About Storebrand Letter from the CEO Organisation Executive Management A sustainable strategy Financial capital and our investment universe Customers and community relations Our people and systems Shareholder matters Storebrands history
STOREBRAND GROUP Profit and Loss Account Statement of total comprehensive income Statement of financial position Statement of changes in equity Cash flow analysis Notes
• Our Purpose: A future to look forward to • Our “How”: Brave pioneer • Our “What”: Better pension – simple and sustainable
Storebrand shall provide better pensions – simple and sustainable. Our most important customers are corporates, employees and former employees of companies with pensions from Storebrand. We provide sustainable solutions adapted to our customers’ circumstances through our market and customer concepts. Our strategy and principal objective for long-term value creation are described and illustrated in the chapter entitled “a sustainable strategy”.
1) After tax, adjusted for write downs and amortisation of intangible assets
It has by no means been a boring anniversary year. In addition to major acquisitions, we have been involved in launching two important new products into the Norwegian savings market: Equity savings account and individual pension savings (IPS). Storebrand has delivered a strong annual profit that, together with a solvency margin of 172%, provides scope for proposing increased dividends to shareholders.
In 2017 we experienced a doubling in digital sales at storebrand.no, while we had growth of close to 40 per cent in digitally established bank accounts. We also see that customer satisfaction among those who trade on the internet has increased strongly during the year. This shows that we have succeeded with our work in strengthening our digital position.
SKAGEN AND SILVER It was announced in autumn 2017 that Storebrand was both acquiring Skagen and taking over Silver’s paid-up policy customers.
We have high expectations for the acquisition of Skagen. We see that the Norwegian savings and pension markets are growing together. The pension reform has also given us greater responsibility for saving for our own pensions. In this situation, Storebrand and Skagen are a good match. Storebrand has a solid foothold in the market for corporate and institutional customers. Skagen is a unique success story in the retail savings market – a pioneering enterprise that has increased its assets under management from NOK 20 million to NOK 80 billion since it was established in 1993.
The paid-up policy customers at Silver have been through a period of major uncertainty since the company was placed under public administration in February 2017. It became clear in October 2017 that Storebrand would be taking over Silver’s insurance portfolios, which would also be converted to paid-up policies with investment options. We are pleased to have been able to have used our experience and expertise to contribute to a good solution for Silver’s 17,000 customers, while the agreement also strengthens Storebrand ’s position within pension savings.
1 November marked the start of the new tax-favoured individual pension savings (IPS) scheme. The new scheme is a significant improvement on the previous IPS scheme. The savings threshold for a tax deduction has been increased to NOK 40,000, while the tax rules for payment of IPS have been changed from being fully taxed as pension income to being taxed as general income (23 per cent in 2018). We have had a strong presence in the media and other channels since the launch and at the end of 2017, 13,000 retail customers had established IPS agreements at Storebrand.
DIGITAL FOCUS There are also exciting things happening in the Group’s other business areas: Storebrand Bank has launched a new mobile bank that has been well received by customers. We had continued strong lending growth during the year. At the same time, we have high expectations for the collaboration with the Swedish savings app Dreams, which was launched in the Norwegian market at the end of 2017.
Storebrand Forsikring developed a new digital sales solution in 2017 which Bearing Point’s international benchmark customer survey named the best in the industry. We have also established a chatbot solution on our websites. This is a step towards better self-service solutions and the development of our web platforms, which enable all “simple” inquiries to be managed digitally. More complex inquiries are in the safe hands of our expert advisors.
250 YEARS With roots dating back to 1767, Storebrand is one of the country’s oldest companies and in 2017 we celebrated our 250 year anniversary. These celebrations have been in the form of several internal and external arrangements. The official ceremony was held on 31 May and was celebrated together with the Crown Prince and Princess and 350 other guests at our head office in Lysaker. At the anniversary ceremony we launched our collection of books about the history of Storebrand which were written by business historians Sverre August Christensen, Espen Ekberg, Christine Myrvang and Trond Bergh from BI Norwegian Business School.
• Customer and society: Recommended by our customers. • People and systems: People first, digital always.
In the year to come we are going to fortify our position as a leading player in the Norwegian savings market. Our social mission is to help our customers to save. We will continue to develop our digital solutions, while also working hard to deliver even better customer experiences. We will maintain our position as a market leader in occupational pensions and further develop our position as the second largest player in the market for transferrable savings.
SAVINGS Savings consists of products that include savings for pensions without guaranteed interest rates. The business area consists of defined contribution pensions in Norway and Sweden, asset management and retail banking products.
The Group is divided into the segments Savings, Insurance, Guaranteed Pension and Other.
NOK 721bn in AuM of which 34% external assets 100% of investments assessed by sustainability criteria
Education State Authorized Public Accountant Authorized Finance Analyst (AFA) — (Norwegian School of Economics and Business Administration)
Career 2011–2012: Managing Director, Storebrand Life Insurance 2002–2011: Executive Vice President, CFO and Group Legal 1998–2002: Head of Business Control, Storebrand ASA 1997–1998: Group Controller, Life Insurance, Storebrand ASA 1994–1997: Vice President, Internal Audit, Storebrand ASA 1989–1994: Arthur Andersen & Co
Education Master of General Business, Norwegian School of Management and MBA, Thunderbird (AGSIM), USA
Career 2011–2012: Head of Product, Claims and Service, Storebrand Life Insurance 2003–2011: Head of Product, Storebrand Life Insurance 2002–2003: Head of UL and DC business, Storebrand Life Insurance 2000–2002: Head of DC business, Storebrand Life Insurance 1998–2000: International Sales, Storebrand Life Insurance 1997–1998: Actuary trainee, Storebrand Life Insurance 1995–1997: Teacher, Oslo University
Career 2015–2016: Senior Vice President Customer and Business Development, Storebrand 2011–2015: Chief Marketing Officer/SVP Marketing, Storebrand 2009–2011: CEO, Inven2 AS 2007–2009: Senior Vice President Marketing and Sales, Aker BioMarine ASA 2002–2007: CEO, Natural ASA 2001–2002: Director/Partner, Refleks AS 1995–2001: Senior Vice President Pizza and various Marketing positions, Orkla Foods AS 1993–1995: Management Consulting
Education Master in International Relations, Bond University Bachelor in Communications, Bond University
Career 2014-2017 Vice President Communications, Opera Softaware 2009-2014 Communicator Director, SN Power 2008-2009 Economics Reporter, TV 2 2005-2008 TV Reporter, CNBC/FBC Media 2004-2005 Researcher, CNBC Europe
Education 2009-2010 Norwegian Business School – Master of Management in scenarios, foresight and strategy 2000-2001 Norwegian Business School — Master of Management in e-commerce 1989-1993 Norwegian Business School — Master in Business and Marketing Specialisation areas within Communication and Marketing
Career Storebrand: 2015-2017: Senior Vice President Retail 2013-2015: Director Storebrand Direct 2011-2013: Director of Business Development and Digitalisation (incl. Lean) 2007-2011: Director of Online Sales and Development (Storebrand and SPP)
Nordea Bank AB: 2002-2007: Nordic Head of Internet, Group Identity and Communications 2001-2002: Manager Web Content Management, Electronic Banking
Ownership in Storebrand Number of shares as of 31.12.2017: 7 227
At the same time, the world is facing serious challenges. In order for our customers to have a future to look forward to, we have a responsibility for the world’s scarce resources to be used in the most sustainable manner possible. A sustainable business model means that we shall deliver returns to our owners, while also creating positive ripple e�ects for society. It also means that we do this in a way that does not deny future generations of the ability to meet their own needs. There is no contradiction between acting in a sustainable manner and delivering returns to customers and owners. Sustainability is integrated into everything we do and our strategy is to establish a sustainable business model that provides long-term value creation for shareholders, customers and society.
The annual report has been prepared based on the principles of the International Integrated Reporting Council (IIRC), with the goal of not only providing a �nancial report and sustainability report, but a report that provides an overall picture of how Storebrand shall create value for the future. The content of this year’s report therefore provides more insight into our strategy and focus areas as a whole, and places �nancial results and sustainability into this context. Sustainability in this report therefore refers to both �nancial and social factors, including human rights and workers’ rights and environmental conditions.
In a complex and rapidly changing world, there must be well-considered priorities for managing the input factors in a manner that ensures longterm value creation. Therefore, value drivers have been identi�ed for each input factor that are evaluated and closely followed-up going forward.
This is also placed in the context of the value this has for society, based on the belief of reciprocity when in�uencing society and own pro�tability and viability.
THE EXPECTATIONS OF OUR STAKEHOLDERS ARE OF DECISIVE IMPORTANCE TO US.
Development, and consists of 17 Sustainable Development Goals (SDGs). More information about the UN sustainable development goals can be found at: As an investor, Storebrand �rst and foremost, can contribute to achieving the sustainable development goals through conscious investments of capital and through active ownership. In this way, investors can in�uence private business and industry that play an important role in �nancial and social development. Companies are dependent on well-functioning societies and markets to succeed. Supporting the sustainable development goals is a means for companies to contribute to stable, transparent and non-corrupt markets that have good and well-functioning management systems. Companies should familiarise themselves with the goals to see what business opportunities they provide and to understand the risk associated with the world’s sustainability challenges. Storebrand has identi�ed the sustainable development goals that are most heavily in�uenced by how we invest the more than NOK 700 billion the company has under management. Storebrand has identi�ed seven
Storebrand has the goal of creating a future that our customers can look forward to. Sustainability is therefore integrated into our investment decisions. In this way we move money from activities with a major negative impact on the climate to companies that are part of the transition to a greener economy. Adaptable companies can, for example, contribute to improved energy e�ciency, circular economy, emission-free transport, renewable energy production and smart infrastructure.
When we know that half of the money on the world’s stock exchanges is pension capital, this demonstrates the possibilities of pension management being a very e�ective means of contributing to more sustainable investments. Companies that are frugal with their own resources and those of the rest of the world can contribute to the transition by, for example, emitting less CO2 and reducing water consumption. These types of future-oriented companies are better positioned to meet global challenges. By investing in these, we achieve good �nancial returns while also contributing to a sustainable transition.
This is an important step in harmonising and standardising climate-related reporting.
Principal goal - Competitive and sustainable returns to shareholders and customers
Financial capital is that which Storebrand manages for owners and for customers, and the Investment universe that this capital is invested in. The state of the investment universe, i.e. the companies and markets Storebrand invests in, will influence Storebrand’s results. Storebrand’s goal is to create competitive and sustainable returns.
As a listed company, the most important objective of the Storebrand Group is to create returns for its shareholders. Returns shall be created in a sustainable manner and contribute to positive ripple e�ects for society.
Storebrand’s strategy is to deliver pro�table growth within the focus areas Savings and Insurance through simple and sustainable solutions, while we also manage our guaranteed portfolios in a capital-e�cient manner. Occupational pension is a core product in both Norway and Sweden. In Norway, employees and former employees in companies with pension agreements at Storebrand are also o�ered attractive solutions within the retail market. Our vision is simple: We are successful when recommended by our customers.
Paris Agreement. We had talks with Japanese and American authorities about climate change and fossil fuel-free investments. In
Norway, Storebrand participates in the Norway 203040 project, which is a business-led climate initiative. The objective is to identify new business opportunities on the path towards a low-emission society and to be a driving force behind Norway’s climate goals.
GRI-412-3 Total number of investment and contracts that include human rights clauses or screening
We prioritise forward-looking dialogue in which we raise ESG issues with companies/industries that should be focussed on more and devote fewer resources to talking to companies about controversial incidents such that they simply correct errors. We also prioritise
“Montreal Pledge” which concerns the reporting of our Group carbon footprint. In addition, we have joined “The Portfolio
Decarbonisation Coalition” which pledges to set targets for managing climate risk and reducing the carbon footprint from our investments. We are also actively working on adapting our investment to meet future challenges and by exercising active ownership in the companies in which we invest. This work is described in more detail below.
Storebrand, Paris Agreement and Task Force on Climate-related Financial disclosures (TCFD)
The �nal report from the Task Force on Climate-related Financial Disclosures (TCFD) was presented in June 2017. TCFD is important for
Storebrand because we want to invest in a manner that supports the goals in the Paris Agreement. The recommendations from TCFD
Agreement. For �nancial reasons, it is therefore important to have quanti�able data that can be used in �nancial analyses and risk assessments of the companies that we invest in.
Storebrand’s goal is to have a positive in�uence on companies. Therefore, in 2017 Storebrand prioritised dialogue with companies/industries that are particularly exposed to climate risk. This is something we do together with other investors in order to have the greatest possible impact. The focus on corporate governance linked to climate will continue.
We will be a driving force for reporting in accordance with TCFD’s guidelines. Therefore, Storebrand itself plans to report in accordance with TCFD’s guidelines in the near future. Storebrand will follow up Climate Action 100+ to in�uence the companies and refer to speci�c plans for reducing GHG emissions if they do not currently have results they can refer to.
Storebrand’s goal is to contribute to standardization, greater transparency and better data �ow in order to more clearly highlight the company’s management of climate risk. The manner in which companies manage the need for restructuring through their strategies and management systems will largely dictate how adaptable business and industry are at developing.
In 2018, we will work purposefully with TCFD by participating in UNEP FI’s investor group for TCFD reporting. Together with a number of other investors, we will reach an agreement about a joint reporting method for investors. The goal is to contribute to standardising practices, developing scenario analyses and ensuring constructive sharing of information relating to climate risk in our investments.
Through the UN a�liated investor initiative, Principles of Responsible Investment (PRI), we are involved in a pilot project with the goal of assessing the bene�t of the TCFD information the companies report to us as investors. In addition, Storebrand is involved in a joint venture with Finance Norway through NORSIF’s ownership group. The purpose of this project is to determine the type of data that is relevant for investors to enable us to avoid setting unnecessary reporting requirements for companies. The project’s planning phase is now over and the work will commence at the end of February 2018. The common feature of the projects with UN PRI and UNEP FI is that Storebrand works together with both the companies we invest in and other investors. By doing so we can set joint requirements from the investor side that give clear signals about what constitutes meaningful reporting that creates added value.
In 2017, Storebrand was in contact with more than one hundred companies, both alone and in cooperation with other investors through PRI. The focus in 2017 was the climate and Storebrand has therefore joined several new PRI climate initiatives. These include: (1) for methane, whereby 42 companies in the oil and gas industry were contacted and asked to measure, manage and reduce methane emissions and to improve the reporting of this, (2) letters to 24 banks asking them to report the extent to which they are following up the TCFD report on climate reporting, and (3) Climate Action 100+ in which the companies with the highest emissions of greenhouse gases within di�erent sectors were contacted with requests to reduce emissions, and to improve the management of climate risk and reporting. See our website for more information about this and other dialogue.
Our ambition is to in�uence companies that have methane leaks in order so that they measure, manage and reduce such emissions.
Storebrand’s Investment universe consists of more than 3,000 companies. A company can be excluded in three ways, and the following are our methods for exclusion: 1. Production-based exclusions: We exclude companies that produce tobacco or controversial weapons.
2. Performance-based exclusions: Our sustainability analyses identify high-risk industries. The 10% with the lowest sustainability rating are excluded.
One of the measures used for �nding such investments is to identify solution-oriented companies with a business model that promotes sustainable development. We refer to these companies as “solution companies” because they develop good solutions to important societal challenges. The total sum of good solutions in key sectors and the interaction between di�erent technologies will pave the way for sustainable development in society. By systematically investing in solution-oriented companies, the capital �ows can reduce capital expenditure for the companies that have the greatest ability to adapt. For example, solution companies can contribute by producing new technology within renewable energy, energy e�ciency improvements, recycling and green transport. The winners of tomorrow will adapt current business models or adopt new business models that use resources more e�ciently. Optimising the use of resources and applied technology are both �nancially pro�table, but also a long-term investment for value creation to continue over time.
Storebrand works every day for our customers’ funds to be placed in future �nancial winners. We have the Nordic region’s largest competence environment for sustainable investments. Our analysts are specialists in everything from resource economics and consumption, to innovation and political regulation.
3. We invest more in the future-oriented and sustainable companies, and less in those less sustainable. In this way we put together funds and portfolios and label them according to their sustainability 100% of Storebrand’s assets under management are screened for �nancial and social factors, including human rights and social rights and environmental criteria that together constitute Storebrand’s sustainability standard. We established two new funds in 2017: The
GRI FS11 Percentage of assets subject to positive and negative environmental or social screening
Storebrand indicator: Percentage of investments in sustainable solutions or green bonds
When many of the world’s countries and companies work towards the realisation of the Paris Agreement and UN sustainable development goals, new market opportunities will arise until 2030. Therefore, investments in companies that follow these trends can both contribute to a positive change through sustainable value creation while also giving major �nancial gains. By investing in di�erent
The table presents short and long-term goals and results for the input factor “Financial capital and our investment universe” that Storebrand uses in its internal follow-up. The column on the right shows the desired positive impact on the UN sustainable development goals.
New sustainability products -> NOK invested in sustainability funds 6,4bn 6bn TBA TBA
Storebrand manages the pensions of 1.2 million Norwegians. A large portion of their funds will be managed for 30, 40 perhaps even 50 years into the future. Our job is to ensure the best possible return on these funds. We believe that we do this by integrating sustainability into all of our asset management activities. We believe that our responsibility also extends beyond this: Our customers shall have a good world to retire in and the manner in which we manage these funds will have an impact on that. We shall create good pensions and a good world in which to retire.
We see that interest in sustainability is increasing among our customers. More customers are concerned about what their money is not being invested in. At Storebrand we have the industry’s strictest exclusion list which evaluates human rights, employee rights, HSE, external environment and climate, ethics and anti-corruption, weapons and tobacco. We focus on companies that are capable of producing more, for more people, while using fewer resources. We exclude companies that violate international norms and conventions, or that are involved in other unacceptable activities. By conducting analyses we �nd the companies that are best equipped for the future. Future-oriented companies are better positioned for global challenges, which is re�ected by lower risk and higher expected returns. We analyse all the companies we can invest in and invest more in those that are good at sustainability. This is also something our customers are concerned about. They can see that their savings can actually contribute to something positive in the world. Storebrand makes limited charitable contributions, but supports sustainable initiatives that contribute to the UN
sustainable development goals through, for example, the “Handshake of the year” prize.
In addition, Storebrand lobbies government authorities and other societal stakeholders to in�uence the regulatory framework for long-term savings.
The purpose of the award is to honor individuals, companies or organizations that contribute to positive progress towards the UN’s sustainability goals. The winner of “Handshake of the Year” should make a di�erence.
GRI FS8 Monetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose
Once again, Storebrand is ranked as the country’s second most sustainable bank and is the best of the �ve largest banks. The future in our Hands and Consumer Council is behind the analysis “Fair Finance Guide” which analyzes the ethical guidelines of 13 Norwegian banks.
Our results g 3. Event-based exclusions: We assess companies on the basis of di�erent events associated with the violation of international laws and conventions. The companies in our investment ecosystem are continuously monitored. If we observe any events that indicate that a company is in violation of the “Storebrand Standard”, the company may be excluded. Exclusions are e�ectuated after a process of anonymized assessment of the issue by Storebrand’s Investment Committee. The committee is comprised of several representatives of executive management and other managers, who meet on a quarterly basis and process the cases anonymously.
Storebrand kommer desidert best ut av de store �nansaktørene i undersøkelsen. Det er kun utfordreren Cultura som får høyere score enn Storebrand. En bank som spesialiserer seg innenfor etisk bankdrift.
Over 90 per cent of our de�ned contribution pension customers are part of the pension solution known as Recommended Pension
Storebrand does not make contributions to political organisations and the work involved in in�uencing the regulatory framework principally takes place through national and international industry organisations.
GRI 418-1 Substansiated complaints concering breaches of customer privacy and losses of customer data
We are known as a leader in the specialist �eld of sustainable investments. However, we shall now go a few steps further. When our customers think about a sustainable savings and pensions provider, they shall think about Storebrand �rst. So simple and yet so di�cult. To achieve this goal, we must both educate the regular saver about what sustainable saving is and we must clearly
In 2017, several measures and improvements were implemented in our serviced channels such as “Customer �rst” (Kunden først),
“Right �rst time”, and “Sustainable settlement” (Bærekraftig oppgjør). At the same time, Storebrand has developed new and improved digital services. Storebrand uses Net Promoter Score (NPS) to measure whether our customers will recommend us to others. NPS is a standard method that shows the proportion of customers who answer 9 or 10 minus the proportion of customers who answer from 0 to 6 to the question: “On a scale from 0-10, to what extent would you recommend Storebrand to a family member, friend or colleague?” The result is based on a 6 month continuous weighted average at year-end, ranked in comparison with speci�c competitors.
Customer First is a programme and tool we have launched to improve customer orientation and to build an even stronger customeroriented culture. It is a basic tool that is a means of doing the correct things in such a way that nothing is left to chance when we create good customer experiences. This is about the culture we strengthen internally and in contact with customers. A focus on simplifying processes and an increased focus on “right �rst time” has given us shorter processing times and allows us to provide better advice. Sustainable settlement (bærekraftige oppgjør) assists Storebrand customers in making the correct choice through discounts on sustainable materials and solutions upon settlement, electric car insurance, and pilot programme for damage prevention dialogue. In combination with transparent processes, this provides good customer experiences. The e�ect of this work is measured in a number of di�erent ways, including through NPS. The purpose of NPS is to obtain feedback about whether Storebrand is providing its products and services in such a positive manner that our customers recommend us to others. NPS is measured at two levels. The �rst is at an operative, transaction-based level and the second is at a more overarching relationship level. Both areas showed positive developments in 2017. Our NPS score increased by more than 3 per cent compared with the previous year for the transaction-based measurement. The increase was especially strong within our digital services. The NLS score for the relationship-based measurement had an even stronger increase in 2017 and ended at almost 9 per cent higher than the 2016 level.
The Group’s ambitions are measured in relation to the Norwegian retail market and Swedish corporate market, something that re�ects the most important strategic focus areas in the time ahead. Storebrand shall be among the top 3 in NPS (Net Promoter Score)
Storebrand’s processing of personal data shall take place in accordance with applicable laws and international regulations. Among other things, Storebrand’s guidelines for processing personal data include Storebrand’s principles for digital trust, fundamental privacy principles such as legal and transparent processing, purpose limitation, the rights of the registered person and requirements for builtin privacy protections. All of our employees receive training in these principles, regardless of where they work in the organisation.
In order to document and verify the e�ectiveness of our security work, we have implemented an internal control system for information security throughout the entire value chain. Through this framework we set requirements for, verify and continually improve the security in the entire Group: The manner in which we ourselves work and what we expect from our partners and in the solutions we o�er to our customers.
The table presents short-term and long-term goals and results for the input factor “Customer and community relations” which Storebrand uses in its internal follow-up. The column on the right shows the desired positive impact of the UN sustainable development goals.
NPS Norwegian pension marked Top 3 #4 #4 Top 3 Top 3 Top 3
Storebrand works with digital tools and the improvement of our digital communications channels in order to increase our customers’
understanding of and interest in pension saving. The relationship between employer and employee is a joint platform for understanding the importance of pension saving as an important employee bene�t to build upon.
We have noted major interest in our fund savings products, not least Storebrand Global Multifactor, which, according to Morningstar, is the global equity fund managed by a Norwegian asset management company that has given the best returns in the past three, �ve and seven years.
FS14: Initiatives to improve access to financial services for disadvantaged people.
In 2017 we continued the project of updating letters that are sent out using language that is clearer and more understandable.
According to the Norwegian Customer Satisfaction Barometer (Norsk Kundebarometer), we are at the top when concerning customer satisfaction in the corporate market. One of the most important areas that contributes to us being ranked number 1 is that we are considered to be the best at communicating information to the employees. This is at the very heart of the question concerning customer advice.
Providing relevant customer advice is vital to our business activities. We have a strong focus on digital channels and the interaction between digital and physical operations will be extremely important. Success with this is re�ected in both customer satisfaction (NPS
Financial litteracy -> Young entrepreneurship N/A N/A N/A N/A N/A N/A
760 million was certi�ed. This means that 38% of the purchase volume over NOK 1 million was environmentally certi�ed in accordance with the purchasing policy. There are a total of 285 suppliers, 66 of whom are certi�ed, which is 23% of the suppliers. All suppliers pledges to follow the Principles of The UN Global Compact.
GRI 412-1 Total number of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening
The digital transition has enabled the development of products and services at a pace that the �nance sector has never seen before. This requires an organisation that has to both represent the long-term commitments Storebrand has to our customers and that must be in the driving seat for digital improvements and innovation.
With the assistance of the mobile-based “pull” learning pathway “Our driving force in the head and heart”, we were able in 2017 to improve the general level of digital expertise in the organisation and enable all employees to learn to use multiple digital platforms
A working life characterised by an increased pace requires a shift from hierarchy to a stronger focus on teams and networks. Modern leadership is principally about coaching and inspiring employees such that they utilise their potential and exercise self-management, i.e. that the individual is able to see opportunities and dares to take responsibility for his/her own decisions.
In addition to following the internal procurement policies, all purchases shall be carried out in such a way that they contribute to reducing the environmental and climatic impact from goods and services that are purchased and support Storebrand’s commitment to the environment and corporate social responsibility. This is done by establishing environmental requirements through Storebrand’s own guidelines for suppliers of goods and services that have an impact on the environment aspects of the business activities, for example, waste, packaging, energy, emissions and transport. In addition, Storebrand’s position as a role model to the rest of the world must always be considered. This speci�cally entails that the supplier should have systems and guidelines for safeguarding environmental aspects in its business activities, including a corporate social responsibility pro�le in its products and services. Using the same criteria, Storebrand prioritises suppliers that are certi�ed in accordance with one or more of the following standards: ISO14001,
Insofar as this is possible, the supplier must still be able to document the products’ lifecycle costs and environmental characteristics.
Storebrand indicator: Number of improvement projects that have resulted in a digital solution.
We will continue to o�er digital learning pathways to our employees into the future and an important, and not least, compulsory course in 2018 will be “Training in the new Personal Data Act – (GDPR)” for which the goal is that we will satisfy the requirements such that our customers can be assured that we correctly process their personal data.
In the future, the ability to manage rapid changes with the assistance of good processes and the right technology will apply. Therefore, at Storebrand we will strive to work according to agile work methods in everything we do (Build, Measure, Learn) – what we call “agile and smart”, and where we test, try and fail, provide feedback and then retest again and continue to build on this. This work method has already been adopted by large parts of the organisation and will be applicable for more of them in the future.
Storebrand has a zero tolerance policy towards harassment and we will continue with preventive work by increasing awareness that we want to have a good and safe workplace where we have a pleasant environment and treat each other with respect. Storebrand has the goal of equal pay for equal work.
The head o�ce has been adapted to meet individual needs. It is a universally designed building.
Storebrand indicator: number and percentage of suppliers that have a certified environmental management system.
Storebrand has for several years worked systematically on identifying future managerial candidates and promoting even gender distribution. There has been a focused e�ort on management development in the areas of strategic and operative management, communication and change. The aim is to ensure that future competence requirements are met, and to develop Storebrand to meet the changing needs of society and the market. The company seeks to ensure equal treatment and opportunities for all the internal and external recruitment and development processes. We shall contribute to achieving sustainable development goal 5 for gender equality and particularly the sub-goal of equal treatment at the workplace.
In cooperation with the union, an assessment and analysis have been carried out of the salary level to be able to even out di�erences based on gender. Several initiatives were commenced in 2017 to increase awareness about gender equality, gender balance in the workplace and an inclusive workplace.
FiftyFifty is based on UN sustainable development goal number 5, gender equality, and during 2017 women from some of the largest companies in Norway and from di�erent industries met together with the goal of de�ning speci�c initiatives at individual, company and society level as well as goals for how to succeed with recruiting more female managers to higher levels. 12 major enterprises participated in the programme: Orkla, Yara, Posten Bring, Cognizant, Coop, Norwegian Armed Forces, ManpowerGroup, Evry,
Norwegian Bar Association, Veidekke, Norsk Tipping and Storebrand. A total of 100 women from these enterprises participated in the programme and each company had participants from di�erent levels of the enterprise.
The mentor programme is a collaboration with the non-pro�t organisation Catalysts, headed by Lisa Cooper. Lisa Cooper and
Catalysts have several years of experience with operating mentor programmes in the public sector. They are now launching a programme for business in cooperation with Storebrand. The objective is to prevent students from dropping out of high school through inclusion in the local community. We at Storebrand are proud of being the �rst collaborative partner for Catalysts from the business community.
Young Entrepreneurship is a non-pro�t, nationwide operator that works with promoting entrepreneurship at schools. The organisation contributes to 150,000 students acquiring skills relating to entrepreneurship, innovation, cooperation and personal
GRI 405-02 Ratio of basis salary and remuneration of women to men
This service can be used to obtain guidance in all types of ethical dilemmas and problems.
“People �rst, digital always” is Storebrand’s HR strategy for 2017-2020 and that is actively used to enable us to meet the company’s need for an operative, strong and adaptable commercial organisation, with the employees at the centre, that allows for rapid changes to be managed with the assistance of good processes and the right technology.
The Group’s business activities require trust from customers, government authorities, shareholders and society in general. In order to gain trust we are dependent upon professionalism, expertise and high ethical standards in all aspects of our work. This applies to the way the Group operates and to the conduct of each individual employee. Storebrand has separate guidelines for ethics, and the work on ethics has a high priority at Storebrand. e-learning courses in ethics and anti-corruption have been prepared that all employees must complete every three years. There is also regular ethical dilemma training in all departments. Ethics is a permanent topic in management training as well in training programmes for new employees. In addition, we have a separate service on the intranet in which employees can anonymously ask questions concerning ethical dilemmas such as discrimination, harassment, corruption etc.
The 2017 employee survey shows signi�cant progress compared with the previous year, and the results for Storebrand are better than the benchmark total for Norway and for the banking and insurance industries.
Group’s sustainability work. This is also con�rmed by the many employees who signed their own private “Paris Agreement” in January 2018 in which they pledged to prioritise in the best interests of the agreement.
Storebrand’s head o�ce in Lysaker is environmentally certi�ed with the grade of “Excellent” in accordance with the international environmental certi�cation standard BREEAM In-Use. BREEAM In-Use (Building Research Establishment’s Environmental Assessment
Our focus on continous learning and feedback applies for everyone in the organisation and we place emphasis on the manager setting the ambition and direction, but also giving employees as much opportunity as possible to select how they shall achieve these goals.
The goal is to increase the job satisfaction of each employee in 2018 and work towards gender balanced recruitment and management. In order to utilise the link between people and the digital elements, the goal is to increase the proportion of digital customers during 2018.
The �nancial sector is being transformed. Organisations such as Storebrand require the ability to initiate quick and continual changes and innovation. Therefore, in 2017 we raised our ambitions of building and strengthening our culture of learning. At Storebrand, we will learn every day from everything we do. Continual learning shall be a part of our mindset – a part of our culture. Our ambition is to o�er an even better learning environment with a “pull” instead of a “push” approach. This means fewer controlled learning activities and more facilitation for employees to �nd the learning resources they need when they need these. We will support this with a modern and �exible learning platform that also supports the establishment of a more digitally competent work force.
The company believes that a focus on, among other things, job satisfaction, can contribute to in�uencing customer satisfaction, which in turn in�uences customer loyalty and has a positive e�ect on the company’s bottom line. In addition, job satisfaction has a positive e�ect on quality, productivity and absence due to illness.
The employee survey also shows progress in terms of questions regarding trust in immediate superiors, cooperation, job content, and learning and development.
All employees have at least two annual performance assessment interviews to follow-up deliveries and carreer development.
404-3 Percentage of employees receiving regular performance and career development reviews.
The table presents short and long-term goals and results for the input factor “Our people and systems” that Storebrand uses in its internal follow-up. The column on the right shows the desired positive impact of the UN sustainable development goals.
Value drivers Goal 2017 Baseline 2016 Result 2017 Goal 2018 Goal 2020 Goal 2025
Every year since 1996 Storebrand ASA has given its employees an opportunity to purchase shares in the company through a share purchase scheme. The purpose of the scheme is to involve the employees more closely in the company’s value creation. In June 2017, each employee was given the opportunity to purchase 250 shares in Storebrand at a price of NOK 55.41 per share. Around 60 per cent of the employees participated and subscribed for a total of 657,715 shares.
If the solvency margin is above 180%, the Board of Directors intends to propose special dividends or share buy backs.
Storebrand attaches importance to comprehensive and e�cient communication with �nancial markets. Maintaining a continuous dialogue with shareholders, investors and analysts both in Norway and internationally is a high priority. The group has a special investor relations unit responsible for establishing and coordinating contact between the company and external parties such as the stock exchange, analysts, shareholders and other investors. All interim reports, press releases and presentations of interim reports are published on Storebrand’s website.
Shareholders should generally contact the operator of their securities account for questions or noti�cation of changes, such as address changes.
Dividend per ordinary share (NOK) 2.1 1.55 0 0 0 0
1978 Storebrand changes its logo and introduces “the link” as an easily recognisable trademark. The formal name of the holding company is changed to A/S Storebrand-gruppen.
UNI Storebrand’s negotiations with Skandia concerning establishing a major Nordic company fail to reach agreement.
Storebrand, Skandia and Pohjola consolidate their P&C insurance activities in the new Nordic, Swedish registered company, If Skadeförsäkring AB. Storebrand sells its stake five years later.
Storebrand acquires SPP, the Swedish life insurance and pensions provider, from Handelsbanken and forms the leading life insurance and pensions provider in the Nordic region.
Storebrand Asset Management surpasses NOK 500 billion in assets under management for the first time.
Previous positions Product Director, Finn.no AS (2011-2017) COO in Kelkoo/Yahoo, London (2007-2009) VP Marketplace in Yahoo Europe, London (2006-2007) Regional Manager Scandinavia and the Netherlands in Kelkoo/Yahoo, Stockholm (2003-2006) VP International Operations in Kelkoo, Paris (2000-2001) Manager in PricewaterhouseCoopers, Oslo (1993-2000)
Positions of trust Board Member of Flytoget AS Board Member of ITERA ASA Chairman, Kongsberg Teknologipark AS Board Member of Sporveien i AS CFO of Opplysningen 1881 AS
Previous positions Special Adviser at Storebrand (2011-2013) Deputy Director General and Director General at the Ministry of Finance (1994-2001,2006-2011) Director General at the Prime Minister’s Office (2002-2006) Management Consultant at McKinsey & Company (2001-2002)
Education Sloan Fellow (London Business School) Computer Science (University of Strathclyde) Bachelor of Arts (University of Strathclyde)
Previous positions Senior Executive of Tandberg/ Cisco Systems Inc. (2010–2012) CEO of Tandberg ASA (1989–1997) CEO of Tomra Systems ASA (1986–1988) Executive VP of Unitor ASA (1983–1986) Sales and Marketing Director of Dyno Industries AS (1980–1983)
Positions of trust Board Member of Hidden ASA Chairman of Dallas Asset Management AS Member of the Norwegian Academy of Technological Sciences Board Member of NEL Hydrogen ASA (2014-2017) Board Member of Rec Solar ASA (2013-2015) Chairman of Tomra Systems ASA (1989-2008) Chairman of Tandberg Television ASA (1989-2007) Deputy Board Chairman of Komplett ASA (1996-2003)
Education MSc in Economics and Business Administration (siviløkonom) (Norwegian School of Economics) Various management programmes (IMD, BI and Management at Lund)
Previous positions Executive Vice President at DnB and various other managerial positions in the same group (1985-2013) Consultant at the Norwegian Ministry of Trade and Shipping (1983-1985)
Positions of trust Board Member of the Storebrand Finance Association Board Member of the Storebrand Art Society
Previous positions Product Specialist, Asset Management, Storebrand Livsforsikring AS (2015-2017) Investment Manager at Storebrand Livsforsikring AS (2011-2015) Group Trainee at Storebrand Livsforsikring AS (2009-2011)
Group is divided into the segments Savings, Insurance, Guaranteed Pension and Other. Savings and Insurance are the Group’s focus areas, while
During 2017, Storebrand continued to work at being the best provider of pension savings, in combination with further capital e�ciency improvements and cost reductions. Continued strong growth within fund-based savings, and competitive and sustainable returns to customers contribute to increased assets under management. The Group’s position in the savings market has been further strengthened by the acquisitions of Skagen and Silver. Assets under management are now NOK 721 billion.
Companies and their current and former employees are the Group’s main target group. Most de�ned bene�t based pension schemes in the private sector have been discontinued and new earnings principally occur in the de�ned contribution based schemes. In the corporate market,
The board proposes a dividend of NOK 2.50 per share (NOK 2.1 in ordinary dividend, NOK 0.4 in extraordinary dividend).
NOK 10 billion in pension assets shall be transferred to Storebrand. NOK 8.5 billion of the portfolio consists of pension products with no interest rate guarantee. The remainder is related to risk coverage.
Group pro�t [3]Group profit [3] of NOK 2,940 million for 2017.
Storebrand achieved a Group pro�t before amortisation and reserve strengthening of NOK 2,940 million (NOK 2,913 million) for 2017. The Group pro�t after tax was NOK 2,405 million (2,143 million). The �gures in brackets show comparative �gures for the same period last year.
Amortisation of NOK 136 million of excess value associated with the acquisition of Skagen increased the level of amortisation in the 4th quarter and in 2017. Ordinary depreciation of intangible assets is expected to be approximately NOK 100 million per quarter in 2018.
The Group had a taxable accounting income of NOK 2 million for 2017. The e�ective tax rate is in�uenced by the fact that the Group has operations in countries with tax rates that are di�erent from Norway, and it varies from quarter to quarter depending on each legal entity’s contribution to the Group result. The tax rate is estimated at between 19-23% for 2018.
A reduction in the corporate tax rate from 24% to 23%, e�ective from 1 January 2018, will have an impact on Group companies that are not subject to the 25% �nancial tax. The Group’s investment properties are owned by companies that receive a reduced tax rate from 2018, something that means lower deferred tax on temporary di�erences relating to the investment properties of NOK 105 million. In addition, sales of properties have resulted in the reversal of associated taxable temporary di�erences, which gives a reduction in the tax expense for the year of approximately NOK 750 million.
(NOK 1,063 million in 2016). The improvement in the result was primarily due to income consolidated from Skagen. Growth in assets under management in pensions and asset management, as well as growth in bank lending contributed to the earnings growth. The costs increase as a result of acquisition costs and the development and marketing of new product lines.
The result for Savings includes the result from Skagen of NOK 259 million and amounts to a total of NOK 1,511 million in 2017. Adjusted for
Total fee and administrative income increased by 13% from 2016 to 2017, adjusted for income from Skagen (NOK 294 million). Income growth is driven by the customers’ conversion from de�ned-bene�t to de�ned-contribution pension schemes in combination with new business and higher savings rates. In addition, volume growth and transaction-based fees in asset management contributed to growth. Improved lending margins give higher net interest income in the bank. Net interest income for the year was 1.20% of average total assets compared with 1.16%
Adjusted for special items in 2016 and 2017, the nominal cost level increased in accordance with the volume growth, which is attributed to investments in new products (IPS and ASK), higher distribution costs and other volume-related costs.
In the Norwegian market, Storebrand maintained its position as the market leader for de�ned contribution schemes, with around 32% of the market. Premium growth for de�ned contribution occupational pensions was 7% in Norway in 2017. The growth is driven by sales to new customers, conversion from de�ned bene�t pensions and sales of higher savings rates, in addition to growth from wage adjustments. There is strong competition in the market for de�ned contribution pensions, and Storebrand expects that this will continue.
SPP has a market share of 14% in the Swedish market for other occupational pensions. Premium income was 3% higher than in 2016. The transfer balance and new sales improved on the previous year.
amounted to NOK 644 billion, comprising mutual funds and funds-in-funds, as well as individual portfolios for insurance companies, pension funds, municipalities, institutional investors and investment companies. For assets under management, see the graph below.
* Low Risk, Balanced and Offensive Pension was established in March 2004. Extra Low Risk and Extra Offensive Pension was established in December 2011.
Swedish corporate and retail markets, P&C insurance and personal risk products in the Norwegian retail market and employer’s liability insurance and pension-related insurance in the Norwegian and Swedish corporate markets.
The combined risk result gives a claims ratio of 70% (75% in 2016) and the underlying risk development is satisfactory. Health insurance has delivered a good result due to good claims development. High �nancial income and the dissolution of reserves for personal insurance contribute to a good result. P&C insurance delivers lower underlying results, but achieves a good level of pro�tability due to gains from dissolution. Group disability pensions delivered a lower result than the previous year, which was primarily due to the �nancial result passing to the customer.
Personal insurance maintains a good level of pro�tability with marginal portfolio growth. The result for the Swedish risk products was lower as a result of the drop in premium income.
The insurance area o�ers a broad range of products to the retail market in Norway, as well as the corporate market in both Norway and
Insurance is responsible for the Group’s risk products in Norway and Sweden.[1] The unit provides health insurance in the Norwegian and
Storebrand’s growth in the retail market has stagnated due to greater competition and a shift in distribution strategy. The Akademiker portfolio is an important driver of growth and the rate of sales is stable. REMA Forsikring was launched as white label in autumn 2016 and is experiencing growth. The partner strategy delivered satisfactory sales during 2017. The growth in personal insurance was stable and in line with general market growth.
The corporate market is generally a more mature market with lower margins and stronger focus on price. The pro�tability of group disability pension has been weak over an extended period, however recent initiatives have signi�cantly improved pro�tability. However, tough competition places pressure on the margins for individual customers. Health insurance is a growth market. Measured in terms of premiums written, Storebrand is one of the market leaders in health insurance, which also has a good level of pro�tability. Storebrand is a relatively small player within personal insurance, but pro�tability is satisfactory. In Sweden, the disability trend has been downward for a long period of time, which has led to reduced premiums in general.
The result for Guaranteed Pension before amortisation totalled NOK 766 million in 2017, which was a decrease of NOK 104 million compared with 2016. The fall in earnings was due to reduced pro�t sharing in SPP as a result of the strengthening of reserves of approximately NOK 200 million in connection with the transition to a new UFR.
Income was NOK 1,483 million in 2017, compared with NOK 1,566 million in the previous year. In 2017, income fell by 5.3% compared with 2016.
The risk result was NOK 67 million in 2017, compared with minus NOK 37 million in the previous year. Changes were made to the reserves at the start of 2017 to strengthen the result and this had an impact in 2017. The risk result is largely generated in the Swedish business. The risk result in the Norwegian business was restricted as a result of the business volume decreasing, reserve strengthening due to the introduction of new collective disability pension and general disability developments in the portfolio during this period.
The result before amortisation for the Other segment activities was NOK 83 million for 2017, compared with NOK 145 million for 2016. The operating costs are in�uenced by transaction costs associated with the acquisition of Skagen and Silver.
The Group’s target solvency margin in accordance with the Solvency II regulations is a minimum of 150%, including use of the transitional rules.
The solvency margin for the Storebrand Group was calculated at 172% at the end of 2017, including the transitional rule. Without transitional rules, the solvency margin was 155%. Storebrand uses the standard model for the calculation of Solvency II. The solvency margin without transitional rules was strengthened due to strong investment results, withheld pro�ts, the issuing of a subordinated loan and certain modi�cations to the modelling. The changes result in decreased equity that was fully compensation by the transitional provisions and thereby explain the increased value of the transitional amounts.
1.5 million for the year. The excess value of bonds and loans valued at amortised cost declined due to higher interest rates by NOK 0.3 million for the year and amounted to NOK 8.5 million as at 31 December. The excess value of bonds and loans at amortised cost is not included in the
Operating costs were NOK 889 million in 2017, which is NOK 92 million less than in 2016. Operating costs are being reduced over time as a result of the area being in long-term decline.
Guaranteed reserves in % of total reserves 61.2 % 64.9 %
Bu�er capital as a % of customer assets SBL 7.2 % 5.7 %
Customer reserves for guaranteed pensions amounted to NOK 264 billion at the end of 2017, which was the level at the start of the year, adjusted for the exchange rate. In the Norwegian business, paid-up policies were the only guaranteed pension portfolio experiencing growth and amounted to NOK 128 billion at the end of 2017, representing an increase of NOK 14 billion in 2017, which is the equivalent of 12% during the year. From the end of 2014, the customers were given an o�er to convert from traditional paid-up policies to paid-up policies with investment options, and insurance reserves for paid-up policies with investment options amounted to NOK 6.8 billion at the end of 2017 and are included in the Savings segment.
The premium income for Guaranteed Pension (excluding transfers) was NOK 4.7 billion in 2017. This represents a decline of 15%, compared with 2016. The majority of products are closed for new business and the customers’ choices about transferring from guaranteed to non-guaranteed products are in line with the Group’s strategy.
Storebrand ASA issues senior debt, Storebrand Bank ASA issues senior debt and subordinated loans, while Storebrand Boligkreditt AS issues covered bonds. All four companies are rated by the credit rating agency Standard & Poor’s. There were changes to the credit rating during the year, which involved the future prospects of Storebrand Livsforsikring AS and Storebrand Bank ASA being changed from stable to positive.
Storebrand’s business is to assume and manage various risks in a deliberate, controlled and responsible manner, at the expense of both the customers and the owners.
Authority of Norway and the Swedish Financial Supervisory Authority. Storebrand must also comply with requirements from other public supervisory authorities, including the Norwegian Consumer Authority and the Norwegian Data Protection Authority. Risk management must satisfy the formal requirements pursuant to legislation and other regulations. The level of risk-taking shall be in accordance with the regulatory requirements and other needs of customers, shareholders, lenders, rating companies, etc. Undesired incidents shall be limited.
The greatest risk is the disability risk. Storebrand has the risk of there being more disability cases than expected and/or that fewer disabled persons will be able to work again. The restructuring of disability cover in Norway’s National Insurance Scheme from 1 January 2016 has for many given better cover from the National Insurance Scheme for new incidents of disability. All else being equal, this will reduce the scope of
Interest rate risk is in a special position because changes in interest rates also a�ect the value of the insurance liability in the solvency accounts.
Other comprises Storebrand ASA, as well as the company portfolios and smaller subsidiaries in Storebrand Livsforsikring and SPP. In addition, this segment comprises lending to commercial enterprises by Storebrand Bank and the activities of BenCo.
New EU rules concerning customer information and advisory services enter into force in 2018.
The standard model that is used for the calculation of capital requirements under Solvency II shall be revised by the end of 2018. In connection with this, the European supervisory authority (EIOPA) has conducted a consultation process as the basis for advice to the Commission. Among the questions raised in the consultation process have been the treatment of the loss-absorbing ability of deferred tax, the risk margin and the risk module for interest rate risk. EIOPA will provide its recommendations to the Commission by the end of February 2018.
PRIIPs (Packaged Retail and Insurance-based Investment Products), MIFID II (Markets in Financial Instruments Directive) and IDD (Insurance
Distribution Directive) are EU rules that harmonise requirements for information and advisory services.
MIFID II and IDD are directives that stipulate rules for sales and advisory services, requirements for quali�cations and further education, product development processes and managing of con�icts of interest for investment services and insurance products. MiFID II entered into force in
The money laundering directive sets new requirements for identifying, understanding and initiating measures to counteract the risk of money laundering and terrorist �nancing. Among other things, requirements are set for the business to implement control measures for all customers and strengthen customer control measures through increased identi�ed risk of money laundering and terrorist �nancing.
The introduction of a system with a separate pension account in which one is able to combine de�ned contribution-based pension earnings from current and former employers has been discussed in several rounds since this was raised by the Confederation of Norwegian Enterprise
The costs should be divided between employer and employee, as they are at present, i.e. that the employer covers the costs associated with the active part, and the employee covers the cost of earnings from previous employment. It is proposed that the employer should pay for administration in its entirety, i.e. both for the active part and for earnings from previous employment.
The repeal of the requirement for at least 12 months’ service prior to gaining pension entitlement has been proposed.
The evaluation report does not propose changes to the scheme. It is expected that the parties will discuss this in connection with the wage settlement in spring 2018. Potential changes to the AFP scheme which make this more predictable for employees may in�uence the companies’
The Ministry of Labour and Social A�airs has reached agreement with all parties to initiate a �nal process to agree to changes to public sector employee occupational pension schemes. The ministry is aiming to have an agreement in place by 1 March 2018. Legislative work must subsequently be carried out before new legislation can take e�ect.
A report from the Ministry of Labour and Social A�airs has assumed that the new scheme shall be a net scheme such as in the private sector, without coordination with the National Insurance Scheme’s retirement pension. A hybrid product has been proposed, but with considerably greater complexity when compared with existing hybrid products in the private sector. This is because there is a desire for gender neutrality for both annual bene�ts and premiums.
Storebrand exited the market for insured public service occupational pensions in 2012, but has since won important contracts for the administration and management of pension funds for municipalities and other public enterprises. The form in which the new scheme for public service occupational pensions shall take will be of importance in determining whether the market for insured public service occupational pensions will again become an attractive market for Storebrand to compete in. A product solution that is based as much as possible on existing hybrid rules pursuant to the Occupational Pensions Act and is a clear di�erence between the previous and new scheme, will be important in facilitating this competition.
A�airs and the Financial Supervisory Authority of Norway, which is tasked with investigating possible changes in the regulations for guaranteed paid-up policies. Finance Norway has been invited to participate in a reference group together with, among others, the parties in business and industry. The report will be complete in May 2018.
A new scheme for individual pension savings (IPS) was introduced from 1 November 2017. The scheme permits an income deduction for savings of up to NOK 40,000 annually. Compared with the previous IPS scheme, the most important improvement is that symmetrical taxation has been introduced with the same rates for deductions for contributions and tax on payments (23% for 2018).
Rules for the equity savings account entered into force on 1 September 2017. The scheme is directed at individuals who can use the equity savings account to invest in listed stocks and equity funds. Pro�ts from the sale of securities in the account shall not be taxed in connection with sale, and will only be taxed when the funds are withdrawn from the account. The transitional period, in which shares and equity funds can be transferred to the equity savings account without realising tax on pro�ts, has been extended to 2018.
With regard to sustainability, requirements will be set for the funds that are based on international conventions that Sweden is a signatory to.
The Storebrand Academy is the Group’s initiative for custom management development programmes. A new group started in 2017 with 20 capable managers.
In the last three years, Storebrand has had an innovative summer programme known as Sandbox. This is for students who wish to have their creativity and business acumen tested. The students use Storebrand’s work methods to arrive at proposed solutions that are ready for the market. The students are able to work with actual customer cases and also attend courses in Lean Startup, presentation techniques and team building. Of the 300 applicants, 10 students are given the opportunity to participate and some eventually become employees.
Storebrand is focussed on “Employer branding”. This involves systematic work on building strong relationships with existing and potential employees and thereby ensuring that the Group has the best key employees. Company presentations are held at a number of universities and the Group has established separate career websites via Storebrand.no, LinkedIn and Instagram.
Storebrand is focussed on the organisation re�ecting our customers and the market the Group operates in. Diversity contributes to increased innovation and learning in the organisation. In 2017, Storebrand achieved a score of 85 (83) points out of a possible 100 in the annual employee survey of our diversity work.
The average age at Storebrand is 44, and average seniority is 12 years in Norway and 9 years in Sweden. Storebrand had 1,773 employees in the
Group at year end. 35% of the management group at Storebrand Norway and 47% at SPP are women. 45% of the employees in the Norwegian part and 55% of the employees at SPP are women.
Storebrand has for several years worked systematically on identifying future managerial candidates and promoting even gender distribution.
There has been a focused e�ort on management development in the areas of strategic and operative management, communication and change.
The aim is to ensure that future competence requirements are met, to develop Storebrand to meet the changing needs of society and the market.
The company seeks to ensure equal treatment and opportunities for all the internal and external recruitment and development processes.
The head o�ce is adapted for meeting individual requirements. It is a universally designed building that was recerti�ed as a miljøfyrtårn (Eco-
Storebrand places signi�cant emphasis on employee surveys. The company believes that a focus on, among other things, job satisfaction, can contribute to in�uencing customer satisfaction, which in turn in�uences customer loyalty and has a positive e�ect on the company’s bottom line.
In addition, job satisfaction has a positive e�ect on quality, productivity and absence due to illness.
The point score for job satisfaction, which is the sum total of satisfaction and motivation, increased by four points from 2016 to 2017. Another important term that the company quanti�es is loyalty. This is the sum total of dependability and dedication/enthusiasm, and this increased by three points from 2016 to 2017. Dependability is measured by the desire of employees to work at Storebrand and them recommending the company as a workplace to others.
The employee survey also shows progress and good results for questions regarding trust in immediate superiors, cooperation, job content, and learning and development.
No injuries to people, property damage, or accidents were reported in the Storebrand Group in 2017.
Trust is the lifeblood of Storebrand, and we work systemically to live up to good ethical standards. The company sets strict requirements concerning high ethical standards for the Group’s employees. The Group has a common code of ethics that is available on our intranet in three languages and which is con�rmed by the Board of Storebrand ASA once a year. Noti�cation routines, brochures, anonymous postbox, dilemma bank, question and answer summaries and presentations are all available to employees on the intranet, so that awareness of and re�ection on the subject can be high on everyone’s agenda. Every year all the managers must con�rm in writing that they have discussed ethics and ethical dilemmas, information security, �nancial crime and HSE in departmental meetings.
The Group has established systems for both internal and external whistleblowing. The external channel has been established through an external law �rm. There are also extensive routines for harassment and improper behaviour.
Storebrand is the market leader for the sale of pension solutions to Norwegian businesses. De�ned-contribution pension plans are the dominant solution for pension savings in Norway. The market for de�ned contribution pensions is growing and Storebrand’s reserves within
Market risk is the Group’s biggest risk. In the Board’s ORSA process, developments in interest rates, credit spreads, and equity and property values are considered to be the biggest risks that in�uence the solvency of the Group. Storebrand has adapted to the low interest rates by building up bu�er capital. Over time the level of the annual interest rate guarantee will be reduced. In the long term, continued low interest rates will represent a risk for products with guaranteed high interest rates running at a loss, and it is therefore important to achieve a return that exceeds the interest rate guarantee associated with the products. Storebrand has therefore adjusted its assets by building a robust portfolio with bonds at amortised cost to achieve the guaranteed interest rate. For insurance risk, increased life expectancy and the development in disability are the factors that have greatest in�uence on solvency. Operational risk is closely monitored and may also have a signi�cant e�ect on solvency.
Storebrand has established a framework for capital management that links dividends to the solvency ratio and has published a new dividend policy for 2018 and into the future. The goal is a solvency ratio of over 150%, including transitional rules. The solvency ratio at the end of the fourth quarter was 172%. The solvency level shows that the Group is robust for the risks the business faces. A gradual improvement is expected in the underlying solvency margin in the coming years. The expected result performance in the Group, and reduced capital requirements from the guaranteed business are expected to increase the solvency level in the coming year. Financial market volatility and changes to regulatory requirements may result in short-term movements in the solvency level. The Board’s ambition is to pay consistently increasing dividends, combined with extraordinary dividends, to re�ect the �nancial market volatility and release of capital. The expected release of capital will result in an increased payment ratio over time.
with Norwegian employees must complete a mandatory HSE course, in which part of the training involves following up illnesses.
Group also has a mandatory ethics course for managers, which includes money laundering and corruption. At these, managers work with dilemmas taken from everyday situations at Storebrand in the past 20 years. Storebrand’s management groups receive equivalent training, since it is the company’s experience that such discussions of dilemmas are very useful and better enable managers to recognise situations that may arise both in private and in work related settings. Managers also train their sta� in the same way. The company’s authorised �nancial advisers complete a specially tailored training programme.
In 2017, the following changes to the composition of Storebrand’s corporate bodies took place: Board of Directors of Storebrand ASA: Chairman Birger Magnus left the Board and Didrik Munch was elected as the new Chairman. Board member (employee-elected) Knut Dyre Haug stepped down from the Board and Ingvild Pedersen was elected as the new (employee-elected)
Nomination Committee: Terje Venold has stepped down as Chairman of the Nominations Committee. Per Otto Dyb has been elected as the new
The Norwegian ten-year interest rate on government bonds was unchanged during the year. The Swedish ten-year interest rate on government bonds also increased by approximately 0.1 percentage points for the year. Swedish interest rates are in�uenced by very expansive monetary policy. The increase in interest rates has continued in 2018 for Sweden and Norwegian interest rates have also increased.
Asset management is an important business area within the Savings segment. Asset management has had stable growth in reserves and good earnings development. The capital management platform is competitive and scalable for continued growth.
The Guaranteed Pension segment is in long-term decline and the combined reserves for the Guaranteed business are decreasing. However, there is continued growth in the reserves linked to paid-up policies due to companies choosing to convert existing de�ned-bene�t schemes to de�ned-contribution schemes. It is expected that the growth in paid-up policies will decline in the future and that there will be �at growth in reserves over several years before the reserves start to fall. The portfolio of free policies does not contribute to the Group’s results with the present interest rates. Guaranteed reserves represent an increasingly smaller share of the Group’s total reserves and were 61.2% at the end of the quarter.
A target has been set for combined nominal costs to be lower in 2018 compared with the level at the end of 2015. Storebrand will still make selected investments in growth. The partnership with Cognizant is expected to provide lower costs for the Group in the coming years.
Storebrand ASA reported a profit before tax of NOK 1,934 million in 2017, compared with NOK 829 million in 2016. Group contributions from investments in subsidiaries totalled NOK 2,154 million, compared with NOK 899 million in 2016.
[2] The income statement is based on reported IFRS results for the individual companies.
A dividend of more than 50% of the Group’s pro�t after tax and a higher nominal level than the ordinary dividend for 2017 are expected for 2018.
Accounting Act, generally accepted accounting policies in Norway, and the Norwegian Regulations relating to annual accounts, etc. for insurance companies.
The pro�t for Storebrand ASA for 2017 was NOK 1,824 million, compared with NOK 738 million in 2016.
Good corporate governance is important to ensure that an enterprise can achieve its defined goals, including best possible utilisation of resources and good value creation. The Storebrand Group (hereafter referred to as Storebrand) works continuously on improving both the overall decision-making processes and the day-to-day management of the company.
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 on page XX.
1. IMPLEMENTATION AND REPORTING ON CORPORATE GOVERNANCE (NO DEVIATIONS FROM THE CODE OF PRACTICE)
The Board has decided that the company will comply with the Norwegian Code of Practice. Compliance with the Code of Practice is described in the Board of Directors’ Report. Storebrand complies with the Code of Practice without any signi�cant exceptions. One minor deviation has been accounted for below under section 3.
Storebrand ASA is the parent company in a �nancial group, and its statutory object is to manage its equity interests in Storebrand’s subsidiaries in compliance with the current legislation. Storebrand’s main business areas are comprised of pension and savings, insurance and banking. The full text of the Articles of Association may be found on Storebrand’s website at www.storebrand.no.
Storebrand has the ambition of maintaining a position among the best companies by integrating this perspective in other business areas.
Storebrand believes that this will create increased value for customers, owners, society and other stakeholders. See the separate article in the annual report on Financial Capital and Our Investment Universe.
General Meeting. In addition, the authorisation shall be based on the adopted dividend policy. The General Meeting was not requested to provide such authorisation in 2017. Read more about Storebrand’s dividend policy in the Board of Directors Report.
4. EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS WITH CLOSE ASSOCIATES (NO DEVIATIONS FROM THE CODE OF PRACTICE)
Storebrand ASA has only one class of shares. Storebrand has no speci�c restrictions on the ownership of shares or voting rights beyond the restrictions imposed by the Financial Institutions Act. The management and Board of Directors of Storebrand focus strongly on the equal treatment of shareholders through their work.
on their own initiative immediately report con�icts of interest that may arise to their immediate superior as soon as they become aware of such a situation. In general, an employee is de�ned as disquali�ed if circumstances exist that could result in others questioning the person’s impartiality in relation to matters other than Storebrand’s interests.
The share capital has been increased in 2017, by the authorisation granted the Board of Directors by the Annual General meeting cf. section 3 above. In case of capital increases in accordance with this authorization, the board may decide that the shareholders’ preferential rights shall be waived.
Pursuant to the Articles of Association, Storebrand ASA’s General Meeting shall be held by the end of June each year. The General Meeting was held on 5 April 2017. All shareholders with a known address will receive notice of the General Meeting, which will be sent out no later than 21 days prior to the General Meeting. Pursuant to the Articles of Association, the deadline for giving notice of attendance shall be set at no later than �ve calendar days prior to the General Meeting. In accordance with Storebrand’s Articles of Association, the right to make other documentation available on Storebrand’s website is exercised, cf. Section 5-11 a of the Norwegian Public Limited Liability Companies Act.
However, a shareholder can still request to be sent these documents by mail.
rights to have matters discussed at the Annual General Meeting is available in the notice of the Annual General Meeting and on Storebrand’s website.
Meeting. The Board members of Storebrand ASA are not obligated to attend, but are encouraged to. The CEO, executive management team and the Group Legal Director participate from the management. Minutes from the General Meeting in Norwegian and English are available on
Stipulate the auditor’s fee, transact any other business listed on the agenda.
Committee include provisions concerning the rotation of Nomination Committee members, but in recent years members of the Nomination
Board of Directors and Nomination Committees. A corresponding request to the shareholders is published on the company’s website
An attempt is made to adapt the remuneration of the members of the Nomination Committee to the nature of the tasks and time spent on committee work. The Nomination Committee held four meetings in 2017.
The assessment of each board member’s independence is commented on in the overview of governing and controlling bodies. An overview of the number of shares in Storebrand ASA owned by members of governing bodies as at 31 December 2017 is included in the notes to the
Storebrand’s future strategy and strategy implementation, and in addition has an annual strategy Meeting. The administration annual preparation of plans and budgets in connection with the annual �nancial plan, is based on the Boards discussions and guidelines from the annual strategy meeting.The Board shall stay informed about Storebrand’s �nancial position and development, and it shall ensure that the company’s value creation and pro�tability are safeguarded in the best possible manner on behalf of the owners. The Board shall also ensure that the activities are subjected to adequate control and ensure that Storebrand has adequate capital based on the scope of, and risks associated with, its activities. The attendance records of individual board members are provided in the overview of the Board of Directors . The work of the Board is regulated by special rules of procedure for the Board, which are reviewed annually. In order to ensure sound and wellconsidered decisions, importance is attached to ensuring that meetings of the Board are well prepared so that all the members can participate in the decision-making process. The Board prepares an annual schedule for its meetings and the topics it will consider. The agenda for the next board meeting is normally presented to the Board based on the approved schedule for the year and a list of matters carried forward from previous meetings. The �nal agenda is �xed in consultation with the Chairman of the Board. Time is set aside at each board meeting to evaluate the meeting without the management present. The Board is entitled to appoint external advisers to help it with its work whenever it deems this necessary. The Board has also drawn up instructions for the CEO.
The Board of Directors has established three sub-committees in the form of a Compensation Committee, Audit Committee and Risk Committee.
0. RISK MANAGEMENT AND INTERNAL CONTROL (NO DEVIATIONS FROM THE CODE OF PRACTICE)
The Board’s and CEO’s areas of responsibility are de�ned in the rules of procedure for the Board and instructions for the CEO, respectively. The
The investor relations guidelines ensure reliable, timely and identical information to investors, lenders and other stakeholders in the securities market.
Directors receives ongoing reports on the status of the strategy implementation.
Risk assessment forms part of the managerial responsibilities in the organisation. The purpose of this is to identify, assess and manage risks that can hamper a unit’s ability to achieve its goals. The process covers both the risk of incurring losses and failing pro�tability linked to economic downturns, changes in the general conditions, changed customer behaviour, etc., and the risk of incurring losses due to inadequate or failing internal processes, systems, human error or external events. Developments in the �nancial markets are important risk factors in relation to
Committees do not receive incentive-based remuneration; instead they receive a fixed annual compensation, either per year or per meeting the member attends, or a combination of such remuneration. The shareholder-elected members of the Board do not participate in Storebrand’s pension schemes. None of the shareholder-elected members of the Board carry out any duties for Storebrand beyond their appointment to the
The Board has issued guidelines for the company’s reporting of �nancial and other information and for contact with shareholders other than through the General Meeting. Storebrand’s reporting with regard to sustainable investments goes beyond the statutory requirements.
Committee. External auditor is elected annually by Storebrand ASA’s General Meeting. The other companies in Storebrand use the same auditor as Storebrand ASA.
In 2016, Storebrand Asset Management AS also established a Corporate Governance Committee. The Committee has a mandate to set the level of ambition and establish frameworks for corporate governance. The Committee shall coordinate Storebrand’s use of voting rights, including prioritising matters and ensuring consistency in the work. The Committee shall meet every quarter.
Norwegian Code of Practice for Corporate Governance published by the Norwegian Corporate Governance Board (NUES).
Storebrand’s consolidated �nancial statements are prepared by the Consolidated Financial Statements unit, which reports to the Group’s CFO. Key executives in the Consolidated Financial Statements unit receive a �xed annual remuneration that is not a�ected by Storebrand’s �nancial earnings. The work involved in the preparation of the �nancial statements is organised in such a way that the Consolidated Financial Statements unit does not carry out valuations of investment assets. Instead it exercises a control function in relation to the accounting processes of the group companies.
Memo). The Board’s Audit Committee conducts a preparatory review of interim �nancial statements and annual �nancial statements, focusing in particular on the discretional valuations and estimations that have been made prior to consideration by the Board.
1. REMUNERATION OF THE BOARD OF DIRECTORS (NO DEVIATIONS FROM THE CODE OF PRACTICE)
The General Meeting �xes the Board’s remuneration annually on the basis of the recommendations of the Nomination Committee. The fees paid to the members of the Board are not linked to earnings, option schemes or similar arrangements. Members of the Board and Board Committees do not receive incentive-based remuneration; instead they receive a �xed annual compensation, either per year or per meeting the member attends, or a combination of such remuneration. The shareholder-elected members of the Board do not participate in Storebrand’s pension schemes. None of the shareholder-elected members of the Board carry out any duties for Storebrand beyond their appointment to the Board.
3. INFORMATION AND COMMUNICATIONS (NO DEVIATIONS FROM THE CODE OF PRACTICE)1
Storebrand’s �nancial calendar is published on the Internet and in the company’s annual report. Financial information is published in the quarterly and annual reports, as described above under Section 10 – Financial information and Storebrand’s accounting process. Documentation that is published is available on Storebrand’s website. All reporting is based on the principle of transparency and takes into account the need for the equal treatment of all participants in the securities markets and the rules concerning good stock exchange practice. Further information may be found in the chapter for Shareholder matters. Storebrand has its own guidelines for handling insider information, see also section 10 –
– prot from investments in associated companies/joint controlled operation 30 119 65
– bonds and other xed-income securities at fair value 16 3,157 4,074
Tax on other result elements not to be classi�ed to pro�t/loss 2 37
Intangible assets and excess value on purchased insurance contracts 28 6 295 4 858
Financial assets at amortised cost: – Loans to nancial institutions 10, 31 313 272
Accounts receivable and other short-term receivables 31, 35 4 834 2 647
Financial assets at fair value: – Bonds and other xed-income securities 8, 10, 12, 31, 37 31 719 30 503
Financial liabilities: Minority interests in consolidated mutual funds 30 303 20 386
Net cash flow from financial assets and banking customers -4,653 1,115
Receipts – issuing of share capital / sale of shares to own employees 14
Cash and cash equivalents at start of the period for new/sold out companies 7 -13
Financing activities include cash �ows for equity, subordinated loans and other borrowing that helps fund the Group’s activities. Payments of interest on borrowing and payments of share dividends to shareholders are �nancial activities.
The asset side of the Group’s statement of �nancial position comprises, for the most part, �nancial instruments and investment properties.
Capitalised intangible assets, which mainly comprise excess value relating to insurance contracts and customer relations upon a business combination, are also recognised on the balance sheet. This excess value is measured at historical cost less annual amortisation and writedowns.
The liabilities side of the Group’s statement of �nancial position comprises, for the most part, �nancial instruments (liabilities) and provisions relating to future pension and insurance payments (technical insurance reserves). With the exception of derivatives and insurance liabilities in
Technical insurance reserves must be adequate and cover liabilities relating to issued insurance contracts. Various methods and principles are used in the Group when assessing the reserves for di�erent insurance contracts. A considerable part of the insurance liabilities relate to insurance contracts with interest guarantees. The recognised liabilities related to Norwegian insurance contracts with guaranteed interest rates are discounted by the basic interest rate (which corresponds to the guaranteed return / interest rate) for the respective insurance contracts.
IBNS reserves are measured using mathematical models based on historical information about the portfolio.
Storebrand ASA’s consolidated �nancial statements are presented using EU-approved International Financial Reporting Standards (IFRS) and related interpretations, as well as other Norwegian disclosure requirements laid down in legislation and regulations.
New accounting standards that have a signi�cant impact on the consolidated �nancial statements have not been implemented in 2017. For changes in estimates, see Note 2 for further information.
No new accounting standards that will have a signi�cant impact on the Group result in Storebrand’s consolidated �nancial statements are expected to be implemented in 2018.
New standards and changes in standards that have not come into effect
IFRS 9 deals with recognition, classi�cation and measurement, impairment, derecognition and hedge accounting of �nancial instruments. IFRS 9 involves rules for classi�cation based on the business model, altered hedge accounting requirements and rules for write-downs of �nancial assets that result in losses being recorded earlier than under IAS39. Under IAS39, impairment losses will be entered when there are objective criteria for an actual loss having taken place, while under IFRS 9, the probability of loss (expected loss) must be calculated based on the elements relating to the �nancial instrument and elements relating to more general macroeconomic factors
Under IFRS 9, �nancial assets are classi�ed into three measurement categories: fair value through pro�t or loss, fair value through other comprehensive income (OCI) and amortised cost. Instruments that, in principle, shall be measured at amortised cost or at fair value through OCI
The standard requires that the recognised value of insurance contracts shall consist of the following components: Probability weighted estimate of future contributions and payments related to the contracts.
IFRS17 requires that components that are distinct from the insurance component are separated and recognised according to the rules in the relevant standard In order to be distinct, the component must be able to be sold separately in the same market, either by a player that issues insurance or by others.
Premium allocation approach: Simpli�ed approach whereby the insurance premium is recognised as income on a straight-line basis over the term of the contract. This can only be used for contracts with a duration of up to 12 months.
Storebrand is working on preparing for implementation of IFRS17, including assessing the e�ects implementation of IFRS 17 will have for
The standard applies for all contracts that are entered into from and including 1 January 2018, and for existing contracts that are not concluded on this date. The purpose of the standard is to remove the inconsistency and weaknesses that exist in current revenue recognition standards and improve the comparability of revenue recognition between business enterprises, industries and geographic regions.
Revenue recognition in the Storebrand Group will be primarily regulated by IAS39/IFRS9 and IFRS4. Revenue that will be recognised under Other
IFRS 16 Leases, replaces the current IAS 17 and is applicable from 1 January 2019. IFRS 16 establishes principles for the recognition, measurement, presentation and disclosure of leases. The new leasing standard will not result in major changes for lessors, but will however signi�cantly change accounting by lessees. IFRS 16 requires that, in principle, lessees recognise all leases in the balance sheet according to a simpli�ed model that resembles the accounting treatment of �nancial leases in accordance with IAS17. The present value of the combined lease payments shall be recognised on the balance sheet as debt and an asset that re�ects the right of use of the asset during the lease period. The recognised asset is amortised over the lease period and the depreciation expense is recognised as an operating expense on an ongoing basis.
Storebrand is working on preparing for the implementation of IFRS 16, including assessing the e�ects implementation of IFRS 16 will have for
The consolidated �nancial statements combine Storebrand ASA and companies where Storebrand ASA has a controlling interest. Minority interests are included in the Group’s equity, unless there are options or other conditions that entail that minority interests are measured as liabilities.
Storebrand Livsforsikring AS, Storebrand Asset Management AS, Storebrand Bank ASA and Storebrand Forsikring AS are signi�cant subsidiaries owned directly by Storebrand ASA. Storebrand Livsforsikring AS also owns the Swedish holding company Storebrand Holding AB, which in turn owns SPP Pension & Försäkring AB (publ). On acquiring the Swedish operations in 2007, the authorities instructed Storebrand to make an application to maintain a group structure by the end of 2009. Storebrand has �led an application to maintain the existing group structure. A
can be measured at fair value through pro�t or loss if this eliminates or signi�cantly reduces a recognition inconsistency.
Storebrand is working on preparing for the implementation of IFRS9, including assessing the e�ects implementation of IFRS9 will have for
When entering into a contract, the expected pro�t is also set aside as a liability. This is recognised as income over the duration of the contract
Variable fee approach: Variant of the general approach, but whereby the return is included in the calculation of the expected contractual service margin (CSM).
exchange rates applied when recording items in the statement of �nancial position and the income statement, any translation di�erences are recognised in total comprehensive income.
Internal receivables and payables, internal gains and losses, interest, dividends and similar between companies in the Group are eliminated in the consolidated �nancial statements. Transactions between the customer portfolios and the company portfolio in the life insurance business and between the customer portfolios in the life insurance business and other companies in the Group will not be eliminated in the consolidated accounts. Pursuant to the life insurance regulations, transactions with customer portfolios are carried out a fair value.
3 Business Combinations is not applied, which in turn means that provisions are not made for deferred tax as would have occurred in a business combination.
Added value when acquiring a business that cannot be directly attributable to assets or liabilities on the date of the acquisition is classi�ed as goodwill on the statement of �nancial position. Goodwill is measured at acquisition cost on the date of the acquisition. Goodwill arising from the acquisition of subsidiaries is classi�ed as an intangible asset.
Investment properties primarily consist of centrally located o�ce buildings, shopping centres and logistics buildings. Properties leased to tenants outside the Group are classi�ed as investment properties. In the case of properties partly occupied by the Group for its own use and partly let to tenants, the identi�able tenanted portion is treated as an investment property. All properties that are owned by the customer portfolios are measured at fair value and the changes in value are allocated to the customer portfolios.
Financial assets and liabilities are included in the statement of �nancial position from such time Storebrand becomes party to the instrument’s contractual terms and conditions. Normal purchases and sales of �nancial instruments are recorded on the transaction date. When a �nancial asset or a �nancial liability is initially recognised in the �nancial statements, it is valued at fair value. Initial recognition includes transaction costs directly related to the acquisition or issue of the �nancial asset/liability if it is not a �nancial asset/liability at fair value through pro�t or loss.
Subsequent to initial recognition, held-to-maturity investments, loans and receivables as well as �nancial liabilities not at fair value in pro�t or loss, are measured at amortised cost using the e�ective interest method. The calculation of the e�ective interest rate involves estimating all cash
The fair value of �nancial assets listed on a stock exchange or on another regulated market in which regular trading takes place is determined as the bid price on the last trading day up to and including the reporting date.
For �nancial assets carried at amortised cost, an assessment is made on each reporting date whether there is any objective evidence that a
Income from properties and �nancial assets are described in Sections 10 and 11.
Fees are recognised when the income can be measured reliably and is earned. Fixed fees are recognised as income in line with delivery of the service, and performance fees are recognised as income once the success criteria have been met.
With the exception of derivatives, only a limited proportion of Storebrand’s �nancial assets fall into this category.
A signi�cant proportion of Storebrand’s �nancial instruments are classi�ed in the category of fair value through pro�t or loss because: such classi�cation reduces the mismatch in the measurement or recognition that would otherwise arise as a result of the di�erent rules for measuring assets and liabilities, or the �nancial assets form part of a portfolio that is managed and reported on a fair value basis.
Held to maturity investments are non-derivative �nancial assets with �xed or determinable payments and �xed maturity and that a company has the intention and ability to hold to maturity, with the exclusion of: assets that are designated in initial recognition as assets at fair value through pro�t or loss, and assets that are de�ned as loans and receivables.
Loans and receivables that are designated as hedged items are subject to measurement under the hedge accounting requirements.
the value of the derivative changes in response to the change in a speci�ed interest rate, �nancial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable (often referred to as the ‘underlying’), it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors, it is settled at a future date.
Derivatives that do not meet the criteria for hedge accounting are recognised as �nancial instruments held for trading. The fair value of such derivatives is classi�ed as either an asset or a liability with changes in fair value through pro�t or loss.
Storebrand uses fair value hedging, where the items hedged are �nancial assets and �nancial liabilities measured at amortised cost. Derivatives are recognised at fair value through pro�t or loss or are included in total comprehensive income. Changes in the value of the hedged item that are attributable to the hedged risk adjusts the carrying amount of the hedged item and is recognised through pro�t or loss.
Subsequent to initial recognition, all �nancial liabilities are primarily measured at amortised cost using an e�ective interest method.
The accounting standard IFRS 4 Insurance Contracts addresses the accounting treatment of insurance contracts. Storebrand’s insurance contracts fall within the scope of this standard. IFRS 4 is meant to be a temporary standard and it allows the use of non-uniform principles for the treatment of insurance contracts in consolidated �nancial statements. In the consolidated �nancial statements, the technical insurance reserves in the respective subsidiaries are included, as calculated on the basis of the laws of the individual countries. This also applies to insurance contracts acquired via business combinations. In such cases, positive excess values, cf. IFRS 4 no. 31b), are capitalised as assets.
(administration reserve). In the case of paid-up contracts, the present value of all future administration costs is allocated in full to the premium reserve. In the case of contracts with future premium payments, a deduction is made for the proportion of future administration costs expected to be �nanced by future premium receipts.
The insurance reserves allocated to cover liabilities associated with the value of the special investments portfolio must always equal the value of the investments portfolio assigned to the contract. The proportion of pro�t in the risk result is included. The company is not exposed to investment risk on customer assets, since the customers are not guaranteed a minimum return. The only exception is in the event of death, when the bene�ciaries are repaid the amount originally paid in for annuity insurance and for guaranteed account (Garantikonto).
The current year’s net unrealised gains / losses on �nancial assets at fair value in the group portfolio in Storebrand Livsforsikring AS are allocated to or reversed from the market value adjustment reserve in the statement of �nancial position assuming the portfolio has a net unrealised excess value. The portion of the current year’s net unrealised gains / losses on �nancial current assets denominated in foreign currencies that can be attributed to �uctuations in exchange rates is not transferred to the market value adjustment reserve. The foreign exchange �uctuations associated with investments denominated in foreign currencies are largely hedged through foreign exchange contracts on a portfolio basis. Similarly, the change in the value of the hedging instrument is not transferred to the market value adjustment reserve, but is charged directly to the pro�t and loss account. Pursuant to the accounting standard for insurance contracts (IFRS4), the market value adjustment reserve is shown as a liability.
The life insurance reserves are estimated as the present value of the expected future guaranteed payments, administrative expenses and taxes, discounted by the current risk-free interest rate (Solvency 2 yield curve). Insurance reserves with guaranteed interest rates in SPP use a modelled discount rate. A nominal risk-free interest rate is used to discount pure endowment insurance and health insurance in de�ned bene�t schemes.
When calculating the life insurance reserves, the estimated future administrative expenses that may reasonably be expected to arise and can be attributed to the existing insurance contracts are taken into account. The expenses are estimated according to the company’s own cost analyses and are based on the actual operating costs during the most recent year. Projection of the expected future costs follow the same principles on which Solvency II is based. Any future cost-rationalisation measures are not taken into account.
The reserves for incurred insurance events consist of reserves for disability pensions, established claims, unestablished claims and claims processing reserves. When assessing the reserves for disability pensions, a risk-free market interest rate is used, which takes into account future index adjustment of the payments. In addition, provisions are made for calculated claims that have been incurred but not reported (IBNR).
The premium reserve represents the present value of the company’s total insurance liabilities, including future administration costs in accordance with the individual insurance contracts, after deducting the present value of agreed future premiums. In the case of individual account policies with �exible premium payments, the total policy value is included in the premium reserve. The premium reserve is equivalent to 100 per cent of the guaranteed surrender or transfer value of insurance contracts prior to any fees for early surrender or transfer and the policies’ share of the market value adjustment reserve.
The premium reserve includes reserve amounts for future administration costs for all lines of insurance including settlement costs
Selling costs in the Norwegian life insurance business are expensed, whilst in the Swedish subsidiaries selling costs are recorded in the statement of �nancial position and amortised over the expected duration of the product.
The conditional bonus arises when the value of customer assets is higher than the present value of the liabilities, and thus covers the portion of the insurance capital that is not guaranteed. In the case of contracts where customer assets are lower than liabilities, the owners’ result is charged via deferred capital contribution allocations. The conditional bonus and deferred capital contribution are recognised on the same line in the statement of �nancial position.
Costs related to insurance claims are recognised when the claims occur. The following allocations have been made: Reserve for unearned premium for own account concerns on-going policies that are in force at the time the �nancial statements were closed and is intended to cover the contracts’ remaining risk period.
Storebrand has country-speci�c pension schemes for its employees. The schemes are recognised in the accounts in accordance with IAS 19. In
In Sweden, SPP has agreed, in accordance with the Finance Companies’ Service Pension Plan (BTP Plan), to collective, de�ned-bene�t pension plans for its employees. A group de�ned-bene�t pension implies that an employee is guaranteed a certain pension based on the pay scale at the time of retirement on termination of the employment.
Pension costs and pension obligations for de�ned-bene�t pension schemes are determined using a linear accrual formula and expected �nal salary as the basis for the entitlements, based on assumptions about the discount rate, future salary increases, pensions and National Insurance bene�ts, future returns on pension plan assets as well as actuarial estimates of mortality, disability and voluntary early leavers. The net pension cost for the period comprises the total of the accrued future pension entitlements during the period, the interest cost on the calculated pension liability and the expected return on pension plan assets.
The de�ned-contribution pension scheme involves the Group in paying an annual contribution to the employees’ collective pension savings. The future pension will depend upon the size of the contribution and the annual return on the pension savings. The Group does not have any further work-related obligations after the annual contribution has been paid. No provisions are made for ongoing pension liabilities for these types of schemes. De�ned-contribution pension schemes are recognised directly in the �nancial statements.
Income Taxes. Tax is recognised in the income statement, except to the extent that it relates to items recognised in total comprehensive income.
Any deferred tax assets shall be recognised if it is considered probable that the tax asset will be recovered. Assets and liabilities associated with deferred tax are recognised as a net amount when there is a legal right to o�set assets and liabilities for tax payable and the Group has the ability and intention to settle net tax payable.
The tax rate on the ordinary income for companies subject to the �nancial tax will be continued at the 2016 level (25 per cent), while it will otherwise be further reduced from 24 per cent to 23 per cent from 1 January 2018.
A lease is classi�ed as a �nance lease if it mainly transfers the risk and rewards incident to ownership. Other leases are classi�ed as operating leases. Storebrand has no �nancial lease agreements.
Pursuant to IAS41, investments in forestry are measures as biological assets. Biological assets are measured at fair value, which is de�ned based on alternative fair value estimates, or the present value of expected net cash �ows. Changes in the value of biological assets are recognised in the pro�t and loss account. Ownership rights to biological assets are recognised at the point in time when the purchase agreement is signed.
In accordance with the accounting standard IFRS 4 Insurance Contracts, liability adequacy test shall be performed. The insurance liabilities are calculated in accordance with rules stipulated by the national supervisory authorities, including the Insurance Activity Act with regulations in
by, among other things, volatility in the �nancial markets, interest rate expectations and the amount of bu�er capital. Storebrand satis�es the adequacy tests for 2017, and they have thus no impact on the results in the �nancial statements for 2017. Reference is made to further information in Note 28.
The IBNR and RBNS reserves for insurance risk are estimated and there is uncertainty associated with the estimates. This uncertainty relates to the frequency and amounts of the claims. Changes in estimates and valuations may entail a reduction or increase in the reserves. Changes will be included as part of the risk result.
In the Norwegian business, a signi�cant share of the insurance contracts have annual interest rate guarantees. Changes in estimates and valuations may entail a change in the return on the customer portfolios. Depending on the size of any impairment in value, such impairment may be o�set by a reduction in the market value adjustment reserve and additional statutory reserves, so that the e�ect on the owner’s result may be limited. Correspondingly, increases in values could, to a large extent, increase the size of such funds.
Changes in the discount rate may have a signi�cant impact on the size of the insurance liabilities and impact the results. If the associated customer assets have a higher value than the recognised value of these insurance liabilities, then the di�erence will represent a conditional customer allocated fund – conditional bonus (bu�er capital). Changes in the assumptions for future administrative expenses (cost assumptions)
may also have a signi�cant impact on the recognised insurance liabilities. Changes in estimates and valuations may entail a change in the return on the customer portfolios. Depending on the size of any impairment in value, such impairment may be o�set by a reduction in the conditional bonus, so that the e�ect on the owner’s result may be limited. If the value of the individual insurance contract is higher than the associated customer assets, the owner will have to cover the de�cient capital.
(credit adjustment) and illiquidity (volatility adjustment). The credit and volatility adjustment is based on the most recently available values that are published by EIOPA.
Further information about insurance liabilities is provided in Notes 7, 39 and 40.
Key elements included in valuations that require exercising judgement are: Market rent and vacancy trends
Reference is also made to Note 12 in which the valuation of investment properties at fair value is described in more detail.
Goodwill and other intangible assets with unde�ned useful economic lives are tested annually for impairment. Goodwill is allocated to the
Group’s cash generating units. The test’s valuation method involves estimating cash �ows arising in the relevant cash �ow generating unit, as well as applying the relevant discount rate. Tangible �xed assets and other intangible assets are measured annually to ensure that the method and time period used correspond with economic realities.
In accordance with the share purchase agreement that was entered into, Storebrand has acquired all class A shares and 10,000 class B shares in
Skagen, corresponding to 90.95% of the share capital in the Company and 99.9% of the votes in the Company.
Storebrand has paid the selling shareholders consideration for the shares amounting to NOK 1.5 billion upon completion of the transaction, divided between newly issued shares in Storebrand ASA and a cash consideration of NOK 407 million. Upon completion of the transaction, 17,904,091 new shares have been issued in Storebrand ASA as a partial �nancing of the share acquisition. The capital increase was carried out as a private placement and without the existing shareholders having preference. This is due to the capital increase being part of the settlement. The value of the consideration that Storebrand ASA is paying for the shares in Skagen is based on the closing price of the shares in
The additional consideration has an upper limit of NOK 1.9 billion.
The acquisition of the shares in Skagen was made public on 25 October 2017, and the transaction has been approved by the Financial
Supervisory Authority of Norway and the Norwegian Ministry of Finance, in addition to the competition authorities in Norway and Sweden.
Excess value of NOK 688 million has been identi�ed before deferred tax in the acquisition analysis. Skagen has a strong brand name and important customer relations in its operations. Of the total excess value, NOK 145 million is related to the brand name, which is amortized over 10 years, while NOK 402 million is related to customer relations, which are amortized over 10 years. In addition, excess value has been identi�ed from customer relations related to the Skagen’s result in 2017 of NOK 131 million, which is amortized in 2017, while there is excess value of NOK
10 million related to IT systems. Deferred tax of NOK 172 million has been calculated for the excess value. Goodwill amounts to NOK 1007 million and this item is not depreciated, but is tested yearly against impairment.
NOK million Book value in the company Excess value upon acquistion Book value
The result for Skagen has been included in Storebrand’s group result from December 2017.
Storebrand Livsforsikring AS paid a purchase price of NOK 520 million �nanced by the company portfolio. The purchase price has been transferred to Silver’s customers as a part of the administration solution, and contributes to maintaining good pensions for the customers.
Silver’s approximately. 21,000 contracts and approximately. NOK 10 billion in pension assets have been moved to Storebrand. Approximately
NOK 8.5 billion of the portfolio consists of pension products with no interest guarantee. The remainder is related to risk cover.
The savings segment includes products for retirement savings with no interest rate guarantees. The segment consists of de�ned contribution pensions in Norway and Sweden, asset management and retail banking products. In addition, certain other subsidiaries in Storebrand
The insurance segment provides health insurance in the Norwegian and Swedish corporate and retail markets, P&C insurance and personal risk products in the Norwegian retail market and employer’s liability insurance and pension-related insurance in the Norwegian and Swedish corporate markets.
Insurance and SPP. In addition, the results associated with loans to commercial enterprises by Storebrand Bank and the activities at BenCo are reported in this segment. The elimination of intra-group transactions that have been included in the other segments has also been included.
Price of return guarantee and profit risk (fee incomes) – Storebrand Life Insurance AS
Group’s income statement, the item is classi�ed under loan losses. With regard to loan losses that are on the balance sheet of the Storebrand
Strengthening of longevity reserves consists of the owner’s equity contributions in connection with the conversion to a new mortality tari� in 2013, K2013. In the Group’s income statement, the item is classi�ed under the item, changes in insurance liabilities.
Financial items and risk result life & pension 8 5 173 233 171 284
Financial items and risk result life & pension 161 401 513 924
The financial result consists of the return for the company portfolios of Storebrand ASA, Storebrand Livsforsikring AS and SPP Pension &
For premiums paid from and including 2016, previous pro�t sharing is replaced by a guarantee fee. The guarantee fee is annual and is calculated as a percentage of the capital. It goes to the company.
Storebrand’s income and performance are dependent on external factors that are associated with uncertainty. The most important external risk factors are the developments in the �nancial markets and changes in life expectancy in the Norwegian and Swedish populations. Certain internal operational factors can also result in losses, e.g. errors linked to the management of the customers’ assets or payment of pension.
The Board of Storebrand ASA has established a Risk Committee consisting of 3-4 Board members. The main task of the Risk Committee is to prepare matters to be considered by the Board in the area of risk, with a special focus on the Group’s appetite for risk, risk strategy and investment strategy. The Committee should contribute forward-looking decision-making support related to the Board’s discussion of risk taking,
Independent control functions have been established for risk management for the business (Risk Management Function / Chief Risk O�cer), for compliance with the regulations (Compliance Function), for ensuring the insurance liabilities are calculated correctly (Actuary Function) and for the bank’s lending. The functions have been established for both the Storebrand Group (the Group) and all of the companies requiring a licence.
The independent control functions are organised directly under the companies’ managing director and report to the respective company’s board.
In terms of function the independent control functions are a�liated with the Group CRO, who is responsible to the group CEO and reports to the board of Storebrand ASA. The Group CRO shall ensure that all signi�cant risks are identi�ed, measured and appropriately reported. The Group
CRO function shall be actively involved in the development of the Group’s risk strategy and maintain a holistic view of the company’s risk exposure. This includes responsibility for ensuring compliance with the relevant regulations for risk management and the consolidated companies’ operations.
Risk management shall ensure that the risk level at any time is compatible with the appetite for risk and within internal and regulatory frameworks. The Group seeks to reduce operational risk through an e�ective system for internal control. Risks are followed up through the management’s risk reviews, with documentation of risks, measures and the follow-up of incidents. In addition, Internal Audit carries out independent checks through audit projects adopted by the Board.
In the Insurance segment, the Group has an insurance risk associated with disability and death. In addition, there are insurance risks associated with occupational injury, critical illness, cancer insurance, child insurance, accident insurance and health insurance. For occupational injury, the risk is �rst and foremost potential errors in the assessment of the level of provisions, because the number of claim years can be up to 25 years.
These are de�ned-bene�t pensions that can be time-limited or lifelong. Many of the agreements have short durations, typically �ve-year early retirement pensions, and the insurance risk is therefore limited.
Savings 1. Group de�ned-contribution pensions are pensions where the premium is stated as a percentage of pay, while the payments depend on the actual added return. Customers have the option of choosing a guaranteed annual return.
2. Pension capital certi�cates are individual contracts with accrued rights that are issued upon withdrawal from or termination of group de�nedcontribution pension agreements.
Guaranteed pension 5. Group de�ned-bene�t pensions are guaranteed pension bene�ts as a percentage of the �nal salary from a speci�ed age for as long as the insured person lives. Alternatively, it can be agreed that the pension will end at a speci�ed age. The product is o�ered within the private sector. Cover options that can be chosen include retirement, disability (including premium/contribution waivers) and survivor pensions. Paidup policies (Sweden only) remain in the group contract.
9. Group life consists of group contracts with lump-sum payments in the event of death or disability.
1. Disability and survivor products in the payment phase without accrual of a paid-up policy.
Savings 1. Individual unit-linked insurance is endowment insurance or allocated annuity in which the customer bears the �nancial risk. Related cover can be linked in the event of death.
4. Individual P&C insurance contracts are individual contracts with lump-sum payments in the event of critical illness, child insurance, damage to motor vehicle or injury to passengers, combined �re insurance, travel insurance or accident insurance.
A new mortality tari� for group insurance (K2013) was developed in 2014. The tari� is based on three elements: Initial mortality, safety margin and future increase in life expectancy. Initial mortality is determined on the basis of actual mortality in the insurance portfolio in the period 2005–2009. The safety margin will take into account the di�erence in mortality based on income, random variation in mortality and the company’s margins. The future increase in life expectancy entails that the projected life expectancy is also dependent on the year of birth.
Today’s 50-year-olds are not expected to live as long as 50-year-olds in 20 years’ time. This factor is referred to as dynamic improvement in life expectancy. K2013 is thus a dynamic tari�.
Tari�s for group life insurance and certain risk insurances within group pensions also depend on the industry or occupation, in addition to age and gender. Group life insurance also applies tari�s based on claims experience. The company’s standard tari� for group life insurance, both for life and disability cover, is based on the company’s own experience.
Insurance risk is monitored separately for every line of insurance in the current insurance portfolio. The development of the risk results is followed throughout the year. For each type of risk, the ordinary risk result for a period represents the di�erence between the risk premiums the company has collected for the period and the sum of provisions and payments that must be made for insured events that occur in the period.
The risk result takes into account insured events that have not yet been reported, but which the company, on the basis of experience, assumes have occurred.
4. Pension certi�cates are individual contracts with accrued rights that are issued upon withdrawal from or termination of hybrid pension agreements.
8. Pension certi�cates are individual contracts with accrued rights that are issued upon withdrawal from or termination of hybrid pension agreements.
The table below speci�es the risk result for the largest entities in the Group and also states the e�ect of reinsurance and pooling on the result.
In the case of group de�ned-bene�t pensions and paid-up policies, any positive risk result passes to the customers, while any de�cit in the risk result must, in principle, be covered by the insurance company. However, up to half of any risk pro�t on a particular line of insurance may be retained in a risk equalisation fund. A de�cit due to risk elements can be covered by the risk equalisation fund. The risk equalisation fund can, as a maximum, amount to 150 per cent of the total annual risk premium. The risk equalisation fund is classi�ed as equity in the balance sheet.
The risk result is paid to the owners in its entirety for all insurance product.
The composition of the �nancial assets within each sub-portfolio is determined by the company’s investment strategy. The investment strategy also establishes guidelines and limits for the company’s risk management, credit exposure, counterparty exposure, currency risk, use of derivatives, and requirements regarding liquidity.
Storebrand aims to take low �nancial risk for the company portfolios, and most of the funds were invested in short and medium-term �xed income securities with low credit risk.
The �nancial risk related to customer portfolios without a guarantee is borne by the insured person, and the insured person can choose the risk pro�le. Storebrand’s role is to o�er a good, broad range of funds, to assemble pro�les adapted to di�erent risk pro�les, and to o�er systematic reduction of risk towards retirement age. The most signi�cant market risks are share market risk and exchange rate risk.
The market risk is managed by segmenting the portfolios in relation to risk-bearing capacity. For customers who have large customer bu�ers, investments are made with higher market risk that give increased expected returns. Equity risk is also managed by means of dynamic risk management, the objectives of which are to maintain good risk-bearing capacity and to adjust the �nancial risk to the bu�er situation and the company’s �nancial strength. By exercising this type of risk management, Storebrand expects to create good returns both for individual years and over time.
In the consolidated �nancial statements, the value of assets and results from the Swedish operations are a�ected by changes in the value of the
Swedish krona. Storebrand Livsforsikring AS has hedged parts of the value of SPP through forward foreign exchange contracts and borrowings in Swedish kroner.
Storebrand Bank ASA hedges net balance sheet items by means of forward contracts. The permitted limit for the bank’s foreign exchange position is 0.50 per cent of primary capital, which is presently approximately NOK 12 million.
The annual guaranteed return to the customers follows the interest rate guarantee. In 2017, new premiums were taken in with an interest rate guarantee of 2.0 per cent, and pensions were adjusted upwards with an interest rate guarantee of 0.5 per cent.
To achieve adequate returns, it is necessary to take an investment risk. This is primarily done by investing in equities, property and corporate bonds. It is possible to reduce market risk in the short term, but then the probability of achieving the necessary level of return is reduced. Risk management shall balance out these considerations.
The interest rate guarantee must be ful�lled on an annual basis. If the company’s investment return in any given year is lower than the guaranteed interest rate, the equivalent of up to one year’s guaranteed return for the individual policy can be covered by transfers from the policy’s additional statutory reserves.
Interest rate risk is in a special position, because changes in interest rates also a�ect the value of the insurance liability (even if the book value of the Norwegian liabilities with guaranteed interest rates is not recognised at market value). Since pension disbursements may be many years in the future, the insurance liability is particularly sensitive to changes in interest rates. In the Norwegian business, greater interest rate sensitivity from the investments will entail increased risk that the return is below the guaranteed level. The risk management must therefore balance the risk of the pro�t for the year (interest rate increase) with the reinvestment risk if interest rates fall below the guarantee in the future. Bonds at amortised cost are an important risk management tool.
New premiums in individual de�ned-contribution pensions (IF) have a guarantee of 1.25% for 85% of the premium. Group de�ned-bene�t pension (KF) is closed to new members.
�nancial market risk. The calculation is model-based and the result is dependent on the choice of stress level for each asset class and assumptions for diversi�cation. The stresses have been applied to the company portfolio and guaranteed customer portfolios as at 31
December 2017. The e�ect of each stress changes the return in each pro�le.
Because it is the immediate market changes that are calculated, dynamic risk management will not a�ect the outcome. If it is assumed that the market changes occur over a period of time, then dynamic risk management would reduce the e�ect of the negative outcomes and reinforce the positive to some extent.
As a result of customer bu�ers, the e�ect of the stresses on the result will be lower than the combined change in value in the table. As at 31
December 2017, the customer bu�ers are of such a size that the e�ects on the result are signi�cantly lower.
Based on the stress test, Storebrand Life Insurance has an overall market risk of NOK 4.9 billion, which is equivalent to 2.5 per cent of the investment portfolio.
Based on the stress test, SPP has an overall market risk of SEK 2.2 billion, which is equivalent to 2.4 per cent of the investment portfolio.
The bu�er situation for the individual contracts will determine if all or portions of the fall in value will a�ect the �nancial result. Only the portion of the fall in value that cannot be settled against the customer bu�er will be charged to the result. In addition, the reduced pro�t sharing or loss of the indexing fees may a�ect the �nancial result.
For the insurance companies, the life insurance companies in particular, the insurance liabilities are long-term and the cash �ows are generally known long before they fall due. In addition, liquidity is required to handle payments related to operations, and there are liquidity needs related to derivative contracts. The liquidity risk is handled by liquidity forecasts and the fact that portions of the investments are in very liquid securities, such as government bonds. The liquidity risk is considered low based on these measures.
Debt raised from issuance of securities 2,244 943 7,834 6,653 17,674 16,575
Storebrand Bank until at least 3 months after the maturity date of the covered bond and the associated derivates with the longest period to maturity. Both agreements provide a minimum capacity to cover at least interests and payments on covered bonds and derivatives the following 31 days.
NOK Million Subordinated loan capital Liabilities to financial institutions Securities issued
Group has used published credit ratings wherever possible, supplemented by the company’s own credit evaluation.
Total interest bearing securities stated by rating 69,129 21,062 31,157 29,625 741 1,708 153,421
Total Fair value Government and government guaranteed bonds 14,036 6,111 7,187 4,068 2,369 33,771
Of which derivatives in bond funds, managed by Storebrand 126 23 2 152
For issued covered bonds, a regulatory requirement for over-collateralisation of 102 per cent and an over-collateralisation requirement of 109.5 per cent for bonds issued before 21 June 2017 apply.
Storebrand Livsforsikring and SPP also have loans to companies as part of the investment portfolio. The corporate market segment at
Storebrand Bank is being discontinued and will eventually be wound up. Lending as an asset class will increase in future years for the life insurance companies, because lending makes a good contribution to achieving the return guarantee.
As at 31 December 2017, Storebrand had loans to customers totalling NOK 54 billion net after provisions for losses of NOK 54 million. Of this,
The weighted average loan-to-value ratio for home loans is approximately 57 per cent. Over 97 per cent of home loans have a loan to value ratio within 85 per cent and approximately 99.7 per cent are within a 100 per cent loan to value ratio. Approximately 51 per cent of the home loans are within a 60 per cent LVR. The portfolio is considered to have a low to moderate credit risk.
The Group has entered into framework agreements with all its counterparties to reduce the risk inherent in outstanding derivative transactions.
For the life insurance businesses, the greatest risks are largely the same in Norway and Sweden. The �nancial market risk will depend signi�cantly on global circumstances that in�uence the investment portfolios in all businesses. The insurance risk may be di�erent for the various companies, and longevity risk in particular can be in�uenced by universal trends.
Both the insurance business and the banking business are exposed to credit risk. The insurance business primarily has a credit risk relating to bonds with signi�cant geographical and industry-related diversi�cation, while the bank is mostly exposed to direct loans for residential property in Norway. There is no signi�cant concentration risk across bonds and loans.
The �nancial market and investment risks are largely related to the customer portfolios in the life insurance business. The risk associated with a negative outcome in the �nancial market is described and quanti�ed in Note 8, �nancial market risk. The banking business has little direct exposure to types of risk other than credit.
The risk from the P&C insurance and health insurance risk in Storebrand Skadeforsikring AS and Storebrand Helseforsikring AS has a low correlation with the risk from the rest of the businesses in the Group.
The Group conducts a comprehensive process to ensure that �nancial instruments are valued as closely as possible to their market value.
This category encompasses listed equities that over the previous three months have experienced average daily trading equivalent to approximately NOK 20 million or more. Based on this, the equities are regarded as su�ciently liquid to be included at this level. Bonds, certi�cates or equivalent instruments issued by national governments are generally classi�ed as level 1. When it comes to derivatives, standardised stock index futures and interest rate futures will also be included at this level.
Of the fund units, it is primarily private equity investments and property funds that represent the majority at level 3. Moreover, there are also some other types of funds, such as infrastructure funds and micro�nance funds here. The majority of Storebrand’s private equity investments are investments in private equity funds. These fund investments are valued based on the value reported by the funds. Most of the funds report on a quarterly basis, while a few report less often. Reporting typically takes place with a few months’ delay. The most recently received valuations are used as a basis, adjusted for cash �ows and possible market e�ects in the period from the most recent valuation until the reporting date. For private equity, the market e�ect is calculated based on the development in value in the relevant index, multiplied by the estimated beta in relation to the relevant index.
The investment properties primarily consist of o�ce buildings located in Oslo and Stockholm and shopping centres in Southern Norway.
Office properties and shopping centres in Norway: When calculating fair value, Storebrand uses an internal cash �ow model. Net cash �ows for the individual property are discounted by an individual required rate of return. A future income and expense picture for the �rst 10 years has been estimated for the o�ce properties and a
An individual required rate of return is determined for each property. The required rate of return is viewed in connection with the related cash
�ow for the property. The knowledge available about the market’s required rate of return, including transactions and appraisals, is used when determining the cash �ow.
�nal value has been calculated for the end of the 10th year based on market rent and normal operating costs for the property. In the net income stream, consideration has been made to existing and future loss of income due to vacancy, necessary investments and an assessment of the future development in the market rent. The majority of contracts have a duration of �ve or ten years. The cash �ows from these lease agreements (contractual rent) are included in the valuations. To estimate the long-term, future non-contractual rental incomes, a forecasting model has been developed. The model is based on historical observations in Dagens Næringsliv’s property index (adjusted by CPI) and market estimates. A long-term, time-weighted average of the annual observations is calculated in which the oldest observations are weighted with the lowest importance. For non-contractual rent in the short-term, the current rental prices and market situation are used.
Other factors such as transactions and perception in the market, vacancy and general knowledge about the market and the individual property.
Derivatives: – of which derivatives with a positive market value 4,114 4,114 4,827
Movements from level 1 to level 2 re�ect a reduction in the trading volume of relevant equities and bonds during the most recent measurement period. On the other hand, movements from level 2 to level 1 indicate an increase in the market value of relevant equities and bonds during the most recent measurement period.
Large portions of the portfolio are priced using comparable listed companies, while smaller portions of the portfolio are listed. The valuation of the private equity portfolio will thus be sensitive to �uctuations in global equity markets. The private equity portfolio has an estimated beta relative to MSCI World (Net – currency hedged to NOK) of around 0.5.
The valuation of indirect property investments will be sensitive to a change in the required rate of return and the expected future cash �ow. The indirect property investments are leveraged structures. The portfolio is leveraged 1 per cent on average.
Change in fair value per 31.12.17 6 -6 Change in fair value per 31.12.16 12 -12
Consolidation is carried out in accordance with Section 18-2 of the Norwegian Act relating to Financial Undertakings and Financial Groups.
The solvency capital requirement and minimum capital requirement for the group are calculated in accordance with Section 46 (1)-(3) of the
The models used as a basis for the calculation of capital requirements and solvency capital are based on a number of requirements and assumptions that are partly speci�ed in the regulations and partly interpreted by Storebrand based on the regulations. The most important assumptions and estimates in the calculation relate to the risk-reducing capacity of deferred tax, future margins and reserve developments, as well as the value of the customers guarantees and options. The assumptions and estimates are reviewed on an ongoing basis and are based on historical experience and expectations of future events and represent the management’s best judgment at the time the �nancial statement were prepared. Changes to the regulations, methods and interpretations may be made that could a�ect the Solvency II margin in the future.
The solvency capital largely appears as net assets in the Solvency II balance sheet with the addition of eligible subordinated loans and deducted for own shares and ineligible minority interests. The solvency capital is therefore signi�cantly di�erent to book equity in the �nancial statements.
Technical insurance reserves are calculated in accordance with the standard method and include the e�ect of the transitional arrangement pursuant to Section 56 (1) – (6) of the Solvency II Regulations. The transitional arrangement entails that the increase in the value of the technical insurance reserves is phased in gradually over a period of 16 years. The composition of solvency capital appears in the table below.
Eligible minority interests and deferred tax assets are categorised as Group 3 capital. Group 3 capital can cover up to 15 per cent of the solvency capital requirement. Group 3 capital cannot be used to cover the minimum capital requirement.
The capital requirement in Solvency II appears as the total of changes in solvency capital calculated under di�erent types of stress, less diversi�cation. The largest part of the capital requirement appears from �nancial market stress and particularly relates to changes in interest rates and falls in the equity markets, as well as increased credit spreads. There is also the insurance risk, for which the most important capital requirement comes from stress relating to the transfer of existing customers within de�ned contribution pensions. The solvency capital requirement appears in the table below.
The Storebrand Group has a requirement to report capital adequacy in a multi-sectoral �nancial group (conglomerate directive). The calculation in accordance with the Solvency II regulations and capital adequacy calculation in accordance with the conglomerate directive give the same
Write-downs/income recognition for loans and guarantees for the period -13 -14
Allocation by company and customers: Total income from properties 2,556 2,304
Net primary capital for companies included in the CRD IV report 2,929 2,690
Under Solvency II, the capital requirement from the CRD IV companies in the Group is included in accordance with their respective capital requirements. In a multi-sectoral �nancial group, all the capital requirements of the CRD IV companies are calculated based on their respective applicable requirements, including bu�er requirement for the largest company in the Group (Storebrand Bank). This increases the total requirement from the CRD IV companies in relation to what is included in the Solvency II calculation. As at 31 December 2017, the di�erence amounted to NOK 229 million.
Note 16 – Net income analysed by class of �nancial instrument
Pro�t on equities and fund units 594 2,642 13,738 16,974 31 16,943 11,647
– of which FVO (fair value option) 3,830 5,089 11,728 20,647 399 20,212 15,725
Operating expenses (including maintenance and repairs) relating to properties that have provided rent income during the period
At end of the policy year 391 461 513 690 793 785
The pension plan for employees at SPP in Sweden follows the plan for bank employees in Sweden (BTP).
SPP has a de�ned-contribution occupational pension known as BTP1. All new employees were enrolled in this pension agreement from and including 1 January 2014. In BTP1, the employer pays a premium for pension savings that is calculated based on pensionable salary up to 30 times the “basic income amount” (inkomstbasbelopp). The insurance includes retirement pension with or without mortality inheritance, disability
In addition, 13 per cent of salary between 7.1 and 12 G is saved.
Net pension liabilities recognised in statement of financial position 338 289
Pension assets are based on the financial assets held by Storebrand Life Insurance/SPP composed at 31.12: NOK million
Acturial loss (gain) – change in other �nancial assumptions -10 -2
Main assumptions used when calculating net pension liability 31.12 Storebrand Livsforsikring SPP
The pension in the BTP2 agreement (de�ned-bene�t occupational pension that is a closed scheme) amounts to 10 per cent of the annual salary up to 7.5 times the “basic income amount” (which was SEK 61,500 in 2017 and will be SEK 62.500 in 2018), 65 per cent of salary in the interval from 7.5 to 20, and 32.5 per cent in the interval from 20 to 30. No retirement pension is paid for the portion of salary in excess of 30 times the
The ordinary retirement age is 65 in accordance with the pension agreement between the Employer’s Association of the Swedish Banking
The retirement age for SPP’s CEO is 65 years. The CEO is covered by BTP1. In addition, the CEO has a de�ned-contribution based additional pension with SPP. The premium for this insurance is 20 per cent of salary that exceeds 30 times the “basic income amount”.
The pension for the employees at Nordben Life and Pension Insurance Company LTD and Euroben Life and Pension LTD is covered by a de�nedcontribution scheme. In addition, the employees of Nordben are covered by a lump sum upon death during their period of service.
Reconciliation of pension assets and liabilities in the statement of financial position
Includes employer contributions on net under-�nanced liabilities in the gross liabilities.
Changes in the fair value of pension assets NOK million 2017 2016
The actuarial assumptions in Sweden follow the industry’s mutual mortality table DUS14 adjusted for corporate di�erences. The average employee turnover rate is estimated to be 4 per cent p.a.
Storebrand’s risk associated with the pension scheme relates to the changes in the �nancial and actuarial assumptions that must be used in the calculations and the actual return on the pension funds. The pension liabilities are particularly sensitive to changes in the discount rate. A
Net pension expenses booked to profit and loss account, specified as follows NOK million 2017 2016
Financial assumptions: The �nancial assumptions have been determined on the basis of the regulations in IAS 19. Long-term assumptions such as future in�ation, real interest rates, real wage growth and adjustment of the basic amount are subject to a particularly high degree of uncertainty.
Actuarial assumptions: In Norway standardised assumptions on rates of mortality and disability as well as other demographic factors are prepared by Finance Norway.
Note 24 – Remuneration to senior employees and elected o�cers of the company
O�cer. The Committee is responsible for keeping itself informed and proposing guidelines for the determination of remuneration of executive employees in the Group. The Committee also acts as an advisory body to the Chief Executive O�cer with regard to remuneration schemes that encompass all employees of the Storebrand Group, including Storebrand’s bonus and pension schemes. The Compensation Committee satis�es the follow-up requirements set forth in the remuneration schemes.
Storebrand aims to base remuneration on competitive and motivating principles that help attract, develop and retain highly quali�ed sta�.
The Group’s executive management team and executive personnel who have a signi�cant in�uence on the Company’s risk receive only �xed salaries. Other employees may, in addition to �xed salary, be awarded a discretionary bonus of 5-15% of �xed salary.
In connection with the transition from de�ned bene�t to de�ned contribution schemes, compensation schemes were established for employees for whom the change was disadvantageous. These schemes give additional monthly saving for employees for a maximum 36 months. The additional saving is taxed as pay.
Entitlement to a severance package is also available if the employee decides to leave the Company due to substantial changes in the organisation, or equivalent circumstances, which result in the individual being unable to naturally continue in his/her position. If the employment is brought to an end due to a gross breach of duty or other material non-performance of the employment contract, the provisions in this section will not apply.
2. BINDING GUIDELINES FOR SHARES, SUBSCRIPTION RIGHTS, OPTIONS ETC. FOR THE COMING 2017 FINANCIAL YEAR
To ensure that the executive management team has incentive schemes that coincide with the long-term interests of the owners, a proportion of the �xed salary will be linked to the purchase of physical STB shares with a lock-in period of three years. The purchase of shares will take place once per year.
Tax e�ect of realised/unrealised shares 112 -89 share dividends received 66 -47 associated companies 14 15 other permanent di�erences 496 319 recognition/write-down of tax assets 1 change in tax rate 104 118
RECONCILIATION OF EXPECTED AND ACTUAL TAX COST NOK million 2017 2016
The e�ective tax rate is also a�ected by the fact that the Group has operations in countries with tax rates that are di�erent from Norway (25 per cent). In addition, the income tax expense is also in�uenced by tax e�ects relating to previous years.
CALCULATION OF DEFERRED TAX ASSETS AND DEFERRED TAX ON TEMPORARY DIFFERENCES AND LOSSES CARRIED FORWARD
*) The Group’s tax-increasing temporary di�erences also include temporary di�erences linked to the Group’s investment properties. These properties are primarily found in the Norwegian life insurance company’s customer portfolio and in companies that are owned by holding companies, which in turn are owned by Storebrand Livsforsikring AS. If these limited companies that own the properties were to be sold, they could be disposed of practically tax-free. The tax-increasing temporary di�erences related to the di�erence between the fair value and taxable value of investment properties that have arisen during the period of ownership (around NOK 10.5 billion), are included in the Group’s temporary di�erences, on which deferred tax is calculated at a nominal tax rate of 23 per cent. In accordance with IAS 12, no provisions have been set aside for deferred tax related to temporary di�erences that existed when companies were acquired and the transaction was not de�ned as a business transfer (basis of around NOK 0.8 billion).
January 2018. It was also agreed to keep the rate at 25 per cent for companies subject to the �nancial tax. The Storebrand Group includes companies that are both subject to and not subject to the �nancial tax. Therefore, when capitalising deferred tax/deferred tax assets in the consolidated �nancial statements, the company tax rate that applies for the individual companies is used (23 or 25 per cent).
Note 28 – Intangible assets and excess value on purchased insurance contracts
Currency di�erences on converting foreign units 3 510 35 43 590 -1,166
In calculating the utility value, the management have made use of budgets and forecasts approved by the Board for the next three years (2018 to 2020). The management has made assessments for the period from 2021 to 2027, and the annual growth for each element in the income statement has been estimated. The primary drivers of improved long-term results will be the return on total assets, underlying in�ation and wage growth in the market (which drive premium growth). The utility value is calculated using a required rate of return after tax of 5.3 per cent.
Calculations related to the future will be uncertain. The value will be a�ected by various growth parameters, expected return and what required rate of return is assumed, etc. It is pointed out that the aim of the calculations is to ensure adequate reliability that the utility value, cf. IAS 36, is not lower than the recognised value in the accounts. Simulation with reasonable, as well as conservative, assumptions indicates a value for the investment that justi�es the book value.
A cash �ow based valuation based on the expected result after tax is used when calculating the utility value of the banking business. In the spring of 2014, the board of the bank approved a liquidation plan for the bank’s corporate market portfolio. This liquidation has been taken into account in the �nancial plan. In addition, budgets and forecasts approved by the Board for the next three years (2018 to 2020) are used as the basis for the valuation.
Storebrand ASA acquired 90.95% of the shares in Skagen AS on 7 December 2017. The intangible assets linked to Skagen are customer lists, branded products, technology and goodwill. On 8 December 2017, Storebrand ASA transferred ownership of Skagen AS to Storebrand Asset
NOK million Useful economic life Depr. rate Depr. method Book value 2017
Value of business in force SPP 20 years 5 % Straight line 3,355
Since it has been decided that the corporate market activities will be discontinued, a di�erent beta has been used for the retail and corporate markets. The retail portfolio consists of a well-diversi�ed home mortgage portfolio with a low loan-to-value ratio and very limited risk. It is therefore natural to assume that the risk premium for this portion of the business is lower than the rest of the market. The beta has been set at 0.8 in the calculations, which corresponds to the average beta for regional banks in Europe. The risk in the corporate market portfolio is correspondingly higher, since it consists of a smaller portfolio with larger individual commitments. In order to re�ect this risk, the beta has been set at 1.5 in the calculations. The use of two di�erent required rates of return is particularly important in relation to the terminal value, in which it is expected that only the retail part will endure.
There will be uncertainty related to the assumptions that have been made in the valuation. The value will be a�ected by the assumptions for the interest rate margin, expected losses on lending, growth parameters and capital requirements, as well as what required rate of return is assumed, etc. It is pointed out that the aim of the calculations is to ensure adequate reliability that the utility value, cf. IAS 36, is not lower than the recognised value in the accounts. Simulation with reasonable, as well as conservative, assumptions indicates a value for the investment that justi�es the book .
NOK million Business area Acquisition cost 01.01 Accumulated writedowns 01.01 Book value
In the Group’s �nancial statements, securities funds in which Storebrand has an ownership percentage of around 40 per cent or more, and which are also managed by management companies within the Storebrand Group, are consolidated 100 per cent on the balance sheet. Minority ownership interests in consolidated securities funds are shown on one line for assets and correspondingly on one line for liabilities. In consequence of other investors in the funds being able to request redemption of their ownership interests from the respective funds, such are deemed to be minority interests that are classi�ed as liabilities in Storebrand’s consolidated �nancial statements.
Voting rights as a percentage of the total number of shares 10
OWNERSHIP INTERESTS IN ASSOCIATED COMPANIES AND JOINT VENTURES NOK million Business location Ownership share Book value 31.12
SPECIFICATION OF ASSOCIATED COMPANIES AND JOINT VENTURES CLASSIFED AS SUBSTANTIAL (100% FIGURES)
INCOME FROM ASSOCIATED COMPANIES AND JOINT VENTURES NOK million 2017 2016
A yield is calculated for each bond, based on both the paper’s book value and the observed market price (fair value). For �xed income securities with no observed market prices the e�ective interest rate is calculated on the basis of of the �xed interest rate period and classi�cation of the individual security with respect to liquidity and credit risk. Calculated e�ective yields are weighted to give an average e�ective yield on the basis of each security’s share of the total interest rate sensitivity.
Office buildings (including parking and storage): Shopping centres (including parking and storage)
The investments are classi�ed as “Investment in associated Ccmpanies and joint ventures” in the Consolidated Financial Statements.
Storebrand Eiendomsfond Norge KS and Ruseløkkveien 26 invest exclusively in real estate at fair value.
The vacancy rate for lettable areas was 4.1 per cent (6.7 per cent) at the end of 2017.
Of the total vacancy, 9.3 per cent (9,2 per cant) is related to to space that is unavaiilable for leasing due to ongoing development procjects.
Purchases: No further property acquisitons has been agreed upon in Storebrand Livsforsikring that is not included in the Financial statement as of 31.12.2017. In SPP and Euroben, SEK 1 144 million in property acquisitions have been agreed upon in addition to the �gures that have been
Sale: No further property sales has been agreed on in Storebrand/SPP in addiition to the �gures that has been �nalised and included in the
Allocation by company and customers: Properties for own use – customers 1,408 2,863
Allocation by company and customers: Bonds and other �xed-income securities – company 31,718 30,504
Bonds and other �xed-income securities – customers without guarantee 33,146 26,654
Gross nominal volume principally indicates the size of the exposure, whilst net nominal volume provides some indication of the risk exposure.
Allocation by company and customers: Accounts receivable and other short-term receivables – company 4,834 2,646
Age distribution for accounts receivable 31.12 (gross) NOK million 2017 2016
Allocation by company and customers: Equities and fund units – company 363 121
Storebrand utilises cash �ow hedging of its credit margin. The hedged items are liabilities that are measured at amortised cost. Derivatives are recognised at fair value in the accounts. The proportion of the gain or loss on the hedging instrument that is deemed to be e�ective hedging is recognised in total comprehensive income. The proportion is subsequently reclassi�ed to pro�t or loss in step with the hedged item’s e�ect on
Storebrand uses fair value hedging for interest risk. The hedged items are �nancial assets and �nancial liabilities measured at amortised cost.
Derivatives are recognised at fair value over pro�t or loss . Changes in the value of the hedged item that can be attributed to the hedged risk are adjusted in the book value of the hedged item and reconised in the income statement.
Of total loans of NOK 27.3 billion , NOK 14.5 billion has been mortgaged in connection with the issuing of covered bonds (covered bond rate) in
of up to 9.5% until these securities mature. Storebrand Boligkreditt AS has security that is NOK 1.1 billion more than what the present rating requires. Storebrand Bank ASA therefore considers the security to be adequate.
Unused credit limit for customers concern granted and unused overdrafts and credit cards, as well as unused facility for credit loans secured by property.
The Storebrand Group companies are engaged in extensive activities in Norway and abroad, and are subject for client complaints and may become part in legal disputes.
Transferred bonds still recognised on the statement of �nancial position 402
Companies in the Storebrand Group have transactions with related parties who are shareholders in Storebrand ASA and senior employees.
These are transactions that are part of the products and services o�ered by the Group‘s companies to their customers. The transactions are entered into on commercial terms and include occupational pensions, private pensions savings, P&C insurance, leasing of premises, bank
deposits, lending, asset management and fund saving. See note 24 for further information about senior employees.
Equity and bond funds denominated in NOK with foreign currency exposurein i.a. EUR and USD NOK 20 billion.[8]
Liabilities for which repayment may be demanded immediately are included in the 0-6 month column.[10]
In the case of perpetual subordinated loans the cash �ow is calculated through to the �rst call date.[11]
In addition, Storebrand Bank ASA has issued hybrid tier 1 capital bonds/hybrid capital that is classi�ed as equity. See the statement of changes in equity.[12]
Includes lending to customers/liabilities to �nancial institutions classi�ed at fair value through pro�t and loss[13]
Includes lending to customers/liabilities to �nancial institutions classi�ed at fair value through pro�t and loss[15]
Includes lending to customers/liabilities to �nancial institutions classi�ed at fair value through pro�t and loss[18]
1) Pro�t earned that is included as equity in the �nancial statements must be replaced by the reconciliation reserve in the solvency balance. The reconciliation reserve also includes pro�t earned, but based on the valuation of assets and liabilities in the solvency balance. The reconciliation reserve will also include the present value of future pro�ts. The value of future pro�ts is implicitly included as a consequence of the valuation of the insurance liability.
Applicable to the company’s share of the result is the minority<br /> interest's share of the pro�t from the sale of investment properties[22]
Including Storebrand Helseforsikring with 100 per cent. Figures for 2017 include 138 employees in Skagen[25]
Comprises company car, telephone, insurance, concessionary interest rate, other taxable bene�ts.[27]
Employees can borrow up to NOK 3,5 million with subsidised rates while excess loanamount hold market rate. From 2018, the loan amount is NOK 7,0 million.[28]
Value of business-in-force, the di�erence between market value and book value of the insurance liabilities in SPP.[39]
All of the proporties in Sweden are appraised externally. The appraisal is based on the required rates of return in the market[44]
All of the proporties in Sweden are appraised externally. The appraisal is based on the required rates of return in the market[45]
All of the proporties in Sweden are appraised externally. The appraisal is based on the required rates of return in the market[46]
All of the proporties in Sweden are appraised externally. The appraisal is based on the required rates of return in the market[48]
Statement of changes in equity 467 813 982 shares with a nominal value of NOK 5.[1]
In 2017, 657 715 shares were sold to our own employees. Holding of own shares 31.December 2017 was 973 672.[5]
Cash and cash equivalents at start of the period 72 161
Assets intended for permanent ownership and use are classi�ed as �xed assets, and assets and receivables due for payment within one year are classi�ed as current assets. Equivalent policies have been applied to liability items.
Tangible �xed assets for own use are recognised at acquisition cost less accumulated depreciation. Write-downs are made if the book value exceeds the recoverable amount of the asset.
The tax cost in the pro�t and loss account consists of tax payable and changes in deferred tax. Deferred tax and deferred tax assets are calculated on the di�erences between accounting and tax values of assets and liabilities. Deferred tax assets are recorded on the balance sheet to the extent it is considered likely that the company will have su�cient taxable pro�t in the future to make use of the tax asset. Deferred tax is applied directly against equity to the extent that it relates to items that are themselves directly applied against equity.
The de�ned-contribution pension scheme involves the company paying an annual contribution to the employees’ collective pension savings. The future pension will depend upon the size of the contribution and the annual return on the pension savings. The company does not have any further work-related obligations after the annual contribution has been paid. No provisions are made for ongoing pension liabilities for these types of schemes. De�ned-contribution pension schemes are recognised directly in the �nancial statements.
Current assets and liabilities are translated at the exchange rate on the balance sheet date. Shares held as �xed assets are translated at the exchange rate on the date of acquisition.
When a �nancial asset or a �nancial liability is initially recognised in the �nancial statements, it is valued at fair value. Initial recognition includes transaction costs directly related to the acquisition or issue of the �nancial asset/liability.
Fair value is the amount for which an asset could be sold for, or a liability settled with, between knowledgeable, willing parties in an arm’s length transaction. For �nancial assets that are listed on an exchange or other regulated market place, fair value is determined as the bid price on the last trading day up to and including the balance sheet date, and in the case of an asset that is to be acquired or a liability that is held, the o�er price.
Storebrand’s employees in Norway have a de�ned-contribution pension scheme. In a de�ned-contribution scheme, the company allocates an agreed contribution to a pension account. The future pension depends upon the amount of the contributions and the return on the pension account. When the contributions have been paid, the company has no further payment obligations relating to the de�ned-contribution pension and the payment to the pension account is charged as an expense on an ongoing basis. For regulatory reasons, there can be no savings in the de�ned-contribution pension for salaries that exceed 12G (G = National Insurance Scheme basic amount). Storebrand has pension savings in the savings product Extra Pension for employees with salaries exceeding 12G.
The Norwegian companies participate in the Joint Scheme for Collective Agreement Pensions (AFP). The private AFP scheme provides a lifelong supplement to an ordinary pension and is a multi-employer pension scheme, but there is no reliable information available for inclusion of this liability on the statement of �nancial position. The scheme is �nanced by means of an annual premium that is de�ned as a percentage of salaries from 1 G to 7.1 G, and the premium rate was 2.5 % in 2017. Storebrand employees in Norway who were born before 1 January 1956 can choose between drawing an AFP scheme pension or retiring at the age of 65 and receiving a direct pension from the company until they reach the age of 67. Employees can choose to receive bene�ts from the AFP scheme from the age of 62 and still continue to work.
Employees who were on sick leave and partiality disabled during the transition to the de�ned-contribution pension, remain in the de�nedbene �t pension scheme. There are also pension liabilities for the de�ned-bene�t scheme related to direct pensions for certain former employees and former board members.
CHANGES IN THE NET DEFINED BENEFITS PENSION LIABILITIES IN THE PERIOD: Net pension liabilities 31.12 183 167
Note 3 – Net income for various classes of �nancial instruments
OTHER COMPREHENSIVE INCOME (OCI) IN THE PERIOD NOK million 2017 2016
PENSION ASSETS ARE BASED ON THE FINANCIAL ASSETS HELD BY STOREBRAND LIFE INSURANCE, WHICH ARE COMPOSED OF AS PER 31.12.: NOK million 2017 2016
Net pension cost booked to profit and loss accounts in the period 7 -3
Net deferred tax asset/liability in the statement of financial position 135 236
The �nancial assumptions have been determined on the basis of the regulations in IAS 19. Long-term assumptions such as future in�ation, real interest rates, real wage growth and adjustment of the basic amount are subject to a particularly high degree of uncertainty.
Storebrand ASA has both interest-bearing securities and interest-bearing debt. A change in interest rates will have a limited e�ect on the company’s equity.
Storebrand ASA has an unused drawing facility of EUR 240 million, expiration December 2019.
The company uses fair value hedging to hedge interest rate risk. The e�ectiveness of hedging is monitored at the individual security level.
Statement of financial position items: Due from group companies 2,207 891
Pension costs include accrual for the year. See also the description of the pension scheme in Note 5.[4]
Storebrand ASA has expensed NOK 51 million in earnout linked to the shares in Skagen, which is a subsidiary of Storebrand Asset Management AS.[6]
On this date, the Board of Directors and the Chief Executive O�cer have considered and approved the annual report and annual �nancial statements for Storebrand ASA and the Storebrand Group for the 2017 �nancial year and as at 31 December 2017 (2017 Annual Report).
(IFRS) and the associated interpretations, as well as the other disclosure obligations stipulated in the Norwegian Accounting Act that must be applied as at 31 December 2017. The annual �nancial statements for the parent company have been prepared in accordance with the
Accounting Act and Norwegian Accounting Standard no. 16 as at 31 December 2017.
In the best judgment of the Board and the CEO, the annual �nancial statements for 2016 have been prepared in accordance with applicable accounting standards, and the information in the �nancial statements provides a fair and true picture of the parent company’s and Group’s assets, liabilities, �nancial standing and results as a whole as at 31 December 2017. In the best judgment of the Board and the CEO, the annual report provides a fair and true overview of important events during the accounting period and their e�ects on the annual �nancial statements for Storebrand ASA and the Storebrand Group. In the best judgement of the Board and the CEO, the descriptions of the most important elements of risk and uncertainty that the group faces in the next accounting period, and a description of related parties’ material transactions, also provide a true and fair view.
Deloitte has consecutively been the Storebrand Group's external auditor in Norway for 13 years and Sweden for 10 years. Each and every company within the Storebrand Group have had the same auditor due to regulatory requirements, cf. the Financial Undertakings Act section 8-17, third paragraph, which states that a financial undertaking being part of a financial undertaking group structure shall have the same auditor as the parent company if exceptions are not set out by law.
The Storebrand Group needs to change the external auditor in 2018 due to regulatory requirements in Sweden prohibiting use of the same auditor for a duration of more than 10 years, which has effect on the Storebrand Groups companies in Sweden (SPP)
Based on the above mentioned factors, the Audit Committee has concluded that PwCs offer presents itself as the best for the Storebrand Group. Therefore, the Audit Committee has concluded to recommend the Board of Directors to recommend to the General Meeting 11 April 2018 to elect PwC as the new external auditor for the Storebrand Group with effect from and including the fiscal year 2018.
�nancial institutions. In order to be eligible as primary capital, tier 2 capital cannot exceed core (tier 1) capital. Perpetual subordinated loan
capital, together with other tier 2 capital, cannot exceed 100 per cent of core (tier 1) capital, while dated subordinated loan capital cannot exceed 50 per cent of core (tier 1) capital. To be fully eligible as primary capital, the remaining term must be at least �ve years. If the remaining term is less, the eligible portion is reduced by 20 per cent per annum.
The booked return on capital shows net realized income from �nancial assets and changes in the value of real estate and exchange rate changes for �nancial assets, expressed as a percentage of the year’s average capital in customer funds with guarantees and in the company portfolio, respectively. The market return shows the total income realised from �nancial assets, changes in the value of real estate and the year’s change in unrealised gains or losses, expressed as a percentage of the year’s average total capital in customer funds with guarantees and in the company portfolio, respectively, at market value.
Life insurance o�ering an investment choice, whereby the customer can in�uence the level of risk and return by selecting in which funds assets are to be invested. Applies to both individual policies and group de�ned contribution pensions.
Contracts with guaranteed payments for as long as the insured person lives. Alternatively, it can be agreed that the pension will end at a speci�ed age.
Bu�er capital consists of the market value adjustment reserve, additional statutory reserves and conditional bonuses.
Derivatives require less capital than is the case for traditional �nancial instruments, such as equities and bonds, and are used as a �exible and cost-e�ective supplement to traditional instruments in portfolio management. Financial derivatives can be used to hedge against unwanted
The purchase of share options confers a right (but not an obligation) to buy or sell shares at a pre-determined price. Share options may be related to stock market indices as well as to speci�c individual stocks. The sale of share options implies the equivalent one-sided obligation. In general, exchange traded and cleared options are used.
Interest rate futures contracts are related to government bond rates or short-term benchmark interest rates. Interest rate futures are standardized contracts which are exchange traded and are subject to established clearing arrangements. Pro�ts and losses on futures contracts are recognized daily and settled on the following day.
Interest rate options can be related to either bond yields or money market rates. The purchase of interest rate options related to bonds (also known as bond options) confers a right (but not an obligation) to buy or sell bonds at a pre-determined price. Interest rate options can be used as a �exible instrument for the management of both long and short-term interest rate exposure.
Periodic payments (representing both capital and interest) on a levelrepayment loan remain constant throughout the life of the loan.
SPP Pension & Försäkring AB eier 29,4 prosent og Storebrand Livsforsikring AS eier 70,0 prosent av Foran Real Estate IA.[1]