The Boards of Directors of DnB and Storebrand announce that they have entered into an agreement under which the two companies intend to merge.
Storebrand has until now carried out its banking activities through two separate banks,
Storebrand maintained its market position in most of its areas of activity in 2002.
5) Group life insurance policies providing a single payment in the event of death or disability. 6) All policies with private individuals including unit linked and health insurance (but excluding annuities and pensions in payment).
I would like to take this opportunity to thank all of Storebrand’s employees for a really impressive willingness to give their all in working to further the interests of the company and its customers throughout a difficult year.
Storebrand is an experienced, forward-looking business that is based on its expertise. This position places particular demands on the company as an employer, not least in a period when changing market conditions make it necessary to implement organisational changes.
Storebrand’s operating result for the year was a loss of NOK 2 713 million as compared to an operating loss of NOK 1 837 million in 2001. Earnings per share shows a loss of NOK 3.73 as compared to a loss of NOK 4.15 in 2001. The group's risk bearing capacity and Storebrand’s financial condition were satisfactory at the close of 2002. The Board hereby confirms that the accounts have been prepared in accordance with the going concern assumption as required by Section 3-3 of the Accounting Act.
Storebrand Livsforsikring (Storebrand Life Insurance) intends to retain and strengthen its position as the market leader for sales of pensions and life insurance products to the Norwegian corporate market. In addition the company aims to expand its activities in the market for public sector pensions. The key factors that will help to ensure that Storebrand Life Insurance achieves its objectives are its high level of technical expertise, low cost base, active risk management and the high quality of its asset management.
Storebrand Helseforsikring AS (Storebrand Health) again reported strong growth in sales of health insurance products in 2002.
Active risk management involves establishing guidelines in advance for the steps to take in the event of both rising and falling prices to smooth the effects of major price movements.
The new bank will focus on the Norwegian retail market and corporate customers of the Storebrand Group. The bank will develop and market financial solutions for private individuals and selected corporate clients, as well as for high net worth individuals.
Storebrand Bank managed to improve its operational profitability by NOK 130 million between 2001 and 2002. The bank reinforced its market position for equity-related savings products and personal risk insurance. Sales of personal risk products were 23%
NOK 39.5 million in 2002. The shareholding in Acta was written down by NOK 15.1 million in 2002. If the effect on earnings of
Finansbanken A/S Denmark, was written down by NOK 20.7 million. The cost saving measures implemented had a positive effect on costs over the second half of the year, and further improvements in cost base are expected in 2003.
1 705.7 million. This represents a capital ratio of 12.2% (13.1%
Sampo’s Non-Life insurance activities were merged into If with effect from 2 January 2002. This strengthened the position of If, making it by far the largest Nordic Non-Life insurance company.
Private and Commercial business in Norway showed a particularly marked improvement with a combined ratio of 100.5% as compared to 109.3% in 2001. Some lines of insurance still face challenges in improving profitability, including Motor insurance in
Storebrand's share in the results of Fair represented a charge of
This improvement reflects an increase in business volume and a resultant reduction in the ratio of costs to premium volume (cost ratio). The company almost doubled its sales in 2002, but its overall business volume is still insufficient to permit satisfactory profitability.
Relationship between corporate bodies and control functions in Storebrand In addition to the company’s own control functions and external audit, Storebrand is subject to statutory supervision by the Norwegian
The main prupose of Storebrand’s Corporate Governance is to provide guidelines for its individual portfolio managers. These guidelines focus on the following observable characteristics: >> Articles of Association. A company’s objectives should be set out in the most precise manner possible, and the company’s actual business concept and strategy should be fully compatible with its formal objectives. The Articles of Association should not place any restrictions on voting rights or the negotiability of the company ’s shares other than what is required by law or regulation.
Almost 302 million Storebrand shares changed hands in 2002, which was 4.7% lower than 2001 when just under 317 million shares were traded. The value of shares traded in 2002 was NOK
Shares and other equity investments - long term holdings 29 37.2 35.5 36.0
Total equity capital and liabilities 148 551.3 152 214.4 156 744.1
Prepaid pension is the difference between the actual value of the pension funds and the present value of estimated pension liabilities, and is booked as a long-term asset in the balance sheet. Correspondingly a long-term liability arises in the accounts when the pension liability is greater than the pension funds. A distinction is made between insured and uninsured schemes. The uninsured scheme will always be entered as a liability since it does not have a pension fund.
Insurance reserves Insurance reserves comprise the insurance fund and the statutory security fund. The insurance fund includes premium reserve, additional statutory reserves, premium fund/pension adjustment fund and claims reserves.
Storebrand Livsforsikring AS 530.6 *) Group contribution booked directly against equity. 99.6 396.4
Pension liabilities accrued for the year -12.1 -7.8 -19.9 -25.7 -40.1
Explanatory note: Life insurance comprises: Storebrand Livsforsikring group, Storebrand Fondsforsikring, Storebrand Helseforsikring, Compensation
Total tax reducing timing differences -2 332.3 -3 598.1 -3 676.0
Total short-term debt instruments and bonds 23 376.2 23 465.5 16 459.8 16 579.8 39 836.0 40 045.3
A long (asset) position in an equity derivative produces a gain in value if the share price increases. For interest rate derivatives, a long position produces a gain if interest rates fall, as is the case for bonds. A long position in a currency derivative produces a gain if the currency strengthens against the NOK . The gap between long and short positions is taken into account in calculating the total net nominal volume, whereas gross total nominal volume takes no account of the result for a particular instrument of a long versus a short position.
In the case of N GAAP bonds already in Storebrand’s ownership which are subsequently classified as "hold to maturity" are valued at the lowest of historic cost and market value at the time of the reclassification. Under US GAAP amortisation of any premium or discount would continue after such re-classification.
Banking Annual percentage rate (APR): The true interest rate calculated when all borrowing costs are expressed as an annual payment of interest in arrears. In calculating the APR allowance must be made for whether interest is paid in advance or arrears, the number of interest rests during the year and all fees and commissions.
Hans Henrik Klouman (41) General Counsel, Executive Vice President, Storebrand ASA
Oslo Reinsurance Company ASA Ruseløkkveien 14 P O Box 1753 Vika N-0122 Oslo Norway Tel: +47 22 31 28 28 www.oslore.no
Storebrand Helseforsikring Filipstad Brygge 1 P O Box 1382 Vika N-0114 Oslo Norway www.storebrandhelse.no