Storebrand Asa · OSL:STB
Storebrand Asa — Q4 2008 Earnings Presentation
60 slides from Storebrand Asa's earnings presentation, Feb 11, 2009
Slide 1: Result 4th Quarter 2008 Analyst Presentation
Storebrand Result 4th Quarter 2008 11. February 2009 Analyst presentation Analyst Presentation 4rd Quarter 2008 Page # Slide # • Storebrand Group 2-15 3-29 Group CEO Idar Kreutzer Back-up: • Storebrand Group 16-22 31-44 • Storebrand ASA 23-24 45-48 • Storebrand Life Group 25-31 49-62 • Storebrand Li
Slide 2: Highlights Q4 2008
Storebrand Results 4th Quarter 2008 11. February 2009 Idar Kreutzer Group CEO Highlights Q4 2008 RESULT Group profit before write-downs and amortisation of NOK 1 787 million in Q4 and NOK 1 310 million for the year Good result from asset management BALANCE SHEET Solvency margin Life 160% Tier 1 capi
Slide 3: Storebrand Group results and Storebrand Livsforsikring AS
RESULT BALANCE OPERATIONS Storebrand Group Q4 Full year NOK million 2008 2007 2008 2007 Storebrand Life (excl SPP) 402 594 351 1.635 SPP 1.419 na 831 na Storebrand Investments 96 38 218 138 Storebrand Bank -54 47 68 235 Other -76 -3 -157 12 Group profit 1.787 682 1.310 2.020 Write-down of intangible
Slide 4: SPP incl. Euroben - portfolio adjustments give good returns
RESULT BALANCE OPERATIONS SPP incl. Euroben - portfolio adjustments give good returns Guaranteed Company Total Total NOK million products Unit Linked Euroben portfolio* Q4 01.01-31.12 Administration result -106 -7 2 6 -104 -103 Risk result 97 -1 95 287 Finance result 1.177 7 1.184 340 Other 229 229
Slide 5: SPP discounting model and Storebrand Investments
RESULT BALANCE OPERATIONS SPP - improved discounting model 1.000 New, improved model for 500 discounting liabilities gives: Mill SEK 0 Reduced volatility in financial result -500 Increased opportunity to -1.000 adjust investments to fit liabilities -1.500 Reduced hedge costs -2.000 -2.500 Old New Gr
Slide 6: Storebrand Bank - result and stable balance sheet
RESULT BALANCE OPERATIONS Storebrand Bank - result affected by market developments Q4 Full year NOK million 2008 2007 2008 2007 Net interest income 110 110 513 413 Net fee and provision income 12 15 62 58 Other income 42 17 89 46 Total income 164 143 664 517 Operating expenses -132 -113 -473 -360 Pr
Slide 7: Storebrand Life Insurance - robust buffer capital
RESULT BALANCE OPERATIONS Storebrand Life Insurance – robust buffer capital 7 180 % 5,8 6 160 % 160 % 5 136 % 140 % Solvency margin* NOK billion 129 % 4 120 % 3,4 3 2,6 100 % 2 80 % 1 60 % 0 40 % Q4 2007 Q3 2008 Q4 2008 Additional Statutory Reserves Solvency margin 13 *Solvency margin for Storebrand
Slide 8: Effect of reclassification and private equity valuation
RESULT BALANCE OPERATIONS Storebrand Livsforsikring AS - effect of reclassification 55 bn 50 bn Hold to maturity reclassified to Hold to Available for maturity sale Assets: 33 bn Assets: 33 mrd Yield: 5.2% Loans & Receivables Loans & Loans & Receivables Assets: > 25% Receivables of AuM Assets: 14.5%
Slide 9: SPP - risk reducing measures
RESULT BALANCE OPERATIONS SPP - risk reducing measures 100 % 3,0 % 5,1 % 5,1 % 90 % Dynamic risk management working as intended 80 % 70 % 57,0 % 60 % 74,6 % Good return in Q4 88,8 % 50 % 40 % Gradual increase in 30 % alternative investments 20 % 40,0 % 10 % 20,3 % 6,1 % 0% Q4 2007 Q3 2008 Q4 2008 Eq
Slide 10: Satisfactory development in operations
RESULT BALANCE OPERATIONS Satisfactory development in operations Positive net transfer balance Growth in premium income for group pensions Cost reducing measures approved and being implemented Synergy realisation in SPP ahead of schedule Transfer of SPPs customer funds to Storebrand Investments carr
Slide 11: Transfer balance and premium income growth
RESULT BALANCE OPERATIONS Storebrand Livsforsikring AS - transfer balance corporate market 2008 1 nd k e an ig ra id a eb eb e de ns er ss ar l or ta th or je Ka Sp St Vi G O N 2.000 1.519 1.500 1.000 NOK million 500 30 4 2 - (150) (500) (682) (665) (1.000) Figure shows announced transfers of pensio
Slide 12: Storebrand Investments and SPP sales development
RESULT BALANCE OPERATIONS Storebrand Investments - positive sales of mutual funds in Q4 Positive net sales in Q4 2008 600 400 379 NOK 1.3 billion net withdrawals 254 from mutual funds in 2008 by 200 Norwegian retail customers 0 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Net positive sales in funds in Q4 -200 -
Slide 13: Programme for cost reductions and SPP synergies
RESULT BALANCE OPERATIONS Storebrand - programme for cost reductions 40 mill Overhead costs Move headquarters √ Nominal flat development in costs over Reduce staff √ 20 mill planning period Investments Admin Distribution Lean Asset management building blocks Storebrand Baltic √ Extensive use of dire
Slide 14: SPP investment synergies and take-on of SPP assets
RESULT BALANCE OPERATIONS SPP - investment synergies Return 2008 SPP's return relative to market (Swedish life companies) strengthened Nordea Privat 15,5 KPA 7 SEB Trygg liv traditionell 5,6 Introduction of Guarantee SPP DC 2,9 SPP DB 0,6 Groups reduces hedge costs Folksam 0,2 Länsförsäkringar Liv 0
Slide 15: Summary
RESULT BALANCE OPERATIONS Summary Good result Balance sheet at fair value Strengthened solvency Satisfactory development in operations 29 4th Quarter 2008 Storebrand's objective is to be the leading and most respected institution in the Nordic market for long-term savings and insurance 30 4th Quarte
Slide 16: Storebrand Group
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. 32 4th Quarter 2008 16
Slide 17: Group profit by sub-group and operating result
Storebrand Group - group profit by sub-group Q4 Full year NOK million 2008 2007 2008 2007 Life activities 1 821 594 1 182 1 635 Investment activities 96 37 218 138 Storebrand Bank -54 47 68 235 Other activities -76 -2 -158 12 Group profit before amortization 1 788 676 1.310 2.020 Write-down intangib
Slide 18: Group operating result and earnings per share
Storebrand Group - operating result Q4 Full year NOK million 2007 2007 Net premiums – insurance 4 694 19 744 Interests income 111 413 Financial income 3 345 12 407 Other income 46 834 Operating income 8 196 33 398 Insurance benefits, reserve allocations -8 814 -27 620 Interests costs - 113 - 318 Loa
Slide 19: Group balance statement
Storebrand Group - balance statement 31.12.08 NOK million Amount Share in % Assets company portfolio Intangible assets 7 921 2% Shares in associated companies 75 0% Loans 39 039 10 % Bonds at amortised cost 384 0% Real estate assessed at fair value 1 607 0% Financial assets at fair value 27 725 7% B
Slide 20: Quarter by quarter profits and other activities
Storebrand Group - quarter by quarter profits 2008 2007 NOK million Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Group contributions and transfers 0 0 0 672 0 0 0 1 033 Interest income 30 46 90 106 41 28 30 19 Interest expense -52 -50 -79 -91 -37 -28 -26 -23 Realised/unrealised gains/losses on securities -16 -29 -11 -7
Slide 21: Shareholder structure and rating
Storebrand Group - shareholder structure as at 9 Feb. 2009 20 largest shareholders By region Acc. Shareholder Type % GJENSIDIGE FORSIKRIN JP MORGAN Iceland CHASE BANK ORD 24.33 Other 4,5 % 8,0 % KAUPTHING BANK HF UN ORD 5.49 ARION CUSTODY ORD 4.53 USA FOLKETRYGDFONDET JP MORGAN 9,0 % CHASE BANK ORD
Slide 22: Group key figures
Storebrand Group - key figures Q4 Full year NOK milion 2008 2007 2008 2007 Group Earnings per share 2,96 2,75 -4,97 7,95 Capital ratio 14,3 % 10,5 % Storebrand Livsforsikring AS (excl. SPP) Policyholders' funds -559 2 097 164 046 165 120 Return on customers guaranteed portfolio 1,7 % 2,0 % Return on
Slide 23: Storebrand ASA result
Storebrand ASA Storebrand ASA - result *) Q4 Full year NOK million 2008 2007 2008 2007 Group contributions and transfers 0 0 672 1 033 Interest income 30 41 272 117 Interest expense - 52 - 37 - 272 - 114 Realised/unrealised gains/losses on securities - 16 2 - 62 85 Other financial income/costs 10 -5
Slide 24: Storebrand ASA quarterly profits and balance statement
Storebrand ASA - quarter by quarter profits 2008 2007 NOK million Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Group contributions and transfers 0 0 0 672 0 0 0 1 033 Interest income 30 46 90 106 41 28 30 19 Interest expense -52 -50 -79 -91 -37 -28 -26 -23 Realised/unrealised gains/losses on securities -16 -29 -11 -7 2
Slide 25: Storebrand Life Group result per line of business
Storebrand Life Group Storebrand Life Group - result per line of business Q4 Full year NOK mill. 2008 2007 Storebrand Livsforsikring AS 368 593 338 1.622 SPP Group 1.419 831 Other subsidiaries (inclusive Storebrand Helse) 34 1 14 13 Profit life group before amortisiation cost 1.822 594 1.183 1.635 A
Slide 26: Life Group profit and loss statement
Storebrand Life Group - profit and loss statement Q4 Full year NOK Million. 2008 2007 2008 2007 Premiums written 3.894 3.846 23.902 16.578 Net transfers of premium reserve -7.171 397 2.738 1.056 Net income of financial investments 2.722 11.932 Net income of common portfolio 10.080 3.382 Net income o
Slide 27: Profit analysis per line of business
Storebrand Life Group - profit analysis per line of business Q4 2008 Storebrand SPP Other Total NOK Millon Livsforsikring AS Group Group Group Interest result 1.162 1.184 2.347 Administration result -88 -104 -193 Risk result 162 95 258 Other results 464 245 34 742 Profit before additional statutory
Slide 28: Life Group solidity and solvency
Storebrand Life Konsern - solidity Capital ratio: 17,4 % and solvency margin: 160 % Solidity capital of NOK 36 bn, approximately 14,1 % of customer funds excl. additional statutory reserves and conditional bonuses Solidity capital (%) of customer funds excl. ASR and CBR 20 % 22,2 bn 18,9 bn 25,6 bn
Slide 29: Details about solvency and capital adequacy ratios
Storebrand Life Group - Details about solvency and capital adequacy ratios Capital Adequacy 31 DEC 2007 31 MAR 2008 30 JUNE 2008 30 SEP 2008 31 DEC 2008 NOK million Equity (NGAAP and after deductions) 15.374 15.341 15.852 13.047 15.065 Intangible assets -9.611 -9.691 -9.443 -6.408 -6.885 Hybrid tier
Slide 30: Life Group balance sheet
Storebrand Life Group - balance sheet (forts.) Share of Share of total assets total assets NOK Million 31.12.08 31.12.08 31.12.07 31.12.07 Equity 14.636 5% 15.748 5% Minority interests' share in equity 203 0% 136 0% Subordinated loan capital 10.085 3% 8.814 3% Market value adjustment reserve 0 0% 3.
Slide 31: New premiums APE
Storebrand Life Group - new premiums APE Q4 Full year NOK mill 2008 2007 2008 2007 SBL AS (excl. SPP) 448 na 1.583 1.187 SPP Group 229 197 913 783 Other (incl Storebrand Helseforsikring) 22 21 80 67 Total 699 na 2.576 2.037 New premiums consist of new sales and increased sales on existing contracts
Slide 32: Storebrand Livsforsikring AS profit analysis
Storebrand Livsforsikring AS (Norwegian operations) Storebrand Livsforsikring AS - profit analysis Q4 Full year NOK Million 2008 2007 2008 2007 Interest result 1.162 3.184 -2.137 7.887 Administration result -88 -409 -255 -669 Risk result 162 -57 737 244 Other results 464 -3.024 408 -3.042 Profit bef
Slide 33: Profit to owner per product
Storebrand Livsforsikring AS - profit to owner per product (FY 2008) Group Individual pension and paid-up Full year 2008 Group and unit polices, pension linked Risk profit- Company NOK Million. fee based fee based products charing portfolio Total Administration result 32 - 97 - 118 29 -154 Interest
Slide 34: Policyholders funds and asset allocation
Storebrand Livsforsikring AS - policyholders funds Full year NOK Million 2008 2007 Premium reserve, premium fund etc. for own account 160.579 159.222 Additional statutory allocations 3.438 5.757 Insurance fund reserves for own account 164.017 164.979 Security reserves 197 Total 164.017 165.176 67 4t
Slide 35: Policyholders solidity capital
Storebrand Livsforsikring AS - policyholders solidity capital Position at 31.12.2008 Individual and Group paid-up NOK million pension policies Total 2008 2008 2008 2007 Additional statutory allocations 1.934 1.504 3.438 5.757 Market value adjustment reserve 3.854 Total 1.934 1.504 3.438 9.611 Change
Slide 36: Company portfolio and unrealised gains
Storebrand Livsforsikring AS - company portfolio Aksjer; 3 % Annet; 4 % Obligasjoner; 3% Eiendom; 17 % Pengemarked; 73 % Value adjusted return (FY2008) 2.72% AuM (NOK bn) 14 *Updated with official numbers 71 4th Quarter 2008 Storebrand Livsforsikring AS - unrealised gains Change Change NOK Million Q
Slide 37: Premium income and net transfers
Storebrand Livsforsikring AS - premium income (excl. transfers) Q4 Full year NOK million 2008 2007 2008 2007 Group pension 2.164 1.654 9.948 8.376 Paid-up policies 15 18 97 110 Group pension defined contribution 648 466 2.260 1.636 Individual endowment and pension 349 1418 1638 4.732 Individual Unit
Slide 38: Transfers and new subscription APE
Storebrand Livsforsikring AS - transfers 5 260 2 834 1 493 1 056 564 2003 2005 2006 2007 2008 *Million NOK 75 4th Quarter 2008 Storebrand Livsforsikring AS - new subscription APE Q4 Full year Nok million 2008 2007 2008 2007 Guaranteed products 103 na 863 na - of which annual premiums 75 na 316 na -
Slide 39: Bond portfolio
Storebrand Livsforsikring - bond portfolio (1) BUSNAME AAA AA A BBB BB Total Agency 1.734 80 - - - 1.814 Asset Backed 443 - 14 - - 457 Banking 3.150 3.786 6.135 8.062 - 21.134 Basic Industry - 31 100 63 - 194 Collateralized Loan Obligation 240 - - 7 10 257 Commercial Mortgage Backed 206 - - - - 206
Slide 40: SPP Group results
SPP Group Profit & Loss Balance sheet Exchange rates used statement statement figures figures 2007 Q4 NOK/SEK 0,8401 0,8401 2008 Q1 NOK/SEK 0,8570 0,8570 2008 Q2 NOK/SEK 0,8478 0,8478 2008 Q3 NOK/SEK 0,8479 0,8487 2008 Q4 NOK/SEK 0,8854 0,8547 SPP Group - results Q4 Full year NOK million 2008 2007 2
Slide 41: SPP results per line of business
SPP incl. Euroben - results per line of business Guaranteed Unit Euroben Company Sum Sum NOK million products Linked portfolio' 4. kvartal 2008 Administration result -106 -7 2 6 -104 -103 Risk result 97 0 -1 0 95 287 Financial result 1.177 0 7 0 1.184 340 Other 0 0 0 229 229 293 Result SPP 1.168 -7
Slide 42: SPP risk result and financial result
SPP incl. Euroben - risk result Q4 Full year NOK million 2008 2007 2008 2007 Premiums written 134 NA 551 519 Change in security reserves 62 NA 222 87 Claims paid -80 NA -292 -291 Result of reinsurance -13 NA -51 -24 Other -9 NA -142 -113 Risk result 95 NA 287 179 83 4th Quarter 2008 SPP incl. Eurobe
Slide 43: SPP financial result per product
SPP incl. Euroben - financial result pr produkt Guaranteed Unt Euroben Company Total Total NOK million products Linked portfolio' Q4 2008 Profit sharing 157 0 5 0 162 174 Change in deffered capital contribution 361 0 1 0 363 -1.642 Hedge result 627 0 0 0 627 1.743 Other 32 0 0 0 32 66 Financial resu
Slide 44: SPP insurance reserves and company portfolio
SPP incl. Euroben - insurance reserves per line of business Guaranteed Unit Euroben Total Total NOK million products Linked 2008 2007 Claims reserves 71.327 20.910 6.329 98.565 91.393 Conditional bonuses 5.463 0 2.036 7.499 13.699 Other 58 0 4 62 64 Total claims reserves 76.848 20.910 8.369 106.127
Slide 45: SPP asset allocation per line of business
SPP incl. Euroben - asset allocation pr line of business Guaranteed NOK million products Unit Linked Euroben Sum Swedish Equity 905 0 818 1.723 International Equity 2.546 0 1.041 3.587 Nominall Bonds 60.308 0 5.714 66.022 Real interest Bonds 5.095 0 791 5.886 Real estate 805 0 0 805 Other 2.989 20.9
Slide 46: SPP allocation Defined Contribution and balance statement
SPP - allocation Defined Contribution (GG) P250 P300 P520 0% 9% 1% 4% 5% 2% 1% 10 % Interest bearing 13 % Equity Real estate Other 77 % 85 % 93 % Investment return (YTD) -5.9 % 1.2% 9.6 % Guaranteed rate p.a. 2.5 % 2,75 % - 4,0 % 4,5 % - 5,2 % AuM (incl. Conditional NOK 6,3 bn NOK 16,5 bn NOK 16,4 b
Slide 47: SPP Group balance statement and premium income
SPP Group* - Balance statement Share of Share of Amount total assets Amount total assets NOK millions 31.12.08 31.12.08 31.12.07 31.12.07 Equity 4.018 3,2% 6.926 5,0% Minority interests' share in equity 0 0,0% 0 0,0% Subordinated loan capital 8.677 7,0% 8.233 6,0% 0 0 Premium reserve for own account
Slide 48: SPP new subscription APE and bond portfolio
SPP incl. Euroben - new subscription APE Q4 Full year Nok million 2008 2007 2008 2007 Guaranteed products 99 59 372 273 - of which annual premiums 74 45 286 210 - of which single premiums 25 15 86 63 Unit Link 88 72 396 289 - of which annual premiums 82 66 372 268 - of which single premiums 6 6 24 2
Slide 49: Storebrand Investments Highlights Q4
Storebrand Investments Results Q4 2008 Storebrand Investments - Highlights Q4 Profit before tax NOK 96 million compared to NOK 38 million 4rd quarter last year. Strong margin development in a year of market turbulence due to strong income development and cost control. NOK 229 billion in assets under
Slide 50: Storebrand Investments profit before tax
Storebrand Investments - Profit before tax Q4 Full year NOK million 2008 2007 2008 2007 Total income 148 84 419 331 Total costs -77 -70 -280 -259 Net financial income/ other 25 24 79 66 Profit before amortisation 96 38 218 138 Amortisation intangible assets -1 0 -3 0 Profit before tax 95 38 215 138
Slide 51: Stable profit development in falling markets
Storebrand Investments - Stable profit development in falling financial markets 700 600 500 400 o n iK O N lm 300 200 100 - Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 2005 2005 2006 2006 2007 2007 2008 2008 Rolling 12 months income* Rolling 12 months costs Rolling 12 months Cost/income ratio Cost/income ratio 56 perce
Slide 52: Assets under management
Storebrand Investments - Assets under management Total assets under management Change in total assets 227 229 217 4 2 billion increase in assets 205 29,7 22,7 24,6 under management in Q4 2008 20,3 165 28,0 35,7 NOK billion 30,3 - 5 billion increase in the 29,4 15,8 20,0 25,6 28,2 group internal asse
Slide 53: Storebrand Bank Group Highlights 4th quarter 2008
Storebrand Bank Group Analyst presentation 4th Quarter 2008 Storebrand Bank Group - Highlights 4th quarter 2008 Storebrand Bank experienced a negative group result of NOK 67 million before tax in Q4. The group profit for the year as a whole was NOK 33 million. The profit before losses in the banking
Slide 54: Bank Group profit and loss
Storebrand Bank Group - profit and loss Q4 Full year NOK million 2008 2007 2008 2007 Net interest income 110 111 512 413 Net fee and commission income 12 15 62 58 Other operating income 42 17 89 46 Total income 164 143 663 517 Operating expenses -132 -114 -473 -360 Operating profit before losses 31
Slide 55: Bank Group balance sheet
Storebrand Bank Group - balance sheet Andel Andel NOK million 31.12.08 31.12.08 31.12.07 31.12.07 Cash and deposits with central banks 672 1,5 % 1 062 2,5 % Loans to and deposits with credit institutions 334 0,7 % 374 0,9 % Financial assets designated at fair value through profit and loss 5 233 11,5
Slide 56: Development in customer deposits and non-performing loans
Storebrand Bank Group - development in customer deposits NOK mill. Customer deposits have 20 52 % increased by NOK 0.8 bn in 18 Q4 16 50 % 14 48 % 12 Still reduction in deposits 10 46 % among larger corporate 8 clients 44 % 6 - More competition 4 42 % - Less liquidity 2 0 40 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 57: Capital adequacy and corporate portfolio
Storebrand Bank Group - capital adequacy Requirement for capital base Net primary capital Capital ratio (NOK million) (NOK million) 31.12.2008 31.12.2007 2.013 2.718 10,8 % 10,5 % Note: Storebrand Bank Group 113 4th Quarter 2008 Storebrand Bank Group - corporate portfolio Total exposure 4% 9% 6% 3%
Slide 58: Customers' debt servicing capacity
Storebrand Bank Group - customers' debt servicing capacity Customers' rental income by sector 5% 8% 23 % Distribution of collateral, corporate portfolio 9% - Office and combination 60% - Wholesale/retail trade 20% - Housing (for rent) 17% 11 % - Other real estate 3% Interest payment ability 23 % - 8
Slide 59: Storebrand Non-life income statement
Storebrand Non-life Storebrand Non-life - income statement Q4 Full year NOK million 2008 2007 2008 2007 Premiums earned, net 53 28 172 65 Claims incurred, net -47 -18 -137 -46 Operating expenses -22 -21 -92 -72 Investment result 16 4 24 19 Storebrand Skadeforsikring AS 1 -7 -32 -34 Oslo Reinsurance
Slide 60: Storebrand Non-life balance sheet
Storebrand Non-life - balance sheet Amount Share Amount Share NOK million 31.12.08 31.12.08 31.12.07 31.12.07 Intangible assets 26 1% 27 1% Shares 20 1% 21 1% Bonds and other interest bearing financial assets 345 15 % 406 19 % Reinsurance share of premium- and claims reserve 1,192 72 % 1,441 69 % Ot