Storebrand ASA — Investor Presentation 2014

Jul 16, 2014

Storebrand Q2 2014 16 July 2014

Odd Arild Grefstad – CEO Lars Aa. Løddesøl – CFO

Highlights Q2 2014

Result

• Group result of NOK 750 mill in Q2 and 1 477 mill YTD
• Strong investment returns
• Strong profit sharing from guaranteed products SPP: 188 mill in Q2

Operations

• Transition from Guaranteed to Savings continues:
• − Fee and administration income Guaranteed business: -12%
• − Fee and administration income Savings: +13%
• Final rules for conversion to paid-up policies with investment choice

Balance sheet

• Buffer capital and longevity reserve strengthening of 5.8 bn YTD¹
• Longevity reserve strengthening of NOK 2.1 bn² YTD
• NOK 502 bn in AuM in Storebrand Asset Management

¹See table on page 17 for description

²Consist of unallocated result of 2.0 bn and shareholders direct contribution of 0.2 bn.

Storebrand Group - strong results

Result
	Q2		01.01 -	30.06	Full year
NOK million	2014	2013	2014	2013	2013
Fee and administration income	1 028	1 051	2 086	2 072	4 253
Underwriting result	256	268	610	503	1 111
Operational cost (non-recurring items excluded)	-795	-831	-1 580	-1 647	-2 938
Financial result	150	-25	271	-5	97
Result before profit sharing and loan losses	640	463	1 386	923	2 522
Net profit sharing and loan losses	200	56	271	150	416
Shareholder direct equity contribution for longevity	-90	0	-180	0	0
Result before amortisation and write-downs Amortisation and write downs of intangible assets	750 -108	519 -105	1 477 -218	1073 -210	2 938 -739
Result before tax Tax Sold/liquidated business	642 -146 -0	414 125 -2	1 259 -253 -0	863 38 -2	2 199 -209 -4
Profit after tax	496	537	1 006	898	1 987

Our strategic response to changing market conditions

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

Managing the balance sheet

Challenging interest rate environment

Longevity - 2.1 bn reserved for longevity YTD

*Includes unallocated customer results as of 30.06.2014 and previously allocated reserves for longevity. Previously allocated reserver are calculated on a solidarity basis. A "no solidarity" principle will reduce the reserves by approximately 500 mill. It also includes shareholders direct contribution of 180 mill

7

Paid-up policies with investment choice

Transition rules:

• Transition rules published on 27th June:
• 1. A paid-up policy must be fully reserved for longevity before it can be converted to an investment choice solution
• 1. Technical calculation rate of 3% during the payout phase of the product, will allow for equalization of pension payments
• 1. Clear rules on customer advise
• Conversion of paid-up policies from 1st September

Storebrand is ready

• 29 bn of paid-up policies with a clear value proposition for conversion
• Early conversion may trigger higher contribution from shareholders for longevity reserving

GO storebrand Person Henri	FixBB and
Bank Fond Pensjon Forskring

Storebrand asset management exceeds NOK 500 bn in AuM!

Key figures

¹Earnings per share after tax adjusted for amortisation of intangible assets.

² Customer buffers in Benco of NOK 2.9 bn are not included

³Solidity capital/customer buffers does not include provisions for future longevity reservations

Storebrand Group - strong investment returns

Result
		Q2	01.01 -	Full year
NOK million	2014	2013	2014	2013	2013
Fee and administration income	1 028	1 051	2 086	2 072	4 253
Underwriting result	256	268	610	503	1 111
Operational cost	-795	-831	-1 580	-1 647	-2 938
Financial result	150	-25	271	-5	97
Result before profit sharing and loan losses	640	463	1 386	923	2 522
Net profit sharing and loan losses	110	56	91	150	416
Result before amortisation and write-downs	750	519	1 477	1 073	2 938

Result per line of business

	Q2		01.01 -	30.06	Full year
NOK million	2014	2013	2014	2013	2013
Savings (non-guaranteed)	184	138	370	227	670
Insurance	154	181	381	277	774
Guaranteed pension	313	255	614	635	1 376
Other	99	-55	112	-66	119
Result before amortisation and write-downs	750	519	1 477	1 073	2 938

Savings (non-guaranteed) - growth and profitability

	Q2		01.01 -	30.06	Full year
NOK million	2014	2013	2014	2013	2013
Fee and administration income	522	461	1 031	909	1 888
Risk result life & pensions	-7	4	-8	4	7
Operational cost	-325	-322	-646	-657	-1 279
Financial result	-	-	-	-	-
Result before profit sharing and loan losses	191	142	377	256	616
Net profit sharing and loan losses	-6	-5	-7	-29	54
Result before amortisation	184	138	370	227	670

Result per product line

	Q2		01.01 -	30.06	Full year
NOK million	2014	2013	2014	2013	2013
Unit Linked Storebrand	32	33	62	49	106
Unit Linked SPP	18	9	55	24	78
Asset Management	86	44	153	90	313
Retail Banking	48	52	100	64	173
Result before amortisation	184	138	370	227	670

Savings (non-guaranteed) - continued growth

Insurance - strong group life result

Insurance

	Q2		01.01 -	30.06	Full year
NOK million	2014	2013	2014	2013	2013
Insurance premiums f.o.a.	770	707	1 540	1 464	3 034
Claims f.o.a.	-558	-430	-1 050	-996	-1 940
Operational cost	-131	-132	-256	-260	-463
Financial result	74	36	147	68	143
Result before profit sharing and loan losses	154	181	381	277	774
Net profit sharing and loan losses	0	0	0	0	0
Result before amortisation	154	181	381	277	774

Result per product line

	Q2		01.01 -	30.06	Full year
NOK million	2014	2013	2014	2013	2013
P&C & Individual life*	76	70	145	135	314
Health & Group life**	25	85	73	115	225
Disability insurance***	53	27	163	27	234
Result before amortisation	154	181	381	277	774

* Individual life and disability, property and casualty insurance

** Group life, workers comp and 50% of result in Storebrand Health insurance

*** DC disability risk result Norwegian line of business and risk result from SPP

Insurance - reduced growth

Comments

• 11% growth and strong results in P&C
• Reduced growth and weaker results within group life
• Weaker disability results from Sweden, as previously announced

Reporting adjustments

• From Q1 2014, SPP risk products are reported under Insurance
• Storebrand Health Insurance (j/v) no longer consolidated
• Historic figures are updated accordingly

Insurance

Guaranteed pension - reduced fee and administration income

Result
	Q2		01.01 -	30.06	Full year
NOK million	2014	2013	2014	2013	2013
Fee and administration income	439	496	913	987	2 013
Risk result life & pensions	48	-19	126	22	7
Operational cost	-281	-275	-562	-545	-1 016
Financial result	-	-	-	-	-
Result before profit sharing and loan losses	206	203	478	463	1 003
Net profit sharing and loan losses	197	52	317	171	373
Longevity provision	-90	-	-180	-	-
Result before amortisation	313	255	614	635	1 376

Result per product line

	Q2		01.01 -	30.06	Full year
NOK million	2014	2013	2014	2013	2013
Defined Benefit (fee based)	135	232	284	457	968
Paid-up policies	-35	-35	-55	-41	19
Traditional individual life and pension	1	0	0	0	21
SPP Guaranteed Products	212	59	385	218	366
Result before amortisation	313	255	614	635	1 376

Guaranteed pension - strengthened buffer capital

NOK million	30.06.2014	31.12.2013	Change in 2014
Market value adjustment reserve	3 701	3 823	-122
Excess value of bonds at amortised cost	8 866	5 160	3 707
Additional statutory reserve	4 310	4 458	-148
Provisions for new mortality tables*	4 196	4 558	-362
Unallocated customer results Shareholders direct contribution,	2 687	0	2 687
provisions for new mortality tables	180	0	180
Conditional bonuses SPP	10 838	11 010	-172
Total	34 778	29 008	5 770

*Provisions for new mortality tables are calculated on a solidarity basis. A "no solidarity" principle will reduce the reserves by approximately 500 mill.

Comments

• Reserve growth due to declining interest rates (Sweden)
• Buffer capital increased with 5.8 bn
• 2.1 bn allocated to longevity reserve strengthening YTD

Other Other

	Q2		01.01 -	30.06	Full year
NOK million	2014	2013	2014	2013	2013
Fee and administration income	67	94	142	176	353
Risk result life & pensions	3	6	2	9	3
Operational cost	-58	-102	-116	-185	-180
Financial result	76	-61	124	-73	-46
Result before profit sharing and loan losses	89	-63	151	-73	129
Net profit sharing and loan losses	9	8	-39	7	-11
Result before amortisation	99	-55	112	-66	119

Result per product line

	Q2		01.01 -	30.06	Full year
NOK million	2014	2013	2014	2013	2013
Corporate Banking	26	15	2	41	113
BenCo	15	9	23	30	46
Holding company costs and net financial results in company portfolios	58	-91	87	-137	-39
Result before amortisation	99	-55	112	-66	119

Summary

• Good results driven by investment returns
• Strong buffers
• Balance sheet transition from guaranteed to non-guaranteed continues
• Operating cost down 5,4% YTD*
• AuM in Storebrand Asset Management: NOK 502 bn

*Currency adjusted

Capital Markets Day London 18. November 2014

Appendix:

Market impacted by extensive product reform – important regulatory changes in place

Storebrand Life Insurance asset allocation

¹The graph shows the asset allocation for all products with an interest rate guarantee in Storebrand Life Insurance Norwegian operations.

SPP asset allocation

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