UBS Annual Nordic Financial Services Conference 2013 Lars Aa. Løddesøl Group CFO - Storebrand 1
The Storebrand Group 100% of investments assessed by sustainability criteria 2.200 employees 40.000 corporate customers 1.900.000 individuals NOK 450 billion in assets under management 5.000.000 Customer dialogues annually 2
Solid, profitable and growing business Group result Assets under Management 2 3000 MNOK 500 BNOK 400 2000 300 1000 200 100 0 2008 2009 2010 2011 2012 1H 2013-2008 2009 2010 2011 2012 1H 2013 Solvency margin 1 180 % 170 % 170 % 164 % 160 % 161 % 162 % 160 % 174 % Customer funds in defined contribution and unit linked 3 80 70 60 BNOK 150 % 50 140 % 40 130 % 30 120 % 2008 2009 2010 2011 2012 1H 2013 20 2008 2009 2010 2011 2012 1H 2013 3 1 Storebrand Life Group 2 Total funds under Management 3 Includes customer funds in DC and UL for Storebrand Life Insurance and SPP
Sound Nordic macro environment enables growth in pension savings GDP growth 1 Unemployment rates 1 4% 14% 12% 3% 10% 2% 8% 1% 6% 4% 0% 2011 2012 2013E 2014E 2% -1% Norway Sweden Euro area 0% 2008 2009 2010 2011 2012 2013E 2014E Norway Sweden Euro area General government net liabilities 2-200 -150-100 -50 0 50 100 150 4 1 OECD Economic Outlook No. 93, June 2013 2 OECD Economic Outlook No. 92, December 2012
Interest rates are picking up 5
External drivers - defining the strategy Low interest rate Individualisation Demographics Technology www Regulations Transparency 6
Our strategic response to changing market conditions We work hard to reach our vision: Recommended by our customers Managing the balance sheet Developing the business Capital optimization Risk reduction Concepts Employees Corporate relation Managing business without raising new equity capital Product optimization Cost reduction Save for < retirement 7
Main focus: shifting the balance sheet - for customer and shareholders values ILLUSTRATION Guaranteed starting point Reserves BNOK Non-guaranteed starting point 350 300 250 200 150 100 50-2012 2014 2016 2018 2020 2022 2024 2026 2023 8
Main focus: shifting the balance sheet - for customer and shareholders values ILLUSTRATION Guaranteed starting point Guaranteed after conversion Reserves BNOK Non-guaranteed starting point 350 300 250 200 150 100 50-2012 2014 2016 2018 2020 2022 2024 2026 2023 9
Main focus: shifting the balance sheet - for customer and shareholders values ILLUSTRATION Guaranteed starting point Guaranteed after conversion Non-guaranteed starting point Reserves BNOK Non-guaranteed with growth initiatives 350 300 250 200 150 100 50-2012 2014 2016 2018 2020 2022 2024 2026 2017 2023 10
New Group organisational structure to support strategy implementation New organisation Objective with new organisation > Separation of growth business and business with guarantees > Support ongoing changes to create - ONE Storebrand > Reducing complexity significantly reducing cost levels > Strengthening customer relations > Nordic synergies 11
Managing the balance sheet Capital optimization 2.3 BNOK converted from guaranteed to non-guaranteed products New subordinated loan of 300 million euro to SBL DB public sector close down by 2015 (6 bn tranferred) Product optimization Managing business without raising new equity capital 500 Risk reduction Optimized real-estate portfolio sold 7 shopping centers (13% of real estate portfolio) Reduced equity allocation in guaranteed portfolios Cost reduction 400 SPP electable in largest collective pension platform ITP from July 2013 300 Price increases in guaranteed products SPP Pension Services sold to KPA 200 100 0 14 Q3-12 67 Q4-12 144 Q1-13 174 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Goal Reached Q3-14 Q4-14 12
Leveraging the corporate market place B2B2C 60 000 new employees annually 40 000 Corporates 60 000 new former employees annually Employees Retirees and holders of pension certificates Storebrand concepts 700 000 Individuals 1 200 000 Individuals Products Pension Asset mgmt. Insurance Bank 13
Actively managed the business towards defined contribution Insurance reserves 1 100 % 12% 12% 12% 16% 17% 19% 21% 80 % 60 % 40 % Key takeaways Continuous shift in business from guaranteed to non-guaranteed over the last six years 20 % 0 % 2006 2007 2008 2009 2010 2011 2012 Premiums 1 VIF 2 100 % 80 % 60 % 40 % 20 % 26% 24% 31% 39% 44% 41% 43% 100 % 80 % 60 % 40 % 20 % 0 % 22% 33% 12% 77% 51% 70% 110% 0 % 2006 2007 2008 2009 2010 2011 2012-20 % 2006 2007 2008 2009 2010 2011 2012 Traditional profit sharing Fee based guaranteed business Fee based Unit Linked and risk products 14 1 Premiums and reserves includes SPP figures from before acquisition in 2007 for comparison 2 Value of in-force
The shift to non-guaranteed products will continue, helped by Storebrand ILLUSTRATION Guaranteed starting point Guaranteed after conversion Non-guaranteed starting point Reserves BNOK Non-guaranteed with growth initiatives 350 < Save for retirement 300 250 200 150 100 Managing business without raising new equity capital 50-2012 2014 2016 2018 2020 2022 2024 2026 2017 2023 15
Revenue management in transistion period ILLUSTRATION Revenue management 1. Maintain revenue from traditional business Price increases Conversion period Reserves BNOK Guaranteed starting point Non-guaranteed starting point 2. Optimize revenue in conversion phase Cost reduction 350 300 Margin management 250 3. Increase revenue from new business Sales Cross sale 200 150 100 1 2 3 Conversion 50-2012 2014 2016 2018 2020 2022 2024 2026 16
Transparent reporting to support new Group organisation and strategy Result Q2 01.01-30.06 Full year NOK million 2013 2012 2013 2012 2012 Fee and administration income 1 077 999 2 122 1 962 3 907 Underwriting result 259 270 483 561 1 072 Operational cost -837-861 -1 671-1 692-3 647 Financial result -36 11-13 40 176 Result before profit sharing and loan losses 463 419 921 871 1 508 Net profit sharing and loan losses 55-73 150 141 451 Result before amortisation and write-downs 518 346 1 070 1 012 1 960 Result per line of business Q2 01.01-30.06 Full year NOK million 2013 2012 2013 2012 2012 Savings (non-guaranteed) 141 81 227 140 288 Insurance 132 113 206 223 417 Guaranteed pension 310 174 709 630 1 193 Other -64-22 -71 19 61 Result before amortisation and write-downs 518 346 1 070 1 012 1 960 17
MNOK MNOK With clear value drivers Managing the balance sheet Developing the business Guaranteed business - Buffer capital Reserves and premiums Unit Linked NOK million 30.06.2013 31.12.2012 Change in 2013 2.439 2.121 2.480 2.318 2.768 Market value adjustment reserve 1 028 1 027 1 Excess value of bonds at amortised cost 4 999 5 225-226 70.458 73.542 Additional statutory reserve 5 280 5 746-466 Provisions for new mortality tables 4 305 4 305 0 57.897 61.007 63.387 +27% Unallocated results 790 0 790 Conditional bonuses SPP 9 668 8 626 1 042 Total 26 070 24 929 1 141 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 Guaranteed reserves in % of total reserves Written premiums Insurance P&C & Individual life Health & Group life Disability Insurance Combined ratio 81,4% 81,0% 80,4% 78,8% 77,9% 86% 2.732 1.073 88% 2.851 1.107 99% 2.933 1.155 94% 2.995 1.197 86% 3.080 1.250 +13% 1.106 1.166 1.182 1.184 1.197 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 553 2Q 2012 578 3Q 2012 596 4Q 2012 614 1Q 2013 634 2Q 2013 18
Summary Market leader in growth market Dual strategy: managing traditional guarantees build business leadership for the future Regulatory uncertainty, but clear action taken: cost reductions capital efficiency customer centric commercialization 19
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