Storebrand Asa · OSL:STB
Storebrand Asa — Storebrand Livsforsikring AS — Debt Investor Presentation (May 2022)
59 slides from Storebrand Asa's debt investor presentation, May 18, 2022
Slide 1: Storebrand Livsforsikring Green Tier 2 Investor presentation
Storebrand Livsforsikring Green Tier 2 Investor presentation 1
Slide 2: Disclaimer
Disclaimer 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 does n
Slide 3: Presentation Content
Presentation Content Section Slide Number Storebrand Overview and Strategy 6 Sustainability at Storebrand 13 Storebrand Green Bond Framework 18 Capital and Solvency 28 Group results Q1 2022 37 3
Slide 4: Executive Summary
Executive Summary • Pension market leader in Norway and strong contender in Sweden, Nordic powerhouse in Asset Management and growing challenger in Norwegian retail market • Active in structurally strong markets with resilient economic development • Digital frontrunner with growth focus in capital-l
Slide 5: Green Tier 2 – Indicative Key Terms
Green Tier 2 – Indicative Key Terms Issuer Storebrand Livsforsikring AS Rating (S&P): Issuer: A- / Issue: Expected BBB Type of Issue: Green FRN Tier 2 Callable Bond Issue The Bonds will constitute Tier 2 Instruments of the Issuer and/or the Issuer Group under the Applicable Regulations, and constitu
Slide 6: Storebrand Overview and Strategy
Storebrand Overview and Strategy Sustainability at Storebrand Storebrand Storebrand Green Bond Framework Overview and Strategy Capital and Solvency Group results Q1 2022 6
Slide 7: An Integrated Financial Services Group with 250 years of pioneering
An Integrated Financial Services Group with 250 years of pioneering in the Nordic financial industry Retail Insurance & Bank Asset Management Unit Linked Pensions and Guaranteed pensions Savings 1767 1847 1861 1917 1995 2021 2050 Foundation: P&C Pioneered Pioneered Pioneered ILLUSTRATIVE Norwegian I
Slide 8: Storebrand - An Integrated Financial Service Group
Storebrand - An Integrated Financial Service Group Insurance P&C, Health and Life insurance Asset Management NOK 6.3bn in NOK 1,058bn AuM annual written 45% external investors premiums 100% of investments Pension & Savings subject to sustainability 40k corporate customers screening 2m
Slide 9: Future Storebrand is delivering strong growth in Savings and Insurance
Future Storebrand is delivering strong growth in Savings and Insurance Unit Linked Asset management 308 +11%1 +19%1 268 1 097 962 220 721 831 168 179 707 140 487 535 571 577 105 128 442 64 85 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 UL reser
Slide 10: Delivered on transition from guaranteed to capital light business
Delivered on transition from guaranteed to capital light business Premiums Storebrand1 Profit Storebrand2 Shift in total Storebrand AUM3 36 808 4 503 1 097 7% 14% 14% 32% 46% 24 584 9% 49% 1 960 3% 442 24% 72% 18% NOK bn NOK m NOK m 15% 61% 14% 4% 52% 9% 36% 21% 59% 27% 15% 2012 2021 2012 2021 2012
Slide 11: Sustainable Nordic Savings and Insurance Group
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 Leading Provider Growth focus in Nordic Powerhouse in Growing Challenger in Occupational Pensions capital-light business Asset Management
Slide 12: Group capital management policy sets thresholds for distribution of dividends
Group capital management policy sets thresholds for distribution of dividends Solvency 2 ratio 184% Consider share buybacks when solvency ratio is above 180% without Current level material use of transitional capital 180% Ordinary dividend of >50% of Group profit after tax Ambition is to pay n
Slide 13: Sustainability at Storebrand
Storebrand Overview and Strategy Sustainability at Storebrand Sustainability at Storebrand Green Bond Framework Storebrand Capital and solvency Group results Q1 2022 13
Slide 14: Storebrand has invested in a sustainable future since 1995
Storebrand has invested in a sustainable future since 1995 25 years of Top 10% most Nr.1 sustainable Nr. 1 insurance sustainable sustainable company investments in Norway company globally1 investments in the world2 and Sweden3 Decision to integrate Next Commitment Sustainability Exclusions Storebran
Slide 15: In 2020 Storebrand launched a company wide climate strategy
In 2020 Storebrand launched a company wide climate strategy covering the entire value chain In 2019, Storebrand was one of the founding members of the Storebrand is aiming for climate neutrality throughout the UN convened Net Zero Asset Owner Alliance entire value chain in the climate strategy Own O
Slide 16: Intermediate targets towards 2025 for net zero by 2050
To achieve net zero emissions by 2050, Storebrand has defined intermediate targets towards 2025 Asset class targets Solution targets Active ownership Customer engagement -32% reduction in scope 1-2 GHG emissions of 15% of our total Special emphasis will be Make it easy for clients to Storebrand's to
Slide 17: Sustainability key figures
Assets under Number of customers Corporate Knights Global 100 management, NOK billion More than (Insurance sector) 1.097 2 million No. 1 Dow Jones Sustainability Founding member of Net Index Investments in Zero Asset Owner Alliance solutions, NOK billion Top 10% (% of AUM) 123.1 (11.2) Number of emp
Slide 18: Storebrand Green Bond Framework
Storebrand Overview and Strategy Sustainability at Storebrand Storebrand Green Storebrand Green Bond Framework Bond Framework Capital and Solvency Group results Q1 2022 18
Slide 19: 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 20: Green bond framework overview
Green bond framework overview Updated: 2022 https://www.storebrand.no/en/investor-relations/rating-and-funding 20 Source: Storebrand Green Bond Framework
Slide 21: The Storebrand Green Bond Framework
The Storebrand Green Bond Framework 1 Use of the Green Bond proceeds 3 Project Evaluation and Selection An amount equal to the net proceeds of any Storebrand Green Bond issuance ‘Project Evaluation & Selection’ refers to the process of determining which will be used to finance and/or refinance E
Slide 22: Focus on the Use of Proceeds - Eligible Green Assets Categories
Focus on the Use of Proceeds - Eligible Green Assets Categories1 Category Sub-Category Eligibility Criteria Indicative metrics SDGs alignment Investments in or financing of new commercial buildings certified to either of, or a combination of, the following standards and levels: • BREEAM: Excellent o
Slide 23: Focus on the Use of Proceeds - Eligible Green Assets Categories
Focus on the Use of Proceeds - Eligible Green Assets Categories1 Category Sub-Category Eligibility Criteria Indicative metrics SDGs alignment Investments in or financing of renovation projects that achieve a reduction in net Primary Energy Demand of at least 30% in comparison to the baseline perform
Slide 24: Focus on the Use of Proceeds - Eligible Green Assets Categories
Focus on the Use of Proceeds - Eligible Green Assets Categories1 Category Sub-Category Eligibility Criteria Indicative metrics SDGs alignment Investments relating to the development, construction, acquisition, maintenance, and operation of electric rail infrastructure and electric rolling stock for
Slide 25: Green Bond Governance
Green Bond Governance To ensure that allocations are made to Eligible Green Assets as in the Green Bond Framework, Storebrand has established a Green Bond Committee The Green Bond Committee Scope The Green Bond Committee Composition Responsibilities Representatives Ensuring the proposed allocation
Slide 26: Second Party Opinion by Sustainalytics
Second Party Opinion by Sustainalytics Use of Proceeds Project Evaluation & Selection The eligible categories for the use of proceeds – Green Storebrand’s Green Bond Committee1 is responsible for Buildings, Renewable Energy, and Clean Transportation – are evaluating and selecting projects. Storebran
Slide 27: EUR Green Bond – Asset Allocation Figures
EUR Green Bond – Asset Allocation Figures 27 Source: Green Bond Allocation Report 2021
Slide 28: Capital and Solvency
Storebrand Overview and Strategy Sustainability at Storebrand Capital and Storebrand Green Bond Framework Solvency Capital and Solvency Group results Q1 2022 28
Slide 29: Storebrand Group Structure
Storebrand Group Structure Diversified cash flow to holding company Storebrand ASA Legal structure (simplified) Storebrand ASA Storebrand Asset Storebrand Livsforsikring AS Storebrand Bank ASA Storebrand Forsikring AS Management AS Reporting structure Storebrand Holding AB Storebrand ASA SPP Pension
Slide 30: 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 Liquidity position Storebrand ASA (NOK billion) 26% 24% 22% 20% 20% 23% 9.5 38.4 35.9 2.0 32.9 7.7 7.6 8.1 27.6 8.1 1.0 24.7 4.9 20.2 5.7 6.1 30.8 27.8 6.6 24.8 22
Slide 31: Term structure debt
Term structure debt Term structure sub-debt Storebrand Livsforsikring1 (bn NOK) Term structure senior debt Storebrand ASA (bn NOK) 2.6 2.6 2.0 1.1 1.3 0.9 0.8 0.5 0.5 0.9 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2021 2022 2023 2024 2025 Perpetual Non- perpetual 31 31 | 1 Total EUR 550
Slide 32: Solvency 2 capital base Q4 2021
Solvency 2 capital base Q4 2021 SCR and own funds (NOK bn) Own funds % (excluding CRD IV subsidiaries) OF % OF % of 52 Regulatory limit of SCR total CRD IV Capital 4 0 Tier 3 Tier 2 9 Tier 3 ≤ 15% SCR 1% 1% Tier 1 Restricted 2 30 Tier 2 ≤ 50% SCR 35% 20% ∑ T2+T3 3 CRD IV entities Tier 1 Unrestricted
Slide 33: Estimated solvency sensitivities
Estimated solvency sensitivities Storebrand Group Group Solvency position(%)1 Estimated sensitivities Target SII margin 150% 175 184 0 0 SII-margin Q1 184 0 184 175 184 Interest rates -50bp 181 0 181 Q4 2021 Q1 2022 Interest 184 0 184 Transitional rules SII standard model rates +50 bp Key takeaways
Slide 34: More robust capital position with increased spreads
More robust capital position with increased spreads Group above discount rate and reduced duration mismatch Expected investment return above Reduced duration gap (years), discount rate (%), Solvency II1 Solvency II2 ∼1.3 % 2.6 1.2 Duration gap ∼0.7 % GUARANTEED NORWAY 6.0 5.7 Asset duration CMD 2020
Slide 35: Solvency position Storebrand Livsforsikring AS
Solvency position Storebrand Livsforsikring AS Solvency position(%)1 Comments 214 218 Main differences between the Storebrand Group solvency and 0 0 Storebrand Livsforsikring AS solo calculation: SPP is treated as a strategic participations with a 22% 214 218 capital charge on the own funds value2
Slide 36: Moderate leverage, fixed charge coverage, and rating
Moderate leverage, fixed charge coverage, and rating give financial flexibility and more debt capacity Moderate leverage2 Strong debt servicing capacity2 Solid rating A- 22% 23% ~13x stable outlook Insurance Financial Strength Rating (IFSR) "We also anticipate that Storebrand's capitalization will r
Slide 37: Group results Q1 2022
Storebrand Overview and Strategy Sustainability at Storebrand Group results Q1 2022 Storebrand Green Bond Framework Capital and Solvency Group results Q1 2022 37
Slide 38: Highlights Q1 2022
Highlights Q1 2022 Strengthened solvency position and stable operating result in a quarter with volatile financial markets 1 040 bn NOK in assets under management Group result1 19% growth in insurance2 628 15% growth in retail banking2 MNOK 678 -50 184% Solvency ratio Q1 2022 Financial items and ris
Slide 39: Structural growth paused by FX and weak financial markets in Q1 2022
Structural growth paused by FX and weak financial markets in Q1 2022 A B C Leading Provider Occupational Pensions Nordic Powerhouse in Growing Challenger in Norwegian Retail Norway & Sweden Asset Management Market DC pensions (Unit Linked) Insurance Portfolio AuM (BNOK) Lending balance (BNOK) reserv
Slide 40: Leader in DC Occupational Pension and Asset Management
Leader in DC Occupational Pension and Asset Management, and a challenger in the Retail Market Occupational Pensions Norway Occupational Pensions Sweden Digital leader Defined Contribution share1 Defined Contribution share2 in Sweden Best customer satisfaction with all time high score for 30% 29%
Slide 41: Key Figures
Key Figures Strengthened solvency position, stable operating result and solid buffer capital levels Result development1 Earnings per share2 Financial items and risk result life Performance related result MNOK Special items Operating profit 2.79 1,353 1,367 2.25 2.18 121 913 329 870 546 1.56 151 454
Slide 42: Storebrand Group
Storebrand Group Stable operating profit Profit1 Q1 Full year NOK million 2022 2021 2021 Fee and administration income 1 457 1 482 6 607 Insurance result 365 220 1 201 Operational cost -1 145 -1 057 -4 678 Operating profit 678 645 3 130 Financial items and risk result life -50 225 1 372 Profit befor
Slide 43: Savings (non-guaranteed)
Savings (non-guaranteed) Growth paused by FX and volatile financial markets Reserves and premiums Unit Linked Retail bank balance and net interest margin (%) 5.3 5.3 5.2 5.4 5.3 Life insurance balance sheet Bank balance sheet 1.10 1.14 1.22 1.19 1.22 308 56 57 59 295 296 291 52 54 MNOK 279 39 40 BNO
Slide 44: Insurance
Insurance Continued growth and improved results Combined ratio Key Takeaways Combined Ratio and Results Claims ratio Cost ratio Combined ratio 98% 96% 91% 90% 92% 92% overall combined ratio (target 90-92%), 91% in P&C & Individual life Improved claims ratio 82% 74% 74% 78% 74% 17% 17% 15% 19% 18
Slide 45: Guaranteed pension
Guaranteed pension Stable operating profit and strong risk result Reserves guaranteed products Key Takeaways 286 295 292 291 281 33 32 Continued run-off of guaranteed reserves. 29 34 28 Customer buffers 25 25 25 26 28 Actively sold Growth in public occupational pensions contribute NOK 4.2bn to r
Slide 46: Asset allocation – Guaranteed products
Asset allocation – Guaranteed products Storebrand Livsforsikring AS (Norway) SPP (Sweden) 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 31.03.2021 10% 11% 12% 13% 55% 31.03
Slide 47: Appendix Risk Factors
Storebrand Overview and Strategy Sustainability at Storebrand Appendix Storebrand Green Bond Framework Risk Factors Capital and Solvency Group results Q1 2022 Appendix: Risk Factors 47
Slide 48: Risk factors
Risk factors Investing in bonds involves inherent risks. Prospective investors should carefully consider, among other things, the risk factors set out in the Registration Document before making an investment decision. A prospective investor should carefully consider all the risks related to the Issu
Slide 49: Risk factors
Risk factors For guaranteed customer portfolios, the risk is affected by changes in interest rates. Falling interest rates are positive for the investment return in the short term due to price appreciation for bonds, but negative in the long term because it reduces the probability of achieving a ret
Slide 50: 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 51: 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, and lead to lower realisations, increased write-downs, impairments of investments and negative fair value adjustments of assets, and
Slide 52: Risk factors
Risk factors Legal and regulatory risk The Issuer is subject to government regulation primarily in Norway and Sweden, but also in other jurisdictions in which it conducts business. Regulatory agencies have broad jurisdiction over many aspects of these businesses, including, but not limited to, solve
Slide 53: Risk factors
Risk factors Accounting and taxation Changes in accounting standards, or in the interpretation of IFRS and other valuation methodologies, both specifically in relation to insurance and more generally, could have a negative impact on the financial position of the Issuer. The Issuer prepares its conso
Slide 54: Risk factors
Risk factors Liquidity risk Liquidity risk is the risk that the company is unable to fulfil its obligations without incurring substantial additional expenses in the form of reduced prices for assets that must be realised, or in the form of expensive financing. Adverse capital and credit market condi
Slide 55: 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 56: 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 57: 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 58: Risk factors
Risk factors Credit ratings may not reflect all risks The Bonds are, at the date of the Prospectus, rated by S&P. S&P is established in the European Economic Area (EEA) and registered under Regulation (EC) No 1060/2009, as amended (the CRA Regulation) and are, as of the date of this Prospectus, incl
Slide 59: Contacts
Leading the way in sustainable value creation Contacts Lars Aa Løddesøl lars.loddesol@storebrand.no Group CFO +47 9348 0151 Nikola Heitmann nikola.heitmann@storebrand.no Head of Capital +47 41697236 Management Daniel Sundahl daniel.sundahl@storebrand.no Group Head of +47 9136 1899 IR & Rating This d
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