Storebrand ASA — Earnings Release 2018

Feb 13, 2019

Storebrand Q4 2018

13 February 2019

Odd Arild Grefstad – CEO Lars Aa. Løddesøl – CFO

³ Proposed 4 Including transitional rules.

Our strategy: A compelling combination of self-funding growth and capital return from maturing guaranteed back-book

Selective bolt-on M&A: Strengthening our asset management offering and a further shift in the group's balance sheet towards non-guaranteed savings

4

Cubera: A strong complement to Storebrand's private equity offering for clients seeking investments in the Nordics

Fourth quarter results impacted by financial markets - growth ambitions maintained

Solvency movement from Q3 2018 to Q4 2018 Storebrand ASA

¹Including increased VA and decreased equity stress

2 Including risk management actions

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² After proposed dividend, including tax gain as pr. stock exchange release 15 January 2019

SII position Storebrand Group

Key takeaways

• Solvency position strengthened from increase in shareholders equity
• Negative impact from adverse financial markets are countered by risk management and change in equity stress levels and volatility adjustment
• No material changes to estimated sensitivities

¹The estimated Economic 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 full year 2018 Storebrand ASA

Group

Key figures

SII Own funds and SCR⁴ Customer buffers development

¹ Result before amortisation, write-downs. ² Earnings per share after tax adjusted for amortisation of intangible assets.

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³ Customer buffers in Benco not included. Surplus values of bonds held at amortized cost excluded. ⁴ Without the use of transitional capital

Storebrand Group

	Q 4		Full year	Full year
NOK million	2018	2017	2018	2017
Fee and administration income	1 301	1 531	5 011	4 771
Insurance result	282	261	1 291	1 146
Operational cost	-1 031	-989	-3 786	-3 490
Operating profit	551	803	2 516	2 427
Financial items and risk result life	11	-185	642	513
Profit before amortisation	563	618	3 158	2 940
Amortisation and write-downs of intangible assets	-99	-237	-360	-536
Profit before tax	464	381	2 799	2 404
Tax	1 392	113	898	2
Profit after tax	1 856	494	3 697	2 405

Storebrand Group

2017 4 771	2018	2017
			2018	NOK million
	5 011	1 531	1 301	Fee and administration income
1 146	1 291	261	282	Insurance result
-3 490	-3 786	-989	-1 031	Operational cost
2 427	2 516	803	551	Operating profit
513	642	-185	11	Financial items and risk result life
2 940	3 158	618	563	Profit before amortisation

Profit per line of business

			Full year	Full year
NOK million	2018	2017	2018	2017
Savings - non-guaranteed	328	639	1 267	1 511
Insurance	97	32	748	608
Guaranteed pension	214	31	1 138	766
Other profit	-76	-84	5	55
Profit before amortisation	563	618	3 158	2 940

Savings (non-guaranteed)

Profit
	Q 4		Full year	Full year
NOK million	2018	2017	2018	2017
Fee and administration income	1 006	1 189	3 708	3 394
Operational cost	-649	-554	-2 394	-1 891
Operating profit	357	635	1 314	1 503
Financial items and risk result life	-29	4	-46	8
Profit before amortisation	328	639	1 267	1 511
1 ) Income earned not booked	0	0	0	0

Profit per product line

Profit per product line
	Q 4		Full year	Full year
NOK million	2018	2017	2018	2017
Unit linked Norway	47	64	235	284
Unit linked Sweden	71	70	267	252
Asset Management segment	160	470	542	823
Retail banking	50	34	224	152
Profit before amortisation	328	639	1 267	1 511

Savings (non-guaranteed) – impacted by weak financial markets

Comments

• 7% premium growth in UL premiums¹
• 7% growth in UL reserves²
• Positive UL transfer balance
• 10% retail lending growth²

Assets under management

Insurance

Profit
		Q 4		Full year
NOK million	2018	2017	2018	2017
Insurance premiums f.o.a.	1 003	968	3 854	3 872
Claims f.o.a.	-721	-707	-2 562	-2 726
Operational cost	-175	-193	-614	-711
Operating profit	107	68	677	435
Financial result	-9	-36	71	173
Profit before amortisation	97	32	748	608

Profit per product line

Profit per product line
	Q	4	Full year	Full year
NOK million	2018	2017	2018	2017
P&C & Individual life	71	38	372	285
Health & Group life	-7	-21	185	242
Pension related disability insurance Nordic	34	15	192	81
Profit before amortisation	97	32	748	608

Insurance – result improvements

P&C & Individual life Health & Group life Disability insurance

Comments Combined ratio and results

• Combined ratio of 89% in Q4
• Lower disability improves result in 2018
• Cost measures successfully implemented

Portfolio premiums Comments premiums and growth

• Flat premium development in 2018
• Growth initiatives starting to show effect

Guaranteed pension

Profit
	Q 4		Full year	Full year
NOK million	2018	2017	2018	2017
Fee and administration income	334	376	1 441	1 483
Operational cost	-226	-240	-828	-889
Operating profit	108	136	614	595
Risk result life & pensions	58	18	191	67
Net profit sharing and loan losses	48	-123	333	104
Profit before amortisation	214	31	1 138	766

Profit per product line

Profit per product line
	Q 4		Full year	Full year
NOK million	2018	2017	2018	2017
Defined benefit (fee based)	80	75	306	297
Paid-up policies, Norway	51	29	508	122
Individual life and pension, Norway	29	43	37	79
Guaranteed products, Sweden	55	-116	288	267
Profit before amortisation	214	31	1 138	766

Guaranteed pension

• reserves in long term decline and robust buffer situation

• As companies convert to DC schemes, the migration from DB to lower-margin paid up policies continues to reduce fee income in Guaranteed pensions

• Paid up policies risk result of NOK 38m, profit sharing of NOK 12m

NOK million	Q4 2018	Q3 2018	Change
Market value adjustment reserve	2 245	2 841	- 596
Excess value of bonds at amortised cost	5 009	5 051	- 42
Additional statutory reserve	8 494	8 267	+ 228
Conditional bonuses Sweden	6 462	6 713	- 251
Total	22 211	22 872	- 661

The term Buffer capital in this table is not consistent with the definition of buffer capital made in the IFRS accounting

Buffer capital Guaranteed reserves in % of total reserves

Other¹

Profit
	Q	4	Full year	Full year
NOK million	2018	2017	2018	2017
Fee and administration income	23	20	102	83
Operational cost	-42	-56	-190	-188
Operating profit	-20	-36	-89	-105
Financial items and risk result life	-56	-48	128	161
Profit before amortisation	-76	-84	40	55

Profit per product line

Q 4		Full year	Full year
2018	2017	2018	2017
0	5	-14	42
-1	3	30	21
-75	-93	24	-8
-76	-84	40	55

Appendix

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. Category bonds includes loans on life insurance balance sheet.

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	Group CFO	lars.loddesol@storebrand.no	+47 9348 0151
Kjetil R. Krøkje	Head of IR	kjetil.r.krokje@storebrand.no	+47 9341 2155
Daniel Sundahl	IR Officer	daniel.sundahl@storebrand.no	+47 9136 1899

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.