In recent years, Storebrand asset management has evolved from a focus on investments in traditional asset classes such as equities and bonds- to an increasingly diversified portfolio including real estate, private equity and infrastructure. Storebrand asset management is now recognised as a leading multi-boutique manager in the Nordic region. We will continue to build on the positive momentum, with the aim of realizing further growth ambitions as a Nordic powerhouse for asset management.
This is Storebrand 10 About Storebrand 14 Executive management 15 Board of directors
Our purpose is clear - we create a future to look forward to.
Norwegian residents received their own pension account (Egen pensjonskonto) from February 2021. It is intended to provide better oversight and control over your own pension and increase payouts. New rules for retirement savings are also being developed in Sweden. It will be easier and more affordable for employees to move pension funds saved from 1 July 2007 to the present da. Swedish authorities are exploring several measures to limit fees related to insurance and savings schemes, to ensure proper freedom of choice for workers.
• Efficient – I make the customer journey easy and improve your organisation.
High ethical standards, good quality advisory services and firstclass customer care are fundamental. Our advisors in Norway are authorised through the financial advisors authorisation scheme (AFR), the non-life insurance and personal insurance authorisation scheme (AIS and AIP) and/or the authorisation scheme for credit and personal insurance, all under the auspices of the financial industry.
New working patterns because of Covid-19 resulted in a change of pace in digitalisation among Storebrand’ s customers and employees, as in society at large. Never before have we had so many digital customer meetings, sold as much in digital channels and handled as many settlement cases digitally as in 2020.
Market position: Pension, corporate market Norway #1 #1 #1 #1 #1 #1
Goals and ambitions Our ambition is to build a learning culture characterised by innovation, responsibility for one’s own and others’ learning, and feedback, to ensure continuous development and improvement. In 2020, we combined the potential of our new communication and interaction tools, with our digital learning platform Campus Storebrand, which enabled increased social learning and learning outcomes. This was in addition to the many courses and offers found in Campus Storebrand, where mandatory training in ethics, combating corruption and anti-money laundering has been facilitated.
Three gatherings were held for the 23 talents in Storebrand Future Impact. Two of sessions were conducted digitally due to Covid-19. The project work, which lasted eight weeks and was carried out according to the Agile Business Exploration method, was facilitated and carried out digitally. Despite the changes explained above, the program achieved a satisfaction score of 84 out of 100. The goal of the program is to enable the participants to become effective ambassadors for change. When evaluating goal achievement on this criterion, participants gave an average score for the program of 4.92 out of 6.
Goals and ambitions Our ambition is to strengthen employee satisfaction, job satisfaction and engagement through meaningful work, good management, a motivating working environment, development opportunities and confidence in management. Our managers are responsible for setting clear objectives and for encouraging employees to collaborate with peers around how to achieve both collective and individual goals.
Our driving force is to be closest to our customers and help them to achieve financial safety and freedom, so that they have a future to look forward to. This requires us to act as courageous pathfinders. Every year, an employee from across the group is awarded with the Courageous Pathfinder Award. The nomination process in 2020 was based on transparency, sharing and accessibility through digital platforms, leading to a record turnout and number of nominations. The award process clearly showed that our employees can rethink, innovative and challenge practices internally and globally.
Measures to prevent money laundering, financial crime and terror financing are described on the Group intranet, along with information on what we expect from our employees in terms of responsible business conduct. The information applies to all companies in the Group.
In 2020, we concretised our work on sustainability in the supply chain further, and thus also our targets. We have defined three specific climate targets for suppliers and partners: • By 2025, the goal is that all suppliers have set short- and mediumterm verifiable emission reduction targets
We work actively to influence - We use our position as a major buyer to influence suppliers and business partners for improvement. We do this both when we consider entering into new agreements and evaluating existing ones.
Why As a leading financial institution in Norway and Sweden, we have an important social responsibility. The sustainability work means that we actively engage with the society in which we operate, beyond delivering financial services.
In 2020, NOK 500 000 was awarded to 17 “We’re rooting for” projects around Norway, and 250 000 SEK were awarded to similar projects in Sweden. All the projects somehow contribute to a future to look forward to.
Number of breaches of code of conduct/Code of Conduct New New 9 2 N/A N/A
25) We have stopped reporting the average number of flights per FTE, as this is not a relevant indicator. The impact of air travel on the environment depends on how far you travel. This indicator is therefore replaced by kg
The Board has carefully reviewed the solvency position, liquidity position and result prognosis for the company, in light of the Covid19 pandemic and the resulting macroeconomic uncertainties. Based on the review, the Board’s assessment is that Storebrand’s financial position supports paying an ordinary dividend. The Board proposes an ordinary dividend of NOK 3.25 per share for 2020, equal to NOK 1,519 million, to the Annual General Meeting.
We invest in companies that contribute to good health and quality of life. We are increasing exposure to companies that contribute to more people accessing essential health services, medicines and vaccines, health insurance, and companies that counteract deaths as a result of unsatisfactory water and sanitation.
We strive to ensure that the companies we are invested in ensure good health and quality of life for their employees. This year we also demanded that companies established proper practices and measures to protect their employees from Covid-19.
Storebrand will no longer invest in companies such as: • receive more than 5 per cent of its revenues from coal or oil sands-based activities
4. Use ownership position to stimulate ambitious climate practices at portfolio companies
In 2020, Storebrand launched a new climate strategy as an addition to the Group’s sustainable investment guidelines. The strategy aims to ensure that we are a driving force for a just transition to a low-carbon society, while helping to reduce climate risk in our investments.
Carbon footprint from equity investments: tonnes of CO2e per NOK 1 million in sales income (against index) 40) 28 (18) 22 (32) 18 (24) 12 (18) N/A N/A
Companies that have been contacted to discuss ESG through active ownership: number/share of investment universe New 314 / 10.8 % 408 / 9.7% 572 / 12% N/A N/A
The scenarios are based on two dimensions that affect the risk. • How serious will the impact of global warming be?
• Commitment to energy efficiency and greenhouse gas emissions: Continuous improvements in energy efficiency are achieved through several measures to optimise operations. The total carbon emissions in direct real estate investments continued to decrease, ending at 8 456 tons of CO2equivalents in 2020, or 7.9kg CO2e/m2. The goal for 2025 is to reduce this to 6.5kg CO2e/m2.
Additional measurement parameters and targets relevant to climate-related risks related to real estate investments can be found on pages 59 and 65.
Carbon footprint from equity investments: tonnes of Co2e per NOK 1 million in sales income (against index)
Investments in solutions: NOK billion/ share of total AUM 53,7 / 6,5 % 92,6 / 9,6 % 15 % av AUM
Foreign ownership As at 31 December 2020, foreign ownership totalled 56.6 per cent, compared to 56.2 per cent at the end of the 2019.
Financial assets at amortised cost: Reinsurers' share of technical reserves 56 26
Financial liabilities: - Loans and deposits from credit institutions 9,12,30 1,653 446 - Deposits from banking customers 9,12,30 15,506 14,404 - Other non-current liabilities 1,355 1,037
Shares and fund units FVP&L (FVO) FVP&L 194,343 194,343 230,830 230,830
6. Consolidation The consolidated financial statements include Storebrand ASA and companies controlled by Storebrand ASA. Minority interests are included in the Group’s equity, unless there are options or other conditions that entail that minority interests are classified as liabilities.
The pensioners’ surplus fund comprises surplus assigned to the premium reserve in respect of pensions in group payments. The fund is applied each year as a single premium payment to secure additional benefits for pensioners.
Reconciliation between the profit and loss statement and alternative statement of the result (segment) The results in the segments are reconciled against the Group result before amortisation and write-downs of intangible assets. The Group’s income statement includes gross income and costs linked to both the insurance customers and owners (shareholders). The alternative statement of the result only includes result elements relating to owners (shareholders) which are the result elements that the Group has performance measures and follow-up for. The result lines that are used in segment reporting will therefore not be identical with the result lines in the corporate profit and loss account. Below is an overall description of the most important differences.
Financial items and risk result life & pension 76 296 278 739
It varies as to how the gross effects above are recognised in the company’s income statement. The business rules define buffer capital and other factors which entail that a negative risk result for the pension products may be covered by the risk equalisation fund, provided that this is sufficient. Equivalently, up to 50% of the positive risk result will be added to the risk equalisation fund, while other positive risk results will pass to the customers. For group disability pensions, group life and personal risk, the risk results pass in their entirety to Storebrand, while the risk result for individual insurance policies are included in the profit sharing between the customers and Storebrand.
SPP Pension & Insurance For SPP it is stress test 1, which includes a fall in interest rates, that creates the greatest impact. The overall market risk is SEK 4.4 billion, which is equivalent to 4.7 per cent of the investment portfolio.
Total derivatives excluding derivatives in bond funds 2019 3,057 1,625 53 578 5,313
External valuations are obtained for properties in the Swedish business. Shopping centres and commercial premises are valued annually, while other wholly-owned property investments are valued on a quarterly basis.
The premiums and content of the defined-contribution pension scheme are as follows: - Saving starts from the first krone of salary. - Savings rate of 7 per cent of salary from 0 to 12 G (the National Insurance basic amount ”G” was NOK 101,351 at 31 December 2020) - In addition, 13 per cent of salary between 7.1 and 12 G is saved. - Savings rate for salary over 12 G is 20 per cent.
The statement is as follows: 1. STATEMENT ON THE EXECUTIVE EMPLOYEE REMUNERATION POLICY DURING THE PREVIOUS FINANCIAL YEAR The executive employee remuneration policy adopted for 2020 has been observed. The annual independent assessment of the guidelines and the practice of these guidelines in connection with bonuses to be paid in 2021 will be carried out by the end of 2021.
5. Comparison with remuneration of other employees Storebrand’s overarching guidelines for financial remuneration for all employees are considered and approved by the Group’s Board of Directors each year. Remuneration is principally based on a fixed salary and the salary level for the different roles is based on assessments of the requirements for the various roles in terms of formal qualifications, experience, responsibility and complexity. The salary levels for all roles in the Group, including the Group’s executive management, are calibrated in relation to the compensation for equivalent positions in the market. Storebrand’s pension and insurance schemes are also the same for all employees at the company, and the Group’s executive management team has no separate pension and insurance arrangements.
Tax effect of shares ("Fritaksmetoden") 228 -64 share dividends received 32 associated companies 4 3 permanent differences 21 68 deferred tax on the increase in value of properties for customer assets 1) -566 -451 deferred tax on the increase in value of properties for customer assets covered by customer returns 1) 566 451
Deferred tax 849 768 4) Uncertain tax positions The tax rules for the insurance industry have undergone changes in recent years. In some cases, Storebrand and the Norwegian Tax Administration have had different interpretations of the tax rules and associated transitional rules. As a result of this, uncertain tax positions arise in connection with the recognised tax expenses. Whether or not the uncertain tax positions have to be recognised in the financial statements is assessed in accordance with IAS 12 and IFRIC 23. Uncertain tax positions will only be recognised in the financial statements if the company considers it to be preponderance that the Norwegian Tax Administration’s interpretation will be accepted in a court of law. Significant uncertain tax positions are described below.
A. In 2015, Storebrand Livsforsikring AS discontinued the Norwegian subsidiary, Storebrand Eiendom Holding AS, with a tax loss of approximately NOK 6.5 billion and a corresponding increase in the tax loss carryforward. In January 2018, Storebrand Livsforsikring AS received notice of an adjustment to the tax returns for 2015 which claimed that the calculated loss was excessive but provided no further quantification. Storebrand Livsforsikring AS disagrees with the arguments that were put forward and submitted its response to the Norwegian Tax Administration on 2 March 2018. The notice was unclear, but based on the notice, a provision was made in the 2017 annual financial statements for an uncertain tax position of approximately NOK 1.6 billion
The Group’s leased assets include offices and other real estate, IT equipment and other equipment. The Group’s right-of-use assets are categorised and presented in the table below: NOK million Buildings IT-equipment Other equipment 2020 2019
Net non-performing loans 1) 104 105 1) The figures apply in their entirety Storebrand Bank
Securities pledged as collateral are linked to lending access in Norges Bank for which, pursuant to the regulations, the loans must be fully guaranteed with collateral in interest-bearing securities and/or the bank’s deposits in Norges bank. Storebrand Bank ASA has four
Storebrand ASA is the holding company of the Storebrand Group. The Storebrand Group is engaged in life and P&C insurance, banking and asset management, with insurance being the primary business. The financial statements of Storebrand ASA have accordingly been prepared in accordance with the Norwegian Accounting Act, generally accepted accounting policies in Norway, and the Norwegian Regulations relating to annual accounts for nonlife insurance companies. Storebrand ASA has used the simplified IFRS provisions in the regulations for recognition and measurement.
CHANGES IN THE NET DEFINED BENEFITS PENSION LIABILITIES IN THE PERIOD
The Group has investment properties that mainly consists of office and retail properties. We have focused on investment property because it represents an estimate and a substantial part of the assets in the Group’s statement of financial position. These properties are measured at fair value and classified in level 3 according to IFRS 13. Valuation of the properties involves use of assumptions which are subject to management judgement. Important assumptions for the value of individual properties are primarily expected future cash flows and discount rate. The basis for management’s estimate is an internal valuation model and external valuations. Management obtain observations of market data from various market participants. Management considers reasonableness of their own estimates through obtaining valuations from external valuers for a sample of properties on a continuing basis. The valuers were engaged by management. Refer to note 1, 2, 12 and 33 in the financial statements for management’s further description of investment properties, the methods used and the assumptions the valuations are based on.
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
These principles are: • We base our business activities on the UN Sustainable
Through our materiality analysis, we have defined the group’s focus areas. These are financial capital and investment universe, customer relations, our employees and keeping our house in order. In our integrated report, page 24, 31, 41, 65 and 73, detailed targets and results are presented for all these areas.
The nomination committee’s mandate in accordance with the company statutes is to propose candidates and remuneration for the Board of Directors and Nomination Committee, through recommendations to the General Meeting
TCFD Recommended Disclosures Page a Describe the Board’s oversight of climate-related risks and opportunities b Describe the management’s role in assessing and managing climate-related risks and opportunities
Described in chapter: This is Storebrand and the sub-chapter About Storebrand
Described in the chapters: This is Storebrand Keeping our house in order
Full 102-47 List of material topics Described in chapter: This is Storebrand under the sub-chapter Material issues
Described in chapter: Customer relationships under the sub-chapter Simple and seamless customer experiences
Described in the chapter: People under the sub-chapter A culture of learning
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Number of shares owned by the close associate, EQT Public Value
Investments in solution companies: NOK billion/ share of total equity investments New New 24.3 / 9.3 % 50.3 / 13% - -
Number of women hired during the year 78 78 124 N/A N/A
Expected pension as a share of salary: Customers’ expected pension from all sources (including private savings for pension, national insurance, AFP, and occupational pension schemes in Norway), expressed as a percentage of current salary.
People Sickness absence: Number of sick leave days divided by number of working days at end-December 2020
Number recruited: Number of recruits including permanent employees, substitutes and internships in Norway and Sweden. The figures also include recruited employees who left the group later in 2020.
Hay Grade: Hay Grade is a recognised job evaluation system used by many larger companies in Norway and internationally. The system makes it possible to compare pay for positions that have the same requirements for competence, experience and complexity. The system is used to compare wages for positions across the group and also against positions with the same Hay Grade in the labour market. The figures only apply to Storebrand in Norway. Hay Grade 21-25 includes roles except CEO.