It is through its investments and loans that the �nancial sector can make the greatest contribution towards more sustainable social development. However, structural changes in investments will only occur if this also makes sense from a commercial perspective. Consumer trends are moving in the direction of increased demand for sustainable products, including in �nancial services, and it is competitive advantage to o�er sustainable products and investment solutions. It is of decisive importance that �nancial players see the prospects of better returns from adapting their investment models to the climate. This will also result in increased investment in climate-friendly solutions and thereby contribute to the green transition.
“Find your pension �gure” assembles all pension schemes from present and past employers, National Insurance and own saved funds. In this way, we assist our customers in understanding the future value of current savings, to better enable them to make safe choices today in order to have a better pension in the future. More than 250,000 Norwegians have found their pension �gures since the launch in 2013.
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 www.storebrand.no/ir.
dividend of more than 35% of the Group result before amortisation after tax is expected for 2017. The expected development in the solvency margin indicates there will be a gradual increase in the dividend distribution rate beyond this from 2018.
The Savings segment experienced growth in fee and administration income of 4% from 2015 to 2016. Good volume growth more than compensates for strong competition and margin pressure.
Fee and administration income in the Guaranteed Pension segment has developed in line with the fact that a large part of the portfolio is mature and in long-term decline. Administration income fell 12%. However, the result is still an improvement on the previous year due to strong pro�t results. It is expected that the contribution to the result will decline over time.
The Insurance result was NOK 575m (NOK 482m) for the full year with an overall combined ratio of 91% (92% in 2015). The insurance premiums increased by 5% in 2016. This premium growth is driven by competitive prices, and simple and relevant products, as well as good cover. The claims ratio has decreased and this is largely due to satisfactory risk development and greater reserve strengthening in 2015.
The result for Guaranteed Pension before amortisation and reserve strengthening totalled NOK 870m in 2016, which was an increase of NOK
2.7bn at the end of the year. Conditional bonus was reduced by NOK 2.1bn and amounts to NOK 7.2bn. The additional statutory reserves totalled NOK 6.8bn at the end of the year, an increase of NOK 1.6bn for the year. A good booked return has contributed to increasing the additional statutory reserves for insurance contracts which are fully strengthened for longevity. The excess value of bonds and loans valued at amortised cost declined due to higher interest rates by NOK 1.8bn this year and amounted to NOK 8.8bn as at 31 December. The excess value of bonds and loans at amortised cost is not included in the �nancial statements.
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. The directives allow for certain national adaptations. It is expected that the Securities Committee will present its proposal for the implementation of MIFID II in February 2017. It is not known when the Norwegian authorities will present a proposal for rules that implement IDD. Swedish regulations for the introduction of MIFID II will most probably be in place during the �rst half of 2017. The intention is to introduce a ban on broker commissions.
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 directive also
Storebrand strives to be transparent and submits results to a number of analysis agencies and sustainability indexes, including Carbon
During the year, the Nordic organisation for eco-labelling, Svanen (the Swan), developed a consumer label for sustainable funds and Storebrand was actively involved with this work during the year. Storebrand has also been in talks with a consortium of NGOs under the umbrella of the Fair
Finance Guide, which demands greater transparency from the industry when concerning guidelines for sustainable investments.
Odd Ivar Biller and Tor Olav Trøim were elected as new members. Leif Ola Rød left the Nomination Committee.
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
Health insurance is owned 50 per cent each by Storebrand ASA and Munich Health.[8]
Board shall ensure that an independent third party assesses the value of transactions that are not insubstantial in nature. Furthermore, the rules of procedure for the Board stipulate that no board member may participate in discussions or a decision concerning matters that are of such material importance to them or a close associate that the member must be regarded as having a conspicuous personal or special �nancial interest in the matter. Each board member has a responsibility to continuously assess whether or not such a situation exists. Transactions with close associates involving Storebrand’s employees and other o�cers of the Group are regulated by Storebrand’s code of ethics. Employees shall 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.
Directors of the annual report and on Storebrand’s website. The composition of the Board of Directors satis�es the independence requirements set forth in the Code of Practice. There are few instances of disquali�cation during the consideration of matters by the Board (none during 2016). 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 2016 is included in the notes to the �nancial statements for Storebrand ASA (Information on related parties) see note 16. None of the board members elected by shareholders have held o�ce for more than ten years.
The main task of the Risk Committee is to prepare matters to be considered by the Board of Directors in the area of risk, with a special focus on
10. RISK MANAGEMENT AND INTERNAL CONTROL (NO DEVIATIONS FROM THE CODE OF PRACTICE)
�nancial and operational targets. In addition, the Board of Directors receives risk reports from the risk management function, which monitors the development of key �gures for risk, solidity, etc.
Storebrand’s consolidated �nancial statements are prepared by the Consolidated Financial Statements unit, which reports to the Group’s CFO.
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
Total other result elements not to be classified to profit/loss -166 -111
Net cash ow from operations before nancial assets and banking customers 462 -3,419
IASB has been working for several years on a new accounting standard for insurance contracts, which was often referred to as IFRS 4, Phase II, but is now known as IFRS17. It is expected that the standard will be published in the first half of 2017, with expected implementation on 1
Investments in associated companies (normally investments of between 20 per cent and 50 per cent of the company’s equity) in which the
The Group’s presentation currency is Norwegian kroner. Foreign companies included in the Group which use a different functional currency are translated into Norwegian kroner. The income statement figures are translated using an average exchange rate for the year and the statement of financial position is translated using the exchange rate prevailing at the end of the financial year. As differences will arise between the exchange rates applied when recording items in the statement of financial position and the income statement, any translation differences are recognised in total comprehensive income if these are not an integrated part of the business.
When making investments, including purchasing investment properties, a decision is made as to whether the purchase constitutes acquisition of a business pursuant to IFRS 3. When such acquisitions are not regarded as an acquisition of a business, the acquisition method pursuant to
Norwegian interest guarantees and profit element risk are included in the premium income.
Storebrand satisfies the adequacy tests for 2016, and they have thus no impact on the results in the financial statements for 2016. Reference is made to further information in Note 29.
Changes in the discount rate may have a significant 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 difference will represent a conditional customer allocated fund – conditional bonus (buffer capital). Changes in the assumptions for future administrative expenses (cost assumptions)
Contingent liabilities are measured in each case and will be based on legal considerations.
Insurance is responsible for the Group’s risk products in Norway and Sweden. The unit provides health insurance in the Norwegian and Swedish corporate and retail markets, P&C insurance and personal risk products in the Norwegian and Swedish retail markets and employee-related and pension-related insurance in the Norwegian and Swedish corporate markets.
1. Amortisation of intangible assets are included in Storebrand Group. 2. Amortisation and write-downs of IT-systems are included in operational cost from 2016. Comparative �gures for 2015 are changed, see also note 23 and 29
Occupational pension agreements (hybrid) are reported in the Guaranteed Pension segment when a customer has an agreement without a choice for investment of the pension assets. This is a small portfolio with limited insurance risk.
2. Pension capital certificates are individual contracts with accrued rights that are issued upon withdrawal from or termination of group defined-contribution pension agreements.
3. A hybrid pension (occupational pension scheme) is where the premium is stated as a percentage of salary, while the payments depend on the contributions and adjustment/return. The insured person selects the investment profile him/herself. The product is only offered in
Guaranteed pension 5. Group defined-benefit pensions are guaranteed pension benefits as a percentage of the final salary from a specified age for as long as the insured person lives. Alternatively, it can be agreed that the pension will end at a specified age. The product is offered 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.
The effect of each stress changes the return in each profile.
The weighted average loan-to-value ratio for retail market loans is approximately 58 per cent on home loans. Over 84 per cent of home loans have a loan to value ratio within 80 per cent and approximately 97 per cent are within a 90 per cent loan to value ratio. About 49 per cent of the home loans are within a 60 per cent LVR. The portfolio is considered to have low to moderate credit risk.
It is primarily investments in forests that are classi�ed under equity at level 3. Forestry investments are characterised by, among other things, very long cash ow periods. There can be some uncertainty associated with future cash ows due to future income and costs growth, even though these assumptions are based on recognised sources. Nonetheless, valuations of forestry investments will be particularly sensitive to the discount rate used in the estimate. The company bases its valuation on external valuations. These utilise an estimated market-related required rate of return. As a reasonable alternative assumption with regard to the required rate of return used, a change in the discount rate of 0.25 per cent would result in an estimated change of around 4.27 per cent in value, depending on the maturity of the forest.
Change in insurance liabilities – life insurance -13,184 -1,221 -9,209 91 -23,522 -15,998
Comparative figures for 2015 are changed by NOK 41 million due to change in classification of amortisation of IT-systems[2]
Actuarial loss (gain) – change in other financial assumptions -2 -8
recognition/write-down of tax asets 152 change in tax rate 118 -73
Solvency II entered into force on 1 January 2016. In accordance with the Solvency II regulations, the first complete Solvency II annual report for 2016 will be reported to the financial markets in the first 6 months of 2017.
In 2016, 431 334 shares were sold to our own employees. Holding of own shares 31. December 2016 was 1 631 387[2]
Cash and cash equivalents at the end of the period 72 161
Booked returns on assets managed by Storebrand Life Insurance were: 6,4% 5,4%
STRAIGHT LINE DEPRECIATION PERIODS FOR TANGIBLE FIXED ASSETS ARE AS FOLLOWS
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 2016 �nancial year and as at 31 December 2016 (2016 Annual Report).
Endowment insurance or allocated annuity in which the customer bears the �nancial risk.