Storebrand Asa · OSL:STB
Storebrand Asa — Q2 2019 Earnings Presentation
25 slides from Storebrand Asa's earnings presentation, Jul 12, 2019
Slide 1: Storebrand Q2 2019
Storebrand Q2 2019 12 July 2019 Odd Arild Grefstad – CEO Lars Aa. Løddesøl – CFO
Slide 2: Highlights Q2 2019
Highlights Q2 2019 11% Unit Linked growth2 Group result1 1 311 307 NOK 45bn AuM growth Asset Management3 MNOK 578 105 1 005 474 NOK 166m income earned not booked3 Q2 2019 H1 2019 Financial and other items Operating profit 167% Solvency II ratio4 2 1 Profit before amortisation and tax. 3 Year to date
Slide 3: Operating profits reduced by restructuring costs and performance related items in the quarter
Operating profits reduced by restructuring costs and performance related items in the quarter Restructuring costs to reach ambitious cost target Strong performance gives increased value creation Performance costs are recognised Reduction of ca 50 FTE's in Norway and quarterly, income at end of y
Slide 4: Our strategy: A compelling combination of self-funding growth and capital return
Our strategy: A compelling combination of self-funding growth and capital return from maturing guaranteed back-book 1 A B C D Asset manager with Build a world class Uniquely positioned in Leading position strong competitive Savings business growing retail savings Bolt-on M&A Occupational Pension pos
Slide 5: Growth in Savings continues
Growth in Savings continues Unit Linked Asset management +11% +6% 198 New sales +37%1 752 Good market return 178 707 Continued structural Cubera included with growth NOK 7bn in Q2 2019 Good market return Q2 2018 Q2 2019 Q2 2018 Q2 2019 UL reserves (BNOK) AuM (BNOK) Insurance Retail loans 2
Slide 6: Fast growing Nordic asset manager with a blend of captive pension assets and external clients
Fast growing Nordic asset manager with a blend of captive pension assets and external clients Pension savings NO Institutional mandates External share +4% and distributors +12% 34,5% 34,0% 33,1% 33,1% 33,8% 32,8% 33,5% 278 238 11 7 267 212 19 Q4 18 Delta Q2 19 Q4 18 Delta Cubera Q2 19 AuM Q4 17 Q1 1
Slide 7: Net flows pension savings
Net flows pension savings Guaranteed Unit Linked 261 2.8 262 3.2 6.8 7.4 5.5 198 19.4 6.6 11.5 179 AuM Premiums Claims/ Asset Other/FX AuM AuM Premiums Claims/ Asset Other/FX AuM 31.12.18 transfers return 30.06.19 31.12.18 transfers return 30.06.19 Numbers in NOK bn
Slide 8: Storebrand to enter Norwegian public sector pension market
Storebrand to enter Norwegian public sector pension market Large public sector market New regulation will make it attractive for Storebrand opening up for competition to enter the market again Annual market premium NOK bn1 With effect from 2020, the pension system for 52 public employees will be a
Slide 9: Digitalisation across all dimensions in Storebrand
Digitalisation across all dimensions in Storebrand Better customer Digital B2B sales in SPP (YTD) Scalable digital experience 701 sales to corporates Digital tools are helping 701 corporates have corporate customers signed occupational provide policyholders pension plans for their with better inform
Slide 10: Key figures
Key figures Group Result development1 Earnings per share2 Financial items and risk result life Performance related result MNOK Special items Operating profit 4.18 812 853 566 733 578 167 168 40 11 202 105 1.46 1.33 1.26 645 645 657 549 568 1.21 -18 -103 -44 -50 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 201
Slide 11: Solvency II Movement from Q1 2019 to Q2 2019
Solvency II Movement from Q1 2019 to Q2 2019 Group +171% -1% -3% +2% +167% -2% +165% -1% +1% Q1 2019 Model and Market changes Business mix and M&A Operating Q2 2019 without Transitionals Q2 2019 assumptions asset allocation earnings, ex transitionals changes dividends 11
Slide 12: Solvency II position Storebrand Group
Solvency II position Storebrand Group Group Solvency position(%)1 Estimated sensitivities 173 167 Target SII margin 150% 2 2 Estimated economic SII-margin Q1 2019 165 2 167 171 165 Interest rates -50bp 153 18 171 Interest Q1 2019 Q2 2019 rates +50 bp 178 2 180 Transitional rules SII standard model E
Slide 13: Storebrand Group
Storebrand Group Group Profit1 Q2 01.01-30.06 Full year NOK million 2019 2018 2019 2018 2018 Fee and administration income 1 235 1 245 2 450 2 465 5 011 Insurance result 269 358 514 693 1 291 Operational cost -1 030 -958 -1 960 -1 878 -3 786 Operating profit 474 645 1 005 1 280 2 516 Financial items
Slide 14: Storebrand Group
Storebrand Group Group Profit Q2 01.01-30.06 Full year NOK million 2019 2018 2019 2018 2018 Fee and administration income 1 235 1 245 2 450 2 465 5 011 Insurance result 269 358 514 693 1 291 Operational cost -1 030 -958 -1 960 -1 878 -3 786 Operating profit 474 645 1 005 1 280 2 516 Financial items
Slide 15: Savings (non-guaranteed)
Savings (non-guaranteed) Savings Profit Q2 01.01-30.06 Full year NOK million 2019 2018 2019 2018 2018 Fee and administration income 911 909 1 807 1 798 3 709 Operational cost -672 -602 -1 287 -1 188 -2 405 Operating profit 239 307 521 610 1 303 Financial items and risk result life -16 -2 -7 -12 -46
Slide 16: Savings (non-guaranteed)
Savings (non-guaranteed) Savings Reserves and premiums Unit Linked Comments 4.2 4.2 3.9 4.1 4.1 7% premium growth in UL1 198 191 11% growth in UL reserves2 187 178 179 6% growth in assets under management2 BNOK Higher net interest margin in bank Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Assets
Slide 17: Insurance
Insurance Insurance Profit Q2 01.01-30.06 Full year NOK million 2019 2018 2019 2018 2018 Insurance premiums f.o.a. 965 946 1 913 1 901 3 854 Claims f.o.a. -696 -588 -1 399 -1 208 -2 562 Operational cost -159 -147 -309 -303 -614 Operating profit 111 211 205 390 677 Financial result 28 19 36 47 71 Pro
Slide 18: Insurance
Insurance Insurance Combined ratio Comments Combined ratio and results Claims ratio Cost ratio Combined ratio 89% 90% 89% Targeted combined ratio 90-92% 78% 81% Good cost control 72% 74% 72% Weak result in Group life, price increases under 67% 62% implementation 16% 14% 17% 16% 16% Q2 2018 Q3
Slide 19: Guaranteed pension
Guaranteed pension Guaranteed Profit Q2 01.01-30.06 Full year NOK million 2019 2018 2019 2018 2018 Fee and administration income 364 370 724 738 1 440 Operational cost -209 -215 -395 -415 -816 Operating profit 155 155 329 323 624 Risk result life & pensions 52 -140 113 42 191 Net profit sharing and
Slide 20: Guaranteed pension - reserves in long term decline and robust buffer situation
Guaranteed pension Guaranteed - reserves in long term decline and robust buffer situation Reserves guaranteed products Comments 258 258 261 261 262 34 34 33 32 33 As companies convert to DC schemes, the migration from DB to paid up policies continues to 133 137 reduce fee income in Guaranteed pens
Slide 21: Other
Other1 Other Profit Q2 01.01-30.06 Full year NOK million 2019 2018 2019 2018 2018 Fee and administration income 14 25 28 47 102 Operational cost -45 -54 -78 -91 -190 Operating profit -31 -29 -50 -44 -89 Financial items and risk result life 36 70 146 150 128 Profit before amortisation 5 41 96 106 40
Slide 22: Appendix
Appendix 22
Slide 23: Storebrand Life Insurance asset allocation
Storebrand Life Insurance asset allocation 60% 50% 40% 30% 20% 10% 0% Bonds at Money Real Equities Bonds amortized Other market estate cost 30.06.2018 8% 25% 4% 52% 11% 1% 30.09.2018 8% 25% 3% 53% 11% 0% 31.12.2018 7% 27% 2% 52% 10% 0% 31.03.2019 8% 26% 3% 53% 10% 0% 30.06.2019 8% 26% 3% 52% 10% 0%
Slide 24: SPP asset allocation
SPP asset allocation 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Alternative Bonds Equities investments 30.06.2018 12% 81% 7% 30.09.2018 12% 80% 8% 31.12.2018 13% 81% 6% 31.03.2019 13% 82% 5% 30.06.2019 13% 83% 5% 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 Group Head of Finance, Strategy and M&A kjetil.r.krokje@storebrand.no +47 9341 2155 Daniel Sundahl IR Officer daniel.sundahl@storebrand.no +47 9136 1899 This document contains Alternati