Storebrand ASA — Investor Presentation 2016

Jul 14, 2016

Storebrand 2Q 2016

14 July 2016

Odd Arild Grefstad – CEO Lars Aa. Løddesøl – CFO

Highlights 2Q 2016

¹Result before amortisation and write-downs.

² Change from 1H 2015 to 1H 2016, adjusted for FX.

³ Growth figures are from 1H 2015 to 1H 2016.

2

⁴ Including transitional rules. Estimated Solvency II ratio excluding transitional rules is 122%.

Transformation of the business model continues

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

Limited Brexit effect on results and solvency

Impact of Brexit - June 23 to July 12

• Positive mark to market return effects on company portfolios and for Guaranteed portfolios in Norway and Sweden
• Limited negative effect on solvency

Paid up policies book is the main challenge in a low interest scenario and under SII…

…But still manageable both short and long term

Expected return paid up polices without use of buffers 2016-2020¹

…including reinvestment due and expected issuance of new paid up polices

¹Expected return paid up polices, including reinvestment and issuance of new paid up polices, without the use of buffers. Illustration is based on normal risk premiums and interest rate level as of June 30, 2016.

• Q2 2016: Built NOK 3.1 bn in new A rated HTM investments at 3.1% yield and 11.3 years average life
• 2016-2020: Longevity reserve strengthening and interest rate guarantee to be covered by expected return, buffers and planned company contribution²
• 2020-2025: Prolonged low interest rate environment will have limited impact on results²

²Based on current interest rates and point estimate based on normal risk premiums. Market shocks could lead to higher use of buffers and reduced results.

Estimated SII position Storebrand Group

Key takeaways

• Reduction in reported Solvency II figures due to amortization of transitional measures
• Strong results and investment returns improve Solvency ratio excluding transitionals
• Change in asset allocation and reduced stress from equities improve the Solvency ratio

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 II movement from Q1 2016 to Q2 2016

1 Solvency II margin excluding transitional rules.

Growth in Savings and Insurance continues

Fee and administration income shifts from Guaranteed to Savings

Income decline of 5% adjusted for FX

Storebrand Group income development 2Q 2016 compared to 2Q 2015 (NOK mill.) 8 74 6 Guaranteed pension Q2 2015 Savings 1.065 -5,6% Q2 2016 1.005 Other 2,700 2,600 2,500 2,400 2,300 2,200 2,800 1,500 2,100 2,000 1,900 1,800 1,700 1,600 Guaranteed pension Savings 2Q 14 2Q 15 2Q 16 Fee- and admin income 12 months rolling Savings and Guaranteed pension (NOK mill.)

Key figures

¹Result before amortisation, write-downs and longevity provisions

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

³ Customer buffers in Benco of NOK 1.0 bn not included

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

Storebrand Group

Profit
	2Q		01.01 -	30.06	Full year
NOK million	2016	2015	2016	2015	2015
Fee and administration income	1 005	1 065	2 058	2 111	4 317
Risk result life & pensions	-6	54	18	63	80
Insurance premiums f.o.a.	962	947	1 909	1 813	3 642
Claims f.o.a.	-726	-683	-1 453	-1 334	-2 822
Operational cost1	-698	-799	-1 501	-1 602	-3 268
Financial result	200	76	387	156	244
Result before profit sharing and loan losses	739	661	1 417	1 207	2 193
Net profit sharing and loan losses	60	-51	-73	8	-431
Result before amortisation and longevity	798	610	1 344	1 215	1 762
Provision longevity	-	-151	-	-306	-1 764
Amortisation and write-downs of intangible assets	-114	-103	-230	-208	-437
Result before tax	684	356	1 114	701	-438
Tax	31	-97	-89	-184	1 821
Sold/liquidated business	-	-0	-	-0	-0
Profit after tax	715	258	1 025	517	1 382

¹ 2Q 2016: Includes 98 NOK mill. in positive effect from change in own disability pension scheme. For a complete overview of special items in previous quarters, please visit storebrand.com/ir.

New and simplified reporting format from 3rd quarter 2016

Consolidating insurance premiums and claims into a single result line

a. Consolidating life risk and financial items into a single result line b. This allows for a pure 'operating profit' line

	2Q	New reporting format:
NOK million	2016
Fee and administration income	1 005	NOK million
Risk result life & pensions	-6	Fee and administration income
Insurance premiums f.o.a.	962	Insurance result
Claims f.o.a.	-726	Operational cost
Operational cost	-698
Financial result	200	Operating profit
Result before profit sharing and loan losses	739	Financial items and risk result life
Net profit sharing and loan losses	60	Profit before amortisation and longevity
Result before amortisation and longevity	798	Provision longevity
Provision longevity	-	Amortisation and write-downs of intangible assets
Amortisation and write-downs of intangible assets	-114	Result before tax
Result before tax	684	Tax
	31	Sold/liquidated business
Sold/liquidated business	-	Profit after tax
Profit after tax	715

New reporting format:

1 1

2

1

2

Storebrand Group - new simplified reporting format from 3Q 2016

Profit
		2Q		01.01 - 30.06
NOK million	2016	2015	2016	2015	2015
Fee and administration income	1 005	1 065	2 058	2 111	4 317
Insurance result	237	264	455	479	820
Operational cost1	-698	-799	-1 501	-1 602	-3 268
Operating profit	544	530	1 012	988	1 869
Financial items and risk result life	254	80	332	227	-107
Profit before amortisation and longevity	798	610	1 344	1 215	1 762
Provision longevity	-	-151	-	-306	-1 764
Amortisation and write-downs of intangible assets	-114	-103	-230	-208	-437
Result before tax	684	356	1 114	701	-438
Tax	31	-97	-89	-184	1 821
Sold/liquidated business	-	-0	-	-0	-0
Profit after tax	715	258	1 025	517	1 382

¹ 2Q 2016: Includes 98 NOK mill. in positive effect from change in own disability pension scheme. For a complete overview of special items in previous quarters, please visit storebrand.com/ir.

Storebrand Group

	2Q		01.01 - 30.06		Full year
NOK million	2016	2015	2016	2015	2015
Fee and administration income	1 005	1 065	2 058	2 111	4 317
Risk result life & pensions	-6	54	18	63	80
Insurance premiums f.o.a.	962	947	1 909	1 813	3 642
Claims f.o.a.	-726	-683	-1 453	-1 334	-2 822
Operational cost1	-698	-799	-1 501	-1 602	-3 268
Financial result	200	76	387	156	244
Result before profit sharing and loan losses	739	661	1 417	1 207	2 193
Net profit sharing and loan losses	60	-51	-73	8	-431
Result before amortisation and longevity	798	610	1 344	1 215	1 762

	2Q		01.01 - 30.06		Full year
NOK million	2016	2015	2016	2015	2015
Savings - non-guaranteed	241	237	520	455	1 020
Insurance	153	192	275	351	488
Guaranteed pension	237	183	252	419	329
Other result	167	-3	297	-10	-75
Result before amortisation and longevity	798	610	1 344	1 215	1 762

¹ 2Q 2016: Includes 98 NOK mill. in positive effect from change in own disability pension scheme. For a complete overview of special items in previous quarters, please visit storebrand.com/ir.

Savings (non-guaranteed) - underlying results growth

	2Q		01.01 - 30.06		Full year
NOK million	2016	2015	2016	2015	2015
Fee and administration income	636	627	1 333	1 255	2 662
Risk result life & pensions	8	4	6	0	-3
Operational cost1	-407	-394	-819	-802	-1 638
Financial result	0	0	0	0	0
Result before profit sharing and loan losses	238	238	521	453	1 022
Net profit sharing and loan losses	3	-0	-1	2	-1
Provision longevity	-	-	-	-	-
Result before amortisation	241	237	520	455	1 020

Profit per product line

	2Q		01.01 - 30.06		Full year
NOK million	2016	2015	2016	2015	2015
Unit linked Norway	38	40	122	93	201
Unit linked Sweden	49	48	77	72	139
Asset Management segment	109	101	240	190	485
Retail banking	44	49	82	101	195
Result before amortisation	241	237	520	455	1 020

¹ 2Q 2016: Includes 34 NOK mill. in positive effect from change in own disability pension scheme. FY 2015: Includes restructuring costs of -28 NOK mill.

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

¹ Growth figures compare 1H 2016 with 1H 2015. ²Excluding transfers. ³Adjusted for FX.

Insurance - reduced growth

Profit
	2Q		01.01 -	Full year
NOK million	2016	2015	2016	2015	2015
Insurance premiums f.o.a.	962	947	1 909	1 813	3 642
Claims f.o.a.1	-726	-683	-1 453	-1 334	-2 822
Operational cost2	-135	-136	-279	-264	-538
Financial result	52	64	99	136	206
Result before amortisation	153	192	275	351	488

Profit per product line

	2Q		01.01 -	30.06	Full year
NOK million	2016	2015	2016	2015	2015
P&C & Individual life3	80	115	185	193	327
Health & Group life4	16	88	56	107	165
Pension related disability insurance Nordic5	58	-11	34	51	-3
Result before amortisation	153	192	275	351	488

¹ FY 2015: Includes disability reserve strengthening of NOK 100 mill.

² 2Q 2016: Includes NOK 23 mill. in positive effect from change in own disability pension scheme. FY 2015: Includes restructuring costs of -15 NOK mill.

³ Individual life and disability, property and casualty insurance.

⁴Group life, workers comp and 50% of result in Storebrand Health insurance.

17 ⁵DC disability risk result Norwegian line of business and disability risk result from SPP.

Insurance - combined ratio on target level

Comments Combined ratio and results

• Combined Ratio 90%, 92% adjusted for special items
• On-going shift to more cost-effective distribution gives temporary lower growth

Comments premiums and growth¹

• 7% premium growth within P&C & Individual life
• 1% premium growth within Health & Group life
• 14% premium growth in Pension related disability Nordic

¹ Growth figures show development from 2Q 2015 to 2Q 2016.

Guaranteed pension - strong financial result SPP

Profit
	2Q		01.01 - 30.06		Full year
NOK million	2016	2015	2016	2015	2015
Fee and administration income	383	457	787	889	1 777
Risk result life & pensions	-10	47	-6	63	89
Operational cost1	-192	-281	-464	-558	-1 156
Financial result	-	-	-	-	-
Result before profit sharing and loan losses	180	223	317	394	711
Net profit sharing and loan losses2	57	-40	-65	24	-382
Result before amortisation and longevity	237	183	252	419	329
Provision longevity	-	-151	-	-306	-1 764

Profit per product line

	2Q			01.01 - 30.06
NOK million	2016	2015	2016	2015	2015
Defined benefit (fee based)	107	148	196	282	512
Paid-up policies, Norway	30	-6	24	-2	1
Individual life and pension, Norway	2	4	4	4	45
Guaranteed products, Sweden	98	37	28	135	-230
Result before amortisation and longevity	237	183	252	419	329

¹ 2Q 2016: Includes NOK 39 mill. in positive effect from change in own disability pension scheme. FY 2015: Includes restructuring costs of -43 NOK mill.

² FY 2015: Includes negative effects from changed interest rate curve and other assumption changes of -265 NOK mill.

Guaranteed pension - conversion to DC schemes continues

	2016
NOK million	2Q	1Q	Change
Market value adjustment reserve	5 244	4 713	531
Excess value of bonds at amortised cost	12 420	12 004	416
Additional statutory reserve	5 198	5 090	108
Unallocated results	1 481	964	517
Provisions for new mortality tables, shareholders direct contribution	-	-	-
Conditional bonuses Sweden	5 300	5 622	-322
Total	29 644	28 393	1 250

Comments

• As companies convert to DC schemes, the migration from DB to lower-margin paid up policies continues to reduce fee income in Guaranteed pensions
• Strong credit and real estate returns contribute to good financial result SPP

Other¹

	2Q		01.01 - 30.06		Full year
NOK million	2016	2015	2016	2015	2015
Fee and administration income	53	35	70	80	129
Risk result life & pensions	-4	3	18	-0	-6
Operational cost2	-30	-43	-72	-91	-188
Financial result3	148	12	288	20	38
Result before profit sharing and loan losses	167	8	305	8	-27
Net profit sharing and loan losses	-0	-11	-7	-19	-48
Result before amortisation	167	-3	297	-10	-75

Profit per product line

	2Q		01.01 -	30.06
NOK million	2016	2015	2016	2015	2015
Corporate Banking	48	-10	36	-17	-84
BenCo Holding company costs and net financial results in company	6	14	36	27	34
portfolios	112	-7	225	-21	-26
Result before amortisation	167	-3	297	-10	-75

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

² FY 2015: Includes negative effect from restructuring costs of -12 NOK mill.

³ FY 2015: Includes minority share of result from real estate sale of 171 NOK mill.

Highlights 2Q 2016

¹Result before amortisation and write-downs.

² Change from 1H 2015 to 1H 2016, adjusted for FX.

³ Growth figures are from 1H 2015 to 1H 2016.

⁴ Including transitional rules. Estimated Solvency II ratio excluding transitional rules is 122%.

Appendix

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

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

Investor Relations contacts

Lars Aa Løddesøl Sigbjørn Birkeland Kjetil R. Krøkje Group CFO Finance Director Head of IR

lars.loddesol@storebrand.no sigbjorn.birkeland@storebrand.no kjetil.r.krokje@storebrand.no

+47 9348 0151 +47 9348 0893 +47 9341 2155