February ■ Storebrand ASA aquires 15% of Balsam.com AS. Over the course of 2001 Balzam is integrated with the Wincome consept developed by Storebrand Livsforsikring. The combined entity represents a new concept for the management and presentation of employee benefits.
■ Storebrand Kapitalforvaltning ASA and Storebrand Fondene AS become the first fund managers in Norway to gain Global Investment Performance Standards certification. This formal recognition of investment standards is used by fund managers around the world.
10 percent of the one million Norwegians under the age of 17 are insured against sickness and accident. This is in sharp contrast to our neighbours in Sweden, where more than 80 percent of the same age group has some form of insurance. The Norwegian market clearly offers considerable potential for an experienced supplier of suitable insurance products.
Market research amongst retail customers shows that nine out of ten believe that it is important to save, but find savings products complicated. Savers now use the Internet and other channels to improve their understanding of alternative savings products, and they expect better and more user-friendly products which they can access through new communications methods. This is changing the rules for competition in the retail savings market.
Monitoring procedures that allow the company to fully appraise its commitments and risk exposure at all times play a central role in Storebrand’s investment policy. This makes it possible to manage risk in an efficient and controlled manner, and avoids the need to make major changes in the composition of investments in response to dramatic events in the financial markets.
■ Storebrand is seen as the winning company for transfers of municipality pension schemes. ■ The ratio of costs to policyholders’ funds fell sharply from 0.94 percent to 0.88 percent. ■ Group life insurance products produced a strong risk result in 2001.
Storebrand offers a number of private equity products that offer attractive returns over the longer term, both in the form of discretionary management products and as fund-of-fund products.
Delphi Fondene also performed well in 2001, with a 1.6% share of the equity fund market as compared to 1.4% in 2000.
Storebrand Bank employed a total of 179 local financial advisers and 40 advisers based at the customer call centre at the close of 2001, and also distributed its products through 20 tied agents.
Oslo Re is principally involved in the run-off of its own reinsurance business and managing run-off business for other companies. The company was acquired by Storebrand Skade in 1999.
Storebrand Skade further reduced its statutory security reserves in 2001, releasing NOK 280 million to profit and loss.
Share price development Storebrand’s share price on 31 December 2000 was NOK 62.50. The high and low prices seen during 2001 were NOK 73.00 and NOK 41.80 respectively. The price on 31 December 2001 was NOK 52.00. This represents a reduction of approximately 16% over the course of 2001. The fall in share price was largely due to a general fall in share prices for companies listed on Oslo Stock Exchange.
Other receivables and assets 39.0 64.1 42.2 Fixed assets excluding real estate 10 71.3 147.1 139.0 Cash and bank 121.8 129.0 326.4
From (to) additional statutory reserves - life insurance 407.6 -450.9 Funds allocated to policyholders - life insurance -3 500.5 -4 180.9
Real estate directly owned by Storebrand Livsforsikring AS Due to the relationship with life insurance customers the rules for the treatment of real estate in the accounts differ as between the life insurance business and the Group’s other businesses.
Financial derivatives Financial derivatives form an integrated part of Storebrand ’s management of the risk and return profile of share and bond portfolios.
Any other balance sheet items are recorded at the exchange rate prevailing at the date of acquisition.
Security fund The security fund is a statutory reserve to cover unexpected insurance risks. The calculations are made by an actuary in accordance with regulations published by the Banking, Insurance and Securities Commission.
Dividends Storebrand Skadeforsikring AS 800.0 Storebrand Livsforsikring AS 530.6 *) A gross amount of NOK 671.6 million of total group contribution of NOK 1,068 million is recognised to profit and loss, the balance of group contribution is treated as an equity transaction. The Ministry of Finance has given a dispensation in accordance to Financial Institutions Act §2a-8 to provide a group contribution in excess of the full year result in Storebrand Skadeforsikring AS. It is a condition that the group contribution is used for repayment of bond loan in Storebrand ASA and that the payment of the group contribution is effectuated before the end of 2003.
Deviations from estimate are booked against the "corridor" in accordance with Norwegian Accounting Standards, and are not reflected in the balance sheet or profit and loss account. (See Accounting Principles). Note 23 also provides a more detailed description of the pension schemes provided by Storebrand and their accounting treatment. Estimated employer's social security contributions in respect of the pension liability shown in the balance sheet amounts to NOK 42.0 million and is included as part of the "Reserves for other risks and costs" item in the balance sheet. The calculations relate to 60 employees and 2,480 pensioners.
Board of Representatives 569 775 461 Control Committee *) 814 849 814 Chairman of the Board 300 398 200 Board of Directors 1 660 1 418 1 190 Auditor's fees for audit and related control functions 2 017 1 205 1 418 Auditor's fees for consultancy services 3 000 1 000 677
Of which listed 51.2 125.2 176.4 *) Convertible bonds issued by Finansbanken ASA.
Group contribution paid -338.8 Dividends received booked directly against equity 470.5 Interest -39.1
Profit and loss account items: Dividends from subsidiaries 1 330.7 0.8 Purchase and sale of services (net) 1.0 306.9 841.6
Note 21: Losses and provisions for losses on loans, guarantees etc.
Of which listed Norwegian shares 6 978.4 Of which listed international shares 11 846.4
Salary account holders (private persons) 1 344.0 10 855.5 4 070.6 7.5 16 277.6 15 009.5 12 595.1
Life insurance activities - shareholders’ capital - N GAAP 3 445.7 3 228.4
Instalment loan: A loan on which the borrower makes regular partial repayments of principal in equal amount throughout the entire repayment period. The borrower pays the sum of a fixed instalment amount and a reducing interest amount at each instalment date. Payments accordingly reduce over the life of the loan assuming a fixed interest rate.