Storebrand ASA — Interim / Quarterly Report 2019

Feb 12, 2020

Storebrand Q4 2019

12 February 2020

Odd Arild Grefstad – CEO Lars Aa. Løddesøl – CFO

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² Growth figures are from YTD 2018 to YTD 2019. ³ Subject to AGM approval 22 April 2020

⁴ Corporate Knights Global 100, 2020. ⁵ Including transitional rules.

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

Dividend 2019

• IFRS result growth - Ordinary dividends minimum 50% of result after tax with nominal growth
• Capital release from back book when solvency ratio is above 180%. Share buy backs preferred

Strong growth in Savings

World leader in sustainability

The Global 100 index¹, as presented during the World Economic Forum in Davos by Corporate Knights, ranks Storebrand as:

• World's most sustainable insurance company
• Most sustainable Nordic financial company

SPP Fonder turns fossil free – named Swedish fund manager of the year

Privata Affärers motivering:

"Man vet vad man får hos SPP Fonder. Klimatsmarta och hållbara fonder till ett bra pris!"

SPP's digital pension plan Sajna named "Digital project of the year"

Sajna is the first completely digital pension plan in Sweden

Lead time decrease from 3 weeks to 0 days 272 signed deals in 2019, compared to 58 in 2018

Key figures

SII Own funds and SCR Customer buffers development ⁴

¹ Result before amortisation and tax, adjusted for performance related result. ² Earnings per share after tax adjusted for amortisation of intangible assets.

³ Excluding customer buffers Benco. Surplus values of HTM bonds cost excluded. ⁴ Bars and green line are without the use of transitional capital. Black line is with transitional.

Movement from Q3 2019 to Q4 2019 Storebrand ASA

Movement full year 2019 Storebrand ASA

SII position Storebrand Group

Key takeaways

• Positive effect from increased interest rates partly offset by decreased VA
• Subordinated loan with call in March excluded
• Business mix strengthens balance sheet

Storebrand Group

	Q4		Full year
NOK million	2019	2018	2019	2018
Fee and administration income	1 561	1 301	5 308	5 011
Insurance result	223	282	1 005	1 291
Operational cost	-1 077	-1 031	-4 015	-3 786
Operating profit	707	551	2 298	2 516
Financial items and risk result life	319	11	739	642
Profit before amortisation	1 026	563	3 037	3 158
Amortisation and write-downs of intangible assets	-117	-99	-444	-360
Profit before tax	909	464	2 593	2 799
Tax	-234	1 392	-511	897
Profit after tax	675	1 856	2 082	3 696

Storebrand Group

	Q	4	Full year
NOK million	2019	2018	2019	2018
Fee and administration income	1 561	1 301	5 308	5 011
Insurance result	223	282	1 005	1 291
Operational cost	-1 077	-1 031	-4 015	-3 786
Operating profit	707	551	2 298	2 516
Financial items and risk result life	319	11	739	642
Profit before amortisation	1 026	563	3 037	3 158

Profit per line of business

	Q 4		Full year
NOK million	2019	2018	2019	2018
Savings - non-guaranteed	547	325	1 364	1 257
Insurance	70	97	439	748
Guaranteed pension	332	217	1 029	1 148
Other profit	77	-76	205	5
Profit before amortisation	1 026	563	3 037	3 158

Group

Storebrand Group

Profit1	Q	4	Full	year
NOK million	2019	2018	2019	2018
Fee and administration income	1 561	1 301	5 308	5 011
Insurance result	223	282	1 005	1 291
Operational cost	-1 077	-1 031	-4 015	-3 786
Operating profit	707	551	2 298	2 516

Operating profit adjusted for performance related income and costs²

	Q	4	Full year
NOK million	2019	2018	2019	2018
Performance related income	225	96	225	96
Performance related OPEX	26	-11	-84	-11
Adjusted operating profit	456	466	2 157	2 431

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

² Performance related costs refer to performance bonuses and kick-backs in funds with performance fees that are booked on a quarterly basis. The corresponding income is not booked until the end of the year. The numbers will vary with performance development through the year.

Group

Savings (non-guaranteed)

	Q 4		Full	year
NOK million	2019	2018	2019	2018
Fee and administration income	1 233	1 006	3 996	3 709
Operational cost	-692	-652	-2 621	-2 405
Operating profit	541	354	1 375	1 303
life Financial items and risk result	6	-29	-11	-46
Profit before amortisation	547	325	1 364	1 257

Profit per product line

	Q 4		Full year
NOK million	2019	2018	2019	2018
Unit linked Norway	57	44	275	224
Sweden Unit linked	89	71	291	267
Asset management	329	160	526	542
Retail banking	72	50	272	224
Profit before amortisation	547	325	1 364	1 257

Savings (non-guaranteed)

Profit
	Q 4	Full	year
NOK million	2019	2018	2019	2018
Fee and administration income	1 233	1 006	3 996	3 709
Operational cost	-692	-652	-2 621	-2 405
Operating profit	541	354	1 375	1 303

Operating profit adjusted for performance related income and costs¹

	Q	4		Full year
NOK million	2019	2018	2019	2018
Performance related income	225	96	225	96
Performance related OPEX	26	-11	-84	-11
Adjusted operating profit	290	269	1 234	1 218

Savings (non-guaranteed) – strong AuM growth

Comments¹

• 11% premium growth in UL premiums
• 23% growth in UL reserves
• 18% growth in assets under management²
• Q3 2019 Higher net interest margin in the bank

¹Growth figures from YTD 2018 to YTD 2019.

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2 Includes a reclassification of NOK 16bn in assets under administration to assets under management

Insurance

Profit
	Q 4 Full			year
NOK million	2019	2018	2019	2018
Insurance premiums f .o.a.	1 014	1 003	3 909	3 854
Claims f .o.a.	-792	-721	-2 904	-2 562
Operational cost	-177	-175	-648	-614
Operating profit	45	107	357	677
Financial result	25	-9	83	71
Profit before amortisation	70	97	439	748

Profit per product line

		Q 4		Full year
NOK million	2019	2018	2019	2018
P&C & Individual life	87	71	335	372
Health & Group life	-34	-7	-41	185
Pension related disability insurance Nordic	16	34	145	192
Profit before amortisation	70	97	439	748

Insurance – overall in line with target

			Portfolio premiums			Comments premiums and growth1
	P&C & Individual life		Health & Group life	Disability insurance
	4 455	4 442	4 507	4 583	4 698	▪ 5% overall premium growth in line with target
K O N M	1 743	1 769	1 810	1 845	1 915	10% P&C & Individual life growth ▪
	1 574	1 548	1 563	1 609	1 639
	1 138	1 124	1 134	1 130	1 144
	Q4 2018	Q1 2019	Q2 2019	Q3 2019	Q4 2019

Comments Combined ratio and results

• 91% combined ratio 2019, target ratio 90-92%
• Good cost control

• Group life re-priced from 1 January 2020

• 5% overall premium growth in line with target

• 10% P&C & Individual life growth

Guaranteed pension

Profit
	Q	4	Full	year
NOK million	2019	2018	2019	2018
Fee and administration income	368	333	1 475	1 440
Operational cost	-225	-223	-819	-816
Operating profit	143	111	657	624
Risk result life & pensions	71	58	215	191
profit Net sharing	118	48	157	333
Profit before amortisation	332	217	1 029	1 148

Profit per product line

	Q 4		Full year
NOK million	2019	2018	2019	2018
Defined benefit (fee based)	63	82	287	314
Paid-up policies Norway ,	91	51	409	511
Individual life and pension Norway ,	11	29	21	35
Guaranteed Sweden products ,	167	55	312	288
Profit before amortisation	332	217	1 029	1 148

Guaranteed

Guaranteed pension - strong financial result and robust buffer situation

• As companies convert to DC schemes, the migration from DB to paid up policies continues to reduce fee income in Guaranteed pensions
• Strong financial result Sweden
• Strong risk result

NOK million	Q4 2019	Q3 2019	Change
Market value adjustment reserve	500 5	893 5	- 393
of Excess value bonds at amortised cost	697 4	6 495	- 1 798
Additional statutory reserve	9 023	8 194	829 +
Conditional bonuses Sweden	7 802	7 213	589 +
Total	27 022	27 795	- 773

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

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Profit	Q 4		Full year
NOK million	2019	2018	2019	2018
Fee and administration income	13	23	51	102
Operational cost	-35	-42	-143	-190
Operating profit	-22	-20	-91	-89
Financial items and risk result life	99	-56	296	128
Profit before amortisation	77	-76	205	40

Profit per product line

	Q 4		Full year
NOK million	2019	2018	2019	2018
BenCo	26	-1	33	30
Holding costs and net financial results in company portfolios company	52	-75	173	24
Profit before amortisation	77	-76	205	40

To register, please visit Storebrand.com/ir

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 Kjetil R. Krøkje Daniel Sundahl

Group CFO Group Head of Finance, Strategy and M&A Head of Investor Relations and Rating

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