Storebrand Asa · OSL:STB

Storebrand Asa — Q3 2012 Earnings Presentation

25 slides from Storebrand Asa's earnings presentation, Oct 24, 2012

  1. Slide 1: Storebrand Q3 2012

    Storebrand Q3 2012 24 October 2012 Odd Arild Grefstad – CEO Lars Aa. Løddesøl – CFO 1

  2. Slide 2: Highlights Q3 2012

    Highlights Q3 2012 RESULT  Group result of NOK 458 mill in Q3, 1 471 mill YTD  Provisions for cost program reduce the result with NOK 181 mill  Result before profit sharing and loan losses 19% growth YTD1 OPERATIONS  Strong measures implemented to reduce costs  Actively advising customers to no

  3. Slide 3: Storebrand Group

    Storebrand Group Q3 01.01. - 30.09 Full year NOK mill. 2012 2011 2012 2011 2011 Storebrand Life Insurance 219 140 18 519 342 481 SPP 263 247 -220 646 304 291 Asset management 25 -27 73 44 203 293 Bank 72 60 50 173 162 213 Insurance 113 93 95 286 204 281 Storebrand ASA / other -54 -55 -65 -197 -204 -

  4. Slide 4: Storebrand Life Insurance

    Storebrand Life Insurance  NOK 79 mill in provision for 01.01. - Full cost program in Q31 Q3 30.09 year NOK mill. 2012 2011 2012 2011 2011  Longevity reservation Administration strengthening fully covered result -60 28 9 79 101 by financial return Risk result 34 50 124 81 117 Financial result*  C

  5. Slide 5: SPP

    SPP  NOK 16 mill in provision for 01.01. - Full Q3 30.09 year cost program in Q3 NOK mill. 2012 2011 2012 2011 2011  Contraction in credit Administration result 25 32 91 94 99 spreads strengthen Risk result financial result 45 46 119 158 289 Financial result 137 -320 304 -42 -226  Indexation fee

  6. Slide 6: Asset Management

    Asset Management 01.01. - Full  NOK 52 mill in provision for Q3 30.09 year cost program in Q3 NOK mill. 2012 2011 2012 2011 2011 Operating revenue 169 184 506 521 684  Customer de-risking reduce income and margins Operating cost -189 -118 -447 -359 -481 Operational result -20 66 59 161 203  Stron

  7. Slide 7: Bank

    Bank 01.01. - Full Q3 30.09 year  NOK 12 mill in provision for NOK mill. 2012 2011 2012 2011 2011 cost program in Q3 Net interest income 122 113 357 339 443 Net fee and commission income 19 18 54 55 73  Low loan losses Other operating 16 1 47 25 32 income  Net interest rate margin Total income 15

  8. Slide 8: Insurance

    Insurance 01.01. - Full Q3 30.09 year  NOK 20 mill in provision for NOK mill. 2012 2011 2012 2011 2011 cost program in Q3 Premiums earned, 507 460 1 448 1 351 1 807 net  66% claims ratio Claims incurred, net -333 -316 -953 -986 -1 314 Operation costs excl -109 -84 -281 -248 -332  Strong sales wit

  9. Slide 9: Storebrand Group – operational reporting

    Storebrand Group – operational reporting Full Q3 01.01. - 30.09 year Increased quality of earnings: NOK mill. 2012 2011 2012 2011 2011 Fee and administration income 1 035 981 3 118 2 979 3 952  Fee and adm results 5% growth YTD Operational cost -716 -675 -2 161 -2 068 -2 800 Fee and  Result before

  10. Slide 10: Key figures

    Key figures Result development Earnings per share1 Net profit sharing and loan losses NOK mill. Result before profit sharing and loan losses 1.38 Provisions for cost program 667 459 268 211 345 129 0.87 398 404 455 420 511 0.52 -136 -75 -181 0.21 -447 -49 -0.15 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 201

  11. Slide 11: Storebrand towards Solvency II

    Storebrand towards Solvency II Changes in domestic regulation Solvency II Solvency I Changes in EU Solvency II Storebrand’s own measures Current regime 1.1.2014 ? 11 11

  12. Slide 12: Clear target for optimizing the operations towards Solvency II

    Clear target for optimizing the operations towards Solvency II Capital optimization Risk reduction Clear target: Managing business without raising new equity capital Product optimization Cost reduction 12

  13. Slide 13: Cost reduction: cost program executed on plan

    Cost reduction: - cost program executed on plan Number of initiatives Implemented measures Work in progress distributed by progress Completed 12 Examples Examples 90 % 3 80 % 5 Voluntary lay off Further reduction in staff of 80 employees 70 % 2 60 % 6 Termination of trainee Transfer of operations to

  14. Slide 14: Product optimization: price increases in guaranteed products

    Product optimization: - price increases in guaranteed products  Defined Benefit public sector: 25% price increase  Defined Benefit private sector: Price for interest rate guarantees and profit from risk increased by 20% from 2013  Paid-up policies: 2% up-front fee introduced  Guaranteed business

  15. Slide 15: Product optimization: transfer of customers to non-guaranteed products

    Product optimization: - actively transfer of customers to non-guaranteed products SPP guaranteed portfolio SBL individual portfolio SBL paid up policies  NOK ~25 bn is transferable  NOK ~15 bn of portfolio  NOK ~70 bn will be open reserves in guaranteed open to transfer for conversion from busine

  16. Slide 16: Product optimization: set-up for conversion of paid up policies

    Product optimization: - set-up in place for conversion of paid up policies  New and improved product offering in place  Three attractive products with investment choice, and possibility to Product change between them: • "Tailor-made Life cycle portfolio" • "Pension portfolio" • "Free fund selectio

  17. Slide 17: @nsket pensjon

    @nsket pensjon Sparebehov storebrand

  18. Slide 18: Summary

    Summary  Improved underlying results  Increased buffer capital  Strengthening operations through:  Executing cost program  Actively advising customers to non-guaranteed portfolios  Price increases in guaranteed products  Ready to launch full scale program to transfer paid-up policies to non-g

  19. Slide 19: @d storebrand

    @d storebrand @9 storebrand

  20. Slide 20: Appendix

    Appendix: 20 @9 storebrand

  21. Slide 21: Cost reduction: cost program executed on plan

    Cost reduction: - cost program executed on plan 2011 Q3 2012 Target NOK million cost base (12 mth rolling)1 2014 SBL 1 072 1 113 SPP 902 909 Asset Management 481 517 Bank 345 353 Insurance 374 387 ASA 165 172 Adm cost allocated to product with profit sharing 185 201 Costs from subsidiaries 117 109 T

  22. Slide 22: Storebrand Life Insurance

    Storebrand Life Insurance Defined Individual Group contri- and paid- defined bution and up Company Result Result Full year NOK mill. benefit * unit linked* policies** BenCo portfolio Q3 2012 Q3 2011 2011 Administration result -64 -6 4 7 0 -60 28 101 Risk result 24 4 0 4 0 34 50 117 Financial result1

  23. Slide 23: Storebrand Life Insurance – return by asset class and main portfolios

    Storebrand Life Insurance - return by asset class and main portfolios Return by asset class Q3 2012(%) Return Defined Benefit portfolios Value Booked Equity adjusted Returns proportion returns (Q3) (Q3) Real estate 1,2 (Q3) DB - High 2.6% 1.0% 21% Bonds at 1,2 DB - Balanced 2.3% 1.1% 18% amortised c

  24. Slide 24: Storebrand Life Insurance asset allocation

    Storebrand Life Insurance asset allocation 50% 45% 40% 35% Allocation (%) 30% 25% 20% 15% 10% 5% 0% Bonds at Equities Bonds Money market Real estate Alpha Other amortised cost 31.12.2011 12% 18% 8% 41% 15% 2% 5% 31.03.2012 13% 16% 7% 43% 15% 2% 5% 30.06.2012 11% 18% 7% 43% 15% 2% 5% 30.09.2012 10% 1

  25. Slide 25: SPP asset allocation

    SPP asset allocation 90% 80% 70% 60% Allocation (%) 50% 40% 30% 20% 10% 0% Equities Bonds Other 31.12.2011 12% 81% 8% 31.03.2012 17% 75% 8% 30.06.2012 9% 82% 9% 30.09.2012 12% 81% 8% Asset allocation guaranteed products SPP AuM NOK 82 bn1 1 The graph shows the asset allocation for all products with

Storebrand — Q3 2012 Earnings Presentation on 6ix