Storebrand Asa · OSL:STB
Storebrand Asa — Storebrand Livsforsikring AS — Debt Investor Presentation (August 2021)
42 slides from Storebrand Asa's debt investor presentation, August 2021
Slide 1: A Sustainable Nordic Savings and Insurance Group
A Sustainable Nordic Savings and Insurance Group Restricted Tier 1 bond offering 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 5 Focus on Performance and Solvency 14 Sustainability at Storebrand 29 The Proposed Transaction 35 Appendix 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 Storebrand1 • Active in structurally strong markets with resilient economic development • Digital frontrunner with growth focus
Slide 5: Storebrand Overview and Strategy
▪ Storebrand Overview and Strategy Storebrand ▪ Focus on Performance and Solvency Overview and ▪ Sustainability at Storebrand Strategy ▪ The Proposed Transaction ▪ Appendix 5
Slide 6: An Integrated Financial Services Group with years of pioneering in the Nordic financial industry
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 2020 2050 Foundation: P&C Pioneered Pioneered Pioneered ILLUSTRATIVE Norwegian I
Slide 7: Strategy - Sustainable Nordic Savings and Insurance Group
Strategy - 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 Norwegian Retail Market Norway & Sweden areas in front book Strategic D Leadersh
Slide 8: Strong position within Occupational Pension with high customer satisfaction and strong digital capabilities
Strong position within Occupational Pension with high customer satisfaction and strong digital capabilities Occupational Pensions Norway Occupational Pensions Sweden ✓ Digital leader Defined Contribution share1 Defined Contribution share2 in Sweden ✓ Best customer satisfaction with all time high sco
Slide 9: Storebrand Group Structure
Storebrand Group Structure Diversified cash flow to holding company Storebrand ASA Legal structure (simplified) Storebrand ASA Issuing Entity Storebrand Asset Storebrand Livsforsikring AS Storebrand Bank ASA Storebrand Forsikring AS Management AS Reporting structure Storebrand Holding AB SKAGEN AS S
Slide 10: Delivering Strong Growth in Savings and Insurance
Delivering Strong Growth in Savings and Insurance Unit Linked Asset management 268 +10%1 +20%1 220 179 962 168 831 128 140 721 707 105 487 535 571 577 85 442 64 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020 UL reserves (NOK bn) AuM (NOK bn) Insurance Retai
Slide 11: Growth focus in capital-light business with Sustainability and Technology as strategic differentiators
Growth focus in capital-light business with Sustainability and Technology as strategic differentiators Storebrand 2021-2023: Earnings growth across the business - Group profit2 target1 of NOK ~4bn in 2023 A B C Leading Provider Occupational Pensions Nordic Powerhouse in Growing Challenger in Norwegi
Slide 12: Financial targets are maintained for a robust balance sheet, a profitable business, and reaffirming commitment to growing dividends
Financial targets are maintained for a robust balance sheet, a profitable business, and reaffirming commitment to growing dividends Target Actual 2019 Actual 2020 % Solvency 2 margin Storebrand Group1 > 150% 176% 178% > 50% Cancelled Dividend pay-out ratio2 due to 65% & nominal growth Covid-19 Retur
Slide 13: Capital ambition: Earnings growth will continue to grow ordinary dividends, run-off of back book will release excess capital
Capital ambition: Earnings growth will continue to grow ordinary dividends, run-off of back book will release excess capital 1 Growing ordinary dividends from earnings 2 NOK ∼10bn capital release from back book by 2030 Regulatory cancelled ▪ Storebrand also continues to manage capital and a back boo
Slide 14: Focus on Performance and Solvency
▪ Storebrand Overview and Strategy Focus on ▪ Focus on Performance and Solvency Performance and ▪ Sustainability at Storebrand Solvency ▪ The Proposed Transaction ▪ Appendix 14
Slide 15: Highlights Q2 2021
Highlights Q2 2021 26% Unit Linked reserve growth2 Group result 1 2 223 18% AuM growth Asset Management2 893 MNOK 1 353 667 18% Insurance Portfolio Premium growth2 1 331 686 Q2 2021 YTD 2021 172% Solvency ratio3 Financial items and risk result life Operating profit 230 million in Performance Fees ea
Slide 16: Key Figures
Key Figures Group Result development1 Earnings per share2 Financial items and risk result life Performance related result MNOK Special items Operating profit 2.79 1,353 1,225 121 2.13 1,012 1.90 808 298 870 546 340 217 225 1.23 1.21 228 599 703 709 671 754 -19 -31 -26 -68 Q2 2020 Q3 2020 Q4 2020 Q1
Slide 17: Storebrand Group
Storebrand Group Group Profit1 Q2 YTD NOK million 2021 2020 2021 2020 Fee and administration income 1,473 1,301 2,954 2,649 Insurance result 332 255 552 184 Operational cost -1,119 -975 -2,176 -1,999 Operating profit 686 580 1,331 834 Financial items and risk result life 667 228 893 -360 Profit befo
Slide 18: Savings (non-guaranteed)
Savings (non-guaranteed) Savings Reserves and premiums Unit Linked Comments1 5.1 5.2 5.3 5.3 4.9 295 ▪ 4% growth y/y in Unit Linked premiums 279 268 252 ▪ 26% growth y/y in Unit Linked reserves 235 BNOK ▪ 18% growth y/y in overall AuM in Asset Management ▪ 15% lending growth y/y in the Bank Q2 2020
Slide 19: Insurance
Insurance Insurance Combined ratio Comments Combined ratio and results Claims ratio Cost ratio Combined ratio 98% 92% 91% 91% combined ratio, within target range (90-92%). 88% 87% ▪ ▪ Generally solid claims development, but still weak in Group life ▪ Strong cost control maintained with stable cost r
Slide 20: Guaranteed pension
Guaranteed pension Guaranteed Reserves guaranteed products Comments 285 288 288 286 295 30 30 38 ▪ Defined Benefit NO reserves include new Public Occupational 30 37 Pension mandates 143 145 145 144 149 ▪ Guaranteed products SE now include Euroben reserves (previously BNOK under "Other") 12 12 12 11
Slide 21: Strong Group IFRS equity and capital structure – reduced financial leverage
Strong Group IFRS equity and capital structure – reduced financial leverage Group equity (NOK million) Liquidity position Q2 2021 Storebrand ASA (holding), NOK bn ~ 7.3 35,923 2.0 32,873 33,398 ~ 5.2 27,637 24,741 1.0 20,175 25,748 27,840 24,795 (77%) (77%) (75%) 19,031 22,779 14,079 (77%) (82%) (70
Slide 22: Solvency II capital base Q2 2021
Solvency II capital base Q2 2021 SCR and own funds (NOK bn) Own funds in % of SCR (excluding CRD IV subsidiaries) OF % OF % of Regulatory limit of SCR total 54 3 CRD IV capital Tier 3 ≤ 15% SCR 0% 0% 10 Tier 2 31 1 Tier 1 restricted* CRD IV capital requirements 3 Tier 2 ≤ 50% SCR 36% 21% ∑ T2+T3 39
Slide 23: SII position Storebrand Group
SII position Storebrand Group Solvency position(%)1 Estimated sensitivities Target SII margin 150% 176 172 0 0 SII-margin Q1 172 0 172 176 172 Interest rates -50bp 163 14 177 Interest Q1 2021 Q2 2021 rates +50 bp 179 0 179 Transitional rules SII standard model Equity -25% 174 7 181 Key takeaways ▪ R
Slide 24: SII position Storebrand Livsforsikring AS
SII position Storebrand Livsforsikring AS1 Solvency II position(%) Estimated sensitivities Target SII margin 150% 219 213 SII-margin 31.12.2020 213 0 213 Interest rates -50bp 201 21 222 Interest rates +50 bp 223 0 223 31.03.2021 30.06.2021 SII standard model Equity -25% 208 10 218 Solid buffer above
Slide 25: Minimum Capital Requirement (MCR) 2021
Minimum Capital Requirement (MCR) 2021 Storebrand Group (NOK bn) Storebrand Livsforsikring AS (NOK bn) MCR-ratio 384% 383% MCR-ratio 479% 476% 41.3 42.1 34.5 34.9 10.8 11.0 7.2 7.3 Q1 2021 Q2 2021 Q1 2021 Q2 2021 Own funds MCR MCR Own funds MCR MCR 25
Slide 26: A- rating with stable outlook from S&P Global
A- rating1 with stable outlook from S&P Global -reflecting business and capital improvement during the past years Rating and underlying rationale Key Comments Insurance Financial Strength Rating (IFSR) ▪ S&P Global has assigned an "A-" rating with a stable outlook reflecting their belief that: A- ▪
Slide 27: Moderate leverage, fixed charge coverage, and rating give financial flexibility and more debt capacity
Moderate leverage, fixed charge coverage, and rating give financial flexibility and more debt capacity Moderate leverage1 Strong debt servicing capacity2 Solid rating 23% ~9x 20% A- stable outlook Insurance Financial Strength Rating (IFSR) "We also anticipate that Storebrand's capitalization will re
Slide 28: Term structure debt
Term structure debt Term structure sub-debt Storebrand Livsforsikring (bn NOK) Term structure senior debt Storebrand ASA (bn NOK) Perpetual Non-perpetual 3.0 2.7 2.1 1.1 1.4 1.0 0.8 1.0 0.5 0.5 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2021 2022 2023 2024 2025 28
Slide 29: Sustainability at Storebrand
▪ Storebrand Overview and Strategy ▪ Focus on Performance and Solvency Sustainability at ▪ Sustainability at Storebrand Storebrand ▪ The Proposed Transaction ▪ Appendix 29
Slide 30: Storebrand has worked systematically with sustainability since 1995
Storebrand has worked systematically with sustainability since 1995 Decision to integrate Next Commitment Sustainability Exclusions Storebrand sustainability generation to achieve net team across life standard in all funds sustainability zero emissions established insurance launched through ESG fund
Slide 31: Widespread global industry recognition as a leader in Sustainability, highly recognised by our clients
Widespread global industry recognition as a leader in Sustainability, highly recognised by our clients 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 Score4: Sustainable Investmen
Slide 32: Storebrand aims for transparency in our sustainability work and reports on a wide range of KPIs
Storebrand aims for transparency in our sustainability work and reports on a wide range of KPIs to track progress Sustainability questions - Sustainability library Integral annual report since 2008 procurement All sustainability documents Focus on transparency and All the basic sustainability (guide
Slide 33: In 2020 Storebrand launched a company wide climate strategy covering the entire value chain
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 34: To achieve net zero emissions by 2050, Storebrand has defined intermediate targets towards 2025
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 35: The Proposed Transaction
▪ Storebrand Overview and Strategy ▪ Focus on Performance and Solvency The Proposed ▪ Sustainability at Storebrand Transaction ▪ The Proposed Transaction ▪ Appendix 35
Slide 36: 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: FRN Storebrand Livsforsikring 2021/Perpetual Restricted Tier 1 Non-Cumulative Callable Bond Issue The Bonds will constitute Restricted Tier 1 Instruments of t
Slide 37: Appendix
▪ Storebrand Overview and Strategy ▪ Focus on Performance and Solvency Appendix ▪ Sustainability at Storebrand ▪ The Proposed Transaction ▪ Appendix 37
Slide 38: Storebrand Life Insurance asset allocation
Storebrand Life Insurance asset allocation 60% 50% 40% 30% 20% 10% 0% Bonds & Bonds at Equities Real estate Loans Money market amortised cost 30.06.2020 6% 11% 16% 15% 52% 30.09.2020 8% 10% 15% 14% 52% 31.12.2020 9% 11% 13% 15% 52% 31.03.2021 10% 11% 12% 13% 55% 30.06.2021 10% 10% 12% 14% 55% 38 Not
Slide 39: SPP asset allocation
SPP asset allocation 70% 60% 50% 40% 30% 20% 10% 0% Bonds & Money Equities Real estate Loans market 30.06.2020 11% 12% 59% 17% 30.09.2020 12% 12% 57% 18% 31.12.2020 13% 12% 57% 17% 31.03.2021 15% 12% 54% 19% 30.06.2021 16% 13% 51% 21% 39 Note: The graph shows the asset allocation for all products wi
Slide 40: P&L Storebrand Livsforsikring AS
P&L Storebrand Livsforsikring AS 1 40 1 The result may include special items. Please see storebrand.com/ir for a complete overview.
Slide 41: Balance Sheet Storebrand Livsforsikring AS
Balance Sheet Storebrand Livsforsikring AS 41
Slide 42: Leading the way in sustainable value creation
Leading the way in sustainable value creation 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 9136 1899 IR & Ratin
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