Storebrand Asa · OSL:STB
Storebrand Asa — Storebrand Livsforsikring — Debt Investor Presentation (September 2024)
58 slides from Storebrand Asa's debt investor presentation, Sep 9, 2024
Slide 1: Storebrand Livsforsikring Tier 2 Bond Issue
Storebrand Livsforsikring Tier 2 Bond Issue Investor Presentation 9 September 2024
Slide 2: Disclaimer (1/2)
Disclaimer (1/2) IMPORTANT: You must read the following before continuing. The attached presentation is in summary form and relates to an offering of securities as currently contemplated and has been prepared solely for information purposes and on the basis of your acceptance of this disclaimer and
Slide 3: Disclaimer (2/2)
Disclaimer (2/2) This presentation is the sole responsibility of the Issuer and has not been approved by any regulatory authority. The information contained in this presentation speaks as of the date hereof and is subject to change, completion and amendment without notice. The information contained
Slide 4: Presentation content
Presentation content Section Page 1. Storebrand overview and strategy 7 2. Sustainability at Storebrand 17 3. Capital and solvency 21 4. Group results Q2 2024 30 5. Appendix 40 4
Slide 5: Executive summary
Executive summary • Nordic Savings and Insurance Group Storebrand1 • Leading provider of occupational pensions in Norway and Sweden, Nordic powerhouse in Asset Management and growing Overview and challenger in Norwegian retail market • Active in structurally growing markets with resilient economic d
Slide 6: Transaction summary – Indicative key terms
Transaction summary – Indicative key terms Issuer Storebrand Livsforsikring AS Rating (S&P) Issuer: A / Issue: Expected BBB+ Type of Issue Green [FRN/Fixed-to-Floating] Tier 2 Callable Bond Issue Status The Bonds will constitute direct, unsecured and subordinated Tier 2 Instruments of the Issuer and
Slide 7: Storebrand overview and strategy
1. Storebrand overview and strategy Storebrand 2. Sustainability at Storebrand overview 3. Capital and solvency and strategy 4. Group results Q2 2024 5. Appendix 7
Slide 8: 257 years of pioneering the Nordic financial industry
257 years of pioneering the Nordic financial industry Future Storebrand is a capital light business with material group synergies Future Storebrand ILLUSTRATIVE Retail Asset Management Unit Linked Pensions and Savings Guaranteed Pensions 1767 1847 1861 1917 1995 2024 Foundation: P&C Pioneered Pionee
Slide 9: A Nordic Savings and Insurance group
A Nordic Savings and Insurance group 55,000 Pensions & savings Asset management Corporate Market leader World leader in sustainability customers NOK 714bn AuM1 NOK 1,298bn AuM 2,200,000 Individuals Retail banking Insurance Fast growing challenger Fast growing challenger NOK 82bn lending NOK 8.2bn pr
Slide 10: Storebrand Simplified Legal Structure
Storebrand Simplified Legal Structure Diversified cash flow to holding company Storebrand ASA Storebrand ASA Storebrand Storebrand Storebrand Storebrand Livsforsikring AS Forsikring AS Asset Management AS Bank AS Storebrand Storebrand Holding AB Boligkreditt AS SPP Pension & Försäkring AB 10
Slide 11: Transitioned from capital consumptive Guaranteed to capital light business
Transitioned from capital consumptive Guaranteed business to capital light Savings and Insurance business Premiums Storebrand Shift in total Storebrand AuM NOK million NOK billion 42,772 1,212 14% 49% 24,584 15% 66% 36% 442 28% 27% 14% 49% 23% 20% 59% 2012 FY 2023 2012 FY 2023 Guaranteed Savings Ins
Slide 12: Pursuing our Group Strategy
Pursuing our Group Strategy Leading The Way In Sustainable Value Creation to be a leading Sustainable Nordic Savings and Insurance Group A B C Future Storebrand Growth focus in Leading Provider Nordic Powerhouse in Growing Challenger in capital-light business Occupational Pensions Asset Management N
Slide 13: Occupational pensions in Norway
Occupational pensions in Norway Sticky and growing assets in an immature defined contribution market The Norwegian Product Product Highlights Market AuM pensions system when employed when retired NOK bn 2 Defined Pension capital ▪ Growing and profitable market Contribution certificate ▪ Storebrand i
Slide 14: SPP: A digital leader in the Swedish life & pension market
SPP: A digital leader in the Swedish life & pension market Core market within occupational Serving clients in Sweden Value proposition and go-to market pensions The Swedish pension system ployees B2B2E Private Em pension savings 350 Women/Men Occupational 55/45 • Collective • Non-collective Multi-ch
Slide 15: Double digit growth continues across the Group
Double digit growth continues across the Group Unit linked (defined contribution) pensions Asset management UL reserves (NOK billion) YOY AuM (NOK billion) YOY 19%2 14%2 +13%1 +18%1 426 1 298 380 1 097 1 020 1 212 308 315 962 268 721 831 220 707 168 179 577 140 2016 2017 2018 2019 2020 2021 2022 202
Slide 16: Increasing ambitions for financial and sustainability side
Increasing ambitions for both the financial and sustainability side of the business Group financial ambitions Group sustainability ambitions 5 NOK billion >14% Net-zero investments Workforce participation Group profit 2025 Return on Equity Group-level by 2050 Reduce disability NOK Increasing every y
Slide 17: Sustainability at Storebrand
1. Storebrand overview and strategy 2. Sustainability at Storebrand Sustainability 3. Capital and solvency at Storebrand 4. Group results Q2 2024 5. Appendix 17
Slide 18: 29 years of pioneering sustainable finance
29 years of pioneering sustainable finance Top 10% Of global listed companies' work within sustainability Grade A Part of CDP's A-list for 2022 & 2023. Leading the way in environmental transparency and performance on climate change Rated #1 Within sustainable investments in Norway, Sweden and Denmar
Slide 19: Maintaining sustainability leadership
Maintaining sustainability leadership through product, service and operations focus Storebrand in Sustainability in Sustainability in Society Products and Services Operations Sustainable finance thought leader in the Nordics; Net zero ambition across portfolios by 2050; 15% of Science-based targets
Slide 20: On track to reach sustainability targets
On track to reach sustainability targets Science Solution Greenhouse gas emissions Other highlights based targets investments Stocks and bonds Real estate Developing products & services that aim to reduce growth in disability benefit dependent population NOK 13bn of green Status bonds issued and Q4
Slide 21: Capital and solvency
1. Storebrand overview and strategy 2. Sustainability at Storebrand Capital and 3. Capital and solvency solvency 4. Group results Q2 2024 5. Appendix 21
Slide 22: Consistent group capital management and dividend policy
Consistent group capital management and dividend policy Capital management and dividend policy 191% ▪ Intention to return excess capital through share buybacks when Q2 2024 the solvency ratio is above 175% 175% ▪ Ambition is to pay nominally growing dividends per share Solvency II ratio ▪ Maintain i
Slide 23: Solvency position and sensitivities Q2 2024 (Group)
Solvency position and sensitivities Q2 2024 Storebrand Group Solvency position 1 Estimated sensitivities Target SII margin 150% 191 % 191 % SII-margin Q2 191 Interest rates -50bp 188 Interest Q1 2024 Q2 2024 rates +50 bp 193 Key takeaways Q2 2024 Equity -25%, SA -14p.p. 196 ▪ The positive effect fro
Slide 24: Solvency position and sensitivities Q2 2024 (Livsforsikring)
Solvency position and sensitivities Q2 2024 Storebrand Livsforsikring Solvency position 1 Estimated sensitivities 258 % 261 % SII-margin Q2 261 Interest rates -50bp 255 Interest rates +50 bp 264 Equity -25%, SA -14p.p. 254 Spread +50 bp, VA +15bp 246 Property -10% 253 Q1 2024 Q2 2024 24 1. The estim
Slide 25: Solid capital position with low leverage and strong liquidity
Solid capital position with low leverage and strong liquidity gives financial flexibility Group capital (NOK billion) and leverage ratio 1 Liquidity position Storebrand ASA Q4 (NOK billion) 6.1 26% 24% 22% 20% 20% 20% 20% 2.3 3.8 40.8 41.9 35.9 1.0 32.9 11.8 12.0 27.6 8.1 24.7 8.1 4.9 20.2 5.7 6.1 2
Slide 26: Solvency capital base Q2 2024
Solvency 2 capital base Q2 2024 SCR and own funds (NOK bn) Own funds % (excluding CRD IV subsidiaries) OF % OF % 54 Regulatory limit of SCR of total CRD IV Capital 6 0 Tier 3 Tier 3 ≤ 15% SCR 0% 0% Tier 2 8 Tier 1 Restricted 2 Tier 2 ≤ 50% SCR 35% 17% 28 ∑ T2+T3 5 CRD IV entities Tier 1 ≤ 20% T1 8%
Slide 27: Term structure debt (to ordinary call date)
Term structure debt (to ordinary call date) Term structure sub-debt Storebrand Livsforsikring (bn NOK)1 Term structure senior debt Storebrand ASA (bn NOK)2 2.8 Perpetual Non- perpetual 2.03 1.4 1.0 1.03 0.9 0.7 0.5 0.5 2024 2025 2026 2027 2028 2029 2030 2031 2025 2026 2027 2028 2029 1. Total EUR 300
Slide 28: Rating
BBB rating for Storebrand ASA and A rating for Storebrand Livsforsikring AS from S&P Global …reflecting business and capital improvement during the past years Rating and underlying rationale Comments Storebrand Livsforsikring AS • S&P Global has assigned an "A" rating with a stable outlook to Storeb
Slide 29: High quality assets, with fixed income as the backbone
High quality assets, with fixed income as the backbone, provide secure returns for guaranteed pensions and company capital Invested assets 1 on Storebrand's balance sheet Bonds Bonds and at amortised cost Money Market NOK billion Equities Real Estate Average rating Book yield Average rating 203 10%
Slide 30: Group results Q2 2024
1. Storebrand overview and strategy 2. Sustainability at Storebrand Group results 3. Capital and solvency Q2 2024 4. Group results Q2 2024 5. Appendix 30
Slide 31: Highlights Q2 2024
Highlights Q2 2024 Strong operating result driven by continued growth and cost control, financial result boosted by sales gain Group result 1 MNOK 14% AuM growth2; NOK 1 298bn per Q2'24 3 331 19% growth in unit linked reserves2 1 047 2 249 1 047 777 16% growth in insurance premiums2 384 819 1 507 19
Slide 32: Two acquisitions announced and divestment of health business concluded
Two acquisitions announced and divestment of health business concluded during the second quarter Acquisition of Investment in Divestment of Storebrand AIP Management corporate headquarter Health Insurance concluded • Increased ownership in Danish infrastructure fund • Gross property value of NOK ~1.
Slide 33: Key Figures
Group Key Figures Strong improvement in operating and financial result, solid solvency position Result development 1 Earnings per share 2, 6 Special items 4.59 Financial items and risk result life Cash equivalent earnings from operations 2,249 STB 1,047 Helse 2.16 2.14 2.09 1,070 1,082 1.73 856 728
Slide 34: Storebrand Group | Profit
Group Storebrand Group | Profit Strong improvement in operating result driven by growth and cost control, financial result positively affected by income recognition from the divestment of Storebrand Heath Insurance Profit 1 Q2 Year to date Full year NOK million 2024 2023 2024 2023 2023 Fee and admin
Slide 35: Savings (non-guaranteed)
Savings Savings (non-guaranteed) Key figures Reserves and premiums Unit Linked Retail bank balance and net interest margin (%) Unit Linked Reserves Unit Linked Premiums Life insurance balance sheet Bank balance sheet Interest margin 7.5 7.7 7.0 7.1 7.2 1.46% 1.44% 1.52% 1.60% 1.43% 426 75 77 79 82 4
Slide 36: Insurance
Insurance Insurance Key figures Reserves and premiums Unit Linked Key takeaways combined ratio and results Claims ratio Cost ratio Combined ratio 115% ▪ 97% overall combined ratio in the quarter, weak results in P&C 96% 99% 98% 97% driven by high claims inflation and a high level of large losses ▪ P
Slide 37: Guaranteed pension
Guaranteed Guaranteed pension Key figures Reserves guaranteed products Key Takeaways Customer buffers Actively sold Run-off ▪ Stable result development from operations 279 278 284 285 288 25 23 26 29 29 ▪ Improved profit-sharing result, mainly generated by the 30 29 30 33 34 Swedish business 224 225
Slide 38: Asset allocation – Guaranteed products
Asset allocation – Guaranteed products Storebrand Livsforsikring AS (Norway) SPP (Sweden) 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Bonds & Bonds at Bonds & Real Equities Money Loans amortised Equities Real estate Money Loans estate market cost market 31.12.2022 5% 12% 15% 14% 54
Slide 39: For further information
For further information Contact us Information Nikola Heitmann nikola.heitmann@storebrand.no Head of Capital +47 4169 7236 Management Investor relations website Kjetil R. Krøkje kjetil.r.krøkje@storebrand.no Financial reports and information Group Head of +47 9341 2155 Finance & Strategy Follow us:
Slide 40: Appendix
1. Storebrand overview and strategy 2. Sustainability at Storebrand Appendix 3. Capital and solvency 4. Group results Q2 2024 5. Appendix 40
Slide 41: Green Bonds issuance is a natural step toward sustainability targets
Green Bonds issuance is a natural step to work towards our long-term sustainability targets Summary of Green Bonds issued and Allocated Proceeds Green Bonds in Storebrand The financial services industry plays an important role in the transition towards sustainable, lower-carbon economies Storebrand
Slide 42: Rationale for green bond framework
Rationale for green bond framework The financial services industry has an important role in the … and Storebrand’s ambition is to ensure that our investment transition towards sustainable, lower-carbon economies… portfolio and financing activities contribute positively ▪ Storebrand recognizes that t
Slide 43: Storebrand aims for transparency in sustainability work
Storebrand aims for transparency in the sustainability work and reports on a wide range of KPIs to track progress Sustainability documentation Sustainability report Numbers, metrics and goals Storebrand has produced Comprehensive annual report, Several KPIs can be followed to track environmental rep
Slide 44: Storebrand Group | Profit
Group Storebrand Group | Profit Profit by line of business Profit 1 Q2 Year to date Full year NOK million 2024 2023 2024 2023 2023 Fee and administration income 1 888 1 670 3 706 3 275 6 782 Insurance result 396 382 763 739 1 122 Operational cost -1 465 -1 460 -2 962 -2 851 -5 787 Cash equivalent ea
Slide 45: Other
Other Other 1 Improved operational result and strong financial result driven by the divestment of Storebrand Health Insurance Profit Q2 Year to date Full year NOK million 2024 2023 2024 2023 2023 Fee and administration income 4 6 11 11 18 Operational cost -66 -109 -147 -203 -411 Cash equivalent earn
Slide 46: Risk factors
Risk factors Investing in bonds involves inherent risks. Prior to making an investment decision, prospective investors should carefully consider, among other things, the main risk factors – non exhaustive list below. A prospective investor should carefully consider all the risks related to the Issue
Slide 47: Risk factors
Risk factors The company portfolios consists of capital in excess of what is needed to cover customer obligations. The market risk in the company portfolios has a direct impact on the profit. Storebrand Livsforsikring aims to take low market risk for the company portfolios, and most of the assets ar
Slide 48: Risk factors
Risk factors Credit risk/ counterparty risk The Issuer has credit risk/ counterparty risk in relation to third parties. Storebrand investment returns are susceptible to changes that impact the general creditworthiness of the issuers of the debt securities held in its investment portfolios. Storebran
Slide 49: Risk factors
Risk factors Insurance risk Insurance risk (underwriting risk) is the risk of higher than expected claims and/or unfavourable changes in the value of an insurance liability due to the actual development differing from what was expected when premiums or provisions were calculated. Longevity risk is t
Slide 50: Risk factors
Risk factors Business risk General deterioration in major economics throughout the world would reduce the level of demand for the products and services of the Issuer. It may lead to reduced savings rates from corporates in defined contribution occupational pension schemes down to the mandatory minim
Slide 51: Risk factors
Risk factors The Issuer is highly reliant on computer systems for its business operations. The Issuer is also dependent on its ability to adapt its computer systems to new products and business needs. Technical implementation can be extensive and complicated. Storebrand is facing a major technologic
Slide 52: Risk factors
Risk factors Changes in government policy, legislation or regulatory interpretation applying to the financial services industry in the markets in which the Issuer operates may adversely affect the Issuer's product range, distribution channels, capital requirements and, consequently, reported results
Slide 53: Risk factors
Risk factors Liquidity risk Liquidity risk is the risk that the Issuer is unable to fulfil its obligations without incurring substantial additional expenses in the form of reduced prices for assets that must be realized, or in the form of expensive financing. For Storebrand Livsforsikring, insurance
Slide 54: Risk factors
Risk factors All investments in interest bearing securities have risk associated with such investment. The risk is related to the general volatility in the market for such securities, varying liquidity in a single bond issue as well as company specific risk factors. The Bonds may not be a suitable i
Slide 55: Risk factors
Risk factors Under certain conditions, interest payments under the Bonds may be optionally or mandatorily deferred The payment obligations by the Issuer under the Bonds are conditional upon the Issuer not being in breach of Applicable Regulations at the time of payment, and still not being in breach
Slide 56: Risk factors
Risk factors Changes in ranking and terms No limitation on issuing further debt and guarantees There is no restriction on the amount of debt which the Issuer may issue ranking equal or senior to the obligations. Such issuance of further debt may reduce the amount recoverable by the Bondholders upon
Slide 57: Risk factors
Risk factors In respect of issuance with a specific use of proceeds, such as a ‘Green Bond’, the application of the net proceeds of such Notes might not meet investor expectations or be (or remain) suitable for the investment criteria of an investor Issuance described as “Green Bonds”, will be the I
Slide 58: Important information
Important information This document may contain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may be beyond the Storebrand Group’s control. As a result, the Storebrand Group’s actual fu
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