Storebrand Asa · OSL:STB
Storebrand Asa — Q2 2017 Earnings Presentation
25 slides from Storebrand Asa's earnings presentation, Jul 13, 2017
Slide 1: Storebrand 2Q 2017
Storebrand 2Q 2017 Storebrand celebrates 250 years in 2017 13 Jul 2017 Odd Arild Grefstad – CEO Lars Aa. Løddesøl – CFO
Slide 2: Highlights 2Q 2017
Highlights 2Q 2017 Group result1 18% Unit Linked growth2 878 313 9% AuM growth Asset Management2 MNOK 565 2Q 2017 28% Retail Bank lending growth2 Financial items and risk result life Operating profit 163% Solvency II ratio4 1 Result before amortisation and write-downs. 2 Growth figures are from YTD
Slide 3: Our strategy
Our strategy 1 Manage the guaranteed 2 Continued growth in Savings balance sheet and Insurance >150% SII margin Capital-light and profitable growth Cost reductions through automation and Market leading asset gatherer with strong Insurance outsourcing offering Manage for future capital release
Slide 4: Solvency movement from Q1 2017 to Q2 2017
Manage guaranteed 1 balance sheet 2 Growth in Savings and Insurance Solvency movement from Q1 2017 to Q2 2017 163% 4% 152% 11% 147% -2% 3% Q1 2017 ex. Model and Operating Economic Q2 2017 ex. Transitional Q2 2017 transitionals assumptions earnings2 variance3 transitionals rules Solvency ratio change
Slide 5: SII position Storebrand Group
Manage guaranteed 1 balance sheet 2 Growth in Savings and Insurance SII position Storebrand Group Solvency position(%)1 Estimated sensitivities Target SII margin 150% 159 163 12 11 Estimated economic 152 11 163 SII-margin Q2 2017 Interest 141 27 168 147 152 rates -50bp Interest rates +50 bp 160 3 16
Slide 6: Cost Target on Track
Manage guaranteed 1 balance sheet 2 Growth in Savings and Insurance Cost Target on Track Target to reduce costs nominally… …on track despite strong business growth 3 728 1 60 New investments in fast growing business Increased investments in new digital growth ~400 3 268 2 Financial tax in Norway + N
Slide 7: Growth in Savings continues, Insurance growth paused by changes in distribution
Manage guaranteed 1 balance sheet 2 Growth in Savings Growth in Savings continues, and Insurance Insurance growth paused by changes in distribution Unit Linked Asset management 18% 9% 151 621 128 569 Growth driven by non- 14% growth in guaranteed and Sweden external mandates 23% growth in Norw
Slide 8: Sustainability focused Asset Manager with scalable cost advantage
Manage guaranteed 1 balance sheet 2 Growth in Savings and Insurance Sustainability focused Asset Manager with scalable cost advantage Cost income (%) global asset managers 2016 AUM (EUR bn) 80,4 82,3 76,4 71,9 72,5 69,6 64,5 64,7 64,8 64,8 66,9 62,5 53,4 47,7 48,1 63 683 1,083 431 449 406 771 226 35
Slide 9: Storebrand Asset Management: Growing share of external assets
Manage guaranteed 1 balance sheet 2 Growth in Savings Storebrand Asset Management and Insurance Growing share of external assets, Sweden case in point Mutual funds growth Increased share of earnings1 Next step: distribution and scale SEK bn (SPP funds only) 1 Strengthen distribution Sweden AM, % rev
Slide 10: Pillar III Savings introduced in Norway with sales start 1 November
Manage guaranteed 1 balance sheet 2 Growth in Savings Finally! and Insurance Pillar III Savings introduced in Norway with sales start 1 November Pillar I Pillar II Pillar III State pensions Corporate Pensions Individual Savings 1 Savings for pension – Locked until retirement 2 Individuals can save N
Slide 11: Innovating the customer journey
Manage guaranteed 1 balance sheet 2 Growth in Savings and Insurance Innovating the customer journey Digitally driven sales front Customer service People and technology Products and concepts New distribution cooperation with Successful pay outs digital partners from new Swedish core system Introducin
Slide 12: Key figures
Group Key figures Result development1 Earnings per share2 Financial items and risk result life Special items MNOK Operating result 912 1.83 1.89 878 1.64 788 676 386 671 225 1.23 1.25 254 209 88 208 123 495 578 463 565 411 -27 -52 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q2 2016 Q3 2016 Q4 2016 Q1 20
Slide 13: Storebrand Group
Group Storebrand Group Profit1 2Q 01.01-30.06 Full year NOK million 2017 2016 2017 2016 2016 Fee and administration income 1 079 1 005 2 098 2 058 4 235 Insurance result 290 237 565 455 945 Operational cost2 -805 -7072 -1 636 -1 519 -3 191 Operating profit 565 535 1 028 994 1 989 Financial items and
Slide 14: Storebrand Group
Group Storebrand Group Profit 2Q 01.01-30.06 Full year NOK million 2017 2016 2017 2016 2016 Fee and administration income 1 079 1 005 2 098 2 058 4 235 Insurance result 290 237 565 455 945 Operational cost -805 -707 -1 636 -1 519 -3 191 Operating profit 565 535 1 028 994 1 989 Financial items and ri
Slide 15: Savings (non-guaranteed) - continued growth
Savings (non-guaranteed) Savings - continued growth Profit 2Q 01.01-30.06 Full year NOK million 2017 2016 2017 2016 2016 Fee and administration income 747 636 1447 1333 2 758 Operational cost -438 -414 -897 -833 -1 700 Operating profit 309 222 551 500 1 058 Financial items and risk result life 10 12
Slide 16: Savings - strong growth in assets and retail lending
Savings (non-guaranteed) Savings - strong growth in assets and retail lending Reserves and premiums Unit Linked Comments 3,7 3,6 3,5 3,4 3,5 3% premium growth in UL premiums1 151 147 140 28% retail lending growth2 132 BNOK 128 9% growth asset management2 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
Slide 17: Insurance
Insurance Insurance Profit 2Q 01.01-30.06 Full year NOK million 2017 2016 2017 2016 2016 Insurance premiums f.o.a. 971 962 1911 1909 3 828 Claims f.o.a. -681 -726 -1346 -1453 -2 883 Operational cost -171 -137 -344 -283 -602 Operating profit 119 99 222 173 342 Financial result 65 52 133 99 233 Profit
Slide 18: Insurance - Lagging growth, strong combined ratio
Insurance Insurance - Lagging growth, strong combined ratio Combined ratio Comments Combined ratio and results Claims ratio Combined ratio Cost ratio 90% 91% 91% 89% 88% Combined Ratio 88% Reduced premiums due to on-going shift to more cost-effective distribution and new 75% 75% 74% 71% 70% disa
Slide 19: Guaranteed pension - strong quarter but long term run off
Guaranteed pension Guaranteed - strong quarter but long term run off Profit 2Q 01.01-30.06 Full year NOK million 2017 2016 2017 2016 2016 Fee and administration income 369 383 727 787 1 566 Operational cost -216 -192 -437 -464 -981 Operating profit 153 191 290 323 585 Risk result life & pensions 6 -
Slide 20: Guaranteed pension - reserves in decline and robust buffer situation
Guaranteed pension Guaranteed - reserves in decline and robust buffer situation Reserves guaranteed products Comments 266 262 259 260 260 49 47 46 42 37 As companies convert to DC schemes, the migration from DB to lower-margin paid up policies 112 115 116 121 126 continues to reduce fee income in
Slide 21: Other
Other Other1 Profit 2Q 01.01-30.06 Full year NOK million 2017 2016 2017 2016 2016 Fee and administration income 23 53 44 70 145 Operational cost -39 -30 -79 -72 -141 Operating profit -16 23 -34 -2 4 Financial items and risk result life 102 143 179 298 401 Profit before amortisation 85 166 145 295 40
Slide 22: Appendix
Appendix 22 @® storebrand
Slide 23: Storebrand Life Insurance asset allocation
Storebrand Life Insurance asset allocation 60% 50% 40% 30% 20% 10% 0% Bonds at Equities Bonds Money market Real estate Other amortized cost 30.06.2016 5% 29% 5% 49% 11% 1% 30.09.2016 5% 28% 6% 50% 11% 1% 31.12.2016 5% 27% 4% 52% 11% 1% 31.03.2017 6% 25% 4% 53% 11% 1% 30.06.2017 6% 25% 5% 52% 11% 1%
Slide 24: SPP asset allocation
SPP asset allocation 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Alternative investments Bonds Equities 30.06.2016 8% 87% 5% 30.09.2016 8% 87% 5% 31.12.2016 8% 86% 6% 31.03.2017 9% 85% 6% 30.06.2017 9% 85% 6% Note: The graph shows the asset allocation for all products with an interest rate guarantee
Slide 25: Investor Relations contacts
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 This document contains Alternative Performance Measures as defined by the European Securities and Market Authority (ESMA). An overv