PowerPoint-presentasjon...Investor Presentation Q4 2019 Compelling combination of self-funded...

1

Investor Presentation Q4 2019

Compelling combination of self-funded savings growth

and capital return from maturing guaranteed back-book

Important information:

This document 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, the Storebrand Group’s actual future

financial condition, performance and results may differ materially from the plans, goals and expectations set forth in these forward-looking

statements. Important factors that may cause such a difference for the Storebrand Group include, but are not limited to: (i) the macroeconomic

development, (ii) change in the competitive climate, (iii) change in the regulatory environment and other government actions and (iv) market

related risks such as changes in equity markets, interest rates and exchange rates, and the performance of financial markets generally.

The Storebrand Group assumes no responsibility to update any of the forward looking statements contained in this document or any other

forward-looking statements it may make.

2

3

▪ Transformed business from guaranteed to non-

guaranteed

▪ Well positioned to capture capital light and

profitable savings growth

▪ Back book capital consumption has peaked:

increased capital return to shareholders

▪ Delivering on financial targets

Key Takeaways

Strategy

4

250 years of pioneering in the Nordic financial industry

5

1767 1861 1917 1995

Foundation

- among the first

Norwegian P&C

companies delivering

fire insurance

Pioneered

Life Insurance

Pioneered

Occupational

Pensions

Pioneered

sustainable

investments

1847

Expanded into

other P&C

insurance

2006

First

fully digital

P&C operation

6

Pension & Savings

▪ 40k corporate customers

▪ 2m individual customers

▪ NOK ~480bn of reserves of which

45% Unit Linked

Asset Management

▪ NOK 831bn in AuM of

which 40% external clients

▪ 100% of investments

subject to sustainability

screening

Retail Bank

▪ Internet Bank

▪ NOK 48bn of net

lending

Insurance

▪ Health, P&C and

group life

insurance

▪ NOK 4.7bn in

portfolio

premiums

• Capital synergies

• Customer synergies

• Cost synergies

• Data synergies

Storebrand - An Integrated Financial Service Group

All numbers as of Q4 2019

Leading position in Norway and strong contender in Sweden

7

Market share occupational pensions (Defined Contribution)

✓ Best customer satisfaction

with all time high score for

large Norwegian corporates

Clear value proposition

Sparebank 1GjensidigeNordeaStorebrand

28%

DNB

31%

14%

9% 9%

20%

17%

15%14%

7%

LF SEB MovesticSkandia SPP

✓ Best customer service

in Sweden

Norway 1 Sweden 2

World's most sustainable insurance company 2020

World leader in corporate sustainability

1 Finance Norway. Gross premiums defined contribution with and without investment choice. Q4 2018 2 Insurance Sweden. Segment Non-unionised pensions labelled 'Other occupational pensions' (written premiums) Q4 2018

Demographic change has driven pension reforms in Norway with

opportunities emerging

8

II

III

I

1950

Now

2050

55 %

40 %

Before Now

60 %

100 %

Before Now

380

1 000

Now Soon

Workers per pensioner

Public pensionreplacement rate1

Occupational pensioncoverage2

Retail savings(AuM, bn NOK)3

Pension

pillar

1 OECD (2005-2017) Pensions at a Glance. Gross pension replacement rates from mandatory public pensions based on

average earner.

2 NOU 2005:15 Obligatorisk tjenestepensjon. Utredning nr. 13 fra Banklovkommisjonen.3 See page 20.

9

Moderate replacement rates and a wealthy population with an overweight in

bank deposits fuel growth potential in retail market for savings

55%

49%

Germany

Sweden

France

Netherlands

Greece

Italy

Spain

Norway

Switzerland

United Kingdom

37 554

31 947

United Kingdom

France

Netherlands

Norway

Switzerland

Germany

Sweden

Italy

Spain

Greece

Household financial assets Norway3Household disposable income1 Net replacement rate2

70%

15%

9%

6%

Bank deposits

Stocks

Ind. Life & pension

Mutual funds

NOK 1 600 bn

1 OECD (2018), Household disposable income (indicator). Gross adjusted, USD 2016.2 OECD (2017), Pensions at a Glance 2017: OECD and G20 Indicators. Net mandatory public

and private pension replacement rates, average earner.

3 Bank Deposits: SSB (2016) Formuesrekneskap for hushald – Bankinnskot. Mutual funds: VFF (2017) Norske

personkunder – Forvaltningskapital. Stocks: VPS ASA (2017) Eierfordeling i børsnoterte selskap – Aksjer – Lønnstakere

o.a., Ind. Life & Pensoin: see next page

Continued shift from Guaranteed to Non-guaranteed pension

10

Historic premium income1 Current share of reserves2 Expected flow of reserves3

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

Guaranteed Non-guaranteedNOKm

0%

1%

2%

3%

4%

5%

10 20 30 40 50 60 70 80 90 100

Sh

are

of

rese

rves

Policyholder age

Guaranteed Non-guaranteed

2022E 2023E2020E 2021E

3 2

-13

2

-13

2

-13 -13

16 17 17 18

-4 -4 -5 -6

Guaranteed premiums

Claims

Non-guaranteed premiums

NOKbn

2012 2019 2012 2019

1 Guaranteed: Defined Benefit Norway and Guaranteed npension Swede, excl. transfers. Non-guaranteed: Unit Linked (occupational pension) Norway and Sweden, excl. transfers.2 Guaranteed: Defined Benefit and Paid-up policies Norway and Guaranteed pension Sweden. Non-guaranteed: Unit Linked (occupational pension) Norway and Sweden. As of 2018.3 Aggregated numbers from Norwegian and Swedish pension products. Acquired premiums from Silver excluded.

Successful transition from Guaranteed to non-guaranteed Savings

11

20192012

64%

21%

15%

14%

41%

45%

1 960

3 037

20%

2012

49%

15%

36%

15%

2019

65%

24 584

26 278

SavingsGuaranteed Insurance

NO

K m

NO

K m

14%

18%

9%

2%

59%

32%

40%

2012

26%

2018

442

831

External

SavingsOther/internal

Guaranteed

Premiums Storebrand1 Profit Storebrand2 Shift in total Storebrand AUM3

Guaranteed Insurance Savings

NO

K b

n

1 Pension premiums in Guaranteed products, Insurance and Unit Linked products, Storebrand Group.2 Profit before amortisation. "Guaranteed" includes "Other" segment.

3 Savings: Unit linked reserves, Guaranteed: Guaranteed reserves, External: External AUM in Storebrand Asset

Managment, Other/internal: residual group internal AUM including company portfolio.

Our strategy: A compelling combination of self-funding growth and capital

return from maturing guaranteed back-book

12

Build a world class

Savings business

- supported by

Insurance

Leading position

Occupational Pension

Uniquely positioned in

growing retail savings

market

Asset manager with

strong competitive

position and clear

growth opportunities

Bolt-on M&A

A B C D1

Manage balance

sheet and capital

2

A. Cost discipline

2018 2020

0%176%

Q4 2019

150%

180%

B. SII capital management framework C. Increased return

Manage for capital release and

increased dividend pay-out ratio

Growth in Savings and Insurance

6485

105128 140

168 179220

20182012 2013 2014 2015 2016 2017 2019

+19% 831

20182012 2013 2014 2015 2016 2017

442535 571

487577

721 707

2019

+9%

UL reserves (NOKbn)

2013 201520142012 201820172016

23.7 23.9 23.9

48.2

26.9

35.4

46.542.1

2019

+11%

AuM (NOKbn)

Balance (NOKbn)Portfolio premiums (NOKm)

Unit Linked

Retail bank

Asset management

13

3 308 3 569 3 6994 327 4 502 4 462 4 455 4 698

2012 2013 20152014 201920182016 2017

+5%

Insurance

1

Net premiums and market return drive AuM growth

14

NOK bn

40

80

220

60

100

180

160

200

280

140

120

240

260

2016 20172014 2021E2012 2013 2015 2018 2019 2020E

Expected

market return

20132012

19%

AuM development Unit Linked

Drivers of expected net premiums

▪ Majority of premiums generated by

active policies

▪ Growth driven by:

─ Increased salaries and savings rates

─ Population growth

─ Age distribution of policyholders

─ DB conversions

─ New sales

─ New retail savings products

─ Positive transfer balance

─ Market returns


A

12-15%

1 Premiums net of claims.

Storebrand to enter Norwegian public sector pension market

15

29

52

Public Sector2Private Sector Defined Contribution

Annual market premium NOK bn1

▪ With effect from 2020, the pension system for public employees will be adjusted to better fit the 2010 Norwegian pension reform.

▪ Market monopoly today.

▪ Capital efficient product offering.

▪ 5% expected annual market premium growth.

▪ Storebrand will build on existing systems and solutions and execute within previously communicated cost target for the group.

Large public sector market opening up for competition

New regulation will make it attractive for Storebrand to enter the market again

1 Private sector as of 2018, Public sector est. 20182 Norwegian municipalities, does not include pay as you go scheme for state employees.


A

1 Private sector as of 2018, Public sector est. 20182 Norwegian municipalities, does not include pay as you go scheme for state employees.

Building on our relationship with employers

to reach out to individuals

16

Our position in the Norwegian

occupational pension market…

...gives us a customer base of 1.3

million individuals..

..with above average financials

and savings capacity

31%Market share

DNB28%

Nordea14%

Customers with a paid-up policy or pension certificate

Customers with occupational

pension

Retail customers

Spb 19%

Household income

Household assets

Retail

B

785 000

1 090 000

1 800 000

3 200 000

All of Norway

(age 30-70)

Customers

(age 30-70)

All of Norway

(age 30-70)

Customers

(age 30-70)

+39%

+78%

Fast growing Nordic asset manager with a blend of captive

pension assets and external clients

17

Main channels for AuM (NOK bn)1

Pension savings NO

296 bn

168 bn 42 bn

325 bn

Institutional mandatesand distributors2

Direct retail savings NO

External share

Asset types

42%

51%

5%

0%

2%

40%

60%

Equities

Real estate

Money market

Bonds

Other

External

Captive

Pension savings SE

AuM

831 bn

1 Data as of Q4 2019. 2 Includes company capital.

Asset Mgmt

C

Increased external share in Asset Management

18

62%

47%

32%

9%

7%

12%

22%

26%

16%24%

40%

2009 2015 2019

2%

2015

External Other

Unit Linked Guaranteed

AuM mix Revenue mix1

Asset Mgmt

C

2019

37%

24%

36%

3%

14%

11%

72%

1%

1 Revenue & AuM include Skagen from 01.01.2017 proforma

Solutions

Active ownership

Exclusions

Asset Mgmt

C

All assets under management are subject to sustainability screening

Sustainability at the core of our business NOK 831 bn AuM aligned to contribute to the UN Sustainability Goals

19

831 bn

AUM Sustainability Enhanced, NOK bn

2015

59.8

277.3

3.0

2016

68.1

2017 2018

10.3

2019

AuM Q4 2019

Storebrand's History of Sustainable Investments

Sto

reb

ran

d

Decision to integrate sustainability in all funds

(2010)

Kyoto Protocol (2009) (2015)

(2017-2030)

(2005)

Next generation sustainability funds

- Global Solutions- Green Bond Fund- Plus fund family

Storebrand standard launched(2005)d

Sustainability team established (1995)

Exclusions across life insurance

(2001)

UN Sustainable Development Goals

1995 2000 2005 2010 2015 2020

Wo

rld

20

Asset Mgmt

C

Ambition: Build a world class Savings business

supported by Insurance

Insurance

21

Savings Insurance

#1Market position

Pension Norway

Double digit CAGR

Pension Sweden1

Double digitCAGR retail

savings Norway

>10%Bank ROE2

#1Norwegian asset manager with

European footprint

~5%Long term growth

90-92%Combined Ratio

Leading position


AUniquely positioned in

growing retail savings market

B Asset manager with strong

competitive position and clear

growth opportunities

C

Supported by Insurance

1

1 Within segment 'Other occupational pensions'. 2 RoE Retail banking only.

Savings

Significant difference in capital consumption and return

profile between old and new business

22

1 552

Allocated Equity2

(NOKbn)

IFRS earnings1

(NOKm)

GroupInsurance Guaranteed3

638 982 3 172

5.5 2.0 23.6 31.1

Pro forma

RoE adj(%)4 31% 36% 5% 11%

The equity in the Group sits within different legal units. This allocation of equity is done on a pro-forma basis to reflect an approximation to the IFRS equity consumed in the different

reporting segments after group diversification. The estimated allocation is based on the capital consumption under SII and CRD IV adjusted for positive capital contribution to own

funds. The Insurance segment has been allocated an increased capital level which is more in line with long-term expected diversification effects.

2

ILLUSTRATIVEFROM CMD 2018

1 Result before amortisation and after tax, Q1 2017 – Q1 20182 Based on solvency II position pr. Q1 2018 incl. transitional rules on 165%. IFRS equity allocated on a pro forma basis.

3 Includes reporting segment "Other".4 Allocated equity 1Q 2018, ROE calculated on 1Q 2017.

Majority of AUM in Storebrand is already capital efficient and

growing while capital consumptive guaranteed AUM is trailing off

23 Company capital and Other: Company portfolios, buffer capital and BenCo. External AuM: Non-life AuM in Storebrand Asset Management. Non-guaranteed Life: Unit Linked Norway and Sweden. Low capital consumption Guarantees: Capital-light guarantees Sweden. Medium capital consumption Guarantees: Defined Benefit and medium guaranteed Sweden and paid ups with high buffers/low guarantees. High capital consumption Guarantees: Paid-up policies, Individual Norway and capital consumptive guarantees Sweden. Categories change in time du to buffer building. .

0

200

400

600

800

1 000

1 200

1 400

2019 2020E 2021E 2022E 2023E 2029E2024E 2027E2025E 2026E 2028E

Company capital and Other

External AuM

Medium capital consumptive Guarantees

Non-guaranteed Life

Low capital consumptive Guarantees

High capital consumptive Guarantees

2019:

71% of AuM

non guaranteed

2029e:

~85% of AuM

non guaranteed

ILLUSTRATION

▪ Guaranteed portfolio has reached Solvency

II peak capital consumption

▪ New growth in Savings and Insurance need

little new capital

▪ Increased free cash flow and dividend

capacity

▪ Increased fee and adm. income and

reduced sensitivity to financial markets

Forecast assets under management (NOKbn) Implications

2

Capital generation from increasing fee based earnings in front book

and capital release from the back book

24

~10%Expected capital generation

Net capital generation ~5%

~5%Dividends

1 Solvency generation (%) on Solvency II ratio without transitional rules.

▪ Expected annual capital generation of ~10pp of improved

solvency ratio after new business strain

▪ Further management actions have the potential to further

improve solvency

Estimated solvency generation (annual) short term1

Capital consumption includes sum of solvency capital requirement and sum of

VIF for all guaranteed products

NO

Kbn

ILLUSTRATION

0

5

10

15

20

25

0

50

100

150

200

250

2018 2020 2022 2024 2026

Guaranteed reserves Capital consumption

Estimated reduced capital consumption back book

▪ Lower capital consumption because guaranteed portfolio in

run-off, interest rate guarantee reduced and new polices

have lower guarantees, hence more capital light

From CMD

1 Solvency generation (%) on Solvency II ratio without transitional rules.

2

Strong historical growth in solvency ratio

25

147

20192014

124

2015

3

144

2016

4

174155

179

2018

6

2017

159

101

178

172

6

Solvency ratio without transitional rules development 2014-2019 (%)

2

Dividend paidSet aside for Dividend Solvency ratio without transitionals

Group capital management policy sets thresholds for

distribution of cash dividends

26

Solvency IIIncl. transitional rules

176%Q4 2019

150%

180%

130%

▪ Dividend of more than 50% of Group result after tax

▪ Ambition is to pay ordinary dividends per share of at least the same

nominal amount as the previous year

▪ Maintain investments in growth

▪ Reduced dividend pay out

▪ More selective investment in growth

▪ Consider risk reducing measures

▪ Share buybacks to be considered on a semi-annual basis

▪ No dividend

▪ Risk reducing measures

2

Ambitions Capital – back book has reached peak capital and is

expected to contribute with cash together with growing front book

27

2021Expected start of capital release as

dividends when S2 ratio >180%

~NOK 10 BN Back book capital release until 2027

Base case: Release capital from the business

▪ Regulatory change

▪ Lower interest rates

▪ Margin pressure

Low case: Release capital from the business

▪ Regulatory change

▪ Higher interest rates

▪ Better profitability

High case: Release capital from the business

2

FROM CMD 2018

Delivered on Financial Targets

Return on equity1

Dividend pay-out ratio1

8.0%

73%

> 10%

> 50%

Target Actual 2019

28

Solvency II margin Storebrand Group2 176%> 150%

✓

✓%

1 Before amortisation after tax. 2 After tax3 Including transitional rules.

Capital Management

29

Storebrand Group StructureDiversified cash flow to holding company Storebrand ASA

Storebrand ASA

Storebrand Livsforsikring AS

Storebrand HoldingAB

SPP Pension & Försäkring AB

Benco

Storebrand Asset Management AS

SKAGEN AS

Storebrand Bank ASAStorebrand Forsikring

AS

30

Legal structure (simplified)

Storebrand ASA

Savings(non-

guaranteed)Insurance

Guaranteedpension

Other

Reporting structure

IFRS earnings close to cash allow for a high remittance ratio in

the Group

31

Storebrand Life

Group

1520

Remittance ratio

Remittance2

(NOK m)

Storebrand BankStorebrand Asset

Management

Storebrand

Forsikring

Storebrand

Helseforsikring

80 65 1 465

82% 79% 271% 0% 112%

2129

72%

∑ Group3

Earnings after tax1

(NOK m)1846 101 24 213 414 2952

1 As reported by legal entity YE 2018.2 Upstreamed capital to Storebrand ASA

3 Group sum differs from consolidated earnings since the figure excludes the holding

company Storebrand ASA and tax effects

4,858(18%)

14,079(70%)

22,779(82%)

23,900(78%)

6,096(30%)

2012

5,710(23%)

19,031(77%)

20162014

6,932(22%)

2017

8,078(25%)

24,795(75%)

2018

25,748(77%)

7,650(23%)

2019

20,175

24,741

27,637

30,83232,873 33,398

Tangible equity Intangible equity1

1 Intangible equity: Brand names, IT systems, customer lists and Value of business-in-force (VIF), and goodwill. VIF and goodwill mainly from acquisition of SPP.2 Specification of subordinated liabilities: - Hybrid tier 1 capital, Storebrand Bank ASA and Storebrand Livsforsikring AS- Perpetual subordinated loan capital, Storebrand Livsforsikring AS- Dated subordinated loan capital, Storebrand Bank ASA and Storebrand Livsforsikring AS3 (Senior debt – liquidity portfolio) in holding company shown in separate column as it is not part of group capital.

-503 -837

7,948

(19%)7,826

(24%)7,075

(26%)

20,175

(74%)

24,741

(76%)

27,250

2012 2014

27,637

(78%)

7,621

(22%)

30,832

(78%)

2016

32,873

(81%)

8,867

(22%)

2017 2018

33,398

(79%)

2019

8,925

(21%)

-1,693

32,567

-1,462

35,258

39,69940,821

38

42,323

1,983

Equity Subordinated liabilities Net liquidity STB ASA (Holding)3

Strong Group IFRS equity and capital structure

– reduced financial leverage

Group equity (NOK bn) Group capital structure2

32

Term structure debt

33

Term structure sub-debt Storebrand Livsforsikring1 (bn NOK)

1 EUR 300 Million. SEK 750 Million 1,0 BN and 900 Million

Development net liquidity Storebrand ASATerm structure senior debt Storebrand ASA (bn NOK)

2020

0.9

2023

1.1

2021 2022 2024

0.9

2025

3.2

0.70.9

2.0

0.8

Non- perpetual

Perpetual

2025202420222020 2021 2023

0.8

0.5

3.0

0.0

4.0

1.0

2.0

5.0

6.0

7.0

8.0

2019

~8x

EBITDA/Interest costs

Interest charge coverage Storebrand group2

12%

23%

2019 2019

Subordinated Debt (%) of Solvency II Own Funds

Subordinated debt (%) of IFRS Capital

-20 %

-10 %

0 %

10 %

20 %

MRD

NO

K

The Solvency Calculation – moving to a market consistent

balance sheet and risk sensitive capital requirements

IFRS balance sheet Solvency II balance sheetSolvency II Balance Sheet under 1/200 years shock

SCR

Moving to economic balance sheet

1 in 200 years shock

Group solvency II ratio =Own Funds

SCR=

NOK 47bn

NOK 27bn= 176%1 (Q4 2019)

Equity

Assets Liabilities

Own Funds

Market value

of assets

Market value of liabilities

1 Including transitional rules.

Assets after shock

Liabilities after shock

Own Funds after shock

34

High quality capital base under Solvency II

35

24

3

27

SCR

3

47

7

0

1

36

Own funds

Tier 1 restricted*

CRD IV capital

Tier 3

Tier 2 Tier 1 unrestricted

CRD IV capital requirements

SCR SII regulated entities Tier 1

Unrestricted

Tier 1Restricted

Tier 2

Tier 3

Regulatory limitOF %

of SCR

≥ 50% SCR

∑ All T1

≤ 20% T1

≤ 50% SCR

∑ T2+T3

≤ 15% SCR

148%

5%

29%

1%

OF % of

total

81%

3%

16%

1%

SCR and own funds Q4 2019 (NOK bn) Own funds in % of SCR (excluding CRD IV subsidiaries)

Solvency Capital Requirements (SCR)

36

26

3

SCR beforediversification

-5

-7

Risk absorbingcapacity of tax

Diversification

CRD IV fromsubsidiaries

SCR

SCR calculation Q4 2019 SCR dominated by financial market risk…

SCR excludes effect of transitionals on equity of NOK -297m.

NOKbn

61%

29%

3%4%

Financial market

Counterparty

2%

Operational

Life

P&C & Health

19%

29%

12%

24%

16%

Currency

Interest Rate Down

Equity

0%

Property

Spread

Concentration

Life

8%

Financial marketOperational Counterparty P&CHealth

0%

40%66% 67% 77%

1 E.g. a NOK 100m increase of Insurance SCR leads to a NOK 23m increase of Basic SCR, because 78% are absorbed by diversification benefit (2019 Q4).

…Strong diversification benefits from adding more insurance risk1

36

Group SII 174% Q4 2019

Savings and Insurance are close to self-financing going forward- SII-ratio of 204% excluding Savings and Insurance

37

28

16

3

Own funds

47

12

9

Own funds Solvency Capital

Requirement

139%28

16

4

Own funds Solvency Capital

Requirement

32

204%

1 Savings includes CRD IV minorities, not included in illustration. All numbers excluding transitionals.

Product contribution to own funds (VIF),

i.e no hard capital, covers the capital

requirement – low risk for shareholders

Capital requirement supported by

hard capital

SCR Contribution to own funds (’VIF’) Hard capital

Savings & Insurance SII1 Guaranteed & Other SII

16

8

3

1

Solvency Capital

Requirement

27

VIF’

CRD IV

Hard Capital

Insurance

Savings

Guaranteed

ILLUSTRATIVE PRO FORMA ALLOCATION BASED ON 174% SOLVENCY RATIO PR Q4 20191

NOK bn NOK bn NOK bn

Reduced Solvency Capital Requirement from Guaranteed

business

40%44%

48% 52% 55% 58% 60% 63% 66% 68%

56%51%

47%43% 40% 37% 34% 32% 29% 27%

3%

2%

2019 2020

2%

3%

2%

2021

3%

2%

2026

2%

3%

2022

3%

3%

2023

2%

3%

2024

2%

3%

2025

3%3%

2027

2%

2028

2% 100%2%

Guaranteed PensionOther SavingsInsurance

▪ Savings products generates own funds, low

need to hold hard capital in the form of

equity/sub debt

▪ Low buffer need to SCR because of low

volatility

▪ Insurance products have strong

diversification effects

▪ Medium buffer need to SCR because of

low volatility

▪ Guaranteed products have more financial

market risk

▪ High buffer need to SCR because of high

volatility

Expected proportion of SCR 2019-2028

38

Investment management

39

Liability Driven Investments are expected to generate SII Capital

and Stabilise IFRS Results

40

SII

IFRS

Long term perspective

Risk management of own funds and SCR

Annual perspective

Risk management of financial result and buffers

Required Risk Premium

Expected Risk Premium

1.2%

0.5%

+0.7%

Required Book Return

Expected Book Return

3.9%

3.2%

+0.7%

2019

12.8%

2028

19.7%

+6.9%

2019 2028

8.5%

13.0%

+4.5%

SII buffer – over guaranteed liabilities

IFRS buffer development

Expected excess mark to market return*

Expected excess book return*

* Norwegian portfolio only

Storebrand Life Insurance asset allocation

41

Note: The graph shows the asset allocation for all products with an interest rate guarantee in Storebrand Life Insurance Norwegian operations. Category bonds includes loans on life insurance balance sheet.

Equities BondsMoney

market

Bonds at

amortized

cost

Real

estateOther

31.12.2018 7% 27% 2% 52% 10% 0%

31.03.2019 8% 26% 3% 53% 10% 0%

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%

0%

10%

20%

30%

40%

50%

60%

SPP asset allocation

42

Alternative

investmentsBonds Equities

31.12.2018 13% 81% 6%

31.03.2019 13% 82% 5%

30.06.2019 13% 83% 5%

30.09.2019 12% 84% 4%

31.12.2019 12% 81% 6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Note: The graph shows the asset allocation for all products with an interest rate guarantee in SPP.

High quality assets with fixed income as the backbone

43

55%

10%

9%

Norway

25%

6%12%

82%

Sweden

NOK 192 bn

SEK 82 bn

Fixed income

Equities Real estate

Average rating

AA-Average rating

A

Amortisingbonds and loans

80%MSCI World

20%Local Index (OMX & OBX)

PrimeLocation & Quality

Equities

Alternative investments

Fixed income

Amortising Bonds and Loans

High Quality Fixed Income I

- Characteristics of Bonds at Amortised Cost1

44

Market & book value – no reinvestment (NOKbn)

Yield and rating development – no reinvestment

1 Norwegian portfolio only.

2 %

0 %

3 %

1 %

4 %

AA

A

202320212019 2020 2022 2024 2025 2026 2027 2028 2029 2030

Rating distribution (%)

Sector distribution (%)

34%

23%

23%

14%

6%

AAA

AA

A

BBB

Loans and unrated

26%

21%41%

12% Sovereign and gov. Guaranteed

Covered BondsFinancials

Corporate

9383 77 72

6048 42 34 26 23

113

5

2019

24

108

2021

5

2020

4

27

2022

3

2023

3

2024

2

2025

117

4

2

20282026

1

2027

97

11

2029 2030

50

113

8681

75

62

4335

1

Book value Excess value

1 Norwegian portfolio only.

High Quality Fixed Income II

- Characteristics of Mark to Market Fixed Income1

45

26%31%

39%

0%4%

US

Europe ex. NO & SWE

Norway

Sweden

Other

Rating distribution (%) Geographical distribution (%)

Sector distribution (%)

1 Total of Norwegian and Swedish portfolio.

27%

11%

12%11%

39%

AAA

AA

ABBB

Loans and unrated

21%

16%

17%

33%

7%

5%

Sovereign and gov. Guaranteed

Covered Bonds

Financials

Corporate

Mortgages and loans

Bank deposits and others

1 Total of Norwegian and Swedish portfolio.

Paid up policies in Norway:

Segmentation According to Risk Capacity

46

Low

B

uff

er level

Hig

h

Required book returnLow High

Segment 444 bn.

Segment 327 bn.

Segment 225 bn.

Segment 121 bn.

Equities

Real Estate

Credit

Government bonds

Amortizing bonds and loans

Segment 520 bn.

Q4 2019 Results

47

Highlights Q4 2019

48

Group result1

MNOK

707

2 298319

739

3 037

1 026

Q4 2019 Full year 2019

Financial items and risk result life

Operating profit

23% Unit Linked reserve growth2

#1 sustainable insurance company in the world4

176% Solvency margin5

1 Result before amortisation and tax. Operating result adjusted for booked performance related result.

2 Growth figures are from YTD 2018 to YTD 2019. 3 Subject to AGM approval 22 April 2020

4 Corporate Knights Global 100, 2020.5 Including transitional rules.

NOK 124bn AuM growth Asset Management2

NOK 3.25kr proposed ordinary dividend3

Dividend 2019

49

0.40

2016

1.55

2019

2.10

2017 2018

1.55

2.50

3.003.25

+8.3%

Special dividends Ordinary dividends

▪ IFRS result growth - Ordinary

dividends minimum 50% of result

after tax with nominal growth

▪ Capital release from back book

when solvency ratio is above 180%.

Share buy backs preferred

50

% of customer funds3

Q4 2018 Q3 2019Q1 2019

1.22

Q2 2019 Q4 2019

1.211.26

4.18

1.68

7.4%6.4%

9.9%

Q4 2018 Q2 2019Q1 2019 Q3 2019 Q4 2019

7.9%8.7%

9.4%8.3%

9.8%8.6%

10.7%

Customer buffers Norway

Customer buffers Sweden

MNOK

569 546 568 635456

202251

319700

Q4 2018

85 11

-44 -50-103 -18

105

563

Q1 2019 Q2 2019

114

-49

Q3 2019 Q4 2019

730 579

1,026

Result development1 Earnings per share2

Customer buffers developmentSII Own funds and SCR4

Financial items and risk result life

Special items

Performance related result

Operating profit

Group

BNNOK

173% 173%

167%

177% 176%

172% 171%

165%

172% 174%

Q3 2019Q4 2018 Q1 2019 Q2 2019 Q4 2019

45.6

25.5

43.8

26.6

44.4

26.9

45.2

26.3

46.9

27.0

SII Own Funds SII Capital Requirement

Key figures

1 Result before amortisation and tax, adjusted for performance related result. 2 Earnings per share after tax adjusted for amortisation of intangible assets.

3 Excluding customer buffers Benco. Surplus values of HTM bonds cost excluded. 4 Bars and green line are without the use of transitional capital. Black line is with transitional.

Movement from Q3 2019 to Q4 2019 Storebrand ASA

51

+9 %

+2 %+1 %

+2 %

Business mix and asset allocation

VA, equity stress level

and regulatory changes

-7 %

0 %

Q4 2019Q3 2019 without

transitionals

-3 %

Changes in interest rates

Model improvements & assumption

changes

Subordinated loan

Operating earnings

Q4 2019 without

transitionals

Transitionals

+172 %

+176 %+174 %

Group

Movement full year 2019 Storebrand ASA

52

Group

3%

10%

10%

2%

Q4 2019 without

transitionals

Q4 2019Q4 2018 without

transitionals

Subordinated liabilities

Q4 2019 before

dividend

ReinsuranceVA, equity stress and regulatory changes

M&A

-5%

172%

-1%0%

-8%-1%

179%

174%

6%

Changes in interest rates

DividendModel improvements & assumption

changes

TransitionalsOperating earnings

Business mix and asset allocation

176%

SII position Storebrand Group

531 The estimated Economic solvency position of Storebrand Group is calculated using the current Storebrand implementation of the Solvency II Standard model with the company's interpretation of the transition rules from the NFSA. Output is sensitive to changes in financial markets, development of reserves, changes in assumptions and improvements of the calculation framework in the economic capital model as well as changes in the Solvency II legislation and national interpretation of transition rules.

Target SII margin 150%

172 174

25

Q4 2019Q3 2019

177 176

SII standard modelTransitional rules

174

161

186

167

169

172

169

Interestrates +50 bp

168

2

188

2

SII-margin Q4

9Interest

rates -50bp

2

176

1Equity -25%

2Spread +50 bp, VA +15bp

UFR = 3.75%

2UFR = 3.60%

170

171

174

171

▪ Positive effect from increased interest rates partly offset by decreased VA

▪ Subordinated loan with call in March excluded

▪ Business mix strengthens balance sheet

Solvency position(%)1 Estimated sensitivities

Key takeaways

Group

Storebrand Group

1 The result includes special items. Please see storebrand.com/ir for a complete overview.54

Group

Profit1

NOK million 2019 2018 2019 2018

Fee and administration income 1 561 1 301 5 308 5 011

Insurance result 223 282 1 005 1 291

Operational cost -1 077 -1 031 -4 015 -3 786

Operating profit 707 551 2 298 2 516

Financial items and risk result life 319 11 739 642

Profit before amortisation 1 026 563 3 037 3 158

Amortisation and write-downs of intangible assets -117 -99 -444 -360

Profit before tax 909 464 2 593 2 799

Tax -234 1 392 -511 897

Profit after tax 675 1 856 2 082 3 696

Q4 Full year

Storebrand Group

55

Group

Profit1

NOK million 2019 2018 2019 2018





Financial items and risk result life 319 11 739 642


Q4 Full year

Profit per line of business

NOK million 2019 2018 2019 2018

Savings - non-guaranteed 547 325 1 364 1 257

Insurance 70 97 439 748

Guaranteed pension 332 217 1 029 1 148

Other profit 77 -76 205 5


Q4 Full year

1 The result includes special items. Please see storebrand.com/ir for a complete overview.

Storebrand Group

56

Group

Profit1

Operating profit adjusted for performance related income and costs2

NOK million 2019 2018 2019 2018





Q4 Full year

1 The result includes special items. Please see storebrand.com/ir for a complete overview.2 Performance related costs refer to performance bonuses and kick-backs in funds with performance fees that are booked on a quarterly basis. The corresponding income is not booked until the end of the year. The numbers will vary with performance development through the year.

NOK million 2019 2018 2019 2018

Performance related income 225 96 225 96

Performance related OPEX 26 -11 -84 -11

Adjusted operating profit 456 466 2 157 2 431

Q4 Full year

Savings (non-guaranteed)

57

Profit

Profit per product line

Savings

NOK million 2019 2018 2019 2018

Unit linked Norway 57 44 275 224

Unit linked Sweden 89 71 291 267

Asset management 329 160 526 542

Retail banking 72 50 272 224

Profit before amortisation 547 325 1 364 1 257

Q4 Full year

NOK million 2019 2018 2019 2018


Operational cost -692 -652 -2 621 -2 405


Financial items and risk result life 6 -29 -11 -46


Q4 Full year

Savings (non-guaranteed)

58

Group

1 Performance related costs refer to performance bonuses and kick-backs in funds with performance fees that are booked on a quarterly basis. The corresponding income is not booked until the end of the year. The numbers will vary with performance development through the year.

Operating profit adjusted for performance related income and costs1

NOK million 2019 2018 2019 2018


Operational cost -692 -652 -2 621 -2 405


Q4 Full year

Profit

NOK million 2019 2018 2019 2018

Performance related income 225 96 225 96

Performance related OPEX 26 -11 -84 -11

Adjusted operating profit 290 269 1 234 1 218

Q4 Full year

Savings (non-guaranteed) – strong AuM growth

59

BN

OK

Q4 2019

831

Q3 2019Q1 2019Q4 2018

752

Q2 2019

707729

786

4.64.1 4.2 4.2 4.2

1.211.33

Q2 2019Q4 2018

1.16

Q3 2019Q1 2019

1.221.31

Q4 2019

Savings

18 17 18 18 18

46

29 29 28 2930

4847 46 47

Life insurance balance sheet Bank balance sheet

MN

OK

BN

OK

Retail bank balance and net interest margin (%)

Reserves and premiums Unit Linked

Assets under management2

Comments1

▪ 11% premium growth in UL premiums

▪ 23% growth in UL reserves

▪ 18% growth in assets under management2

▪ Higher net interest margin in the bankQ3 2019

179

Q2 2019Q4 2018 Q1 2019 Q4 2019

191198

207

220

1 Growth figures from YTD 2018 to YTD 2019.2 Includes a reclassification of NOK 16bn in assets under administration to assets under management

Insurance

60

Profit


Insurance

NOK million 2019 2018 2019 2018

Insurance premiums f.o.a. 1 014 1 003 3 909 3 854

Claims f.o.a. -792 -721 -2 904 -2 562

Operational cost -177 -175 -648 -614

Operating profit 45 107 357 677

Financial result 25 -9 83 71

Profit before amortisation 70 97 439 748

Q4 Full year

NOK million 2019 2018 2019 2018

P&C & Indiv idual life 87 71 335 372

Health & Group life -34 -7 -41 185

Pension related disability insurance Nordic 16 34 145 192

Profit before amortisation 70 97 439 748

Q4 Full year

Insurance – overall in line with target

61

1 138 1 124 1 134 1 130 1 144

1 574 1 548 1 563 1 609 1 639

1 743 1 769 1 810 1 845 1 915

4 442

Q3 2019Q4 2018 Q1 2019

4 455

Q2 2019 Q4 2019

4 507 4 583 4 698

P&C & Individual life Health & Group life Disability insurance

72%

16%

74% 73%

Q4 2018

72%

Q4 2019

17%

Q1 2019

16%

Q2 2019

17%

Q3 2019

78%

17%

Claims ratio Cost ratio

MN

OK

89%89% 90% 89%96%

Combined ratio

Insurance

Combined ratio

Portfolio premiums Comments premiums and growth1

Comments Combined ratio and results

▪ 5% overall premium growth in line with target

▪ 10% P&C & Individual life growth

▪ 91% combined ratio 2019, target ratio 90-92%

▪ Good cost control

▪ Group life re-priced from 1 January 2020

1 Growth figures from YTD 2018 to YTD 2019.

Guaranteed pension

62

Profit

Guaranteed


NOK million 2019 2018 2019 2018

Fee and administration income 368 333 1 475 1 440


Operating profit 143 111 657 624

Risk result life & pensions 71 58 215 191

Net profit sharing 118 48 157 333


Q4 Full year

NOK million 2019 2018 2019 2018

Defined benefit (fee based) 63 82 287 314

Paid-up policies, Norway 91 51 409 511

Indiv idual life and pension, Norway 11 29 21 35

Guaranteed products, Sweden 167 55 312 288


Q4 Full year

Guaranteed pension- strong financial result and robust buffer situation

63

BN

OK

59.2 %

56.1 %

Q4 2018 Q3 2019

57.7 %

Q1 2019

57.0 %

Q2 2019

54.5 %

Q4 2019

Guaranteed

81 79 80 81 80

133 136 137 137 137

33 32 33 33 33

Q2 2019Q4 2018 Q1 2019

13 13

262

Q3 2019

1213 12

Q4 2019

261 261 264 263

Defined Benefit NO

Paid up policies NO Guaranteed products SE

Individual NO

Reserves guaranteed products Comments

Buffer capital Guaranteed reserves in % of total reserves

▪ As companies convert to DC schemes, the migration from DB to paid up policies continues to reduce fee income in Guaranteed pensions

▪ Strong financial result Sweden

▪ Strong risk result

NOK million Q4 2019 Q3 2019 Change

Market value adjustment reserve 5 500 5 893 - 393

Excess value of bonds at amortised cost 4 697 6 495 - 1 798

Additional statutory reserve 9 023 8 194 + 829

Conditional bonuses Sweden 7 802 7 213 + 589

Total 27 022 27 795 - 773

The term Buffer capital in this table is not consistent with the

def init ion of buffer capital made in the IFRS accounting

Other1

64

Profit


Other

1 Excluding eliminations. For more information on eliminations, see Supplementary Information.

NOK million 2019 2018 2019 2018

Fee and administration income 13 23 51 102


Operating profit -22 -20 -91 -89

Financial items and risk result life 99 -56 296 128

Profit before amortisation 77 -76 205 40

Q4 Full year

NOK million 2019 2018 2019 2018

BenCo 26 -1 33 30

Holding company costs and net financial results in

company portfolios52 -75 173 24

Profit before amortisation 77 -76 205 40

Q4 Full year

65

To register, please visit Storebrand.com/ir

Investor Relations contacts

Lars Aa. Løddesøl

Kjetil R. Krøkje

Daniel Sundahl

Group CFO

Group Head of Finance, Strategy and M&A

Head of Investor Relations & Rating

[email protected]

[email protected]

[email protected]

+47 9348 0151

+47 9341 2155

+47 9136 1899

This document contains Alternative Performance Measures as defined by the European Securities and Market Authority

(ESMA). An overview of APMs used in financial reporting is available on storebrand.com/ir.

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