Storebrand Asa · OSL:STB
Storebrand Asa — Q3 2020 Earnings Presentation
35 slides from Storebrand Asa's earnings presentation, Oct 21, 2020
Slide 1: Storebrand Q3 2020
Storebrand Q3 2020 21 October 2020 Odd Arild Grefstad – CEO Lars Aa. Løddesøl – CFO
Slide 2: Highlights Q3 2020
Highlights Q3 2020 22% Unit Linked reserve growth2 Group result 1 1 486 17% AuM growth Asset Management2 1 012 MNOK 340 1 506 672 15% Insurance Portfolio Premium growth2 -20 Q3 2020 YTD 2020 179% Solvency margin3 Financial items and risk result life Operating profit 2 1 Result before amortisation an
Slide 3: 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 4: Strong growth
Strong growth Unit Linked Asset management +22% +17% 252 ▪ 15% premium growth 921 ▪ NOK 35bn net inflow YTD 207 786 ▪ NOK 15bn premium ▪ New ESG mandates won income YTD in the European market ▪ NOK 6bn net transfers YTD Q3 2019 Q3 2020 Q3 2019 Q3 2020 UL reserves (BNOK) AuM (BNOK) Insurance Retail l
Slide 5: Strong new sales and bolt-on M&A
Strong new sales and bolt-on M&A Breakthrough in Public Sector Pension Insr transaction according to plan ▪ Storebrand becomes new provider of public ▪ Storebrand becomes new provider for up to 2% of service pension for Vestland Fylkeskommune Norwegian retail P&C market ▪ 11 000 current and former e
Slide 6: A leading position in sustainable investements gives results
A leading position in sustainable investements gives results Strengthened Investment Climate Policy to accelerate Winning International ESG Mandates green transition ▪ Make investment decisions in line with scientific consensus ▪ Broad family of sustainable mutual funds with ▪ Increase capital flows
Slide 7: Key figures
Key figures Group Result development1 Earnings per share2 Financial items and risk result life Performance related result MNOK Special items Operating profit 1.90 1.68 1,026 1,012 700 808 319 340 1.22 1.23 114 228 251 635 599 703 0.82 456 265 -49 -19 -31 -588 -11 -334 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Slide 8: Solvency movement from Q2 2020 to Q3 2020
Solvency movement from Q2 2020 to Q3 2020 Group Storebrand Group +3 % 179 % +3 % +8 % -1 % +5 % +2 % -3 % 163 % Q2 2020 Model and Updated Updated VA and Asset Q3 results Dividend Q3 ∆ Transitional Q3 2020 assumptions pricing and de- Symmetric Equity return and risk strategy adsjustment allocation 8
Slide 9: SII position Storebrand Group
SII position Storebrand Group Group Solvency position(%) Estimated sensitivities Target SII margin 150% +16% 163% 179% S2-ratio Q3 150 30 179 Interest rates -50bp 138 45 182 Interest Q2 2020 Q3 2020 rates +50 bp 163 13 176 Equity -25% 139 37 176 Key takeaways ▪ Tighter credit spreads and increased e
Slide 10: Storebrand Group
Storebrand Group Group Profit1 Q3 01.01 - 30.09 Full year NOK million 2020 2019 2020 2019 2019 Fee and administration income 1 352 1 296 4 001 3 746 5 308 Insurance result 304 268 488 782 1 005 Operational cost -984 -979 -2 983 -2 938 -4 015 Operating profit 672 586 1 506 1 591 2 298 Financial items
Slide 11: Storebrand Group
Storebrand Group Group Profit1 Q3 01.01 - 30.09 Full year NOK million 2020 2019 2020 2019 2019 Fee and administration income 1 352 1 296 4 001 3 746 5 308 Insurance result 304 268 488 782 1 005 Operational cost -984 -979 -2 983 -2 938 -4 015 Operating profit 672 586 1 506 1 591 2 298 Financial items
Slide 12: Savings (non-guaranteed)
Savings (non-guaranteed) Savings Profit Q3 01.01 - 30.09 Full year NOK million 2020 2019 2020 2019 2019 Fee and administration income 1 038 957 3 055 2 764 3 996 Operational cost -639 -643 -1 908 -1 929 -2 621 Operating profit 400 314 1 148 834 1 375 Financial items and risk result life -6 -11 -82 -
Slide 13: Savings (non-guaranteed)
Savings (non-guaranteed) Savings Reserves and premiums Unit Linked Comments1 5.0 5.1 4.9 4.6 4.2 252 235 ▪ 15% growth in Unit Linked premiums. 220 207 210 ▪ 22% growth in Unit Linked reserves. BNOK ▪ Net interest margin decline in the Bank due to lower rates. Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020
Slide 14: Insurance
Insurance Insurance Profit Q3 01.01 - 30.09 Full year NOK million 2020 2019 2020 2019 2019 Insurance premiums f.o.a. 1 105 981 3 195 2 895 3 909 Claims f.o.a. -801 -713 -2 707 -2 112 -2 904 Operational cost -168 -162 -518 -471 -648 Operating profit 135 106 -30 311 357 Financial result 37 21 59 58 83
Slide 15: Insurance
Insurance Insurance Combined ratio Comments Combined ratio and results Claims ratio Cost ratio Combined ratio 124% ▪ 88% combined ratio, better than target (90-92%). 96% 92% ▪ Continued strong cost control. 89% 88% ▪ Reserve strengthening in H1 2020 is satisfactory. 107% 73% 78% 76% 73% 17% 17% 17%
Slide 16: Guaranteed pension
Guaranteed pension Guaranteed Profit Q3 01.01 - 30.09 Full year NOK million 2020 2019 2020 2019 2019 Fee and administration income 370 384 1 080 1 108 1 475 Operational cost -212 -199 -628 -594 -819 Operating profit 159 185 453 514 657 Risk result life & pensions -21 30 3 144 215 Net profit sharing
Slide 17: Guaranteed pension
Guaranteed pension Guaranteed AuM guaranteed products Comments 272 274 277 264 263 30 30 30 ▪ Indexation fee in Sweden 33 33 ▪ Asset returns increase overall level of AuM in the quarter and the 142 143 145 BNOK 137 137 level of buffer capital. 12 12 12 12 12 ▪ Guaranteed reserves as a share of total
Slide 18: Other
Other1 Other Profit Q3 01.01 - 30.09 Full year NOK million 2020 2019 2020 2019 2019 Fee and administration income 9 10 42 38 51 Operational cost -31 -29 -105 -107 -143 Operating profit -21 -19 -64 -69 -91 Financial items and risk result life 165 51 66 197 296 Profit before amortisation 144 32 3 128
Slide 19: Save the date
- Save the date 10 December 2020 14:00 – 16:00 CET The event will be hosted virtually. A formal invitation with more information and registration details will follow. 19
Slide 20: Q&A
Q&A Please follow the operator's instructions to ask questions in the conference call Group CEO Group CFO Head of Strategy & Finance Head of IR Odd Arild Grefstad Lars Aa. Løddesøl Kjetil R. Krøkje Daniel Sundahl 20
Slide 21: Appendix
Appendix 21
Slide 22: Results
Results 22
Slide 23: Storebrand Group
Storebrand Group Group Profit1 Q3 01.01 - 30.09 Full year NOK million 2020 2019 2020 2019 2019 Fee and administration income 1 352 1 296 4 001 3 746 5 308 Insurance result 304 268 488 782 1 005 Operational cost -984 -979 -2 983 -2 938 -4 015 Operating profit 672 586 1 506 1 591 2 298 Operating profi
Slide 24: Savings (non-guaranteed)
Savings (non-guaranteed) Group Profit Q3 01.01 - 30.09 Full year NOK million 2020 2019 2020 2019 2019 Fee and administration income 1 038 957 3 055 2 764 3 996 Operational cost -639 -643 -1 908 -1 929 -2 621 Operating profit 400 314 1 148 834 1 375 Operating profit adjusted for performance related i
Slide 25: Asset allocation
Asset allocation 25
Slide 26: Storebrand Life Insurance asset allocation
Storebrand Life Insurance asset allocation 60% 50% 40% 30% 20% 10% 0% Bonds & Bonds at Equities Real estate Money Loans amortized market cost 30.09.2019 8% 10% 13% 15% 53% 31.12.2019 9% 10% 13% 15% 53% 31.03.2020 4% 11% 20% 14% 51% 30.06.2020 6% 11% 16% 15% 52% 30.09.2020 8% 10% 15% 14% 52% Note: Th
Slide 27: SPP asset allocation
SPP asset allocation 70% 60% 50% 40% 30% 20% 10% 0% Bonds & Money Equities Real estate Loans market 30.09.2019 11% 12% 64% 13% 31.12.2019 12% 12% 61% 15% 31.03.2020 10% 12% 62% 16% 30.06.2020 11% 12% 59% 17% 30.09.2020 12% 12% 57% 18% Note: The graph shows the asset allocation for all products with
Slide 28: High Quality Fixed Income I - Characteristics of Bonds at Amortised Cost
High Quality Fixed Income I - Characteristics of Bonds at Amortised Cost1 Market & book value – no reinvestment (NOKbn) Rating distribution (%) 107 107 101 10 10 93 0% 9 87 9 83 8 8 71 22% AAA 27% 7 63 AA 6 53 5 45 A 98 97 92 37 84 78 4 75 3 27 BBB 64 57 48 3 41 33 Unrated & BB 25 25% 25% Q3 2020 20
Slide 29: High Quality Fixed Income II - Characteristics of Mark to Market Fixed Income
High Quality Fixed Income II - Characteristics of Mark to Market Fixed Income1 Rating distribution (%) Geographical distribution (%) 7% 17% 24% AAA Europe ex. NO & SWE 17% AA 2% 3% Norway 47% A Sweden BBB Other 14% Unrated & BB US 55% 15% Sector distribution (%) 16% Sovereign and gov. Guaranteed 36%
Slide 30: Capital and liquidity
Capital and liquidity 30
Slide 31: 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 44,417 42,323 40,821 35,181 35,258 32,873 33,398 32,567 27,637 27,250 35,181 24,741 33,398 32,873 (79%) 26,879 (79%) 20,175 24,795 25,748 27,637 (81%) (76%) 24,741 (75%) (77%) (
Slide 32: 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 33: Group Liquidity NOK bn
Group Liquidity NOK bn 6.1 2.22 3.9 1.31 2.6 Liquidity Undrawn RCF Liquidity inc RCF Debt Financed Equity financed Total liquidty inc RCF 1 Includes NOK 300m bond maturing 22 October 2020 33 2 Revolving Credit Facility of EUR 300 Million, exchange rate 11,08 applied
Slide 34: 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 0.5 0.8 0.3 1.0 2020 2021 2022 2023 2024 2025 2020 2021 2022 2023 2024 2025 1 Total EUR 300 million, SEK 3,650 million a
Slide 35: Investor Relations contacts
Investor Relations contacts Lars Aa. Løddesøl Group CFO lars.loddesol@storebrand.no +47 9348 0151 Kjetil R. Krøkje Group Head of Finance, Strategy and M&A kjetil.r.krokje@storebrand.no +47 9341 2155 Daniel Sundahl Head of Investor Relations and Rating daniel.sundahl@storebrand.no +47 9136 1899 This