The retirement age for some members of the senior group management is 62, the others have a retirement age of 70. Of the current members of the senior group management, four are members of the closed Norwegian defined-benefit pension scheme. Given the full earnings period, they are entitled to a pension of 70 per cent of final salary at the full vesting period of 30 years at age 67. Six members are part of the Company’s defined-contribution pension scheme. The Company continues a previously agreed individual pension agreement for one member of the senior group management.
The Board confirms that the guidelines on the remuneration of executive personnel for 2020 set out in last year’s statement have been complied with.
Janne Merethe Flessum, Executive Vice President 2,626.8 392.5 170.0 282.5 386.5 2,364 687 3,646 5,226
Lars Gøran Bjerklund, Executive Vice President 2,880.6 447.4 277.6 478.5 421.9 2,472 282 3,037 403
The Board Gisele Marchand, Chairman 8 733.9 2.5 1,481 John Giverholt 8 294.5 1.2 Per Arne Bjørge 8 321.2 1.8 Eivind Elnan 8 370.5 7.4 2,200 Hilde Merete Nafstad 8 413.9 2.5 2,946 Vibeke Krag 7, 8 445.2 2.5 1,500 Terje Seljeseth 8 400.2 2.5 Tor Magne Lønnum (25.5.20-31.12.20) 1 141.3 2.5 11,000 Gunnar Sellæg (25.5.20-31.12.20) 1 112.3 2.5 Gunnar Mjåtvedt, staff representative (25.5.20-31.12.20) 4, 8 285.2 Anne Marie Nyhammer, staff representative (25.5.20-31.12.20) 4 229.2 Lotte Kronholm Sjøberg, staff representative (25.5.20-31.12.20) 4, 8 334.0 Ellen Kristin Enger, staff representative (25.5.20-31.12.20) 1 112.3 1,005 Ruben Pettersen, staff representative (25.5.20-31.12.20) 1 141.3 202 Sebastian Buur Gabe Kristiansen, staff representative (1.9.20-31.12.20) 1 66.2 2.5 1 The stated remuneration applies to the period the individual in question has held the position/office. 2 Age 62, 100 per cent salary reducing gradually to 70 per cent at age 67 according to time of earning, then Gjensidige Forsikring's ordinary pension terms will take effect. 3 Age 62, 70 per cent salary until age 67 according to time of earning, then Gjensidige Forsikring's ordinary pension terms will take effect. 4 For staff representatives only remuneration for the current position is stated. 5 Earned variable salary includes expatriation allowance. 6 Including bonus shares in the share saving's programme for employees. See note 22 for terms and further description of the scheme. 7 Remuneration includes remuneration as Chairman in the Audit Committee honoured with NOK 166 thousand for 2020. 8 Remuneration includes remuneration in other committees. 9 Is only disclosed for persons who are in the senior group management at year end.
Aysegul Cin, Executive Vice President 5 2,524.9 560.1 351.5 185.3 360.1 707 707 1,489
Specification of tax expense Tax payable (1,623.2) (1,174.4) Correction previous years 52.6 74.9 Change in deferred tax 182.8 (98.1) Total tax expense (1,387.9) (1,197.6)
Deductible temporary differences Property, plant and equipment and intangible assets (14.1) Loans and receivables (31.5) (14.1) Provisions for liabilities (297.5) (296.9) Pension liabilities (332.8) (326.8) Other deductible temporary differences (46.3) Total deductible temporary differences (708.1) (651.9) Loss carried forward (95.2) (89.8) Net temporary differences 3,781.1 4,657.5
Net deferred tax liabilities 935.5 1,147.5 Of this non-assessed deferred tax assets 20.7 21.2 Deferred tax liabilities 956.2 1,168.6
Reconciliation of tax expense Profit before tax expense 6,341.7 7,753.8 Estimated tax of profit before tax expense (25%) (1,585.4) (1,938.4)
Tax effect of Different tax rate in foreign subsidiaries 7.9 6.9 Valuation allowance and reversal of loss carried forward in subsidiaries 2.8 Dividend received 1.9 1.8 Tax exempted income and expenses 46.3 573.9 Tax on interest on Perpetual Tier 1 capital 11.6 12.8 Associates and joint ventures 84.7 77.3 Non-tax-deductible expenses (7.5) (9.6) Correction previous years 52.6 74.9 Total tax expense (1,387.8) (1,197.6) Effective rate of income tax 21.9% 15.4%
Change in deferred tax Deferred tax liabilities as at 1 January 1,147.5 1,079.9 Change in deferred tax recognised in profit or loss continuing operations (182.8) 98.1
Change in deferred tax recognised directly in the balance sheet Adjustment related to merger with Nykredit and Mølholm (0.9) Adjustment on initial application of IFRS 16 (20.1) Net deferred tax liabilities as at 31 December 935.5 1,147.5
Tax recognised in other comprehensive income Deferred tax pensions 28.1 29.3 Tax payable on exchange rate differences (67.2) 17.1 Total tax recognised in other comprehensive income (39.1) 46.4
The appeal was processed by the Tax Appeal Board on 27th January 2020 but was not accepted. For Gjensidige's part, the tribunal's decision entails a reduction of tax payable for 2010 by NOK 42.4 million. If the increased depreciation basis in the decision is used as a basis for the following years, this results in a further reduction in tax payable by approximately NOK 140 million.
Gjensidige has both defined contribution and defined benefit plans for its employees. The defined benefit plan has been placed in a separate pension fund and is closed to new employees. New employees become members of the defined contribution pension plan.
Risk The risk in the net pension liability is a combination of the pension plan itself, the pension liability, pension assets, financing level and the co-variation between pension liabilities and pension assets.
Interest rate risk The pension assets’ exposure to interest rate risk is deemed to be moderate because the market value-weighted duration is approximately 4.7 years (3.6). The portfolio value will fall by approximately 4.7 per cent in the event of a parallel shift in the yield curve of plus one percentage point.
Interest cost 45.2 12.3 57.6 59.8 15.1 75.0 Actuarial gains and losses 241.7 120.4 362.1 146.5 62.5 209.0 Benefits paid (117.0) (34.5) (151.5) (112.9) (34.5) (147.4) Employers' national insurance contributions of benefits paid (17.6) (6.4) (23.9) (26.9) (6.3) (33.2)
Pension expense recognised in profit or loss Current service cost 25.6 10.1 35.6 25.1 9.8 34.9 Interest cost 45.2 12.3 57.6 59.8 15.1 75.0 Interest income (52.2) (52.2) (64.5) (64.5) Employers' national insurance contributions 4.9 1.9 6.8 4.8 1.9 6.7 Defined benefit pension cost 23.4 24.3 47.8 25.2 26.8 52.0
Cumulative amount as at 1 January (2,802.9) (2,691.7) Return on plan assets 175.8 41.0 Changes in demographic assumptions (136.5) (134.4) Changes in financial assumptions (225.6) (74.6) The effect of the asset ceiling 73.6 50.9 Other changes 6.0 Exchange rate differences 0.6 Cumulative amount as at 31 December (2,914.8) (2,802.9)
The effect of the asset ceiling Cumulative amount as at 1 January 73.6 124.6 Change in the effect of the asset ceiling (73.6) (50.9) Cumulative amount as at 31 December 73.6
Other specifications Amount recognised as expense for the defined contribution plan 226.1 209.0
Expected contribution to the defined benefit plan for the next year 94.7 145.1 1 Future salary increases represent our expected average future salary increase for the industry. Since Gjensidige has a closed plan, average future salary increase for Gjensidige's population is 0.83 per cent (1.55). See explanation under Actuarial assumptions.
Shares and similar interests 499.9 499.9 Bonds 2,017.3 2,017.3 Loans, receivables and bank deposits 33.2 33.2 Total 2,550.4 2,550.4
Shares and similar interests 201.8 201.8 Bonds 2,086.5 2,086.5 Derivatives 58.7 58.7 Total 2,347.0 2,347.0
Cost As at 1 January 2019 3,840.7 1,422.3 1,534.3 903.2 7,700.5 Additions 229.3 9.8 239.2 Additions through business combinations 87.4 87.4 Additions from internal development 2.7 2.7 Disposals/reclassifications (33.8) (507.1) (57.7) (598.6) Exchange differences (24.0) (10.5) (6.0) (12.6) (53.1) As at 31 December 2019 3,816.7 1,465.4 1,253.2 842.7 7,378.0 Uncompleted projects 304.7 304.7 As at 31 December 2019, including uncompleted projects 3,816.7 1,465.4 1,557.9 842.7 7,682.7
Carrying amount As at 1 January 2019 3,577.0 231.5 791.2 265.3 4,865.2 As at 31 December 2019 3,554.6 160.3 796.7 167.9 4,679.4
Amortisation and impairment losses As at 1 January 2020 (262.2) (1,305.1) (761.2) (674.9) (3,003.3) Amortisation (89.0) (236.3) (108.3) (433.6) Disposals/reclassifications 495.8 579.8 1,075.7 Exchange differences (11.3) (89.6) (15.4) (47.8) (164.1) As at 31 December 2020 (273.5) (987.8) (433.1) (831.0) (2,525.4)
Carrying amount As at 1 January 2020 3,554.6 160.3 796.7 167.9 4,679.4 As at 31 December 2020 3,773.4 74.7 966.5 91.2 4,905.9
The Group’s intangible assets are either acquired or internally developed. Goodwill, customer relationships, trademarks and parts of other intangible assets are all acquired through business combinations, and are a result of a purchase price allocation of initial cost of the acquisition. Software is developed for use in the insurance business. External and internal assistance used in relation with implementation or substantial upgrade of software, including adjustment of standard systems, are capitalized as intangible assets. Amortisation is included in the accounting line Expenses.
Level of combined ratio (CR) The expected CR level is both in the growth period and when estimating the terminal value considered to be from 85.3 to 97.0.
CR-level when calculating terminal value General Insurance Denmark 85,3-89,1 % 90,0 % General Insurance Sweden 91,1-97,0 % 91,1 % General Insurance Private 86,0-88,8 % 88,6 % General Insurance Baltics 91,0-97,0 % 92,0 %
Growth rate in terminal value calculation The growth rate is determined to 2.5 per cent in Scandinavia and 3.0 per cent in Baltics. This is the same growth as in 2019. The growth rate corresponds to the best estimate of long-term nominal GDP growth for the various countries and represents the expectations for growth in the various insurance markets.
compared to expected next 3 years CR increases by 2% next 3 years
Gjensidige Forsikring Group 12. Owner-occupied and right-off-use property, plant and equipment
Cost As at 1 January 2020 30.9 1,190.5 445.6 17.2 1,684.2 Additions 0.6 85.8 43.3 3.6 133.3 Disposals (1.1) (65.2) (125.1) (6.9) (198.2) Exchange differences 0.2 24.0 6.7 0.6 31.4 As at 31 December 2020 30.6 1,235.2 370.5 14.4 1,650.6 Uncompleted projects 76.5 76.5 As at 31 December 2020, including uncompleted projects 30.6 1,235.2 447.0 14.4 1,727.1
Gjensidige has assessed the consequences of Covid-19 in valuing owner-occupied and right-to-use property, plant and equipment, without having found a need for write-downs of any of the values.
Undiscounted lease liability and maturity of cash flows Less than 1 year 196.6 195.9 1-2 years 182.7 188.3 2-3 years 161.8 172.6 3-4 years 133.4 153.1 4-5 years 129.2 126.4 More than 5 years 300.9 397.4 Total undiscounted lease liability as at 31 December 1,104.5 1,233.7
Gjensidige has recognised its lease liabilities at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate at the date of initial application, as well as the recognition of related right-of-use assets to an amount corresponding to the lease liability according to the modified retrospective approach. However, for the largest rental agreements in Norway, Sweden and Denmark, Gjensidige chose as at 1. January 2019 to recognise the right-ofuse asset at the carrying amount as if the standard had been applied since the commencement date but discounted using the lessee’s incremental borrowing rate at the date of initial application. Transaction costs were not included.
• Loan funds containing secured debt and real estate funds. The funds are valued based on reported NAV values as reported by the fund administrators. Because of late reporting from the funds, the NAV values from the previous quarterly reporting are used in estimating fair value.
Financial assets held to maturity Bonds held to maturity 151.9 153.0 210.7 212.1
Loans and receivables Bonds and other fixed income securities classified as loans and receivables 15 20,927.0 22,300.8 19,951.8 20,598.9 Loans 2,371.5 2,371.5 2,410.8 2,410.8 Receivables related to direct operations and reinsurance 7,702.7 7,702.7 7,097.6 7,097.6 Other receivables 15 565.0 565.0 1,192.0 1,192.0 Cash and cash equivalents 2,861.1 2,861.1 2,419.5 2,419.5
Debt in life insurance with investment options 34,586.4 34,586.4 29,989.4 29,989.4
Financial assets Financial derivatives Financial derivatives at fair value through profit or loss 1,291.2 1,291.2 Financial derivatives subject to hedge accounting 3.2 3.2
Financial liabilities at fair value through profit or loss, designated upon initial recognition Interest-bearing liabilities at fair value through profit or loss Liabilities in life insurance with investment options 34,586.4 34,586.4
Financial assets at fair value through profit or loss, designated upon initial recognition Shares and similar interests 69.2 5,176.0 1,306.3 6,551.6 Bonds and other fixed income securities 10,783.6 19,500.1 708.6 30,992.4 Shares and similar interests in life insurance with investment options 1 25,792.8 25,792.8 Bonds and other fixed income securities in life insurance with investment options 1 4,196.5 4,196.5 Loans 2.2 2.2
Financial liabilities at fair value through profit or loss, designated upon initial recognition Interest-bearing liabilities at fair value through profit or loss Liabilities in life insurance with investment options 1 29,989.4 29,989.4
Shares and similar interests 1,306.3 (126.9) 164.8 (66.4) 0.4 1,278.2 (126.9) Bonds and other fixed income securities 708.6 (19.1) (469.2) 57.7 277.9 Loans at fair value 2.2 1.6 (1.9) 1.9 1.8 Total 2,017.1 (144.4) 164.8 (537.6) 58.1 1,558.0 (125.1)
Perpetual Tier 1 capital ¹ 1,002.3 1,002.2 Subordinated debt 1,498.4 0.4 1,498.8
Hedge accounting Net investment in the foreign operation Gjensidige Forsikring started hedge accounting of currency exchange differences on the part of the net investment in ADB Gjensidige from May 2020. The net investments were hedged through designated currency-related contracts that were renewed every quarter at a principal equal to the amount set to hedge the investment. The amount is currently at 30 MEUR. The credit risk associated with the hedging derivatives was within the limits of Gjensidige's credit policy.
Net investment in the foreign operation Market value as at 31.12.2020
Shares and similar interests owned by branches Shares and similar interests owned by Gjensidige Forsikring ASA, Danish branch 7.1 Total shares and similar interests owned by branches 7.1
Total shares and similar interests owned by Gjensidige Forsikring ASA 5,522.4
Shares and similar interests owned by other group companies Shares and similar interests owned by Gjensidige Pensjonsforsikring AS 3.7 Total shares and similar interests owned by other group companies 3.7
Total shares and similar interests owned by the Gjensidige Forsikring Group 5,526.1 15. Loans and receivables
Loans and receivables Bonds classified as loans and receivables 20,927.0 19,951.8 Other loans 7.7 11.5 Total loans and receivables 20,934.7 19,963.3
Other receivables Receivables in relation with asset management 359.0 918.6 Other receivables and assets 206.0 273.4 Total other receivables 565.0 1,192.0
Claims and claims handling costs Claims reported and claims handling costs 14,179.3 (613.5) 13,565.8 13,835.4 (374.6) 13,460.8 Claims incurred, but not reported 13,985.6 (2.0) 13,983.6 15,520.4 (163.8) 15,356.6 Total as at 1 January 28,164.8 (615.5) 27,549.4 29,355.8 (538.4) 28,817.4
Increase in liabilities Arising from current year claims 19,583.6 (342.5) 19,241.1 21,429.8 (306.3) 21,123.6 - of this paid (11,741.0) 547.3 (11,193.7) (13,975.2) 225.2 (13,750.0) Arising from prior years (run-off) (1,076.7) (45.6) (1,122.3) (1,252.1) (111.1) (1,363.2) Other changes, including effects from discounting 176.0 176.0 231.4 231.4 Transfer of pension savings 2 (2,143.7) (20.3) (2,164.0) Exchange differences 714.6 (48.4) 666.2 (110.0) 16.2 (93.9) Total as at 31 December 28,534.3 (543.8) 27,990.6 28,164.9 (615.5) 27,549.4
Claims reported and claims handling costs 12,464.7 (543.8) 11,921.0 14,179.3 (613.5) 13,565.8 Claims incurred, but not reported 16,069.6 16,069.6 13,985.6 (2.0) 13,983.6 Total as at 31 December 28,534.4 (543.8) 27,990.6 28,164.8 (615.5) 27,549.4
Provisions for unearned premiums in general insurance As at 1 January 10,499.1 (45.2) 10,453.9 10,051.0 (42.4) 10,008.6 Increase in the period 28,370.2 (630.8) 27,739.5 25,858.1 (724.9) 25,133.2 Release in the period (27,788.4) 634.0 (27,154.4) (25,371.9) 721.5 (24,650.4) Exchange differences 233.6 (1.5) 232.1 (38.1) 0.6 (37.5) Total as at 31 December 11,314.6 (43.4) 11,271.2 10,499.1 (45.2) 10,453.9 1 For own account. 2 According to new Norwegian Financial Reporting Regulations for Life Insurance Companies, claims provision is reclassified to premium reserve. Accordingly 2020 includes only general insurance.
The reason why the claims provisions for annuities are discounted is due to very long cash flows and substantial future interest income. The claims for workers’ compensation in Denmark are paid either as annuities or as lump-sum indemnities (which are calculated mainly as discounted annuities). Therefore, it is most expedient to regard the whole portfolio as annuities. For Swedish and Baltic bodily injuries for motor insurance are paid as lifelong annuities. The discount rate used is the swap rate.
Over the next two years, average annual run-off gains are expected to be around NOK 1,000 million, moving the expected reported combined ratio to the lower end of the 86-89 corridor (undiscounted).
Other provisions and liabilities Restructuring costs 1 68.9 74.4 Other provisions 2 231.8 222.9 Total other provisions and liabilities 300.7 297.3
Other financial liabilites Outstanding accounts Fire Mutuals 48.2 32.6 Accounts payable 234.7 216.3 Liabilities to public authorities 289.4 271.5 Motor insurance tax to Norwegian Motor Insurers’ Bureau (TFF) 1,651.9 1,617.5 Other liabilities 553.2 597.5 Total other financial liabilities 2,777.3 2,735.4
Other related parties / cooperating companies 1 Fire Mutuals All over the country, Norway Gjensidige Pensjonskasse Oslo, Norway 94.7 %
Transactions Income statement The table below shows transactions the parent company has with related parties recognised in the income statement.
Earned premiums written and gross claims 32.8 45.7 28.1 50.0 Administration expenses 2 175.0 927.6 325.1 392.5 Interest income and expenses 44.5 60.4 Gain and losses on sale and impairment losses on subsidiaries and liquidation of subsidiaries 5.6 3,093.3 153.2 2 The increase in administration expenses in 2020 is mainly due to ICT deliveries from the newly established subsidiary Gjensidige Business Services AB.
Guarantees Gjensidige Forsikring ASA is responsible externally for any insurance claim arising from the cooperating mutual fire insurers' fire insurance business, see note 21.
Transactions with related parties that are defined as core business (reinsurance, distribution, claims handling) are priced based on market prices. Group functions of a purely administrative nature (such as IT, purchasing, accounting) are priced based on the cost-plus method.
As part of its ongoing financial management, Gjensidige has undertaken to invest up to NOK 582.8 million (590.5) in loan funds containing senior secured debt and various private equity and real estate investments, over and above amounts recognized in the balance sheet.
22. Share-based payment Description of the share-based payment arrangements As at 31 December 2020, Gjensidige has the following sharebased payment arrangements: Share-based remuneration for executive personnel with settlement in equity and cash (remuneration scheme) Gjensidige has established equity-settled share-based payment for the group management and more explicitly defined executive personnel.
The fair value at the grant date is measured based on the market price. The amount is recognised as payroll expenses at grant date with a corresponding increase in other paid-in equity, both for the part that is settled in shares and for the part that is settled in cash to cover the tax obligations. No specific companyrelated or market-related entitlement criteria apply to the shares, but the Company may carry out a reassessment if subsequent results and development suggest that the bonus was based on incorrect assumptions. The expected allocation is set to 100 per cent. No adjustment is made to the value of the cash-settled share based on the share price at the reporting date. The number of shares is adjusted for dividend paid.
Equity-settled share savings program for employees Gjensidige has established a share savings programme for employees of the Group with the exception of employees of Gjensidige Baltic. All employees are given an opportunity to save an annual amount of up to NOK 90,000. Saving take the form of fixed deductions from salary that is used to buy shares four times a year. The employees are offered a discount in the form of a contribution of 25 per cent, limited upwards to NOK 7,500 kroner per year, which corresponds to the maximum taxexempt discount. Employees will receive one bonus share for every four shares they have owned for more than two years, provided that they are still employed by the Company or have become retired. No other vesting conditions exists in this arrangement.
The number of bonus shares Outstanding 1 January 95,154 99,015 Granted during the period 48,196 46,419 Forfeited during the period (2,751) (9,602) Released during the period (44,940) (36,654) Cancelled during the period (4,680) (4,024) Outstanding 31 December 90,979 95,154 Exercisable 31 December 0 0
The number of shares Outstanding 1 January 38,453 34,672 53,940 48,411 Granted during the period 19,931 18,284 25,121 22,518 Transferred in/out during the period (14,535) (12,826) Exercised during the period (19,495) (17,546) (28,343) (25,583) Modification dividend during the period 2,556 2,324 2,270 2,152 Outstanding 31 December 41,445 37,734 38,453 34,672 Exercisable 31 December 0 0 0 0
Gjensidige Forsikring Group 23. Events after the balance sheet date At a board meeting on 21 January 2021, it was decided to distribute a dividend of NOK 2.40 per share, a total of NOK 1.2 billion, based on the board's authorisation. The dividend is related to the 2019 accounts and constitutes payment of surplus capital. The payment was made on 4 February 2021.
Profit/(loss) for the year for continuing and discontinued operations 4,953.8 6,593.7 Profit/(loss) for the year for continuing operations 4,953.8 6,556.1
Weighted average number of shares 1 499,988,919 499,983,151 Weighted average number of shares share-based payment 107,145 110,456 Weighted average number of shares, diluted 1 500,096,064 500,093,607
Earnings per share from continuing and discontinued operations (NOK), basis 9.91 13.19 Earnings per share from continuing and discontinued operations (NOK), diluted 9.91 13.18
Earnings per share from continuing operations (NOK), basis 9.91 13.11 Earnings per share from continuing operations (NOK), diluted 9.91 13.11 1 Holdings of own shares are not included in the calculations of the number of shares.
Claims Gross claims 4 (17,765.7) (16,662.5) Claims, reinsurers' share 399.4 412.6 Total claims incurred, net of reinsurance (17,366.3) (16,249.9)
Received commission for ceded reinsurance and profit share 9.8 45.2 Total insurance-related operating expenses (3,738.5) (3,499.3)
Other comprehensive income that may be reclassified to profit or loss Exchange differences from foreign operations 334.9 (65.1) Tax on items that may be reclassified to profit or loss 9 (64.9) 17.1 Total other comprehensive income that may be reclassified to profit or loss 270.0 (48.0)
Assets Goodwill 3,131.1 2,950.1 Other intangible assets 546.1 1,026.0 Total intangible assets 11 3,677.2 3,976.2
Investments Buildings and other real estate Owner-occupied property 12 28.5 28.5 Right-of-use property 12 831.6 966.7 Subsidiaries and associates Shares in subsidiaries 5 2,498.4 2,063.8 Shares in associates and joint ventures 5 1,086.9 1,086.9 Interest-bearing receivables on subsidiaries and joint ventures 13, 20 2,365.6 2,401.4 Financial assets measured at amortised cost Loans and receivables 13, 15 15,214.1 14,714.8 Financial assets measured at fair value Shares and similar interests (incl. shares and similar interests measured at cost) 13, 14 5,522.4 6,545.3 Bonds and other fixed-income securities 13 28,245.9 28,446.3 Subordinated loans 13 1.9 2.2 Financial derivatives 13 1,294.3 934.1 Other investments 13 111.0 111.0 Total investments 57,200.7 57,301.0
Other assets Plant and equipment 12 111.1 189.8 Cash and cash equivalents 13 2,365.0 1,796.1 Pension assets 10 336.1 241.8 Total other assets 2,812.1 2,227.6
Retained equity Funds etc. Natural perils capital 2,612.9 2,676.3 Guarantee scheme provision 715.5 676.3 Other retained earnings 11,201.4 11,459.6 Total retained earnings 14,529.9 14,812.2
Adjustment due to amendment to IFRS 2 (61.4) (61.4) Merger losses (65.7) (65.7)
Transactions with the owners of the company Own shares 0.0 (9.2) (9.2) Dividend (6,124.9) (6,124.9) Equity-settled share-based payment transactions 9.2 9.2 Perpetual Tier 1 capital 0.6 (0.6) Perpetual Tier 1 capital - interest paid (50.1) (50.1) Total transactions with the owners of the company 0.0 9.2 (49.5) (6,134.8) (6,175.1)
Cash flow from investing activities Net receipts/payments from sale/acquisition of subsidiaries, associates and joint ventures 5,576.1 Net receipts/payments on sale/acquisition of owner-occupied property, plant and equipment and intangible assets 149.0 (397.1)
Cash flow from financing activities Payment of dividend (6,124.9) (3,549.9) Net receipts/payments on subordinated debt incl. interest (33.7) (34.2) Net receipts/payments on loans between Group companies (6.8) Payments regarding intra-group equity transactions (434.9) (208.1) Net receipts/payments on sale/acquisition of own shares (13.0) (9.2) Repayment of lease liabilities (163.3) (146.0) Payment of interest related to lease liabilities (28.1) (30.4) Tier 1 interest payments (46.5) (50.9) Net cash flow from financing activities (6,851.1) (4,028.6)
Cash and cash equivalents at the start of the year 1,796.1 1,656.4 Adjustment to cash and cash equivalents at the start of the year due to merger 100.5 Adjusted cash and cash equivalents at the start of the year 1,796.1 1,756.9 Net cash flow 539.2 44.4 Effect of exchange rate changes on cash and cash equivalents 29.7 (5.2) Cash and cash equivalents at the end of the year ¹ 2,365.0 1,796.1
Reconciliation of changes in liabilities from financing activities is found in note 13.
Notes 1. Accounting policies Reporting entity Gjensidige Forsikring ASA is a publicly listed company domiciled in Norway. Gjensidige’s head office is located at Schweigaardsgate 21, Oslo, Norway. The activities of Gjensidige consist of general insurance. Gjensidige does business in Norway, Sweden and Denmark.
New standards adopted Gjensidige has not implemented any new standards with effect from 1 January 2020.
At the end of each subsequent reporting period the carrying amount of a group of insurance contracts is remeasured to be the sum of: • the liability for remaing coverage; which comprices the fulfilment cash flows related to future services and the CSM at that date; • and the liability for incurred claims, which is measured as the fulfilment cash flows related to past services at that date.
IASB has decided to defer the effective date of IFRS 17 to the reporting period beginning on January 1 2023.
Based on our preliminary assessments and on the basis of Gjensidige’s current operations, other amendments to standards and interpretation statements will not have a significant effect.
Segment reporting The operating segments are determined based on Gjensidige’s internal organisational management structure and the internal financial reporting structure to the chief operating decision maker. In Gjensidige Forsikring Group, the Senior Group Management is responsible for evaluating and following up the performance of the segments and is considered the chief operating decision maker. Gjensidige reports on four operating segments, General insurance Private, General insurance Commercial, General insurance Denmark and General insurance Sweden, which are independently managed by managers responsible for the respective segments depending on the products and services offered, distribution and settlement channels, brands and customer profiles. Identification of the segments is based on the existence of segment managers who report directly to the Senior Group Management/CEO and who are responsible for the performance of the segment under their charge. Segment information is shown in note 4 in the consolidated financial statements.
Cash and bank deposits with maturity less than three months ahead are considered cash. Certificates and bonds with a similar short residual maturity are not classified as cash equivalents.
Insurance-related operating expenses Insurance-related operating expenses consist of insurancerelated administration expenses including commissions for
Tangible assets Owner-occupied property, plant and equipment Recognition and measurement Items of owner-occupied property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the item. In cases where equipment or significant items have different useful lives, they are accounted for as separate components.
The interest effect of discounting the lease liability is presented separately from the depreciation charge for the right-of-use asset. The depreciation expense is presented with other depreciations, whereas the interest effect of discounting is presented in the line Administration expenses related to investments, including interest expenses.
Transaction expenses are recognised in profit or loss when they incur. Financial assets at fair value through profit or loss are measured at fair value at the reporting date. Changes in fair value are recognised in profit or loss.
The category at fair value through profit or loss comprise the classes shares and similar interests, subordinated loans and bonds and other fixed income assets.
The category financial liabilities at amortised cost comprises subordinated debt, interest-bearing liabilities, other financial liabilities, liabilities related to direct insurance and reinsurance and liabilities within Gjensidige.
If there is objective evidence that the asset is impaired, impairment loss is calculated as the difference between the carrying amount of the asset and the present value of estimated future cash flows discounted at the original effective interest rate. The loss is recognised in profit or loss.
Impairment losses are reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. The reversal shall not result in the carrying amount of the financial asset exceeding the amount of the amortised
cost if the impairment had not been recognised at the time the loss was reversed. Reversal of previous losses on impairment is recognised in profit or loss.
See note 22 for a further description of Gjensidige’s share-based payment arrangements and their measurements method.
3. Risk and capital management For information about insurance and financial risk please refer to note 3 in the consolidated financial statements that cover both
Premiums written Gross - direct business and accepted proportional reinsurance 27,034.0 Gross – accepted non-proportional reinsurance 10.1 20.8 1.1 129.5 161.4 Reinsurers' share (2.9) (620.0) Net 10.1 20.8 1.1 126.6 26,575.5
Claims incurred Gross - direct business and accepted proportional reinsurance (17,655.9) Gross – accepted non-proportional reinsurance (12.5) (23.9) (0.3) (73.1) (109.8) Reinsurers' share 0.1 1.5 399.4 Net (12.5) (23.9) (0.3) (71.6) (17,366.3)
Gross claims incurred (12.5) (23.9) (0.3) (73.1) (17,765.7) Incurred during the year (45.5) (6.3) (75.4) (18,852.1) Incurred previous years 33.0 (17.6) (0.3) 2.3 1,086.4
Provision for unearned premiums, gross 10,792.9 Claims provision, gross 43.8 57.6 1.4 135.9 28,097.3
Breakdown of revenue by geographical area Gross premium written direct business 19,517.2 1,701.3 5,964.0 5. Shares in subsidiaries and joint ventures
Subsidiaries Gjensidige Norge AS Oslo, Norway 100% 195.7 0.2 195.7 0.2 Gjensidige Pensjonsforsikring AS Oslo, Norway 100% 681.9 681.9 681.9 681.9 Samtrygd AS Oslo, Norway 100% 1.3 0.1 1.3 0.1 Lokal Forsikring AS Oslo, Norway 100% 31.4 7.8 31.4 7.8
Gjensidige Business Services AB Stockholm, Sweden 100% 668.0 668.0 231.0 231.0
Gjensidige Tech AS (former Gjensidige Bolighandel AS) (liquidated 2020) Oslo, Norway 100% 140.3 2.4
Joint ventures Oslo Areal AS Oslo, Norway 50% 1,086.9 1,086.9 1,086.9 1,086.9
Subsidiaries - additional information Gjensidige Norge AS 0.2 0.2 Gjensidige Pensjonsforsikring AS 38,815.6 902.2 37,913.4 1,047.2 148.3 Samtrygd AS 0.1 0.1 Lokal Forsikring AS 7.9 7.8 0.1 Försäkringshuset Amb & Rosèn AB 2.5 2.5 1.2 NAF Forsikringsformidling AS (liquidated 2019) 0.2 Gjensidige Business Services AB 235.5 233.9 1.5 (0.7) ADB Gjensidige 1,817.5 555.0 1,262.5 1,127.1 68.6 Gjensidige Tech AS (former Gjensidige Bolighandel AS) 9.6 8.5 1.1 2.1 (27.6) Ejendomsselskabet Krumtappen 2 A/S 1.4 1.4 Vardia Försäkring AB 18.7 15.7 3.0 Försäkringsakademin JW AB 16.6 15.8 0.8 0.6 Certes Sak AB 5.5 5.5 0.2 Total subsidiaries 40,931.1 1,748.7 39,182.4 2,176.5 190.7
Gjensidige and AMF Pensionsforsäkring (AMF) owns Oslo Areal AS as a joint venture (50/50), as each party has rights to its share of the net assets of the arrangement. The parties will make joint investments in the Norwegian real estate market through Oslo Areal. The investment is recognised at cost of NOK 1.1 billion at year end. Gjensidige Forsikring has granted a loan to Oslo Areal amounting to NOK 2.4 billion at year end. The loan is interest-bearing and total loan limit is NOK 4.0 billion.
Net income and gains/(losses) from investments in subsidiaries, associated companies and joint ventures Income from investments in subsidiaries, associated companies and joint ventures 0.2 Impairment on investments in subsidiaries, associated companies and joint ventures 5.6 (153.2) Net gains/(losses) from sale of investments in subsidiaries, associated companies and joint ventures 3,093.1 Total net income and gains/(losses) from investments in subsidiaries, associated companies and joint ventures 5.6 2,940.1
Net income and gains/(losses) from financial assets at fair value through profit or loss, designated upon initial recognition
Total net income and gains/(losses) from financial assets at fair value through profit or loss, designated upon initial recognition 632.4 1,409.8
Net income and gains/(losses) from bonds held to maturity Net interest income from bonds held to maturity 0.5 Total net income and gains/(losses) from bonds held to maturity 0.5
Specifications Interest income and expenses from financial assets and liabilities not recognised at fair value through profit or loss Total interest income from financial assets not recognised at fair value through profit or loss 574.6 837.9 Total interest expenses from financial assets not recognised at fair value through profit or loss (29.6) (39.4) Specification of other financially related income and expenses not recognised in net income from investments Net interest from bank deposits and subordinated loan classified as other income and other expenses (26.8) (25.8)
Employee benefit expenses Wages and salaries 2,154.4 1,980.1 Social security cost 506.6 481.8 Pension cost - defined contribution plan (note 10) 218.8 203.9 Pension cost - multi-employer plan (AFP) (note 10) 21.4 22.7 Pension cost - defined benefit plan (note 10) 46.5 51.0 Share-based payment (note 22) 16.0 11.6 Total employee benefit expenses 2,963.7 2,751.1
Auditor's fee (incl. VAT) Statutory audit 4.3 3.5 Other assurance services 0.1 0.1 Other non-assurance services 0.9 0.7 Tax consultant services 0.1 0.6 Total auditor's fee (incl. VAT) 5.5 4.9 1 Other expenses include cost reductions for Gjensidige Forsikring ASA regarding duties performed for subsidiaries and cost allocations to claims and finance.
Guidelines for remuneration and career development shall be linked to achievement of the Group’s strategic and financial goals and core values, and both quantitative and qualitative targets shall be taken into consideration. The measurement criteria shall promote the desired corporate culture and longterm value creation, and, as far as possible, take actual capital costs into account. The remuneration system shall contribute to promoting and providing incentives for good risk management, sustainable value creation, prevent excessive risk-taking and contribute to avoiding conflicts of interest. A fixed basic salary shall be the main element of the overall remuneration, which also consists of variable remuneration, pension, insurance and payments in kind. Variable remuneration shall be used to reward performances that is agreed through performance agreements or that exceeds expectations, where both results and behaviour in form of compliance with the core values, brand and management principles are to be assessed.
The overall remuneration is decided on the basis of the need to offer competitive terms in the various business areas. It shall contribute to attracting and retaining executive personnel with the desired expertise and experience who promote the Group’s core values and development.
The senior group management Helge Leiro Baastad, CEO 5,534.2 1,300.7 179.2 2,101.8 1,303.7 8,150 7,723 15,330 65,383 2
Kaare Østgaard, Executive Vice President (1.1.20-1.6.20) 1 1,252.3 25.4 91.0 333.9 6.2 2,800 2,420 5,218 3
Rene Fløystøl, Executive Vice President (1.6.20-31.12.20) 1 1,512.2 309.2 99.4 105.0 316.7 50 59 111 3,286
Specification of tax expense Tax payable (1,569.4) (1,117.0) Correction previous years 52.6 74.9 Change in deferred tax 166.1 (111.5) Total tax expense (1,350.7) (1,153.6)
Tax effect of Dividend received 1.9 1.8 Tax exempted income and expenses 46.6 912.8 Tax on interest on Perpetual Tier 1 capital 11.6 12.8 Non-tax-deductible expenses (2.3) (3.5) Profit with lower tax rate (1.1) 1.1 Correction previous years 52.6 74.9 Total tax expense (1,350.7) (1,153.6) Effective rate of income tax 23.1% 13.4%
Change in deferred tax recognised in other comprenehsive income Pensions (27.4) (29.1) Exchange differences 2.0 (0.3)
Change in deferred tax recognised directly in the balance sheet Adjustment related to merger with Nykredit and Mølholm 40.5 Adjustment related change in excess value/cost of shares Mølholm (0.9) Adjustment related to initial application of IFRS 16 (20.1) Net deferred tax liabilities as at 31 December 1,198.9 1,391.4
decrease in tax payable. In February 2015, Gjensidige received a decision from the Central Tax Office for Large Enterprises in connection with the calculation of a tax gain as a result of the conversion of Gjensidige Forsikring BA into a public limited company (ASA) in 2010. The decision meant an increase in the taxable basis for depreciation and thus reduced the tax payable for 2010 and the following years. Gjensidigestiftelsen received a similar decision, and appealed the decision on the grounds that there was no basis for the change and that the tax office had based its decision on an incorrect valuation. Gjensidige decided to join the complaint.
Gjensidige has not yet recognised a reduction in tax payable for the years 2011-2020 in the accounts.
The defined contribution plan is a post-employment benefit plan under which Gjensidige pays fixed contributions into a separate entity and there is no legal or constructive obligation to pay further amounts. The rates are seven per cent of earnings between 0 and 7.1 times the National Insurance basic amount (G) and 20 per cent of earnings between 7.1 and 12 G.
Gjensidige Forsikring’s branches and some of its subsidiaries have a defined contribution pension plan corresponding to the plan in Gjensidige Forsikring in Norway.
The defined benefit plan is a post-employment benefit plan that entitles employees to contractual future pension benefits. Disability pension, spouse/cohabitant pension and child’s pension are also included in the plan subject to more detailed rules.
Actuarial assumptions Actuarial assumptions are shown in the table. The discount rate is the assumption that has the greatest impact on the value of the pension liability. Wage growth, pension increases, and the adjustment of the National Insurance basic amount are based on historical observations and expected future inflation. Wage growth is set at 2.7 per cent (3.1) and is adjusted for age based on a decreasing trend. The year-on-year nominal wage growth 2020/21 is calculated to be 0.83 per cent (1.55). The reason for the low wage growth is that the pension plan is closed to new members and that the average age of employee members is 58.2 years (57.9).
Equity and real estate risk The pension assets are exposed to the stock market and the real estate market through equity funds and real estate funds. At the end of the year, the exposure was 19.6 per cent, divided into 11.9 per cent shares and 7.7 per cent in real estate.
Private collective pension (AFP) As a member of Finance Norway, Gjensidige has a collective (AFP) pension agreement for its employees. AFP is a defined benefit scheme funded jointly by many employers. The administrator of the pension plan has not presented calculations that allocate the pension assets or liabilities in the plans to the individual member enterprises. Gjensidige therefore recognises the plan as a defined contribution plan.
Present value of the defined benefit obligation As at 1 January 2,082.9 608.1 2,691.0 2,043.7 559.9 2,603.6 Current service cost 24.6 9.9 34.6 24.5 9.6 34.1 Employers' national insurance contributions of current service cost 4.7 1.9 6.6 4.7 1.8 6.5
Business combinations (3.4) (3.4) (4.2) (4.2) The effect of the asset ceiling (73.6) (73.6) (50.9) (50.9) Foreign currency exchange rate changes 2.4 2.4 (0.2) (0.2) As at 31 December 2,184.9 712.9 2,897.8 2,082.9 608.1 2,691.0
Amount recognised in the balance sheet Present value of the defined benefit obligation 2,184.9 712.9 2,897.8 2,082.9 608.1 2,691.0 Fair value of plan assets (2,521.0) (2,521.0) (2,324.7) (2,324.7) Net defined benefit obligation/(benefit asset) (336.1) 712.9 376.8 (241.8) 608.1 366.3
The expense is recognised in the following line in the income statement Insurance-related adm. expenses including provisions for received reinsurance and sales expenses
Actuarial assumptions Discount rate 1.67% 2.21% Future salary increases 1 2.65% 3.14% Change in social security base amount 2.77% 3.14%
Expected contribution to the defined benefit plan for the next year 91.9 142.7 1 Future salary increases represent our expected average future salary increase for the industry. Since Gjensidige has a closed plan, average future salary increase for Gjensidige's population is 0.83 per cent (1.55). See explanation under Actuarial assumptions.
Sensitivity - 1%-point discount rate 12.6% 12.2% + 1%-point discount rate (10.6%) (10.1%) - 1%-point salary adjustment (3.0%) (2.7%) + 1%-point salary adjustment 3.7% 3.6% - 1%-point social security base amount 1.7% 1.6% + 1%-point social security base amount (1.5%) (1.3%) + 1%-point future pension increase 10.8% 10.3% 10% decreased mortality 3.0% 2.8% 10% increased mortality (4.0%) (3.8%)
Shares and similar interests 199.9 199.9 Bonds 2,066.6 2,066.6 Derivatives 58.1 58.1 Total 2,324.7 2,324.7
Cost As at 1 January 2019 1,946.6 753.2 1,300.7 350.3 4,350.7 Additions through merger 1,123.9 487.5 13.8 329.8 1,955.0 Additions
Carrying amount As at 1 January 2019 2,950.1 606.9 492.9 414.5 4,464.5 As at 31 December 2019 2,950.1 161.4 748.6 116.0 3,976.2
Carrying amount As at 1 January 2020 2,950.1 161.4 748.6 116.0 3,976.2 As at 31 December 2020 3,131.1 113.4 374.3 58.4 3,677.1
Amortisation method N/A Straight-line Straight-line Straight-line Useful life (years) N/A 5-10 5-8 1-10
The company’s intangible assets are either acquired or internally developed. Goodwill, customer relationships and parts of other intangible assets are all acquired through acquisition of portfolios or mergers and are a result of a purchase price allocation of initial cost of the acquisition. Software is developed for use in the insurance business. External and internal assistance used in relation developed software is developed for use in the insurance business. External and internal assistance is used in relation with implementation or substantial upgrade of software, including adjustment of standard systems, are capitalized as intangible assets. Amortisation is included in the accounting line Insurance-related administration expenses including commissions for received reinsurance and sales expenses.
Impairment testing goodwill The carrying amount of goodwill in the company as at 31 December 2020 is NOK 3,131.1 million.
Goodwill General Insurance Denmark 2,771.2 2,699.7 General Insurance Sweden 231.2 121.7 General Insurance Private 128.7 128.7 Total 3,131.1 2,950.1
Budgets/prognoses and the period for which the cash flows are projected The projection of cash flows is based on budget and forecast for the next four years reviewed by the management and approved by the Board. The growth in this five-year period is higher than the long-term growth expectancy. In the period after 2024 a lower annual growth has been used than in the budget period to arrive at a normal level before a terminal value is calculated. The terminal value is calculated in 2029. Gjensidige normally has a ten-year horizon on its models, as the acquired companies are in a growth phase and a shorter period will give a less correct view of expected cash flows. The long-term growth rate beyond the board approved plan, is no higher than the long-term growth in the market for the respective cash generating units.
CR-level when calculating terminal value General Insurance Denmark 85,3-89,1 % 90,0 % General Insurance Sweden 91,1-97,0 % 91,1 % General Insurance Private 86,0-88,8 % 88,6 %
The growth rate in terminal value calculation The growth rate is determined to 2.5 per cent in Scandinavia and the same that was used in 2019. The growth rate corresponds to the best estimate of long-term nominal GDP growth for the various countries and represents the expectations for growth in the various insurance markets.
Cost As at 1 January 2019 28.5 456.6 485.1 Implementation of IFRS 16 1,110.3 13.0 1,123.3 Merger 2.3 2.2 Additions 35.5 29.3 3.6 68.4 Disposals (33.2) (103.2) (136.4) Exchange differences (2.9) (1.5) (4.4) As at 31 December 2019 28.5 1,109.7 383.5 16.5 1,538.1 Uncompleted projects 48.4 48.4 As at 31 December 2019, including uncompleted projects 28.5 1,109.7 431.9 16.5 1,586.5
Depreciation and impairment losses As at 1 January 2019 (298.4) (298.4) Merger (0.7) (0.7) Depreciation (143.0) (44.4) (6.2) (193.6) Disposals 90.1 90.1 Exchange differences (0.1) 1.1 1.0 As at 31 December 2019 (143.1) (252.3) (6.2) (401.6)
Carrying amount As at 1 January 2019 28.5 203.7 232.2 As at 31 December 2019 28.5 966.7 179.5 10.3 1,184.9
Cost As at 1 January 2020 28.5 1,109.7 383.5 16.5 1,538.1 Additions 47.7 25.4 3.6 76.6 Disposals (54.4) (118.0) (6.2) (178.6) Exchange differences
Summary of the lease liability in the financial statements As at 1 January 1,060.5 1,203.8 Change in lease liability 15.8 27.3 New lease liabilities (4.6) (21.4) Paid installment (cash flow) (163.3) (146.0) Paid interest (cash flow) (28.1) (30.4) Accrued interest (profit and loss) 28.1 30.4 Exchange rate differences (other comprehensive income) 20.5 (3.2) As at 31 December 928.9 1,060.5
Expenses related to short-term contracts (including short-term low value contracts) 9.5 2.6
Expenses related to low value contracts (excluding short-term low value contracts) 0.3 0.9
Undiscounted lease liability and maturity of cash flows Less than 1 year 179.9 181.4 1-2 years 166.4 175.6 2-3 years 147.1 160.1 3-4 years 122.2 142.2 4-5 years 118.4 119.9 More than 5 years 274.7 387.8 Total undiscounted lease liability as at 31 December 1,008.6 1,167.2
To determine whether a contract contains a lease, it is considered whether the contract conveys the right to control the use of an identified asset. This is for Gjensidige considered to be the case for office leases, leases for cars and some office machines etc. However, the main part of the latter group is exempted for recognition due to low value. IT agreements are not considered to fall under IFRS 16 since these are based on the purchase of capacity that is not physically separated and thus not identifiable.
13. Financial assets and liabilities Fair value Financial assets and liabilities measured at fair value are carried at the amount each asset/liability can be settled to in an orderly transaction between market participants at the measurements date at the prevailing market conditions.
Valuation based on observable market data When quoted prices in active markets are not available, the fair value of financial assets/liabilities is preferably estimated on the basis of valuation techniques based on observable market data.
Loans and receivables Bonds and other fixed income securities classified as loans and receivables 15 15,208.3 16,210.0 14,705.4 15,226.1 Loans 2,371.5 2,371.5 2,410.8 2,410.8 Receivables related to direct operations and reinsurance 7,460.9 7,460.9 6,867.0 6,867.0 Receivables from group companies 20 26.1 26.1 7.1 7.1 Other receivables 364.5 364.5 975.4 975.4 Cash and cash equivalents 2,365.0 2,365.0 1,796.1 1,796.1
Valuation hierarchy 2020 The table shows a valuation hierarchy where financial assets/liabilities are divided into three levels based on the method of valuation.
Valuation hierarchy 2019 The table shows a valuation hierarchy where financial assets/liabilities are divided into three levels based on the method of valuation.
Shares and similar interests 69.2 5,170.0 1,306.1 6,545.3 Bonds and other fixed income securities 10,051.3 17,686.4 708.6 28,446.3 Loans 2.2 2.2
Financial assets at amortised cost Bonds and other fixed income securities classified as loans and receivables 15,226.1 0.0 15,226.1 Loans 2,410.8 2,410.8
Amount of net realised/unrealis ed gains recognised in profit or loss that are attributable to instruments held as at 31.12.2020
Reconciliation of financial assets valued based on non-observable market data (level 3) 2019
Amount of net realised/unrealis ed gains recognised in profit or loss that are attributable to instruments held as at 31.12.2019
Shares and similar interests 1,352.5 (41.9) 184.8 (189.4) 1,306.1 (42.8) Bonds and other fixed income securities 778.7 89.2 (155.4) (3.9) 708.6 Loans (1.7) 3.8 2.2 Total 2,131.2 47.3 184.8 (346.5) 3.8 (3.8) 2,016.9 (42.8)
Gjensidige Forsikring ASA Norwegian financial shares and primary capital certificates Sparebanken Vest 832 554 332 5.6 SpareBank 1 BV 944 521 836 5.2 SpareBank 1 Østlandet 920 426 530 4.6 SpareBank 1 SR-Bank 937 895 321 4.6 SpareBank 1 Ringerike Hadeland 937 889 275 2.9 SpareBank 1 SMN 937 901 003 2.4 Sogn Sparebank 837 897 912 0.5 Total Norwegian financial shares and primary capital certificates 25.7
Total shares and similar interests owned by Gjensidige Forsikring ASA 5,522.4 15. Loans and receivables
Loans and receivables Bonds classified as loans and receivables 15,208.3 14,705.4 Other loans 5.8 9.4 Total loans and receivables 15,214.1 14,714.8
Additions through merger 55.6 55.6 Claims paid, prior year claims (7,515.0) (7,515.0) (5,550.8) 104.7 (5,446.1)
Increase in liabilities Arising from current year claims 18,834.8 (359.6) 18,475.2 18,395.3 (330.9) 18,064.4 - of this paid (10,703.8) 480.9 (10,222.8) (12,865.5) 214.3 (12,651.2) Arising from prior years (run-off) (1,069.1) (39.8) (1,108.9) (1,245.7) (81.7) (1,327.4) Other changes, including effects from discounting 176.0 176.0 231.4 231.4 Exchange differences 681.1 (43.7) 637.4 (96.6) 12.7 (83.9) Total as at 31 December 28,097.3 (516.6) 27,580.7 27,693.4 (554.5) 27,138.9
Provisions for unearned premiums As at 1 January 10,003.0 (42.3) 9,960.7 9,399.6 (39.6) 9,360.1 Addition through merger 172.8 172.8 Increase in the period 27,195.6 (646.7) 26,548.9 24,703.4 (716.3) 23,987.2 Earned in the period (26,608.4) 650.3 (25,958.1) (24,236.4) 712.9 (23,523.5) Exchange differences 202.7 (1.3) 201.4 (36.4) 0.6 (35.8) Total as at 31 December 10,792.8 (39.9) 10,752.9 10,003.0 (42.3) 9,960.7 1 For own account.
In thousand shares 2020 2019 Issued 1 January 500,000 500,000 Issued 31 December 500,000 500,000
NOK 2.40 kroner (5.00) based on excess capital distribution 1, 2 1,200.0 2,500.0 1 Proposed dividend for 2020 is at the reporting date recognised in Gjensidige Forsikring ASA’s financial statement, but not in the Group’s financial statement. The dividend does not have any tax consequences. 2 Based on the financial position as at 31 December 2019.
The shareholder list is based on the VPS shareholder registry as of 31 December 2020.
Restructuring costs 1 Provision as at 1 January 71.6 125.6 New provisions 18.4 11.3 Provisions used during the year (25.5) (65.2) Exchange rate difference 1.0 (0.1) Provision as at 31 December 65.5 71.6 1 In 2020 NOK 18,4 million is allocated to restructuring provision, due to a decision of changes in processes in Denmark and Sweden. The processes have been communicated to all entities affected by the changes. 2 Other provisions are various bonus schemes.
Other accrued expenses and deferred income Liabilities to public authorities 59.8 30.9 Accrued personnel costs 287.7 303.1 Other accrued expenses and deferred income 18.4 20.2 Total other accrued expenses and deferred income 365.9 354.2
Overview Gjensidige Forsikring ASA is the Group's parent company. As at 31 December 2020 the following companies are regarded related parties. See note 5 in Gjensidige Forsikring ASA for specification of subsidiaries and joint ventures.
Dividends Gjensidigestiftelsen (proposed and declared) 3,049.8 3,812.2 NAF Forsikringsformidling AS 0.2
Balances The table below shows a summary of receivables/liabilities the parent company has from/to related parties.
Fire Mutuals and Gjensidige Pensjonskasse 3 111.0 48.2 111.0 32.6 3 Gjensidige Forsikring ASA is a sponsor of Gjensidige Pensjonskasse and has contributed with funds equivalent to NOK 111.0 million.
Gjensidige Forsikring has granted a loan to Oslo Areal amounting to NOK 2.4 billion (2.4) at year end. The loan is interest-bearing and total loan limit is NOK 4.0 billion.
Weighted average share price (NOK) 189.00 143.00 163.02 163.02 Expected turnover N/A N/A 10% 10% Expected sale N/A N/A 5% 5% Lock-in period (years) 3 3 2 2 Expected dividend (NOK per share) 1 6.45 10.92 6.45 10.92 1 The expected return is based on the Group's actual profit/loss after tax expense as of the third quarter, grossed up to a full year, plus the maximum distribution of dividend corresponding to 80 per cent (80) of the profit after tax expense. This was carried out as a technical calculation because the Company's forecast for the fourth quarter result was not available at the time the calculations were carried out.
The number of bonus shares Outstanding 1 January 90,484 88,765 Granted during the period 46,253 44,326 Forfeited during the period (2,549) (3,692) Released during the period (42,514) (34,533) Cancelled during the period (4,569) (3,854) Movement to/(from) during the period (177) (528) Outstanding 31 December 86,928 90,484 Exercisable 31 December 0 0
Weighted average fair value of shares granted 2 189.00 143.00 Weighted average share price of shares released during the period 201.02 143.00 Fair value of shares granted that are to be settled in cash 191.40 184.25 2 The fair value is calculated based on the market value of the share at the time of allocation.
23. Events after the balance sheet date At a board meeting on 21 January 2021, it was decided to distribute a dividend of NOK 2.40 per share, a total of NOK 1.2 billion, based on the board's authorisation. The dividend is related to the 2019 accounts and constitutes payment of surplus capital. The payment was made on 4 February 2021.
We hereby declare that, to the best of our knowledge: • the 2020 annual accounts for the Group and the parent company have been prepared in accordance with applicable accounting standards; • the information in the accounts gives a true and fair picture of the Group and the parent company’s assets, liabilities, financial position and overall performance as of 31 December 2020; • the integrated annual report, prepared in accordance with the International Integrated Reporting
Framework (IR), meets the requirements for the content of the Directors’ report, the statement on corporate governance, and the Global Reporting Initiative’s (GRI) standards for corporate social responsibility and sustainability reporting; • the integrated annual report for the Group and the parent company, including the Directors’ report, gives a true and fair picture of - the Group and the parent company’s development, performance and position, - key risk and uncertainty factors facing the Group and the parent company.
Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Gjensidige Forsikring ASA, which comprise: • The financial statements of the parent company, which comprise the balance sheet as at 31 December 2020, the income statement, statement of changes in equity and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and
• The financial statements of the group, which comprise the statement of financial position as at 31 December 2020, the income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion: • The financial statements are prepared in accordance with the law and regulations. • The accompanying financial statements give a true and fair view of the financial position of the Company as at 31 December 2020, and its financial performance and its cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway.
• The accompanying consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2020, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU.
Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Measurement of claims provision Key audit matter How the matter was addressed in the audit Measurement of the Groups claims provisions is based on different methods and models, complex calculations and a number of assumptions and estimates related to future developments that are uncertain.
The accounting principles are described in note 1, significant accounting estimates are described in in note 2, insurance risk is described in note 3 and insurance provisions are specified in note 16.
The calculation models, assumptions and estimates applied are of great significance when measuring the claims provisions. The most important assumptions and estimates relate to: • Estimate of future claims payments, which, among other, are based on historic payment patterns.
• Determination of the margin included in the claims provisions to address the uncertainty related to calculated provisions.
The calculation models, assumptions and estimates are essential for the measurement of claims provisions and are therefore identified as a key audit matter.
We assessed whether the disclosure information related to claims provisions is adequate.
IT systems: Controls relevant for financial reporting and data quality Key audit matter How the matter was addressed in the audit Gjensidige has an extensive IT environment with a variety of different IT systems that support financial reporting. IT systems include both inhouse developed and standardized systems with different degrees of adaptations and changes. A significant part of the IT operations and infrastructure is outsourced to service providers. The IT systems are essential to recording and reporting of transactions and to provide data for significant estimates and calculations as well to as obtain relevant additional information. Refer to note 3 for further information on operational risk in Gjensidige.
We assessed the third party confirmation (ISAE 3402) from several of Gjensidige’s service providers to assess whether the service provider had adequate internal controls in areas that are important for Gjensidige’s financial reporting.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In preparing the financial statements, management is responsible for assessing the Company’s and the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern. The financial statements of the Company use the going concern basis of accounting insofar as it is not likely that the enterprise will cease operations. The financial statements of the Group use the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Note: This translation from Norwegian has been prepared for information purposes only.
Registrert i Foretaksregisteret Medlemmer av Den norske Revisorforening Organisasjonsnummer: 980 211 282
Our responsibility is to express a limited assurance conclusion on the information in the Report. We have conducted our work in accordance with ISAE 3000 (Revised) Assurance Engagements other than Audits or Reviews of Historical Financial Information, issued by the International Auditing and Assurance Standards Board.
The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement. Consequently, the level of assurance obtained is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed.
Considering the risk of material misstatement, our work included analytical procedures and interviews with management and individuals responsible for sustainability management, as well as a review on a sample basis of evidence supporting the information in the Report.
We believe that our work provides an appropriate basis for us to provide a conclusion with a limited level of assurance on the subject matters.
Based on our work, nothing has come to our attention causing us not to believe that: • Gjensidige has completed a materiality analysis to identify material sustainability aspects to include in the
Report, as described in the Report and in accordance with the GRI Standards. • Gjensidige has applied procedures to identify, collect, compile and validate information for 2020 to be included in the Report, as described in the Report. • The information presented for 2020 is consistent with data accumulated as a result of these procedures and appropriately presented in the Report. • Gjensidige applies a reporting practice for its sustainability reporting aligned with the Global Reporting Initiative
The integrated annual report 2020 for the Gjensidige group is prepared according to the Global Reporting Initiative (GRI) Standards, the reporting level Core.
In accordance with the GRI Standards, an assessment of relevance has been conducted in order to identify the most relevant sustainability issues for Gjensidige and our stakeholders. This assessment is further elaborated in chapter 2 – Creating added value in Gjensidige. The table below indicates according to which GRI standards we consider the relevance of these issues. References are provided as to where to find the information related to the different GRI elements in our integrated annual report. This encompass both the information providing a partial and a complete description, according to the requirements of the GRI standards. The table below also indicates which reported GRI elements that at the same time comply with the information required for the Board of Directors’ Report. In relation to this, general reporting elements which are not compulsory for reporting at the GRI Core level, are also included. In our opinion, the present reporting should mainly be in accordance with the GRI reporting principles, as well as fulfilling the Core level of the GRI Standards. In addition, the Norwegian Accounting Act’s requirements on corporate social responsibility are fulfilled.
We have commissioned Deloitte AS to conduct an independent attestation of our reporting, according to the GRI Standards. The attestation is based on the standard ISAE3000 «Revised, assurance engagements other than audits or reviews of historic, financial information», published by the International Auditing and Assurance Standard Boards, and is issued with a moderate degree of certainty. The auditor’s statement is cited at page 288.
Ethics and integrity 102-16 Values, principles, standards, and norms of behavior
Stakeholder engagement 102-40 List of stakeholder groups Creating values for our stakeholders 49-51 102-41 Collective bargaining agreements
Note 5 Gjensidige Forsikring ASA 212 102-46 Defining report content and topic Boundaries 102-47 List of material topics Risk and materiality assessment 50 102-48 Restatements of information Not relevant 102-49 Changes in reporting Introduction 3 102-51 Date of previous report 1.1.2019-31.12.2019 102-52 Reporting cycle Annual. In addition, quarterly market reports 102-53 Contact point www.gjensidige.no/konsern/investorinfor masjon/kontakt-ir 102-54 Claims of reporting in accordance with the GRI Standards
Management approach – Economic Statement concerning the annual accounts Value created 2020 – Financial result 201 Rskl §3-3a Economic Performance Statement concerning the annual accounts
All segments have locally employed managers, with the exception of segment managers for Sweden and Denmark.
We create value in partnership with our suppliers, and Value created – Climate and the Environment 205 Rskl §3-3c Anti-corruption 205-2 NRS 16 2.2 Communication and training about anticorruption policies and procedures
Environmental topics 103-1 – 103-3 Rskl §3-3a, c Management approach – Environment Our climate and environmental commitment, Value crated 2020 – Climate and the environment 301-1 Rskl §3-3a, c Materials used by weight and volume
Our climate and environmental commitment, Value created in Gjensidige – Climate-related financial disclosures (TCFD), and Value crated 2020 – Climate and the environment 302-1 Rskl §3-3a, c Energy consumption within the organisation
Key figures and alternative performance measures Climate-related financial disclosures (TCFD) Value created 2020 – Climate and the environment 305-4 Rskl §3-3a, c GHG emission intensity
Key figures and alternative performance measures Climate-related financial disclosures (TCFD) Value crated 2020 – Climate and the environment 305-5 Rskl §3-3a, c Reduction of GHG emissions
Key figures and alternative performance measures Climate-related financial disclosures (TCFD) Value crated 2020 – Climate and the environment 306 Effluents and waste 306-3 Rskl §3-3a, c Waste generated Climate-related financial disclosures (TCFD) Value crated 2020 – Climate and the environment 306-4 Rskl §3-3a, c Waste diverted from disposal Climate-related financial disclosures (TCFD) Value crated 2020 – Climate and the environment 307 Environmental Compliance 307-1 Rskl §3-3a, c Non-compliance with environmental laws and regulations
No cases in 2020 308 Supplier Environmental Assessment 308-2 Rskl §3-3a, c Negative environmental impacts in the supply chain and actions taken
We create value in partnership with our suppliers Reduce CO2-intensity Value created 2020 – Climate and the environment
Social topics 103-1 – 103-3 Rskl §3-3a, c Management approach – Social Stakeholder analysis Our engaged employees Value created 2020 – engaged employees 401-1 Rskl §3-3c New employee hires and employee turnover
403 Occupational Health and Safety 403-9 Rskl §3-3a, c Work-related injuries Value created 2020 – engaged employees No serious injuries leading to absence and no accidents involving employees in 2020.
Key figures and alternative performance measures Value created in Gjensidige – Gjensidige’s Board of directors Value created in 2020 – Engaged employees
Statement on equality Appendix 4 Statement on equality 298-303 406 Non-discrimination 406-1 NRS 16 2.10 Incidents of discrimination and corrective actions taken
Value created in Gjensidige – We create value in partnership in partnership with our suppliers Follow-up of our suppliers No significant risk identified related to own operations 408 Child labor 408-1 Rskl §3-3c Operations and suppliers at significant risk for incidents of child labor
Banned by local law. Our sustainability policy requires compliance with the Global Compact principles, including ban on child labour. No significant risk identified related to own operations 409 Forced or Compulsory Labor 409-1 Rskl §3-3c Operations and suppliers at significant risk for incidents of forced or compulsory labor
Banned by local law. Our sustainability policy requires compliance with the Global Compact principles, including ban on forced labour. No significant risk identified related to own operations 412 Human Rights Assessment
Value created in Gjensidige – We create value in partnership in partnership with our suppliers Covered both by own operations, requirements for suppliers, and as part of the follow-up of the investments. All contracts contain clauses concerning human rights.
Value created in Gjensidige – We create value in partnership in partnership with our suppliers Value created in 2020 – Climate and the environment – Follow-up of our suppliers 414-2 Rskl §3-3c Negative social impacts in the supply chain and actions taken
Value created in Gjensidige – We create value in partnership in partnership with our suppliers Value created in 2020 – Climate and the environment – Follow-up of our suppliers
Value created in Gjensidige – Ethical operations – Complaints handling, Values created 2020 – Results of our commitment to management and control 418 Customer Privacy 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data
Values created 2020 – Results of our commitment to management and control No significant deviations in 2020.
NRS 16 2.5.3 Cash flow Statement concerning the annual account 165
NRS 16 2.8 Continued operations Statement concerning the annual account 163
NRS 16 2.9 Allocation of the profit before other income and expenses Statement concerning the annual account 178
Appendix 2 – Selected governing documents Governing documents shall ensure that Gjensidige as a group acts in accordance with the requirements set by society, the expectations of important stakeholders to the group, and the ambitions set by the board and management. Selected documents are published in their entirety on www.gjensidige.no, but some Internal documents are also relevant for understanding Gjensidige's framework for good governance and control.
MMoorrggaann SSttaannlleeyy ((MMSSCCII)) SSuussttaaiinnaallyyttiiccss SSttaannddaarrdd && PPoooorr’’ss ((SS&&PP)) CCaarrbboonnee DDiisscclloossuurreess PPrroojjeecctt ((CCDDPP))
NNOO 11:: TThhee mmoosstt ssuussttaaiinnaabbllee bbrraanndd iinn tthhee NNoorrwweeggiiaann ffiinnaanncciiaall iinndduussttrryy
Level 2 Level 3 Level 4 Level 5 Other levels Parental leave (number of person-days) Women 14,320 13,242 Men 6,189 5,522 Sickness absence Women 5.46% 4.13% Men 2.77% 2.47% Absence due to child sickness (total number of person-days) Women 1,694 1,793 Men 1,042 1,685 Proportion of part-time employment Women 13.5 % 12.2% Men 3.9% 3.9% Proportion of temporary employment Women 7.1% 6.3% Men 4.4% 4.9%
Our efforts to identify the risk of discrimination and obstacles to equality
Through our health and safety work, we make targeted efforts to achieve higher job satisfaction, reduced sickness absence and a healthy working environment for all our employees. In line with the company’s action plan for health, safety and environmental work, we conduct an annual HSE survey that forms the basis for risk assessments and measures. All managers with personnel responsibility are responsible for following up the results and presenting them to their departments. The results form the basis for completion of the HSE Risk Assessment form. All managers contribute to achieving the measures in the action plan by putting bullying/harassment, unwanted sexual attention, threats and threatening behaviour on the agenda for departmental meetings where the pertaining guidelines are also reviewed. Managers are also responsible for ensuring that all employees are familiar with the company’s handbooks, which include ethics, company regulations and descriptions of various HR processes, including whistleblowing procedures.
In cooperation with the employee representatives (represented on the Diversity and Inclusion Committee), the HR department works to identify the risk of discrimination and obstacles to equality. We have looked at the likelihood of individual risks/obstacles arising in different HR areas, in addition to the seriousness of the individual risk/obstacle.
We want to give all employees equal opportunities for career development. We see that there is a risk that, by holding seminars, meetings, courses etc. in places that may require employees to spend several nights away from home, we may be excluding certain groups of employees.
There is no recurring theme in our diversity work, and see that, without instructions for diversity, we will not manage to gain momentum in this work by understanding, using, developing and recruiting employees from diverse backgrounds. Increased diversity requires a greater understanding of and respect for each other’s differences in culture, religion, attitudes etc. This can be reflected in the dialogue between colleagues, in interaction between managers and staff, in conversations around the lunch table, in connection with seminars and courses, and, not least, in connection with social events.
There is a pay gap between women and men when we look at gender seen in isolation, and we must therefore ensure that our pay policy does not contain any discriminating elements.
We also see that discrimination and obstacles to equality may arise in connection with promotions and in our communication.
Based on the risks and obstacles identified by the employee representatives and HR, we have devised an action plan describing risks/obstacles with pertaining measures, goals, who is responsible, deadline/status and evaluation.
Instructions for diversity are being drawn up that will be appended to the company’s sustainability policy. The instructions are expected to be adopted shortly and implementation is scheduled to start in Q1 2021. In addition, we have certified two diversity managers under the auspices of the centre for diversity management (Seema) and Standards Norway, while a further two have started the certification process
We wish to take responsibility in the national initiative to promote inclusion, and have formalised this cooperation further through the inclusion agreement ‘Vi inkluderer’. The agreement means we will make active efforts to ensure that people who are left out of the labour market get a chance to work at Gjensidige by ensuring that candidates with gaps in their CVs are considered for vacancies and that we offer work placements/work training.
In December 2020, we conducted an HSE survey that returned high scores for employees’ satisfaction with the company’s health, safety and environmental work. HSE audits have also been carried out. Sickness absence remained stable throughout the year, with a slight decrease towards the end of the year.
As of the end of 2020, the share of women remained unchanged at 46.7 per cent (up 0.5 percentage points from 2019), and the proportion of women in all managerial positions in the company is 39.3 per cent (up 0.9 percentage points from 2019). Level 1 and 2 managers: 37.8 per cent in 2020 (up 4.9 percentage points from 2019).
Through the year, we have worked on several extensive measures that we believe will be important in our work to fight discrimination and obstacles to equality. The strange year that was 2020 provides opportunity for learning about management, cooperation and workplace requirements. We at Gjensidige will take these lessons with us, actively test and learn more, and use the experience gained to design a new normal for working at Gjensidige.
Goal of measure How will the measures contribute to greater equality? How do we determine success?
RReessppoonnssiibbiillii ttyy Who is responsible for following up and carrying out various measures?
Postponed Most activities have taken place online in 2020, which means we need to regain focus on this when society opens again.
Higher turnover among those who have been on parental leave in the past two years than among other employees
Attitudes and prejudice among the staff influence our dealings with colleagues, customers and partners.
Initiated A lot of good feedback. Approx. 130 employees participated. Corresponding webinar scheduled for Q1 2021
All employees shall be given equal opportunities for career development and promotion
Help to give opportunities to people excluded from the labour market (for example with gaps in their CVs)
Review the annual wage settlement to identify any gender-based wage disparities From 2018, employees returning from at least five months’ parental leave have been given an extra salary grade, or 1.3% pay increase.
A lot of good work is carried out in relation to diversity and inclusion, but a clear direction and objective is lacking.
Prepare and ensure support for instructions on diversity in the company.
Initiated Instructions for diversity have been drawn up that will be appended to the company’s sustainability policy. Implementation will start in Q1 2021.
Ensure good gender balance and that we attract applicants from different backgrounds with different expertise and experience.
We do not register the gender of applicants and cannot therefore refer to any specific gender balance figures in this context. We are nonetheless of the view that our gender balance has improved, and see that more women have been recruited for positions dominated by men this year. By focusing more on the job than on desired qualifications, we see that we attract applicants from other backgrounds than has traditionally been the case. In 2020, we hired more men than women in total.
BBaacckkggrroouunndd ffoorr mmeeaassuurree What did the survey reveal about discrimination risks and obstacles to equality? Is the measure linked to one or more grounds for discrimination?
Initiated There have been few social events in 2020 and the work will be carried over to the next year.
Raise employees’ awareness of the guidelines to prevent unwanted sexual attention through departmental meetings and ahead of annual parties/Christmas parties/big gatherings. The new guidelines were adopted in 2018, but we bring them up frequently.
In line with the company’s HSE action plan, all managers must have addressed the topic at departmental meetings and carried out risk assessments and pertaining measures. See also the chapter on HSE in the annual report.
Facilitate equal opportunities for competence-raising measures, for example by considering the time/place of courses. More continuous employee development with greater opportunity to influence one’s own development.
The project aims to contribute to the socially, economically and environmentally sustainable development of the region by making efficient cookstoves widely available and educating the population about their benefits.
Volume (tonnes CO2e) 1 050 Type VER (Verified Emission Reduction) Issuing body Gold Standard Foundation
Project name GS 1385 – Energy Efficiency and Improved Clean Burning Cookstoves in Ghana
CEMAsys.com AS | Hegdehaugsveien 31, 0352 Oslo, Norway | www.cemasys.com 142 000 Households provided with clean cook stoves through this project jobs 70 men and 30 women mitigated
The social benefit of the project is that it creates jobs for local people, with employment of both women and men in the region. They are educated in the health benefits of using clean-burning stoves, and employed in the production of stoves. This gives locals a livelihood, with wages that are 80% higher than the minimum wage. The stoves are produced locally from scrap metal and sold at subsidized prices. The improved stoves are 40% more energy efficient than traditional stoves, and reduce consumption of wood charcoal. The project contributes to reduced demand and thus to less deforestation. A significant proportion of annual household budget is spent on the purchase of charcoal. By reducing the need for charcoal, the project also reduces expenses for a family accordingly.
Factors employed for the calculation of CO2 equivalents 1) Numbers on air travels 2020, delivered by our travel agency Berg-Hansen 2) Numbers delivered by our leasing agency for company cars in Norway 2020 3) The factor employed for energy use based on location is based on the Electricity Disclosure for Norway 2020, issued by the Norwegian Water Resources and Energy Directorate (NVE) 4) DEFRA 2020 Greenhouse gas reporting: converting factors 5) NVE 2020 Electricity Disclosure 6) Electricity cnsumption outside Norway, based on IEA GHG codes