Storebrand Asa · OSL:STB
Storebrand Asa — Q2 2022 Earnings Presentation
41 slides from Storebrand Asa's earnings presentation, 2022
Slide 1: Storebrand ASA Investor Presentation Post Q2 2022
Storebrand ASA Investor Presentation Post Q2 2022 1
Slide 2: Storebrand – A Nordic Savings and Insurance Group
Storebrand – A Nordic Savings and Insurance Group Insurance ▪ P&C, Health and Life insurance Asset Management ▪ NOK 7.0bn in ▪ NOK 1,009bn AuM annual written ▪ 46% external investors premiums ▪ 100% of investments subject to sustainability Pension & Savings screening ▪ 40k corporate customers ▪ 2m i
Slide 3: 250 years of pioneering in the Nordic financial industry
250 years of pioneering in the Nordic financial industry ILLUSTRATIVE - Future Storebrand builds on strategic strengths Future Storebrand Retail Insurance & Bank Asset Management Unit Linked Pensions and Guaranteed pensions Savings 1767 1847 1861 1917 1995 2022 2050 Foundation: P&C Pioneered Pioneer
Slide 4: Transition from capital consumptive guaranteed business to capital light savings and insurance
The Group has transitioned from capital consumptive guaranteed business, to capital light savings and insurance 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%
Slide 5: Pursuing our Group Strategy: Leading The Way In Sustainable Value Creation
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 6: Future Storebrand is delivering strong growth in Savings and Insurance
Future Storebrand is delivering strong growth in Savings and Insurance Unit Linked (Defined Contribution) Pensions 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 2
Slide 7: Market leader in DC Occupational Pensions and Asset Management, growing retail challenger
Storebrand is the market leader in DC Occupational Pensions and Asset Management, and a growing challenger in the Retail Market Occupational Pensions Norway Occupational Pensions Sweden Defined Contribution share1 Defined Contribution share2 30% 34% 27% 17% 11% 12% 9% 12% 10% 7% Competitor 1 Storebr
Slide 8: Leading provider in a growing Defined Contribution market
A Leading Provider Storebrand is a leading provider in a growing Defined Contribution Occupational Pensions Norway market and a challenger in the newly opened Public Sector market Defined Contribution market is in Storebrand is a strong competitor in the Public sector occupational pension market is
Slide 9: SPP is a digital leader in the Swedish pension market
A Leading Provider SPP is a digital leader in the Swedish pension market and significant Occupational Pensions Sweden result contributor to the Storebrand Group Portfolio transfers facilitated by a cutting Strong and consistent growth in core Well capitalised with a mature back book edge digital pla
Slide 10: A leading multi-boutique asset manager in the Nordics
B Nordic Powerhouse in A leading multi-boutique asset manager in the Nordics, recognised for Asset Management our leadership in sustainable investments 1 2 3 Local Nordic Partner Gateway to the Nordics Sustainable pioneer Solution Cubera Impact NOK Plus funds 372bn in ESG Green bonds enhanced fuds I
Slide 11: Stable net inflow from pensions business and edge in institutional market
B Nordic Powerhouse in Stable net inflow from the pensions business and an edge in the Asset Management institutional market fuels assets under management Pension savings Norway Institutional Clients 411 360 368 362 35 -7 21 16 -8 AuM 1 009bn Q4 20 Flow Return Q2 22 Q4 20 Flow Return Capital Q2 22 I
Slide 12: Retail offering leverages large customer base and digital capabilities
C Growing Challenger in The retail offering leverages Storebrand's large customer base and Norwegian Retail Market digital capabilities to drive scalable and profitable growth DATA DRIVEN RECRUITING SEGMENTS AND CONCEPTS PRODUCT AREAS CUSTOMER DEVELOPMENT MASS MARKET Insurance Nest-builders and Empl
Slide 13: Gaining market share across the product portfolio
C Growing Challenger in Storebrand is gaining market share across the product portfolio and Norwegian Retail Market establishing itself as a challenger in a growing market Market share mutual funds % Market share P&C insurance % 5.9 4.5 4.4 3.4 3.2 ~8% 4.5 ~4% 2.5 annual market annual market Storebr
Slide 14: Growth accelerated with selected add-on acquisitions
Growth has accelerated with selected add-on acquisitions that build on Group synergies A B C Leading Provider Occupational Nordic Powerhouse in Growing Challenger in Norwegian Retail Pensions Asset Management Market Norway & Sweden Bolt-on acquisitions 2017-2022 Strategic ▪ M&A bolt-ons have been us
Slide 15: Storebrand has invested sustainably since 1995
Storebrand has invested sustainably 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 to Sustainability Exclusions Storebrand sustain
Slide 16: Intermediate targets towards net zero emissions 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 in numbers – From Annual Report 2021
Sustainability in numbers – From Storebrand's Annual Report 2021 About us Investments Operations People Investments in 318 Purchasing volume from Active dialogues Number of employees in Assets under management, solutions, NOK environmentally certified Storebrand ASA NOK billion billion (% of AUM) re
Slide 18: Blend of growing high ROE future business and low ROE run-off business
Storebrand is a blend of growing high ROE future business delivering dividends, and low ROE run-off business releasing capital Future Run-off ILLUSTRATIVE Storebrand business Savings & Insurance Guaranteed4 Group IFRS earnings1 (NOKm) 2 256 1 401 3 657 Allocated Equity2 6.5 34.2 (NOKbn) 27.7 Pro for
Slide 19: Shareholder returns: growing ordinary dividends and capital release
Shareholder returns: Growing ordinary dividends from our growth business and capital release from our run-off business I Growing ordinary dividends from earnings II NOK ∼10bn capital release from back book by 2030 3.50 3.25 3.25 ∼10bn 3.00 2.50 0.40 1.55 NOK bn 2.10 2016 2017 2018 2019 2020 2021 202
Slide 20: Financial targets maintained
Financial targets are maintained for a robust balance sheet, a profitable business, and reaffirming commitment to growing dividends Target Actual 2021 % Solvency 2 margin Storebrand Group1 > 150% 175% > 50% 52% Dividend pay-out ratio2 NOK 3.50 & nominal growth +0.25 y/y Return on equity3 10.7% > 10%
Slide 21: Capital & Investments
Capital & Investments 21 G2 storebrand
Slide 22: Transformational journey towards asset management based, capital light business
The transformational journey towards an asset management based and capital light business continues Forecast assets under management in Storebrand Group (NOKbn) Implications ILLUSTRATIVE 2 000 2021: 2031e: ▪ Guaranteed pensions in run-off reduces 77% of AuM ~90% of AuM 1 500 capital consumption non-
Slide 23: The mature back book of guaranteed pensions is in run-off
The mature back book of guaranteed pensions is in run-off Guaranteed pension reserves have declined Guaranteed reserves have declined, buffers The run-off of the guaranteed book will as a share of total pensions balance sheet have grown from strong returns continue as pensions are being paid out NOK
Slide 24: 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 (Q2 2022, NOK billion) 26% 24% 23% 22% 20% 20% 7.8 37.7 35.9 32.9 7.8 2.1 8.1 5.8 27.6 8.1 0.5 24.7 4.9 20.2 5.7 6.1 29.9 27.8 5.
Slide 25: Solvency 2 capital base Q2 2022
Solvency 2 capital base Q2 2022 SCR and own funds (NOK bn) Own funds % (excluding CRD IV subsidiaries) OF % OF % of 51 Regulatory limit of SCR total CRD IV Capital 4 Tier 2 9 Tier 3 ≤ 15% SCR 0% 0% Tier 1 Restricted 2 Tier 2 ≤ 50% SCR 39% 19% 26 ∑ T2+T3 3 CRD IV entities Tier 1 Unrestricted 36 Tier
Slide 26: Solvency position and estimated solvency sensitivities
Solvency position and estimated solvency sensitivities Storebrand Group Solvency position(%)1 Estimated sensitivities Target SII margin 150% 184 195 SII-margin Q2 195 Interest rates -50bp 193 Q1 2022 Q2 2022 Interest rates +50 bp 195 Key takeaways Equity -25% 186 ▪ Increased volatility adjustment an
Slide 27: More robust capital position, reduced interest rate sensitivity
More robust capital position with increased capital generation and reduced interest rate sensitivity Expected investment return above Reduced interest rate sensitivity: discount rate (%), Solvency II1 duration gap (years), Solvency II2 ∼1.3 % 2.6 0.9 Duration gap ∼0.7 % GUARANTEED NORWAY 6.0 5.3 Ass
Slide 28: Target solvency ratios
Target solvency ratios - more low risk and less volatile business means less need for solvency buffer in the future SCR Buffer over SCR 'Future Storebrand' 'Run-off business' Solvency 2 Group Future Solvency 2 target range Low volatility business with less Interest rate sensitive business in run- To
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 NOK 195 bn 6% Equities Bonds Bonds and Real estate at amortized cost Money Market 12% Bonds & Money market Loans Average rating Book yield Average rating 14% Bonds at amortized cost AA- >3% AA 14% Eq
Slide 30: High Quality Fixed Income – Bonds at Amortised Cost
High Quality Fixed Income - Characteristics of Bonds at Amortised Cost1 Book value – no reinvestment (NOK bn) Rating distribution (%) 105 105 100 98 0% 89 84 19% AAA 75 29% 68 61 AA 51 44 A 39 BBB 22% Unrated & BB 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 30% Geographical distribut
Slide 31: High Quality Fixed Income – Mark to Market
High Quality Fixed Income - Characteristics of Mark to Market Fixed Income1 Rating distribution (%) Geographical distribution (%) 9% 17% AAA 26% Europe ex. NO & SWE 21% AA 3% 40% 5% Norway A Sweden BBB Other Unrated & HY 18% US 12% 48% Sector distribution (%) 21% Sovereign and gov. Guaranteed 31% Co
Slide 32: Q2 2022 results
Q2 2022 results 32 G2 storebrand
Slide 33: Resilient business model in a rising rate and inflationary environment
Resilient business model in a rising rate and inflationary environment NOK 10y SWAP % +1.37% 6.3% 4,0 3,0 Increase in NOK 10y swap rate H1 2022 Inflation Norway2 2,0 1,0 +1.81% 7.3% Increase in SEK 10y swap rate H1 2022 Inflation Sweden3 0,0 33 1 Bloomberg and Norges Bank's Monetary Policy Report 2/
Slide 34: Highlights Q2 2022
Highlights Q2 2022 Strengthened solvency position and stable operating result in a year with turbulent financial markets 14% growth in insurance2 Group result1 2 224 546 Divestment of AS Værdalsbruket Danica acquisition completed 1 204 347 MNOK 577 1 383 1 331 'A' rating upgrade by S&P 705 -129 -178
Slide 35: Volume growth in Q2 2022 paused by weak financial markets
Volume growth in Q2 2022 paused by weak financial markets 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) reserves (BNOK) P
Slide 36: Key Figures
Key Figures Strengthened solvency position, stable operating result and strong 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 2.18 121 913 329 546 1.56 151 454 628
Slide 37: Solvency movement from Q1 to Q2 2022
Solvency movement from Q1 to Q2 2022 Storebrand Group 7% 2% 195% 15% -3% -2% -2% 2% 184% -9% Q1 2022 Interest rates Market returns VA & Symmetric Risk CRD IV & Result Dividend Share buybacks Q2 2022 Equity Stress management sub debt and asset allocation 37
Slide 38: Savings (non-guaranteed)
Savings (non-guaranteed) Key figures Reserves and premiums Unit Linked Retail bank balance and net interest margin (%) 5.3 5.2 5.4 5.3 5.3 Life insurance balance sheet Bank balance sheet 1.14 1.22 1.19 1.22 1.16 308 295 296 59 63 291 54 56 57 MNOK 276 BNOK 36 39 39 40 46 18 17 18 19 16 Q2 2021 Q3 20
Slide 39: Insurance
Insurance Key figures Combined ratio Key Takeaways Combined Ratio and Results Claims ratio Cost ratio Combined ratio 96% 92% 91% 90% 88% ▪ 88% overall combined ratio (target 90-92%) ▪ Improved claims ratio 74% 74% 78% 74% 70% 17% 15% 19% 18% 18% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Portfolio prem
Slide 40: Guaranteed pension
Guaranteed pension Key figures Reserves guaranteed products Key Takeaways 295 292 291 281 275 33 32 ▪ Continued run-off of guaranteed reserves. 34 28 Customer buffers 25 25 25 26 28 28 Actively sold ▪ Temporary increase in guaranteed reserves as % of total due to fall in Unit Linked reserves under t
Slide 41: Leading the way in sustainable value creation
Leading the way in sustainable value creation Investor Relations contacts Lars Aa Løddesøl lars.loddesol@storebrand.no Group CFO +47 9348 0151 Kjetil R. Krøkje kjetil.r.krokje@storebrand.no Group Head of +47 9341 2155 Finance & Strategy Daniel Sundahl daniel.sundahl@storebrand.no Group Head of +47 9