INSURANCE 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 retail market and employer’s liability insurance and pension-related insurance in the Norwegian and Swedish corporate markets.
THE ANNUAL REPORT PROVIDES AN INSIGHT INTO HOW STOREBRAND CREATES VALUE FOR THE FUTURE
In autumn 2017, Storebrand commenced work on assessing the adjustments that have to be made in our reporting in order to comply with TCFD’s recommendations. In the long-term, the main lines will be integrated into the annual report through the four recommended categories: Governance, strategy, risk management and performance indicators. During 2018 we will also produce new material that is suitable for the more specialised recommendations, particularly in connection with scenario analyses and sensitivity analyses.
the description above. Storebrand also promotes sustainable investments by being a leader for the Norwegian Forum for Responsible and Sustainable Investment’s (Norsif) corporate governance and by discussing responsible investments with the authorities and various organisations. For example, in 2017 we sent a letter to the governments in the G7 and G20 concerning climate change and the
Coalition. These reports can be found at: In 2017, 1.8% (NOK 13 billion) of assets under management were invested in solution companies and green bonds.
(Anbefalt Pensjon). This solution is made up of di�erent funds. Our exclusion list applies of course to all of these funds, but over half of the funds included also have a clear sustainability strategy in addition to this. In 2017 we included some of our fossil fuel free funds in the solution to be able to e�ectively manage climate risk for customers. In addition to investing money in sustainable companies, we also measure the degree to which our customers consider us to be a sustainable company through customer surveys conducted by a third party.
Visions have a tendency to be fanciful. Our vision is very speci�c. We work hard to ensure that our customers will recommend us. We therefore put the needs of the customers �rst in everything we do and following-up the feedback from customers is a core task in the Group.
for both rankings. We are currently number 4 in the Norwegian retail market and number 8 in the Swedish corporate market.
Storebrand shall be a “brave pioneer” within sustainability. This entails that we wish to show our environmental impact in our own operations
EMAS, Eco-Lighthouse, the Swan ecolabel and Green Dot. Storebrand ASA is a member of the UN Global Compact. All suppliers and sub-contractors of goods and services to companies in the Storebrand Group shall comply with the same minimum standards when concerning human rights, personnel and anti-corruption work. The supplier pledges to follow the principles in the UN Global Compact.
Ennova regarding the work with diversity and discrimination. The average age at the Storebrand Group 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 managers at
Storebrand is focussed on the organisation re�ecting our customers and the market in which the Group operates. Diversity contributes to increased innovation and learning in the organisation.
We are convinced that this contributes to more rewarding job tasks, learning and development for each individual. More than 1,000 employees in Norway and Sweden participated in a pilot programme in 2017 known as “Pulse Readings” (Pulsmålinger) where managers received regular feedback from their employees and followed the trend in employee enthusiasm over time. This type of tool gives managers the ability to more quickly involve their employees in ongoing improvement e�orts and in this way make continual improvements. The pulse readings are well-integrated into the organisational development work at Storebrand and will be continued in 2018 as a tool for all managers in Norway and Sweden
Storebrand ASA is among the largest companies listed on Oslo Børs measured by the number of shareholders. The company has shareholders from almost all the municipalities in Norway and from 60 countries. In terms of market capitalisation, Storebrand was the 11th largest company on Oslo Børs at the end of 2017.
Earnings per ordinary share (NOK) 5.28 4.73 2.63 4.61 4.41 2,25
Education MSc in Economics and Business Administration (siviløkonom) with specialisation in finance (BI Norwegian Business School)
Positions of trust Chairman of GIEK Chairman of Entur AS Board Member of Grieg Seafood ASA Board Member and Head of Audit Committee at KID ASA Chairman of Røisheim Hotell AS and Board Member at Røisheim Eiendom AS Chairman of Visit Jotunheimen AS Board Member of HAV Eiendom AS Board Member of Boligselskapet INI AS, Grønland Member of the Nomination Committee at Orkla ASA and Arcus ASA
Education Bachelor of Management (BI) Certified Executive Coach (Coach Team AS) DNCF Certified Coach (Metaresource AS) Business Economist (BI)
Sweden, SPP has a strong challenger role with a market share of 14% within occupational pensions outside the collective agreements.
Storebrand’s dividend policy from 2018: Storebrand has the goal of paying a dividend of more than 50% of the Group pro�t after tax. The Board has the ambition of the ordinary dividend per share being at least at the same nominal level as the previous year. The normal dividend is paid out at a sustainable solvency margin of over 150%. At a solvency margin over 180%, the Board’s intention is to propose extraordinary dividends or the buy-back of shares.
The Savings business area includes products for retirement savings with no interest rate guarantees. The business area consists of de�ned contribution pensions in Norway and Sweden, asset management and retail banking products.
New subscriptions for guaranteed pensions have been closed for most products, however, premium payments and the accumulation of returns for existing customers mean that it takes time before the reserves are nominally reduced.
During 2017, fee and administration income developed in line with the fact that a large part of the portfolio is mature and in long-term decline.
NOK 104 million in 2017, compared with minus NOK 322 million in the previous year. The underlying pro�t-sharing results were satisfactory.
The majority of Storebrand’s risk is from liabilities related to the products. The Group’s result and risk are followed up and reported as four areas with very di�erent result and risk drivers: Savings, Insurance, Guaranteed Pension and Other. The di�erent business areas are described under the section Business Areas.
A common feature of the products is that Storebrand guarantees a minimum return. In Norway, the return must exceed the guarantee in each year, while in Sweden it is su�cient to achieve the guaranteed return as an average. In Sweden, new premiums generally have a guarantee of 1.25% for 85% of the premium, whereas existing reserves have a guaranteed annual return of up to a 5.2%. In Norway, new premiums are included with a 2.0% guaranteed return and increase in bene�ts due to a surplus exceeding the interest rate guarantee occurring with a 0.5%
Since pension disbursements may be many years in the future, the insurance liabilities are particularly sensitive to changes in interest rates, and they should ideally be balanced with the equivalent interest rate sensitivity for the assets. It is not possible to eliminate the interest rate risk in
In 2017, signi�cant changes were made to the tax requirements for private savings.
The Storebrand Group has worked systematically and purposefully on sustainability for almost 20 years. The sustainability work originated from the managing of our own assets and sustainability is an important fundamental pillar of Storebrand’s investment strategy. The Group has published environmental reports since 1995, and sustainability reports since 1999. The sustainability reporting has been an integrated part of the annual report and certi�ed by an independent party since 2008. Storebrand reports in accordance with the Global Reporting Initiative (GSI)
The 2017 employee survey shows signi�cant progress in all main areas compared with the previous year, and the results for Storebrand are on par or better than the average total for Norway and for the banking and insurance industries.
Storebrand’s absence due to illness has been at a stable low level for many years. The Group’s absence due to illness in 2017 was 3.5%. Absence due to illness in Norway was 3.5% and was 3.4% for the Swedish part of the business. Storebrand has been an “inclusive workplace” (IA)
The Board carried out an evaluation in 2017, in which the executive management participated. A total of eleven board meetings were held in 2017. The work of the Board is regulated by special rules of procedure for the Board. The Board has established three advisory committees: the
�rst step in the downscaling of the central bank’s programme for purchasing �xed income securities has been taken and a gradual reduction in the programme is expected going forward. This is expected to increase the probability of higher market interest rates.
For more than 20 years, Storebrand has been among the best within sustainable investments and has taken an active approach to how we invest both our own capital and that of our customers. Storebrand believes that companies that integrate environmental, social and governance considerations in their business activities reduce risk and create new opportunities for the business activities and capital owners.
At the same Annual General Meeting, the Board was authorised to buy back shares for a maximum value of NOK 224,954,945. The total holdings of treasury shares must, however, never exceed 10 per cent of the Group’s share capital. The buyback of treasury shares may be a tool for the distribution of surplus capital to shareholders in addition to dividends. In addition, each year Storebrand ASA sells shares to employees from its own holdings in connection with the share purchase scheme and long-term incentive schemes for employees of Storebrand. Accordingly, it is appropriate to authorise the Board of Directors to buy shares in the market to cover the aforementioned needs or any other needs. The authorisation is valid until the next Annual General Meeting.
The capital increase was carried out against deposits in assets other than money. The shareholders therefore did not have preferential rights pursuant to section 10-4 of the Public Limited Liability Companies Act.
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 2017).
Storebrand’s risk appetite and risk strategy, including investment strategy. The Committee should contribute forward-looking decision-making support related to the Board’s discussion of risk taking, �nancial forecasts and the treatment of risk reporting. The Risk Committee has held seven meetings in 2017, including a joint meeting with the Audit Committee.
Board. More detailed information on the compensation, loans and shareholdings may be found in notes 24 (Group) and 6 and 16 (ASA). Board members are encouraged to hold shares in the company.
Further information on Storebrand’s corporate governance can be found at www.storebrand.no > About Storebrand > Facts on Storebrand, where we have also published an overview of the members of Storebrand’s governing and controlling bodies, CVs for the members of
5. Provisions in the Articles of Association that refer to the provisions in chapter 5 of the Norwegian Public Limited Companies Act with regard to the general meeting are discussed in section 6 above.
�gures is provided below and in Note 13 for Solvency II and in Note 27 for Tax.
The amount of NOK 520 million has been transferred to Silver’s customers, and in the acquisition analysis the excess value of the acquisition will be allocated to the insurance contracts (VIF –value of business in force) and deferred tax asset.
As a part of the administration solution, Silver’s portfolio of paid-up policies has been converted to paid-up policies with investment options (FMI)
for retirement pension coverage. Risk cover is continued based on a reduced base rate of 2.75%. Storebrand Livsforsikring has taken over FMI
Financial items and risk result life and pensions include Risk Result Life and Pensions and Financial Result includes net pro�t sharing and Loan
Risk result life and pensions consists of the di�erence between risk premium and claims for products relating to de�ned-contribution pension, unit linked contracts (savings segment) and de�ned-bene�t pension (guaranteed pension segment). Risk premium is classi�ed as premium income in the Group’s income statement.
For individual insurance, the premiums for death risk and long life expectancy risk are based on tari�s produced by insurance companies on the basis of their shared experience. This applies to both endowment and pension insurance. Disability premiums are based on the company’s own experience.
The risk result for Storebrand Livsforsikring AS in the table above shows the total risk result before distribution to customers and the owner (the insurance company).
For company portfolios and guaranteed customer portfolios, most of the assets that are in currencies other than the domestic currency are hedged. This limits the currency risk from the investment portfolios.
Changes in this customer bu�er are not recognised in the pro�t and loss account.
Unit linked insurance without a guaranteed annual return is not included in the analysis. For these products, the customers bear the market risk and the e�ect of a falling market will not directly a�ect the result or bu�er capital.
If the stress causes the return to fall below the guarantee, it will have a negative impact on the result if the customer bu�er is not adequate.
Liquidity risk is one of the largest risk factors for the banking business, and the regulations stipulate requirements for liquidity management and liquidity indicators. The guidelines for liquidity risk specify the principles for liquidity management, minimum liquidity reserves and �nancing indicators for measuring liquidity risk. In addition to this, an annual funding strategy and funding plan are being drawn up that set out the overall limits for the bank’s funding activities.
6 billion. This has no expired date, but can be terminated by the bank with 15 months’ notice. The other facility may not be terminated by
Indirect real estate investments are primarily investments in funds with underlying real estate investments where Storebrand’s intention is to own the investments throughout the fund’s lifetime. The valuation of the property funds is carried out based on information received from each fund manager, adjusted for cash �ows in the period from the most recent valuation until the reporting date. Estimated values prepared by the fund companies will be used if these are available.
Changes in the net defined benefit pension liabilities in the period NOK million 2017 2016
The Board of Directors of Storebrand ASA has had a dedicated Compensation Committee since 2000. The Compensation Committee is tasked with making a recommendation to the Board of Directors concerning all matters regarding the Company’s remuneration of its Chief Executive
In the opinion of the Board of Directors, this has a positive e�ect on the company and the shareholders, given the structure of the scheme and the size of each person’s portfolio of shares in Storebrand ASA.
All of the proporties in Sweden are appraised externally. The appraisal is based on the required rates of return in the market[43]
A capital increase was carried out in 2017 by issuing 17,904,091 shares with a subscription price of NOK 62.90. The shares have been used as consideration for the purchase of shares in SKAGEN.
Guaranteed pension payments 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 in both the private and public sectors. The cover includes retirement, disability and survivor pensions.
Interest rate swaps/asset swaps are agreements between two-parties to exchange interest rate terms for a speci�ed period. This is normally an agreement to exchange �xed rate payments for �oating rate. This instrument is used to manage or change the interest rate risk.