Slide 1: Results 2nd Quarter 2006 - Analyst Presentation
Storebrand Results 2nd Quarter 2006 10 August 2006 Analyst Presentation Analyst Presentation 2nd quarter 2006 Page # Slide # • Storebrand Group Group CEO Idar Kreutzer 2-9 3-18 Back-up: • Storebrand Group 10-15 19-30 • Storebrand ASA 16-17 31-34 • Storebrand Life Insurance 18-31 35-62 • Storebrand I
Slide 2: Highlights Q2 2006
Storebrand Results 2nd Quarter 2006 10 August 2006 Idar Kreutzer Group CEO Highlights Q2 2006 Satisfactory accounting profit Good sales of mandatory occupational pensions Improved result in Investment Management Strong inflow of banking customers and growth in lending Very competitive mark
Slide 3: Group and Life Insurance profit development
Storebrand Konsern - satisfactory development in profit Q2 01.01 - 30.06 01.01-31.12 NOK million 2006 2005 2006 2005 2005 Life activities 277 307 575 562 1.217 Investment activities 32 14 52 22 24 Storebrand Bank 59 69 107 141 241 Other activities -18 1 76 -19 -41 Group profit 350 392 811 706 1.442
Slide 4: Life Insurance return and sales of occupational pensions
Storebrand Livsforsikring - competitive return Relative Risk Return in percent year to date* return exposure Equity Norway 16,0 % +2.89 +1.70% % 4.4 5.7% % Equity Foreign* 2,9 % -+0.31 0.3 %% 19.1 19.7% % Bonds Foreign -1,1 % +0.03 -0.06% % 10.2 10.1% % Bonds Norway -0,9 % +0.61 +0.38% % 9.0 9.0% %
Slide 5: Important framework decisions made
High customer satisfaction levels for Storebrand's occupational pensions customers 70 68 67 65 64 62 2004 2005 2006 2004 2005 2006 Net transfers of NOK 3.5 billion to Storebrand first six months of 2006 Source: Norsk Kundebarometer Q2 2006 9 Important framework decisions made Group Main features of
Slide 6: Storebrand Bank
Storebrand Bank Q2 01.01-30.06 Full year NOK million 2006 2005 2006 2005 2005 Net interest income 102 112 209 232 451 Other income 36 16 60 57 102 Total income 138 128 269 289 553 Operating expenses -94 -82 -191 -170 -346 Operating profit before losses 44 46 78 119 207 Loan loss provisions 15 23 30
Slide 7: Storebrand Investments and reintroduction of P&C insurance
Storebrand Investments - Satisfactory result 2nd quarter Year to date 01.01- 31.12 NOK million 2006 2005 2006 2005 2005 Total income 73 68 147 135 242 Total costs -59 -60 -117 -120 -232 Net financial income/ other 19 6 22 7 15 Profit before tax 32 14 52 22 24 Efficiency measures have reduced costs
Slide 8: Summary
"Competitiveness" – Improved efficiency in Storebrand's core operations Substantial potential for streamlining identified Management Target to improve productivity considerably Culture Operations Three pilot projects executed with good results Q2 2006 15 Summary Satisfactory results Good g
Slide 9: Storebrand shall be the leading and most respected institution
Storebrand shall be the leading and most respected institution in the Norwegian market for long-term savings and life insurance Q2 2006 17 (Page intentionally left blank) Q2 2006 18 9
Slide 10: Storebrand Group - IFRS accounting
Storebrand Group IFRS accounting Storebrand ASA’s group accounts are presented in accordance with the International Financial Reporting Standards (IFRS) approved by the European Union. Q2 2006 20 10
Slide 11: Group profit by sub-group and operating profit
Storebrand Group Group profit by sub-group Q2 01.01 - 30.06 01.01-31.12 NOK million 2006 2005 2006 2005 2005 Life activities 277 307 575 562 1.217 Investment activities 32 14 52 22 24 Storebrand Bank 59 69 107 141 241 Other activities -18 1 76 -19 -41 Group profit 350 392 811 706 1.442 Q2 2006 21 St
Slide 12: Earnings per share and balance sheet
Storebrand Group Earnings per share Q2 01.01 - 30.06 01.01-31.12 NOK million 2006 2005 2006 2005 2005 Group profit 350 392 811 706 1.442 Changes in security reserve etc. - non life 1 -1 -1 -2 3 Profit before tax 352 390 810 704 1.445 Tax -20 -23 -53 -40 -41 Minority interests -6 -2 -6 -2 -4 Profit f
Slide 13: Group profit by sub-group and capital adequacy
Storebrand Group Group profit by sub-group 2006 2005 2004 NOK million Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Life activities 277 299 364 291 307 255 311 228 Investment activities 32 20 4 -2 14 8 8 7 Storebrand Bank 59 48 59 42 69 72 55 32 Other activities -18 94 -9 -13 1 -20 -3 -2 Group profit 350 460 418 318 392
Slide 14: Other activities and shareholder structure
Storebrand Group Other activities Q2 01.01 - 30.06 01.01-31.12 NOK million 2006 2005 2006 2005 2005 Storebrand ASA *) -14 -14 1.025 584 599 Fair Forsikring 8 -1 9 22 Storebrand Skadeforsikring -5 6 43 0 19 Other companies/elimintations **) 1 1 -991 -612 -681 Total profit other activities -18 1 76 -1
Slide 15: Rating and key figures
Rating for Storebrand as at 10 August 2006 Storebrand ASA Moody’s: Baa2 (S) S&P: BBB+ (S) Storebrand Storebrand Livsforsikring AS Bank ASA Moody’s: A2 (S) Moody’s: Baa2 (S) S&P: A (S) S&P: BBB+ (S) P=positive outlook, S=stable outlook, N=negative outlook Q2 2006 29 Storebrand Group Key figures Q2 01
Slide 16: Storebrand ASA profit and loss
Storebrand ASA Storebrand ASA Profit and loss *) Q2 01.01 - 30.06 01.01-31.12 NOK million 2006 2005 2006 2005 2005 Group contributions and transfers 0 0 1.028 611 611 Interest income 21 11 37 29 58 Interest expense -18 -4 -35 -26 -53 Realized/unrealized gains/losses on securities -2 116 37 125 213 O
Slide 17: Storebrand ASA profit and loss and balance sheet
Storebrand ASA Profit and loss 2006 2005 2004 NOK million Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Group contributions and transfers 0 1.028 0 0 0 611 0 0 Interest income 21 16 17 12 11 18 19 21 Interest expense -18 -17 -17 -10 -4 -22 -14 -17 Realized/unrealized gains/losses on securities -2 39 76 11 116 9 19 6 Othe
Slide 18: Storebrand Life Group highlights as at 30.06.2006
Storebrand Life Insurance Storebrand Life Group Highlights as at 30.06.2006 Operating profit in Q2 was NOK 1,578 million, an improvment from NOK 1,122 million in Q2 2005. Operating profit as at 30.06.2006 was NOK 2,613 million compared to NOK 1,843 million as at 30.06.2005 (before effects from IFR
Slide 19: Life Insurance highlights and results
Storebrand Life Insurance Highlights as at 30.06.2006 Total premium income (excluding transfers to/from) discreased by 44 % compared to Q2 2005. Excl. individual savings contracts without fixed contract periods the premiums increased by 7 %. Positive net transfer balance for life insurance in Q2
Slide 20: Life Group profit and loss, solidity
Storebrand Life Group Profit and loss Q2 01.01.-30.06 Full year NOK Million 2006 2005 2006 2005 2005 Premiums written 1,727 4,140 6,231 11,081 16,000 Net transfers of premium reserve 653 313 3,492 642 546 Net income of financial investments -474 2,636 3,720 4,565 10,402 Claims paid -4,332 -2,125 -6,
Slide 21: Allocation and policyholders' funds
Storebrand Livsforsikring AS Allocation and policyholder’s funds Allocation and policyholders' fund Q2-06 Q1-06 Q4-05 Q3-05 Q2-05 Q1-05 Q4-04 Q3-04 Equity Norwegian *) 6% 7% 9% 6% 6% 6% 9% 8% Equity Foreign*) 19 % 20 % 18 % 18 % 16 % 16 % 13 % 12 % Real Estate 11 % 10 % 10 % 9% 9% 9% 10 % 10 % Money
Slide 22: Development in return on capital, unrealised gains
Storebrand Livsforsikring AS Development in return on capital 12 % 11,2 % 10 % 8,8 % 7,5 % 8% 7,6 % Booked 7,2 % 6,9 % 7,2 % 6,9 % 7,0 % Value adjusted excl. Bonds 6% 6,4 % held to maturity 4,8 % Value adjusted incl. Bonds 4% held to maturity 2,7 % 2,6 % 2,6 % 2% 1,9 % 0% 2002 2003 2004 2005 Q2 2006
Slide 23: Premiums excl. reserves transferred
Storebrand Life Group Premiums excl. reserves transferred to the company per 30.06.2006 Total premiums written 6,231 million 6% 2% Group pension Group life 24 % Individual endowment Individual 61 % pension 7% Non-life insurance Q2 2006 45 Storebrand Livsforsikring AS Premiums excl. reserves transfer
Slide 24: Premiums written, net transfers of premium reserves
Storebrand Livsforsikring AS -premiums written, products without profit sharing as of 30.06 NOK million 750 700 650 600 550 500 450 Non-life insurance 400 Individual 350 endowment 300 Group life 250 Group pension 200 150 Group pension applies to one year risk coverage related to 100 defined contribu
Slide 25: New business - premiums
New business – premiums* NOK million 2004 2005 1H 2005 1H 2006 Storebrand Livsforsikring AS Regular premiums 606 647 288 446 - individual business 121 160 105 63 - group pension and group life 485 488 183 384 Single premiums and transferred reserves 9 515 10 128 7 705 5 878 - individual business 6 9
Slide 26: Operating costs and profit analysis
Storebrand Livsforsikring AS Operating costs as % of average policyholders funds 1,06 1,05 0,96 0,94 0,96 0,92 0,9 0,88 1999 2000 2001 2002 2003 2004 2005 per Q2 06*) *) annualized Q2 2006 51 Storebrand Livsforsikring AS Profit analysis Q2 01.01.-30.06 Full year NOK Million 2006 2005 2006 2005 2005
Slide 27: Profit analysis and balance sheet IFRS
Storebrand Livsforsikring AS Profit analysis -products without profit sharing Q2 01.01.-30.06 Full year NOK Million 2006 2005 2006 2005 2005 Interest result 21 16 38 27 68 Risk result 29 51 77 91 197 Administration result -24 -38 -46 -55 -94 Change in security and premium reserve -1 -2 -7 -2 -4 Oper
Slide 28: Life Group balance sheet (continued)
Storebrand Life Group Balance sheet (continued) Share of Share of total assets total assets NOK Million 30.06.2006 30.06.2006 31.12.2005 31.12.2005 Equity 5,447 3% 5,724 4% Minority interests' share in equity 19 0% 19 0% Subordinated loan capital 2,867 2% 2,875 2% Market price adjustment reserve 2,3
Slide 29: Key figures and real estate fund
Storebrand Livsforsikring AS Key figures Q2 01.01.-30.06 Full year 2006 2005 2006 2005 2005 Booked return - year-to-date 1.83% 1.72% 3.43% 3.13% Booked return - annualised 7.52% 7.06% 6.99% 6.37% 6.86% Value adjusted return - year-to-date -0.40% 1.91% 2.39% 3.34% Value adjusted return - annualised -
Slide 30: Profit analysis and Fondsforsikring
Storebrand Livsforsikring AS Profit analysis 2006 2005 2004 NOK Million Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Interest result 1,568 1,046 1,505 977 1,158 719 1,445 573 Risk result 103 87 166 99 69 30 46 80 Administration result -91 -91 -230 31 -102 -29 -73 7 Change in security and premium reserve -2 -10 -5 -2 -4
Slide 31: Storebrand Fondsforsikring balance sheet
Storebrand Fondsforsikring AS Balance sheet Share Share NOK Million 30.06.06 30.06.06 31.12.05 31.12.05 Bonds and other fixed income securities 99 2% 97 2% Assets - Unit Link 6,281 98 % 5,719 97 % Cash and bank 30 0% 31 1% Intra group receivables 3 0% 3 0% Other receivables 19 0% 17 0% Total assets
Slide 32: Storebrand Investments highlights Q2
Storebrand Investments Storebrand Investments Highlights Q2 Profit before tax NOK 32 million compared to NOK 14 million in Q2 last year Increased profit from the subsidiary Storebrand Alternative Investment, a provider of private equity and hedge funds, due to good sales and high performance fee
Slide 33: Profit before tax and profit development
Profit before tax Q2 2006 2nd quarter Year to date 01.01- 31.12 NOK million 2006 2005 2006 2005 2005 Total income 73 68 147 135 242 Total costs -59 -60 -117 -120 -232 Net financial income/ other 19 6 22 7 15 Profit before tax 32 14 52 22 24 Improved result due to increased profits from Storebrand
Slide 34: Contribution to Life portfolio, mutual funds performance
Contribution to Storebrand Life portfolio*** year to date Relative performance 14,9 % Equity Norway 1,7% 13,2 % 4,0 % Equity Europe * -0,3% 4,3 % -7,4 % Equity North America -1,8% -5,7 % Bonds Norway -0,9 % 0,6% -1,5 % Bonds International -0,1 % 0,0% -0,1 % Money market Norway 1,4 % 0,2% 1,2 % Money
Slide 35: Market share Norwegian mutual funds
Market share Norwegian registered mutual funds Mutual funds market in Norway All mutual funds (market share in %) Norwegian mutual funds exceeds 7,9 7,9 8,4 7,9 8,4 Nordea NOK 168 billion in assets under 11,5 12,43 11,21 12,45 11,6 Odin management 12,6 13,9 14,4 16,7 Skagen The overall market co
Slide 36: Assets under management and profit development
Storebrand Investments Assets under management Total assets under management Allocation assets under management Real estate 9% Hold to Other maturit y 206,4 3% 204,9 27 % Equity Norway 20,3 21,0 NOK billion 5% 158,8 165,0 29,4 29,7 15,8 139,7 13,2 14,6 17,8 9,7 10,6 25,3 12,9 21,6 10,1 M oney market
Slide 37: Storebrand Bank Group highlights Q2 2006
Storebrand Bank Group Storebrand Bank Group Highlights Q2 2006 Storebrand Bank Group reports a profit of NOK 59 million in Q2 (NOK 69 million in Q2 2005) Growth in gross lending of NOK 676 million and growth in customer deposits of NOK 547 million in Q2 Net income from loan loss provisions of
Slide 38: Bank profit and loss
Profit and loss Q2 01.01-30.06 Full year NOK million 2006 2005 2006 2005 2005 Net interest income 102 112 209 232 451 Other income 36 16 60 57 102 Total income 138 128 269 289 553 Operating expenses -94 -82 -191 -170 -346 Operating profit before losses 44 46 78 119 207 Loan loss provisions 15 23 30
Slide 39: Net interest income and balance sheet
Development in net interest income Net interest income / avg. total assets Improved competitiveness on retail mortgages NOK million 2,00 % 29.000 28.000 Increased competition on 1,50 % 27.000 larger residential mortgages 26.000 1,00 % 25.000 24.000 Reduced risk in corporate 0,50 % 23.000 22.00
Slide 40: Development in loan portfolio and defaulted loans
Development in loan portfolio Development in gross lending Gross lending by sector NOK billion 27,9 5% 27,3 26,8 Residential 25,6 mortgages 24,5 31 % 24,0 Other retail 23,8 23,6 23,0 22,6 Real estate 55 % Other corporate Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 9% 2004 2004 2004 2004 2005 2005 2005 2005 2006 2
Slide 41: Customer deposits and capital adequacy
Development in customer deposits NOK million 16.000 60 % 14.000 50 % 12.000 40 % 10.000 8.000 30 % Customer deposits have 6.000 increased by NOK 547 20 % 4.000 million in Q2 2.000 10 % 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2004 2004 2004 2004 2005 2005 2005 2005 2006 2006 Customer deposits Customer dep
Slide 42: New accounts - 2004 to June 2006
New accounts - 2004 to June 2006 2.500 2004 2005 2006 2.000 1.500 1.000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Gross new accounts in the period Q2 2006 83 (Page intentionally left blank) Q2 2006 84 42
Slide 43: Storebrand Non-Life highlights Q2 2006
Storebrand Non-Life Non-Life Highlights Q2 2006 Operating loss of NOK 5 million in Q2 (profit of NOK 14 million) and a profit of NOK 42 million (NOK 9 million) for the year to date. Operating result adjusted for statutory insurance reserves for Q2 amounted to a loss of NOK 3 million (profit of NOK
Slide 44: Non-Life highlights and profit and loss
Non-Life Highlights Q2 2006 The re-introduction of P&C insurance is according to plan with respect to timing and costs. Key figures and start-up in Q4 are in accordance with earlier statements. The management team is in place and personell for products, customer service and claims settlement hav
Slide 45: Non-life Group balance sheet, Oslo Re profit and loss
Non-life Group Balance sheet Share Share NOK million 30.06.2006 30.06.2006 31.12.2005 31.12.2005 Deferred tax 12 0% 22 1% Shares 20 1% 20 1% Bonds and other intrest bearing financial a 591 21 % 564 18 % Other assets 2131 77 % 2548 81 % Total assets 2754 100 % 3155 100 % Equity 320 12 % 290 9% Premiu
Slide 46: Oslo Reinsurance Company balance sheet
Oslo Reinsurance Company Balance sheet Share Share NOK million 30.06.2006 30.06.2006 31.12.2005 31.12.2005 Deferred tax asset 10 1% 10 1% Financial assets 431 60 % 469 58 % Receivables 57 8% 10 1% Other assets 222 31 % 325 40 % Total assets 720 100 % 814 100 % Equity 134 19 % 153 19 % Premium and cl