"20% of the world's population use 80% of the world's resources. Companies that are well prepared to meet global challenges are better positioned to create profitable growth than their competitors"
Education MBA MSc from NTNU MBA from INSEAD in France fra INSEAD I Frankrike
Storebrand has worked with sustainability for more than twenty years. This sustainability work started with our investments and is now a fundamental part of the entire investment process and our operations. The Group has published environmental reports since 1995, and sustainability reports since 1999. Sustainability reporting has been an integrated part of the annual report and certi�ed by an independent third party since 2008. The objective of the reporting is to provide an overall picture of Storebrand’s value creation.
Sustainable development is about looking after the needs of people who are alive today without destroying the ability of future generations to look after their needs. September 2015 was a milestone. This was when all of the UN member states met and agreed to a joint work plan for eradicating poverty, combating inequality and stopping climate change by 2030. The plan is called The 2030 Agenda for Sustainable
Storebrand has the goal of paying a dividend in 2018 of more than 50% of the Group pro�t after tax. The Board has the ambition of the ordinary dividend per share being at least at the same nominal level as the previous year. The ordinary dividend is paid out at a sustainable solvency margin of over 150%. At a solvency margin over 180%, the Board’s intention is to propose extraordinary dividends or the buy-back of shares. Furthermore, Storebrand has the ambition of achieving continued pro�table growth within prioritised areas of growth.
Working group established by the G20 Financial Stability Board in 2015.
Percentage of assets screened for sustainability criteria 100 % 100 % 100 % 100 % 100 %
The opinions of customers and potential customers about Storebrand and the services offered in relation to the vision: Recommended by our customers.
In the beginning of November, for the �rst time the “Handshake of the Year” was awarded. The price is NOK 500,000 and is
Fair Finance Guide looks at how sustainable the guidelines for the Norwegian banks are. The analysis covers both own business, investments and lending in the corporate and private market.
Being aware of our customers’ needs and providing each customer with individualised services are key to us achieving our vision of our customers recommending us. We shall be a reliable partner when our customers make �nancial choices that will impact their future. As part of this, we process large amounts of personal data about our customers. The right to a private life is a fundamental human right, which we must do our utmost to protect. Our customers can legitimately expect that their personal data is being processed with the greatest of care and in accordance with their instructions. Storebrand takes this responsibility very seriously.
The supplier shall generally have good internal guidelines for ethics and should, for example, follow the Initiative for Ethical Trade’s guidelines or the standard for social accountability/corporate social responsibility (SA 8000). There must be no purchases from companies that have been excluded under Storebrand’s minimum standards for sustainable investments. The analysis is conducted by the department for sustainable investments and Sourcing is responsible for compliance.
Storebrand Norway are women and the �gure is 47% at SPP. 45% of the employees in the Norwegian part and 55% of the employees at SPP are women.
Storebrand entered into a strategic partnership with Young Entrepreneurship (Ungt Entreprenørskap) in 2017, a partnership that makes it possible to meet young people between 16 and 19 years of age. The purpose of the partnership is to motivate young people to choose sustainable and future-oriented solutions when they start companies.
Storebrand has been an “inclusive workplace” (IA) company since 2002, and the Group’s managers have over the years built up inclusive routines for following up sick employees. All managers with Norwegian employees must complete a mandatory HSE course, in which part of the training involves following up illnesses. Storebrand’s health clinics at the head o�ce in Norway, as well as good health insurance for all employees, are positive contributors to Storebrand’s low rate of absence due to illness.
In order to communicate to and involve employees in creating a joint understanding of our objective, strategy and culture, we invested in new learning technology in 2017. This is new technology that supports the design of longer learning and change processes and which enables �exible and easy access anywhere and at any time. Instead of just focussing on arrangements for involving employees in our culture, we designed and launched a mobile-based learning pathway with a duration of one year. The learning pathway was designed in four phases that are smooth and smart (agile) and open, such that learning from one phase was integrated into the next phase to ensure that the content was always appealing and relevant. Each phase of the learning pathway consisted of videos, nanolearning modules, social activities such as surveys, reviews and re�ection exercises. We also combined the digital part with physical meetings at the departments that were chaired by the managers. We called the learning pathway “Our driving force in the head and heart”.
Storebrand has the goal of paying a dividend of more than 35% of the Group pro�t after tax, but before amortisation costs. The dividend policy is conditional upon a sustainable solvency margin of more than 150%, including a minimum solvency margin of 110% without the use of transitional rules.
Education Authorised Portfolio Manager (NHH/NFF) Masters Degree in Economics (University of Bergen)
Premium income amounted to NOK 15 billion in 2017, which is NOK 0.9 billion higher than in 2016. Total reserves for non-guaranteed life insurance-related savings have grown by 22% to NOK 147 billion since 2016.
Storebrand ASA (holding) held liquid assets of NOK 1.4 billion at the end of the year. Liquid assets consist primarily of short-term �xed income securities with a good credit rating. Storebrand ASA’s (holding) total interest-bearing liabilities were NOK 2.3 billion at the end of the year. This corresponds to a net debt-equity ratio of 4.4%. The next maturity date for bond debt in Storebrand ASA is in October 2018. In addition to the liquidity portfolio, the company has an unused credit facility of EUR 240 million that runs until December 2019. Storebrand ASA recognised dividends and group contributions of NOK 2,154 million for 2017. Provisions for share dividends to the shareholders amounted to NOK 1,168 million.
For insurance and pension products, Storebrand receives payment from companies and individuals to assume the risk that various insured events will occur. For pension products, it is necessary to assume �nancial market risk to create a return on pension assets. The banking business entails a risk of loan losses. In all parts of the business, operational risk arises due to errors that can in�ict losses on customers and/or costs on Storebrand.
There were goods returns for guaranteed customer portfolios in 2017. Good equity markets and high returns on property have made a positive contribution. In addition, reduced credit spreads have given good returns for bonds. In Norway, the return has been more than adequate to cover the guarantee plus completing the strengthening of reserves for increased longevity. In Sweden, the return on assets has been better than the increase in value of insurance liabilities and has contributed to strengthening the consolidation.
(NHO) in connection with the annual wage settlement in spring 2014.
The employer will continue to be responsible for ensuring that, at a minimum, the company’s pension scheme meets the OTP requirements. The risk coverage (waiver and disability pension) is continued as collective coverage.
The AFP scheme has been evaluated by the parties in business and industry and a report was submitted on 7 December 2017. The parties are of the view that the scheme contributes to more people working longer, but also made note of weaknesses in the scheme. Among other things, strict quali�cation requirements make the scheme unpredictable for employees.
The Pension Group thereby �nds that it is not applicable to further address the proposal that individuals must regularly actively con�rm their choice of fund, with transfer of the capital to the seventh AP fund for those who do not do so.
With regard to the question of whether employees think that it is valuable that the Storebrand Group desires to have a leading position within sustainability, the point score increased from 87 to 89 and there is also a very high level of knowledge about the Group’s sustainability work.
Employees at the head o�ce in Norway can work out in a spinning room, weights room and in a separate sports hall. 65% of the employees in
Employees take the company’s e-learning course on ethics. In 2017, 62 employees took the course, and 91 took the anti-corruption course. The
The Board has proposed a dividend to the General Meeting of NOK 1,168 million, equivalent to NOK 2.5 per share, for the 2017 �nancial year, of which ordinary dividends amounted to NOK 2.1 per share and extraordinary dividends amounted to NOK 0.4 per share.
Storebrand’s corporate governance principles have been laid down in accordance with the Norwegian Code of Practice for Corporate Governance. The management and the Board of Directors of Storebrand ASA (hereafter referred to as the Board) conduct an annual review of Storebrand’s adopted corporate governance policies and compliance therewith. Storebrand reports in accordance with section 3-3b of the Norwegian Accounting Act and the Norwegian Code of Practice for Corporate Governance. Storebrand issues an integrated report that deals with the financial, environmental and social conditions, as well as corporate governance, which is material to Storebrand. The materiality analysis is discussed in the Chapter Sustainable strategy.
“Our driving force” and focus areas can be found in the Chapter About Storebrand and a Sustainabale strategy.
The market is kept informed of Storebrand’s goals, strategies and long term value creation through quarterly result presentations and separate thematic presentations. You can read more about the company’s goals and main strategies in the Directors Report.
Stipulate the remuneration of members of the Board of Directors and Board Committees,
None of the members elected by the General Meeting have any employment, professional or consultancy relationship with Storebrand beyond their appointment to the Board of Directors. The backgrounds of the individual board members are described in the Chapter Board of
9. THE WORK OF THE BOARD OF DIRECTORS (NO DEVIATIONS FROM THE CODE OF PRACTICE)
More detailed information about the remuneration of executive personnel may be found in notes 24 (Group) and 6 (ASA) and in the Board’s statement on the fixing of salaries and other remuneration to executive personnel, which is included in the notice of the General Meeting and available at www.storebrand.no. Executive personnel are encouraged to hold shares in Storebrand ASA, even beyond the lock-in period.
As one of the largest investors in the Norwegian stock market, Storebrand has considerable potential in�uence over the development of listed companies. Storebrand attaches importance to exercising its ownership in listed companies on the basis of straightforward and consistent ownership principles that place considerable emphasis on sustainability. Storebrand applies the Norwegian Code of Practice for Corporate
Valuations associated with signi�cant accounting items and any changes to policies, etc., are described in a separate document (Valuation Items
Total other result elements that may be classi�ed to pro�t/loss 395 -796
Accounts receivable and other short-term receivables 31, 35 692 1 053
Net cash flow from operations before financial assets and banking customers 5,392 462
Note 1 – Company information and accounting policies 1. COMPANY INFORMATION
A large majority of the �nancial instruments are measured at fair value (the fair value option is used), whilst other �nancial instruments that are included in the categories Loans and receivables and Held to maturity are measured at amortised cost. Financial instruments measured at amortised cost are largely related to Norwegian pension liabilities with annual interest rate guarantee. In addition, the majority of loans are measured at amortised cost.
The Group’s presentation currency is Norwegian kroner. Foreign companies included in the Group which use a di�erent functional currency are translated into Norwegian kroner. The income statement �gures are translated using an average exchange rate for the year and the statement of �nancial position is translated using the exchange rate prevailing at the end of the �nancial year. As di�erences will arise between the
�nancial asset’s original e�ective interest rate (i.e. the e�ective interest rate calculated at initial recognition). The amount of the loss is recognised in the income statement.
Financial assets are classi�ed into one of the following categories: Financial assets held for trading.
IBNR are reserves for potential future payments when Storebrand has yet to be informed about whether an instance of disability, death or other instance entailing compensation has occurred. Since Storebrand is neither aware of the frequency nor the amount payable, IBNR is estimated using mathematical models based on historical information about the portfolio. Correspondingly, RBNS is a provision for potential future payments when Storebrand has knowledge of the incident, but has not settled the claim. Mathematical models based on historical information are also used to estimate the reserves.
Group. Employees who resign before reaching retirement age or leave the scheme will be issued ordinary paid-up policies. The paid-up policies that are included in technical insurance reserves are measured in accordance with the accounting standard IFRS 4.
A description of the most important elements and assessments in which discretion is used and which may in�uence recognised amounts or key
There will be some uncertainty associated with the pricing of �nancial instruments, particularly instruments that are not priced in an active market. This is particularly true for the types of securities priced on the basis of non-observable assumptions, and for these investments various valuation techniques are applied in order to �x fair value. These include private equity investments, investments in foreign properties, and other
Financial instruments valued at amortised cost are measured on the reporting date to see whether there is any objective evidence that a
The present value of pension obligations depends upon the �nancial and demographic assumptions used in the calculation. The assumptions must be realistic, mutually consistent and up to date as they should be based on a cohesive set of estimates about future �nancial performance.
AQQUISITION ANALYSIS SKAGEN NOK million Book value in the company Excess value upon acquistion Book value
Storebrand Livsforsikring has also taken over the company Silver AS, including the remaining portfolio of pension capital certi�cates and individual pension contracts with no guarantee. As a part of the administration solution, equity in Silver was written down to zero. Storebrand
The return guarantees in group pension insurance with a return guarantee must be priced upfront. The level of the return guarantee, the size of the bu�er capital (additional statutory reserves and unrealised gains), and the investment risk of the portfolio in which the pensions assets are invested determine the price that the customer pays for his or her return guarantee. Return guarantees are priced on the basis of the risk to which the equity is exposed. The insurance company bears all the downside risk and must carry reserves against the policy if the bu�er reserves are insu�cient or unavailable.
Livforsikring Group, these will not be included on this line in either the alternative income statement or in the Group’s income statement, but in the Group’s income statement will be included in the item, net income from �nancial assets and property for customers.
Continuous monitoring and active risk management are core areas of the Group’s activities and organisation. The basis for risk management is laid down in the Board’s annual review of the strategy and planning process, which sets the appetite for risk, risk targets and overriding risk limits for the operations. At the Storebrand group, responsibility for risk management and internal control is an integral part of management responsibility.
Operational risk is the risk of loss due to inadequate or failing internal processes or systems, human error or external events. The de�nition includes compliance risk: Compliance risk is the risk of loss or public sanctions as a result of non-compliance with external or internal rules.
Market risk means changes in the value of assets as a result of unexpected volatility or changes in prices on the �nancial markets. It also refers to the risk that the value of the insurance liability develops di�erently to that of the assets.
Nevertheless, changes in value do a�ect Storebrand’s pro�t indirectly. Income is based largely on the size of the reserves, while the costs tend to be �xed. Lower returns on the �nancial market than expected will therefore have a negative e�ect on Storebrand’s future income and pro�t.
The sensitivity assessment of properties applies both to investment properties and owner-occupied properties. The valuation of property is particularly sensitive to a change in the required rate of return and the expected future cash �ow. A change of 0.25 per cent in the required rate of return when everything else remains unchanged will result in a change in the value of Storebrand’s property portfolio of approximately 4.8 per cent.
Deferred tax assets 71 71 102 Risk equalisation reserve 143 143 140
Guaranteed pension: De�ned Bene�t (fee based) Storebrand Life Insurance -2,091 -4,097
Deductions are made to the termination pay for all work-related income, including fees from the provision of services, o�ces held, etc. The termination pay corresponds to the pensionable salary at the end of the employment, excluding any bonus schemes. The Chief Executive O�cer is entitled to 24 months of termination pay. Other executive vice presidents are entitled to 18 months of termination pay.
The equity includes a risk equalisation reserve, and tax deductions related to the build-up of this reserve are treated as a permanent di�erence between the �nancial and tax accounts (see further information on this under “Reconciliation of the Group’s equity”). Use of the fund will, in isolation, entail a higher e�ective tax rate.
The cash �ow is based on two elements, pro�t/loss after tax to equity and change in expected regulatory tying-up of capital. It is also assumed that all capital in addition to regulatory tied-up capital, can be withdrawn at the end of each period. For the period after 2020, a growth rate of 2.5 percent has been used for the retail market which is also included in the calculation of the terminal value. The required rate of return to equity is calculated based on the capital asset pricing model (CAPM). Long-term risk-free interest is set at the interest rate for 10 year Norwegian government bonds. The market’s risk premium is set at 4,5 percent and this is in line with the risk premium in the Norwegian market.
Applies to subsidiaries with a signi�cant minority, associated companies and joint ventures.
Includes lending to customers/liabilities to �nancial institutions classi�ed at fair value through pro�t and loss[14]
Includes lending to customers/liabilities to �nancial institutions classi�ed at fair value through pro�t and loss[17]
Storebrand ASA is the holding company of the Storebrand Group. The Storebrand Group is engaged in life and P&C insurance, banking and asset management, with insurance being the primary business. The �nancial statements of Storebrand ASA have accordingly been prepared in accordance with the Norwegian Accounting Act, generally accepted accounting policies in Norway, and the Norwegian Regulations relating to annual accounts for nonlife insurance companies. Storebrand ASA has used the simpli�ed IFRS provisions in the regulations for recognition and measurement.
Storebrand ASA is a holding company with subsidiaries in the �elds of insurance, banking and asset management. The layout plan in the
In the company’s accounts, investments in subsidiaries and associated companies are valued at the acquisition cost less any write-downs. The need to write down is assessed at the end of each accounting period. Storebrand ASA’s primary income is the return on capital invested in subsidiaries. Group contributions and dividends received in respect of these investments are therefore recorded as ordinary operating income.
Booked returns on assets managed by Storebrand Life Insurance were: 4,9% 6,4%
With e�ect from 2014 a new mortality basis, K2013, has been introduced for group pension insurance in life insurance companies and pension funds. Storebrand has used the mortality table K2013BE (best estimate) in the actuarial calculations at 31 December 2017.
Loans with �xed rates are hedged by interest swaps, which are booked at fair value through pro�t and loss. Changes in values of loans that can be related to the hedged risk are included in the carrying amount and included in the result.
The Storebrand Group has performed a tender process to obtain and evaluate offers and make a recommendation as to the election of the Storebrand Groups new auditor. The Storebrand Group has received offers from KPMG and PwC. Other relevant auditing companies have been prevented from participation in the process due to the regulatory requirements concerning auditor rotation, and the Norwegian Financial Supervisory Authority's regulations prohibiting an audit company to the assignment as external auditor directly following an assignment as internal auditor for the company in question.
According to the Financial Undertakings Act section 8-19, second paragraph, the Audit Committee shall provide a statement to the Board of Directors concerning the election of external auditor. Hence, the Audit Committee has reviewed the offers and has had meetings with the audit companies that have given an offer.
The Audit Committee finds that good offers have been presented. The evaluation has been performed according to the following main criterias: • Commercial considerations • Responsible partners and audit teams • Processes and digitization • Sustainability