Storebrand Asa · OSL:STB
Storebrand Asa — Debt Investor Presentation (August 2020)
40 slides from Storebrand Asa's debt investor presentation, August 2020
Slide 1: Company Presentation
Company Presentation Storebrand ASA: Compelling combination of self-funded savings growth and capital return from maturing guaranteed back-book 1
Slide 2: Important information
Important information: This document speaks only as of its date and may contain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may be beyond the Storebrand Group’s control. As a result,
Slide 3: Table of contents
Table of contents 1 Proposed transaction 4 2 Overview and strategy 7 3 Capital, solvency and investments 17 4 Group results Q2 2020 27 3
Slide 4: Transaction overview
Transaction overview “> storebrand
Slide 5: Investment highlights
Investment highlights Group •Pension market leader in Norway and strong contender in Sweden •Increasing quality earnings and robust solvency •Main operating entities of group rated A-(stable) •Holding company rated BBB Issue rationale •Long track record as a reliable borrower •Refinancing and increa
Slide 6: Background for new issue
Background for new issue Refinancing of Capacity for more bonds maturing in debt according to 2020 rating ambitions Refinancing Debt capacity Volume Debt outstanding servicing Capital base and Maintain a presence in the capacity debt servicing bond marked with capacity two different maturities consi
Slide 7: Storebrand group – overview and strategy
Storebrand group – overview and strategy 7
Slide 8: Key Takeaways
▪ Resilient through Covid-19 period ▪ Well positioned for continued growth in Swedish and Norwegian occupational pensions Key Takeaways ▪ Digitisation and partnerships provide scalable growth in Norwegian retail market ▪ Leading Nordic asset manager with a modern platform enabling continued growth 8
Slide 9: Storebrand | Response to COVID19
Storebrand | Response to COVID19 1. Keep employees safe 2. Respond and allocate 7. Open to new oppurtunites resources to customers' partnerships and M&A needs Storebrand 6. Keep growing the core We're in this together 3. Operations are with the rest of society running close to normal 5. High degree
Slide 10: 250 years of pioneering in the Nordic financial industry
250 years of pioneering in the Nordic financial industry 1767 1847 1861 1917 1995 2006 Foundation Expanded into Pioneered Pioneered Pioneered First - among the first other P&C Life Insurance Occupational sustainable fully digital Norwegian P&C insurance Pensions investments P&C operation companies d
Slide 11: Storebrand - An Integrated Financial Service Group
Storebrand - An Integrated Financial Service Group Insurance ▪ Health, P&C and group life Asset Management insurance ▪ NOK 880bn in AuM of ▪ NOK 5.2bn in which 41% external clients portfolio premiums ▪ 100% of investments Pension & Savings subject to sustainability ▪ 40k corporate customers screenin
Slide 12: Our strategy: A compelling combination of self-funding growth and capital return
Our strategy: A compelling combination of self-funding growth and capital return from maturing guaranteed back-book 1 A B C D Asset manager with Build a world class Uniquely positioned in Leading position strong competitive Savings business growing retail savings Bolt-on M&A Occupational Pension pos
Slide 13: Leading position in Norway and strong contender in Sweden
Leading position in Norway and strong contender in Sweden Market share occupational pensions (Defined Contribution) Norway 1 Sweden 2 30% 20% 27% 16% 15% 14% 14% 11% 7% 9% Storebrand DNB Nordea Sparebank 1 Gjensidige LF SEB Skandia SPP Movestic Clear value proposition World leader in corporate susta
Slide 14: Growth in Savings and Insurance
Growth in Savings and Insurance Unit Linked Asset management +19% 220 +9% 831 179 721 707 168 140 535 571 577 128 442 487 105 85 64 2012 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2015 2016 2017 2018 2019 UL reserves (NOKbn) AuM (NOKbn) Insurance Retail bank +5% +11% 48.2 46.5 42.1 4 327 4 50
Slide 15: Continued shift from Guaranteed to Non-guaranteed pension
Continued shift from Guaranteed to Non-guaranteed pension Historic premium income1 Current share of reserves2 Expected flow of reserves3 Guaranteed premiums Non-guaranteed premiums Guaranteed Non-guaranteed Claims NOKm Guaranteed Non-guaranteed NOKbn 18 000 5% 3 2 2 2 16 000 14 000 4% Share of reser
Slide 16: Successful transition from Guaranteed to non-guaranteed Savings
Successful transition from Guaranteed to non-guaranteed Savings Premiums Storebrand1 Profit Storebrand2 Shift in total Storebrand AUM3 26 278 3 037 831 24 584 20% 41% 40% 49% 15% 1 960 442 2% 14% 18% 64% 32% 15% 9% NOK bn NOK m NOK m 65% 45% 59% 36% 21% 26% 15% 14% 2012 2019 2012 2019 2012 2019 Exte
Slide 17: Capital and solvency
Capital and solvency @2 storebrand
Slide 18: Key Takeaways
▪ High quality capital base ▪ Capital requirements reflect well diversified set of risks Key Takeaways ▪ Guaranteed products will release capital over time ▪ Non-guaranteed business generates capital in excess of capital requirement 18
Slide 19: Storebrand Group Structure
Storebrand Group Structure Diversified cash flow to holding company Storebrand ASA Legal structure (simplified) Storebrand ASA Storebrand Livsforsikring AS Storebrand Asset Storebrand Forsikring Storebrand Bank ASA Management AS AS Reporting structure Storebrand Holding Benco SKAGEN AS AB Storebrand
Slide 20: Strong Group IFRS equity and capital structure – reduced financial leverage
Strong Group IFRS equity and capital structure – reduced financial leverage Group equity (NOK bn) Group capital structure2 42,323 41,980 40,821 35,258 32,873 33,398 32,873 32,567 27,637 27,250 24,741 33,398 32,873 32,873 (79%) (78%) 27,637 (81%) 20,175 24,795 25,748 24,432 24,741 (78%) (75%) (77%) (
Slide 21: Strong liquidity and low leverage
Strong liquidity and low leverage Net liquidity ratio Storebrand ASA (holding) 12% 10% ▪ Proceeds from subsidiaries have been used to pay dividends, reduce debt in the holding company -3% 0% and increase the liquidity buffer -5% -4% -8% -9% -9% -9% -13% -11% -12% ▪ Holding company net liquidity rati
Slide 22: Group Liquidity NOK bn
Group Liquidity NOK bn 5.6 2.21 3.4 0.8 2.6 Liquidity Undrawn RCF Liquidity inc RCF Debt Financed Equity financed Total liquidty inc RCF 1 Revolving Credit Facility of EUR 300 Million, exchange rate 10.88 applied 22
Slide 23: Term structure debt
Term structure debt Term structure sub-debt Storebrand Livsforsikring1 (bn NOK) Term structure senior debt Storebrand ASA (bn NOK) 3.8 Perpetual Non- perpetual 2.1 1.1 1.4 1.0 0.5 0.8 0.3 1.0 2020 2021 2022 2023 2024 2025 2020 2021 2022 2023 2024 2025 1 EUR 300 Million. SEK 750 Million 1,0 BN, 1,0 B
Slide 24: Rating
BBB rating for Storebrand ASA and A- rating for Storebrand Livsforsikring AS from S&P Global …reflecting business and capital improvement during the past years Rating and underlying rationale Key Comments Storebrand Livsforsikring AS • S&P Global has assigned an "A-" rating with a stable outlook to
Slide 25: SII position Storebrand Group
SII position Storebrand Group Solvency position(%)1 Estimated sensitivities Target SII margin 150% 172 163 17 26 SII-margin Q2 137 26 163 155 137 Interest 127 43 170 rates -50bp Interest Q1 2020 Q2 2020 rates +50 bp 149 10 158 Transitional rules SII standard model Equity -25% 129 36 165 Key takeaway
Slide 26: High quality capital base under Solvency II
High quality capital base under Solvency II SCR and own funds (NOK bn) Own funds in % of SCR (excluding CRD IV subsidiaries) OF % OF % of Regulatory limit of SCR total 51 0 3 Tier 3 ≤ 15% SCR 1% 1% 8 1 31 CRD IV 3 Tier 2 ≤ 50% SCR 26% 16% capital ∑ T2+T3 requirements 38 Tier 1 ≤ 20% T1 4% 2% Restric
Slide 27: Group results Q2 2020
Group results Q2 2020 storebrand
Slide 28: Storebrand Group
Storebrand Group Profit1 Q2 01.01 - 30.06 Full year NOK million 2020 2019 2020 2019 2019 Fee and administration income 1 301 1 235 2 649 2 450 5 308 Insurance result 255 269 184 514 1 005 Operational cost -975 -1 030 -1 999 -1 960 -4 015 Operating profit 580 474 834 1 005 2 298 Financial items and r
Slide 29: Storebrand Group
Storebrand Group Profit1 Q2 01.01 - 30.06 Full year NOK million 2020 2019 2020 2019 2019 Fee and administration income 1 301 1 235 2 649 2 450 5 308 Insurance result 255 269 184 514 1 005 Operational cost -975 -1 030 -1 999 -1 960 -4 015 Operating profit 580 474 834 1 005 2 298 Financial items and r
Slide 30: Savings (non-guaranteed)
Savings (non-guaranteed) Profit Q2 01.01 - 30.06 Full year NOK million 2020 2019 2020 2019 2019 Fee and administration income 974 911 2 017 1 807 3 996 Operational cost -600 -672 -1 269 -1 287 -2 621 Operating profit 374 239 748 521 1 375 Financial items and risk result life 22 -16 -76 -7 -11 Profit
Slide 31: Savings (non-guaranteed)
Savings (non-guaranteed) -Strong premium and reserve growth Reserves and premiums Unit Linked Comments1 5.0 5.1 4.6 ▪ 23% growth in Unit Linked premiums. Continued growth 4.2 4.2 235 despite furloughs in Q2. 220 ▪ 18% growth in Unit Linked reserves. 207 210 198 BNOK ▪ NOK +4.6bn net transfers in SPP
Slide 32: Insurance
Insurance Profit Q2 01.01 - 30.06 Full year NOK million 2020 2019 2020 2019 2019 Insurance premiums f.o.a. 1 070 965 2 090 1 913 3 909 Claims f.o.a. -816 -696 -1 906 -1 399 -2 904 Operational cost -175 -159 -350 -309 -648 Operating profit 80 111 -166 205 357 Financial result 44 28 22 36 83 Profit be
Slide 33: Insurance – C/R back on track
Insurance – C/R back on track Combined ratio Comments Combined ratio and results Claims ratio Cost ratio Combined ratio 124% ▪ 92% combined ratio in line with target (90-92%). 96% 92% ▪ Continued strong cost control. 89% 89% 107% 72% 73% 78% 76% 16% 17% 17% 17% 16% Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2
Slide 34: Guaranteed pension
Guaranteed pension Profit Q2 01.01 - 30.06 Full year NOK million 2020 2019 2020 2019 2019 Fee and administration income 360 364 710 724 1 475 Operational cost -214 -209 -416 -395 -819 Operating profit 147 155 294 329 657 Risk result life & pensions 50 52 24 113 215 Net profit sharing -205 4 -231 18
Slide 35: Guaranteed pension - Strong buffer capital
Guaranteed pension - Strong buffer capital Reserves guaranteed products Comments 262 264 263 272 274 30 30 ▪ Asset returns increase overall level of reserves in the quarter and 33 33 33 the level of buffer capital. 142 143 BNOK 137 137 137 ▪ Guaranteed reserves as a share of total reserves continues
Slide 36: Other
Other1 Profit Q2 01.01 - 30.06 Full year NOK million 2020 2019 2020 2019 2019 Fee and administration income 19 14 32 28 51 Operational cost -39 -45 -75 -78 -143 Operating profit -21 -31 -42 -50 -91 Financial items and risk result life 317 36 -98 146 296 Profit before amortisation 296 5 -141 96 205 P
Slide 37: Movement from Q4 2019 to Q2 2020
Movement from Q4 2019 to Q2 2020 Storebrand ASA +174 % +1 % +5 % -3 % -2 % +26 % +163 % -23 % +5 % +137 % +5 % -2 % -20 % -2 % Q4 2019 Model and Updated Updated Equity Interest Asset Asset Retained Results Dividend Q2 2020 Transitional Q2 2020 assumptions UFR VA stress rates return allocation Divide
Slide 38: Storebrand Life Insurance asset allocation
Storebrand Life Insurance asset allocation 60% 50% 40% 30% 20% 10% 0% Bonds at Money Real Equities Bonds amortized Other market estate cost 30.06.2019 8% 26% 3% 52% 10% 0% 30.09.2019 9% 26% 2% 52% 10% 0% 31.12.2019 9% 25% 3% 52% 10% 0% 31.03.2020 3% 28% 8% 50% 10% 0% 30.06.2020 6% 28% 3% 52% 11% 0%
Slide 39: SPP asset allocation
SPP asset allocation 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Alternative Bonds Equities investments 30.06.2019 13% 83% 5% 30.09.2019 12% 84% 4% 31.12.2019 12% 81% 6% 31.03.2020 13% 85% 2% 30.06.2020 13% 85% 2% Note: The graph shows the asset allocation for all products with an interest rate guarantee
Slide 40: Investor Relations contacts
Investor Relations contacts Kjetil R. Krøkje Group Head of Finance, Strategy and M&A kjetil.r.krokje@storebrand.no +47 9341 2155 Nikola Heitmann Head of Capital Management nikola.heitmann@storebrand.no +47 4169 7236 This document contains Alternative Performance Measures as defined by the European S
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