Market Authority (ESMA). An overview of APMs used in financial reporting is available on storebrand.com/ir.