Storebrand Asa · OSL:STB
Storebrand Asa — Q4 2013 Earnings Presentation
25 slides from Storebrand Asa's earnings presentation, Feb 12, 2014
Slide 1: Storebrand Q4 2013
Storebrand Q4 2013 12 February 2014 Odd Arild Grefstad – CEO Lars Aa Løddesøl – CFO 1
Slide 2: Highlights 2013
Highlights 2013 Result Group result of NOK 2 935 mill in 2013, NOK 1 054 mill in Q4 Fee and administration income increased with 11.5% in 2013 Nominal cost reductions of 6% 2013 1 Operations Embedded value increases with NOK 5.9 bn to 27.7 bn 35% growth in Unit Linked pension reserves New law on hyb
Slide 3: Storebrand Group - strong results
Storebrand Group Group - strong results Result Q4 Full year NOK million 2013 2012 2013 2012 Fee and administration income 1 141 974 4 355 3 907 Underwriting result 227 221 1 068 1 072 Operational cost (non-recurring items excluded) -780 -925 -3 260 -3 452 Financial result 10 53 79 117 Result before
Slide 4: Our strategic response to changing market conditions
Our strategic response to changing market conditions We work hard to reach our vision: Recommended by our customers Managing the balance sheet Developing the business Concepts Capital Risk Employees optimisation reduction Corporate relation Managing business Save for without raising < retirement new
Slide 5: Managing the balance sheet
Managing the balance sheet Capital optimization Risk reduction Transfer out of guaranteed products 9 954 967 7 279 710 Reduced real-estate portfolio – sold 7 998 shopping centers and 5 office buildings in 2013 (18% of real estate MNOK portfolio) Managing business 1Q 2013 2Q 2013 Q3 2013 Q4 2013 Sum
Slide 6: Market impacted by extensive product reform
Market impacted by extensive product reform – new hybrid occupational pension product from 1 January 2014 New legal framework for Norwegian occupational pension Important changes 1. Increased maximum saving rates in 4 DC schemes, from 1 January 2014 DB Paid-up − Up to 7% for wages up to 7G* Defined
Slide 7: Longevity - increased longevity reserves
Longevity - increased longevity reserves Reservation need and buffer capital Comments Excess value bonds at amortised cost MVAR Final reservation need: 12.5 bn Reserved 2011-2013 31.12.2012 01.01.2014 Flexible buffers strengthened 13.3 12.5 11.5 Expect public sector transfers to 10.5 5.2 reduce rese
Slide 8: Key figures
Key figures Group Result development Earnings per share1 Net profit sharing and loan losses MNOK 1.78 1.82 Sale discontinued business/change in pension plan Result before profit sharing and loan losses 1.43 Provisions for cost program 1,054 810 180 1.03 86 277 552 518 56 489 94 55 0.38 181 668 597 3
Slide 9: Storebrand Group - strong results
Storebrand Group Group - strong results Result Q4 Full year NOK million 2013 2012 2013 2012 Fee and administration income 1 141 974 4 355 3 907 Underwriting result 227 221 1 068 1 072 Operational cost (non-recurring items excluded) -780 -925 -3 260 -3 452 Financial result 10 53 79 117 Result before
Slide 10: Savings (non-guaranteed) - continued result improvement
Savings (non-guaranteed) Savings - continued result improvement Result Q4 Full year NOK million 2013 2012 2013 2012 Fee and administration income 489 424 1 888 1 638 Risk result life & pensions 3 2 7 3 Operational cost * -294 -361 -1 279 -1 417 Financial result - - - - Result before profit sharing a
Slide 11: Savings (non-guaranteed) - strong growth in Unit Linked
Savings (non-guaranteed) Savings - strong growth in Unit Linked Reserves and premiums Unit Linked Comments 2.768 2.480 2.318 2.296 2.273 17% growth in occupational pension 85.452 UL premiums MNOK 79.341 73.542 70.458 +35% 63.387 Strong growth in assets helped by strong equity markets 4Q 2012 1Q 2013
Slide 12: Insurance - low seasonal claims
Insurance Insurance - low seasonal claims Result Q4 Full year NOK million 2013 2012 2013 2012 Insurance premiums f.o.a. 754 671 2 868 2 510 Claims f.o.a. -577 -544 -2 098 -1 774 Operational cost -60 -116 -413 -470 Financial result 33 78 135 150 Result before profit sharing and loan losses 150 88 492
Slide 13: Insurance - strong combined ratio: 88%
Insurance Insurance - strong combined ratio: 88% Combined ratio Comments Claims ratio Cost ratio Combined ratio 99% 94% 86% 87% 85% 2013 combined ratio of 88%, 73% claims ratio, 15% cost ratio 81% 78% 76% 67% 71% Cost ratio of 16% in Q4 and 17% in 18% 17% 18% 16% 2013, net of non recurring items 8%
Slide 14: Guaranteed pension - revenue growth
Guaranteed pension Guaranteed - revenue growth Result Q4 Full year NOK million 2013 2012 2013 2012 Fee and administration income 561 456 2 115 1 861 Risk result life & pensions 49 88 288 318 Operational cost -225 -354 -1 111 -1 375 Financial result - - - - Result before profit sharing and loan losse
Slide 15: Guaranteed pension - reserve building
Guaranteed pension Guaranteed - reserve building Reserves guaranteed products Comments Transfer out of guaranteed +2% products of 10 bn in 2013 4.6% value adjusted return in MNOK 259.858 261.502 258.654 262.126 263.776 SBL 2013 Increased market value adjustment with 2.8 bn to 3.8 bn from Q3 4Q 2012
Slide 16: Other
Other Other Result Q4 Full year NOK million 2013 2012 2013 2012 Fee and administration income 90 94 353 408 Risk result life & pensions -2 5 3 14 Operational cost 75 -107 -180 -385 Financial result -23 -26 -57 27 Result before profit sharing and loan losses 141 -34 118 63 Net profit sharing and loan
Slide 17: Storebrand Group - highlights of MCEV 2013 results
Storebrand Group - highlights of MCEV 2013 results 2013 embedded value earnings of + 5.4 billion NOK − 24.7 % return on opening embedded value − 13.8 % operating return Storebrand Group MCEV of NOK 30.2 billon in 2013 − NOK 67.6 per share (54.8 NOK in 2012) 24,7% +2.5 -1.1 +0.5 +3.5 +2.6 +0.5 30.2 N
Slide 18: Value of New Business of 471 million
Value of New Business of 471 million* Per line of business 426 471 Savings (Life) Risk Guaranteed Pensions 274 412 424 218 96 82 52 -40 -51 -22 2011 2012 2013 Per company 471 SBL 426 SPP 287 274 338 149 185 125 88 2011 2012 2013 18 *) All numbers are after tax and in NOK millions
Slide 19: Value of In Force per product group
Value of In Force per product group* SBL Change from 2012 to 2013 Savings: NOK mil + strong returns asset growth - cost allocation 6,968 - stress for mass lapses (CNHR) 7,274 6,863 Savings (Life) 6,905 Fee based: 4,108 7,036 Risk + improved margins Guaranteed Pensions 1,509 1,507 + increased interes
Slide 20: Summary
Summary Strong result improvement Cost program on plan: nominal cost reduced by 6% adjusted for non-reccuring Increase in MCEV of 5.9 bn Solvency ratio: 176% The board proposes no dividend to be paid for 2013 20
Slide 21: Storebrand
@S storebrand @d storebrand
Slide 22: Appendix
Appendix: 22 @d storebrand
Slide 23: Storebrand Life Insurance asset allocation
Storebrand Life Insurance asset allocation 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Bonds at Money Equities Bonds amortized Real estate Alpha Other market cost 31.12.2012 6% 22% 18% 34% 14% 1% 5% 31.03.2013 7% 21% 16% 37% 14% 1% 5% 30.06.2013 7% 20% 15% 40% 12% 1% 4% 30.09.2013 8% 20% 15% 41% 11% 1% 5%
Slide 24: Storebrand Life Insurance - return by asset class
Storebrand Life Insurance - return by asset class Return by asset class Q4 2013 (%) Real estate 0,8 % Bonds at amortized cost 1,2 % Money market 0,5 % Equities 7,2 % Alternative investments 0,9 % Bonds 0,3 % Credit 1,2 % -2,0 % 0,0 % 2,0 % 4,0 % 6,0 % 8,0 % 10,0 % 12,0 % 14,0 % 24
Slide 25: SPP asset allocation
SPP asset allocation 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Alternative investments Bonds Equities 31.12.2012 8% 82% 11% 31.03.2013 8% 81% 12% 30.06.2013 7% 81% 12% 30.09.2013 7% 83% 10% 31.12.2013 7% 82% 11% 1 The graph shows the asset allocation for all products with an interest rate guarantee in