Slide 1: Results 4th Quarter 2007 Analyst Presentation
Storebrand Results 4th Quarter 2007 13 February 2008 Analyst presentation Analyst Presentation 4th Quarter 2007 Page # Slide # • Storebrand Group Group CEO Idar Kreutzer 2-14 3-28 Back-up: • Storebrand Group 15-21 29-42 • Storebrand ASA 22-23 43-46 • Storebrand Life Group 24-35 47-70 • Storebrand Li
Slide 2: Highlights Q4 2007
Storebrand Results 4th Quarter 2007 13 February 2008 Idar Kreutzer Group CEO Highlights Q4 2007 Group profit of NOK 676 million in Q4 and NOK 2,020 million in 2007 Solid market development with more than NOK 4 billion reported positive net transfer balance in 2007 and a 23% growth in premiums MCEV f
Slide 3: Group profit by sub-group; Storebrand Livsforsikring results
Storebrand Group Profit by sub-group Q4 01.01. - 31.12 NOK million 2007 2006 2007 2006 Life activities 594 362 1 635 1 198 Investment activities 38 67 138 156 Storebrand Bank 47 36 235 190 Other activities -3 -21 12 41 Group profit 676 443 2 020 1 585 5 Q4 2007 Storebrand Livsforsikring - solid resu
Slide 4: Livsforsikring buffers; Sales statistics Norway
Storebrand Livsforsikring AS – healthy buffers Risk capital, NOK billion 31.12.2007 4,1 15,5 1,7 3,9 5,8 Additional statutory Market value Core capital Profit carried Total reserve adjustment margin forward reserve 7 Q4 2007 Sales statistics - Norway - satisfactory marked development Defined contrib
Slide 5: Positive transfer balance; Storebrand Investments margin development
Storebrand – positive transfer balance Reported net transfer balance 2007 NOK billion 5.000 4.085 4.000 3.000 2.000 1.000 218 0 (168) (293) -1.000 (822) -2.000 -3.000 (3.002) -4.000 Others Kasse 9 The graph shows reported transfers to/from Storebrand and towards the competitors. Q4 2007 The graph do
Slide 6: Margin improvement; Storebrand Bank profit and loss
The margin improvement continues in 2007 bp 16 14 12 10 8 6 Q4 2003 Q4 2004 Q4 2005 Q4 2006 Q4 2007 Incom e Cost Income = Income ex performance fees and SAI (12 month rolling) / AuM 11 Cost = Total costs ex performance related pay (12 month rolling) / AuM Q4 2007 Storebrand Bank Profit and loss Q4 0
Slide 7: Storebrand Bank good development; Other activities
Storebrand Bank - good development 27 % growth in retail Gross lending by sector market lending in 2007 and 15% growth in customers 2% (5 %) base Margin and results Residential 29 % mortgages - Price changes giving results (32 %) Other retail - Increased deposit to loan 64 % (55 %) ….ratio to 47% Re
Slide 8: SPP & Euroben result development 2007; Implementation
SPP & Euroben - result development 2007 Result of minus SEK 211 million in Q4, and SEK 232 million in 2007 Poor investment results in Q4 SEK 8.5 billion in premium income in 2007, an increase of 7%. New sales increased by 21% Value adjusted return of 0.4% in 2007 Satisfactory buffer capital at SEK 1
Slide 9: Upward adjustment to synergies from SPP
Upward adjustment to synergies from SPP Value creation Cost Synergies NOK million annual profit impact NOK million annual profit impact Revenue synergies (VNB basis) >100 Process improvement ~60 Cost synergies ~150 IT-infrastructure ~15 Investment return ~100 Procurement and economics of ~10 scale T
Slide 10: Strong Embedded Value; MCEV analysis
Strong Embedded Value Consolidated Storebrand Group embedded value of NOK 32.6 billion including the net asset value of business outside of Storebrand Life Group; this represents NOK 71.7 per share 2007 embedded value earnings for Storebrand Life (pre acquisition of SPP) of NOK 2,609 million, repres
Slide 11: MCEV analysis consolidation of SPP; sensitivities
2007 Storebrand Life Group MCEV analysis – consolidation of SPP Comments NOK billion The impact of the acquisition of SPP in late 2007 can be broken down into the following MCEV before SPP 20,8 components: - the issuance of additional capital of NOK 8.9 billion Additional capital 8,9 - the deduction
Slide 12: Buffer capital per 7 February 2008; SPP buffer capital
Storebrand Livsforsikring AS – buffer capital per 7. February 2008 31.12.2007 07.02.2008 4% Hold to 4% maturity 5% 5% 4% Bonds 28 % 12 % 28 % Real Estate 26 % Equity Money market 17 % 18 % 18 % Alpha 15 % 16 % Other 8.000 6.000 4.000 2.000 0 23 Additional Market value Total statutory adjustment Q4 2
Slide 13: Present and adjusted financial targets
Present Financial targets Target Goal 31.12.07 RoE (after tax)* 15% 24% Dividend in % of annual group result after tax >30% 27% Capital Adequacy Ratio Storebrand Bank >10% 10,5% Solvency margin Storebrand Life >150% 136% Rating Storebrand Life A A Operational targets C/I Storebrand Investments <75%
Slide 14: 2007 summarised
2007 summarised Satisfactory result development Strengthened marked position Solid MCEV-numbers Integration and value realisation in SPP proceeding according to plan 27 Q4 2007 Storebrand's objective is to be the leading and most respected institution in the Nordic market for long-term savings and i
Slide 15: 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. 30 Q4 2007 15
Slide 16: Group profit by sub-group; Operating profit
Storebrand Group Group profit by sub-group Q4 01.01. - 31.12 NOK million 2007 2006 2007 2006 Life activities 594 362 1 635 1 198 Investment activities 38 67 138 156 Storebrand Bank 47 36 235 190 Other activities -3 -21 12 41 Group profit 676 443 2 020 1 585 31 Q4 2007 Storebrand Group Operating Prof
Slide 17: Earnings per share; Group balance sheet
Storebrand Group Earnings per share Q4 01.01. - 31.12 NOK million 2007 2006 2007 2006 Group profit 676 443 2 020 1 585 Changes in security reserve etc. - non life 8 -1 9 0 Profit before tax 684 443 2 029 1 586 Tax 39 -4 - 20 - 79 Profit for the year 723 438 2 009 1 506 - Minority interests 7 -3 -3 -
Slide 18: Quarterly group profit; Capital adequacy
Storebrand Group Group profit by sub-group 2007 2006 NOK million Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Life activities 594 307 463 272 362 250 282 304 Investment activities 38 6 64 31 67 38 32 20 Storebrand Bank 47 54 55 79 36 47 59 48 Other activities -3 -9 17 7 -21 -13 -18 94 Group profit 676 357 599 389 443 32
Slide 19: Other activities; Shareholder structure
Storebrand Group Other activities Q4 01.01. -31.12 NOK million 2007 2006 2007 2006 Storebrand ASA *) -6 -5 1.057 1.012 Storebrand Skadeforsikring **) 1 -18 -18 21 Other companies/elimintations ***) 2 1 -1.027 -991 Total profit other activities -3 -21 12 41 *) Including group contributions and divide
Slide 20: Ratings; Key figures
Rating for Storebrand as at October 17 2007 Storebrand ASA Moody’s: Baa2 (S) S&P: BBB+ (N) Storebrand Storebrand Livsforsikring AS Bank ASA Moody’s: A2 (S) Moody’s: A2 (S) S&P: A (N) S&P: BBB+ (P) P=positive outlook, S=stable outlook, N=negative outlook 39 Q4 2007 Storebrand Group Key figures Q4 01.
Slide 21: Pro forma result 2007 incl. SPP; Acquisition analysis
Pro Forma result 2007 inclusive SPP for Storebrand Group Pro Forma Storebrand Pro Forma Group, SPP NOK Million Group SPP Adjustments inclusive Interest result 7.887 214 -437 7.663 Risk result 244 188 432 Administration result -669 72 -597 Other -3.030 10 -3.020 1) Amortisation of intangible assets (
Slide 22: Storebrand ASA profit for the year
Storebrand ASA Storebrand ASA Profit for the year *) Q3 01.01. - 31.12 NOK million 2007 2006 2007 2006 Group contributions and transfers 0 0 1 033 1 028 Interest income 41 18 117 73 Interest expense - 37 - 22 - 114 - 77 Realised/unrealised gains/losses on securities 2 21 85 70 Other financial income
Slide 23: Storebrand ASA quarterly development; balance sheet
Storebrand ASA Quartely development 2007 2006 NOK million Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Group contributions and transfers 0 0 0 1 033 0 0 0 1 028 Interest income 41 28 30 19 18 18 21 16 Interest expense -37 -28 -26 - 23 - 22 - 20 - 18 - 17 Realised/unrealised gains/losses on securities 2 -5 44 44 21 13 -2
Slide 24: Life Group pro forma profit 2007 incl. SPP
Storebrand Life Group Storebrand Life Group Pro forma profit 2007 incl. SPP Storebrand Life Pro forma Pro forma NOK Million Group SPP adjustments Notes Expanded Group Interest result 7,887 214 -422 2 7,678 Risk result 244 188 432 Administration result -699 72 -597 Change in security and premium rese
Slide 25: Satisfactory solidity; Solvency margin
Storebrand Life Group Satisfactory solidity Capital ratio of 10.0 % Risk capital of NOK 15.5 billion, equivalent to 10.3 % of norwegian insurance fund excl. additional statutory reserves Solidity capital of NOK 50.4 billion, equivalent to 21.4 % of insurance fund excl. additional statutory reserves
Slide 26: Life Group balance sheet IFRS
Storebrand Life Group Balance sheet IFRS Share of Share of total assets total assets NOK Million 31.12.07 31.12.07 31.12.06 31.12.06 Intangible assets 9.611 3% 17 0% Real estate 21.359 6% 17.447 10 % Long term shares and interests from group companies 146 0% 208 0% Bonds held to maturity 40.380 12 %
Slide 27: Strong Embedded Value; MCEV analysis
Strong Embedded Value Consolidated Storebrand Group embedded value of NOK 32.6 billion including the net asset value of business outside of Storebrand Life Group; this represents NOK 71.7 per share 2007 embedded value earnings for Storebrand Life (pre acquisition of SPP) of NOK 2,609 million, repres
Slide 28: MCEV analysis consolidation of SPP; methodology
2007 Storbrand Life Group MCEV analysis – consolidation of SPP Comments NOK billion The impact of the acquisition of SPP in late 2007 can be broken down into the following MCEV before SPP 20,8 components: - the issuance of additional capital of NOK 8.9 billion Additional capital 8,9 - the deduction
Slide 29: Asset management look-through value
Asset Management look-through value Comments NOK million Under European Embedded Value principles, Storebrand includes all profits arising for the Storebrand 1.976 Group that relate to the life insurance businesses, Life irrespective of where these are recognised from an accounting perspective Princ
Slide 30: Value of new business; sensitivities
Value of New Business Storebrand Life 2006 2007 NOK million EEV MCEV Present value of future profits comprising 853 518 Fee based business nm 260 20/80 profit sharing portfolio nm 104 35/65 profit sharing portfolio nm 53 Non-participating business nm 101 Cost of capital (44) (1) Cost of volatility (
Slide 31: 2007 new business margins; embedded value earnings
2007 New Business margins Storebrand Life 2007 2007 APE1 margins (%) APE PVNBP2 margins (%) PVNBP 24,8 3,3 Total 34,5 1,187 3,0 13,617 42,4 3,7 20,8 2,5 With-profit 35,6 890 3,0 10,679 business3 40,9 3,4 25,9 4,0 Defined Contribution and 26,5 248 2,7 2,398 Unit Linked 45 4,7 74,0 10,2 Non-participat
Slide 32: Embedded values 2005-2007
Embedded Values 2005 – 2007 Storebrand Life SPP Group EEV EEV MCEV MCEV MCEV MCEV NOK million 20051 20061 2006 2007 2007 2007 Total shareholder surplus at 5,512 5,977 5,977 6,931 5,431 7,478 market value comprising - required capital 3,713 4,111 4,111 4,336 5,250 nm - free surplus 1,799 1,865 1,865
Slide 33: Operating assumptions and variances; economic assumptions
Change in operating assumptions and variances Operating variances and assumption changes of NOK 1.2 billion mainly relate to the following - within non participating business changes in expenses and charges have a negative effect, while shareholder margin on fee based business has increased due to c
Slide 34: Duration; cost of volatility
Cost of volatility - modelled using stochastic simulations Implied volatilities for option on 10 year swaps at Comments the money The stochastic scenarios have been calibrated to 2007 2006 implied volatilities of swaptions at the money NOK SEK NOK SEK Various equity indices are considered in the sto
Slide 35: External opinion
External opinion Tillinghast, the insurance and financial services consulting practice of Towers Perrin, reviewed the methodology and assumptions used to determine the 2007 embedded value results. The review covered the European Embedded Value as at 31 December 2007, the value of 2007 new business,
Slide 36: Storebrand Life (Norway) highlights
Storebrand Life (Norway) Storebrand Life Highlights as at 31.12.2007 Operating profit in Q4 was NOK - 568 million, compared to NOK 1,965 million in Q4 2006 (before effects from IFRS). Operating profit as at 31.12.2007 was NOK 4,162 million compared to NOK 5,176 million as at 31.12.2006. Effects from
Slide 37: Storebrand Life highlights; results
Storebrand Life Highlights as at 31.12.2007 Total premium income (excluding net transfers) increased by 23 % in Q4 compared to the same periode last year and has increased by 27 % in 2007. Positiv net transfer balance for life insurance in Q4 of NOK 398 million and NOK 1.056 million in 2007. 73 Q4 2
Slide 38: Storebrand Life profit and loss
Storebrand Life Profit and loss Q4 01.01-31.12 NOK Million 2007 2006 2007 2006 Premiums written 3,846 3,116 16,578 13,069 Net transfers of premium reserve 398 418 1,056 5,260 Net income of financial investments 3,139 5,471 11,969 12,687 Net incom Unit Linked asset -28 376 353 685 Claims paid -3,362
Slide 39: Net transfers of premium reserves
Storebrand Life Net transfers of premium reserves Q4 01.01-31.12 NOK Million 2007 2006 2007 2006 Premium reserves recieved Group pensions 786 636 2,870 6,435 Individual life insurance 57 57 215 184 Unit Linked 33 40 195 122 Total 876 732 3,279 6,741 Premium reserves transferred Group pensions -429 -
Slide 40: Premiums excl. reserves transferred
Storebrand Livsforsikring AS Premiums excl. reserves transferred to the company as at 31.12.2007 Total premiums written 16,578 million 8% 1% Group pension 3% Group pension defined contribution Group Life 22 % 53 % Individual endowment Individual endowment Unit Linked 3% Individual pension 10 % Non-l
Slide 41: Premiums written, products without profit sharing
Storebrand Livsforsikring AS -premiums written, products without profit sharing as at 31.12 NOK million 3400 3200 3000 Non-life insurance 2800 2600 Individual endowment Unit Linked 2400 Individual endowment 2200 2000 Group life 1800 Group pension defined 1600 contribution 1400 Group pension* 1200 10
Slide 42: Unrealised gains; profit to owner
Storebrand Livsforsikring AS Unrealised gains Change Q4 01.01-31.12 Change NOK Million 2007 2006 2007 2006 2007 Shares -1,767 2,128 4,366 6,151 -1,785 Fixed interest investments 407 -90 -512 -261 -251 Short term investments -1,359 2,038 3,854 5,890 -2,036 Bonds held to maturity 108 -1,191 40 1,097 -
Slide 43: Asset allocation
Storebrand Livsforsikring AS Asset allocation Allocation and policyholders' fund Q4-07 Q3-07 Q2-07 Q1-07 Q4-06 Q3-06 Q2-06 Q1-06 Equity Norwegian 3% 6% 6% 6% 5% 5% 6% 7% Equity Foreign 25 % 21 % 24 % 24 % 24 % 22 % 19 % 20 % Real Estate 12 % 12 % 12 % 11 % 11 % 11 % 11 % 10 % Money market 6% 5% 4% 6
Slide 44: Key figures; balance sheet IFRS
Storebrand Livsforsikring AS Key figures Q4 01.01-31.12 Full year 2007 2006 2007 2006 2006 Booked return 2.72% 2.30% 8.86% 7.12% 7.12% Value adjusted return 1.76% 3.55% 7.26% 8.28% 8.28% -including bonds held to maturity - annualised 1.84% 2.70% 6.59% 6.52% 6.52% Solvency margin 136.1% 174.6% 174.6%
Slide 45: Balance sheet (continued); profit analysis
Storebrand Livsforsikring AS Balance sheet (continued) Share of Share of total assets total assets NOK Million 31.12.07 31.12.07 31.12.06 31.12.06 Equity 15.740 8% 6.043 4% Subordinated loan capital 7.470 4% 2.962 2% Market value adjustment reserve 3.854 2% 5.890 3% 0% 0% Premium reserve for own acc
Slide 46: Real estate fund
Storebrand Livsforsikring AS Real estate fund 01.01.-31.12. Key figures 2007 2006 Portfolio allocation (Market value) The real estate fund: Growth in value 24.7% 13.0% Shopping centres Booked yield *) 23.7% 12.6% 42 % Office Direct yield 9.2% 7.3% 55 % Revaluations 14.5% 5.3% Total m2 1,132,000 1,13
Slide 47: SPP (including Euroben) highlights
SPP SPP (including Euroben) Highlights as at 31.12.2007 SPP’s earnings do not affect Storebrand's earnings for 2007 The results presented here relate to the SPP group as well as Euroben, and do not include results from the asset management activities The total return on SPP’s investment portfolio wa
Slide 48: SPP highlights (cont'd); SPP results 2007
SPP (including Euroben) Highlights as at 31.12.2007(cont'd.) Satisfactory buffer capital. Conditional bonus reserve at SEK 1.9 billion by year end 2007 The solvency margin was 178% at the end of 2007. The decline the previous year-end was principally due to the extraordinary dividend paid Negative f
Slide 49: SPP asset allocation; balance sheet
SPP asset allocation 2007 Asset allocation 4. kv. Equity Swedish 14,6 % Equity Foreign 26,0 % Bonds 46,9 % Money market 9,8 % Real Estate 0,4 % Other 2,2 % Financial assets (bn SEK) 97.696 Insurance fund reserves-defined contribution and 30.155 unit linked (bn SEK) 97 Q4 2007 SPP Balance sheet (NOK/
Slide 50: SPP balance sheet
SPP Balance sheet (NOK/SEK 0,84) Share of total assets NOK Million 31.12.07 31.12.07 Equity 6.944 5% Minority interests' share in equity -17 0% Subordinated loan capital 8.233 6% Premium reserve for own account 79.244 57 % Insurance fund reserves-defined contribution and unit linked 30.279 22 % Othe
Slide 51: Storebrand Investments highlights Q4
Storebrand Investments Storebrand Investments Highlights Q4 Profit before tax NOK 37 million compared to NOK 67 million 4 th quarter last year. Strong operating profit margin, due to good cost control and rising fixed and volume related income. Reduced performance related revenues due to weak relati
Slide 52: Profit before tax; profit development
Profit before tax Q4 2007 Q4 Year to date NOK million 2007 2006 2007 2006 Total income 84 153 331 399 Total costs -70 -95 -259 -280 Net financial income/ other 24 8 66 37 Profit before tax 38 67 138 156 The decline in total income can be ascribed to weak relative performance results for the Storebra
Slide 53: Profit development; margin improvement
Profit development NOK million 500 480 460 440 420 Cost/income ratio 65 percent1 400 as of Q4 (63 percent1 as of Q3, 380 450 64% in 2006). 360 340 The drop in income is due to 320 64 weak investment results in 300 second half of 2007. 280 67 260 283 Good cost control combined 240 37 with lower perfo
Slide 54: Contribution to Life portfolio; mutual funds
Contribution to Storebrand Life portfolio year to date Relative performance Equity Norway 15,3 % 11,9 % 3,5 % Equity Global Active -11,5 % -4,7 % -6,7 % Equity Global Quant -11,0 % -4,9 % -6,1 % 4,4 % Money Market Norway 0,1 % 4,4 % 3,2 % Money Market OECD -1,3 % 4,5 % 1,3 % Money Market Foreign Cre
Slide 55: Market share Norwegian mutual funds; sales
Market share Norwegian registered mutual funds Equity funds market in Norway All mutual funds (market share in %) 7,8 Norwegian equity funds exceed 7,2 6,8 6,9 6,5 NOK 244 billion in assets under 12,7 12,8 12,9 11,6 9,2 Nordea management. Odin 17,0 16,5 18,0 19,1 19,5 The overall market consist of N
Slide 56: Assets under management
Storebrand Investments Assets under management Total assets under management NOK billion 227 217 205 29,7 24,6 20,3 28,0 165 30,3 159 29,4 13,2 15,8 20,0 25,6 9,7 14,6 25,3 12,9 10,1 140,6 142,1 144,1 126,6 110,2 2003 2004 2005 2006 Q4 2007 Group internal Real estate (group internal) External discre
Slide 57: Storebrand Bank Group highlights Q4 2007
Storebrand Bank Group Storebrand Bank Group Highlights Q4 2007 Storebrand Bank reported consolidated pre-tax profit of NOK 47 million for Q4. Pre-tax profit for 2007 as a whole was NOK 235 million. Net interest income as a percentage of average total assets was 1.05% in Q4 and 1.07% for the full yea
Slide 58: Profit and loss; quarterly development
Profit and loss Q4 01.01- 31.12 NOK million 2007 2006 2007 2006 Net interest income 111 101 413 419 Net fee and commission income 15 11 58 32 Other operating income 17 13 46 47 Total income 143 126 517 498 Operating expenses -114 -96 -360 -355 Operating profit before losses 29 30 157 143 Loan loss p
Slide 59: Balance sheet; non-performing loans
Balance sheet Share Share NOK million 31.12.07 31.12.07 31.12.06 31.12.06 Cash and deposits with central banks 1 062 2,5 % 394 1,2 % Loans to and deposits with credit institutions 374 0,9 % 115 0,3 % Financial assets designated at fair value through p&l 3 022 7,2 % 2 350 6,9 % Net lending to custome
Slide 60: Development in loan portfolio and customer deposits
Development in loan portfolio Growth in lending – 12 months rolling Gross lending by sector NOK billion 2% (5 %) 8 7 Residential 6 29 % mortgages (32 %) 5 Other retail 64 % 4 (55 %) 3 Real estate 2 1 Other corporate 0 5% Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 (9 %) Total loans inclusi
Slide 61: Capital adequacy; retail customers
Capital adequacy NOK million and % 31.12.07 31.12.06 Core capital 2 053 1 925 Subordinated loan capital 684 484 Total capital 2 737 2 409 Risk-weighted basis for calculation 26 101 21 918 Capital ratio 10.5 % 11.0 % Surplus capital (*) 649 656 Core capital ratio 7.9 % 8.8 % Note: Storebrand Bank Gro
Slide 62: Storebrand Non-Life highlights Q4 2007
Storebrand Non-life Non-Life Highlights Q4 2007 Storebrand Non-Life reports an operating profit of NOK 1 million in Q4 (loss of NOK 18 million) Operating loss in SB Skadeforsikring AS was NOK 7 million (loss of NOK 32 million). The operating loss is due to the start-up costs in connection with the n
Slide 63: Non-Life Group profit and loss; balance sheet
Non-Life Group Profit and loss Q4 01.01.-31.12 NOK million 2007 2006 2007 2006 50% share of result from Fair 0 0 0 -1 Storebrand Skadeforsikring AS -7 -32 -34 7 Oslo Reinsurance Company ASA (run-off) 8 -2 17 -2 Eliminations 0 16 0 16 Operating result non life insurance 1 -18 -18 19 Change in insuran
Slide 64: Oslo Reinsurance Company profit and loss
Oslo Reinsurance Company Profit and loss Q4 01.01 - 31.12 NOK million 2007 2006 2007 2006 Premiums for own account 0 0 2 3 Claims for own account 7 -6 -4 -11 Insurance related operating costs -7 -3 -21 -22 Financial income 5 5 30 18 Other income/costs 3 2 10 11 Operating result 8 -2 17 -2 Changes in