Storebrand launches its new vision in January: "Recommended by our customers".
Storebrand's CEO of 12 years, Idar Kreutzer, resigns to become the new Managing
This allows flexible product solutions and higher savings rates for defined contribution pension. This will give both employers and retail market customers interesting options in the future. Storebrand works actively to meet the coming changes. Customer needs, profitability and framework conditions are at the heart of the Group's work with a new Norwegian occupational pension.
In our core operations, pension savings, we talk about long time horizons: When we accept a pension agreement for a 20-year-old, we know that it could very well be a customer relationship that will last for 70 years.
We are convinced, for example, that companies that use less water and energy than their competitors, have lower air emissions, are attractive to the consumers, who to an increasing degree demand sustainable products, will be tomorrow's winners. When this also benefits our customers through a higher return, and benefits society through less pollution, it is then clear that this is something that’s important to us.
15,000 be raised and that tax neutrality be introduced as a minimum, so that the tax paid on withdrawal is at least not higher than the deduction allowed when the money is saved.
Nordic region, and one of the foremost companies in the world in the area of sustainable investments.
Investment (PRI) and the UN's Principles for Social Insurance (PSI). Both provide a basis for our sustainability strategy.
The focus on sustainable investments is strategically important to the Group, as we believe that it is a prerequisite for creating stable long-term returns for our customers.
The Group aims to increase the average sustainability score for our largest portfolio of listed companies from 53 to 58 over a five year period from 2012 to 2017. As of 31
Storebrand’s dividend policy shall contribute towards providing shareholders with a competitive return and optimising the company’s capital structure. The dividend to shareholders will normally represent more than 35 per cent of the full-year profit after tax, but before amortisation costs. The Group is in a situation where it needs to strengthen its reserves for higher life expectancy. Given this, the Board has decided to propose to the Annual General
Storebrand’s ambition is to be the best provider of pension savings. The group offers a broad range of products within life insurance, property and casualty insurance, asset management and banking, to companies, public sector entities and private individuals. The group is divided into the segments Savings, Insurance and Guaranteed pension and Other.
Storebrand's group profit before amortization of intangible assets and tax for 2013 was 2 935 million, an improvement of 975 million from 1960 million in 2012. The result is the highest in Storebrand's history. The improved performance is due to revenue growth in all of the Group's business and strong cost control with reduced costs.
A changing public pension system and a shift from defined benefit to defined contribution in both Norway and Sweden, leads to increased responsibility for saving for retirement for the individuals. New digital solutions with governments and pension providers, provides employees an overview of their pension in a simple way. This gives both the individual the opportunity to influence their own pension, but also gives the pension providers a unique opportunity to provide savings and insurance advice on individualized basis.
NOK 275 million due to both non-recurring income in connection with amended pension liabilities, and a provision that was made for the changed distribution model. Accordingly, the real nominal cost reduction is 6 per cent.
The risk result is stable with a claims ratio of 73 per cent (71 per cent). Average claims and frequency are as expected and the risk performance for mortality and disability risk is good. The exception is within group pensions (risk coverage in connection with defined contribution pensions) where the risk result is weak.
Storebrand's discontinuation of defined benefit pensions for the public sector in Norway is behind the greatest part of the transfers. In addition, customers have chosen to move to defined contribution-based products with higher expected returns.
For new accrual of defined benefit-based occupational pensions, the introduction of K2013 entails that the premiums for such schemes are increased by an average of about 10 per cent. For already accrued defined benefit-based occupational pensions, the introduction of
in Norway, Traffic light reporting in Sweden, and self-developed risk goals. The self-developed risk goals are monitored on a daily basis.
Buffer capital in % of customer funds and solvency margin Storebrand Life Insurance
Storebrand ASA has only one class of share. All shares have equal rights and are freely negotiable. The company is not aware of the existence of agreements between shareholders that limit rights to sell shares or to exercise related voting rights.
The Group's primary capital, which consists of equity, subordinated loans and market value adjustment reserve, additional statutory reserves, conditional bonus and other solvency capital in life insurance, amounted to NOK 54.1 billion at year-end, compared with NOK
Buffer capital in % of customer funds and solvency margin SPP
P = positive outlook, S = stabile outlook, N = Negative outlook.
Storebrand's own health clinic in Norway provided treatment on more than 3,000 occasions in 2013 and has also provided training guidance and workplace assessments for employees. Health checks, the health clinic, as well as health insurance for all employees are positively contributing to the low sick leave.
Trust is the lifeblood of Storebrand. The company sets strict requirements concerning high ethical standards for the Group's employees.
General Meeting (AGM), based on a proposal put forward by the Board. Read more about
Association do thus not contain any restrictions with regard to the negotiability of the shares. All the shares carry equal rights, cf.
Board’s members and supervises the management of the company by the Board and CEO. Storebrand ASA is legally required to have a corporate assembly – the Board of Representatives. It has 18 members, 12 of whom are elected by the Annual General
The duties of the Board of Representatives include making recommendations to the Annual General Meeting regarding the
(Global Reporting Initiative) international reporting standard. The results are audited by the Group’s external auditor, see the auditor's report on page 169. For the 15th year in a row the Group qualified for the international Dow Jones Sustainability Index, which includes the top 10 per cent most sustainable companies within all industries on a global basis.
The assessment and management of risk are integrated into the Group’s corporate governance. This management system shall ensure that there is a correlation between goals and actions at all levels of the Group and the overall policy of creating value for
General Meeting. The remuneration consists of fixed salaries, bonuses, pension schemes and other fringe benefits deemed to be natural in a financial group. The aim of the remuneration is to motivate greater efforts to ensure long-term value creation and resource utilisation in the company. In the opinion of the Board the overall remuneration shall be competitive, but not leading. An annual assessment is carried out based on external market data to ensure remuneration is adequate in relation to equivalent positions in the market.
Norwegian stock market, Storebrand has considerable potential influence over the development of listed companies. Storebrand attaches importance to exercising its ownership in listed companies on the basis of straightforward and consistent ownership principles that also focus on sustainability. Storebrand applies the
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 Storebrand
Accounting Act follow here. The points follow the numbering used in the provision.
4. A description of the main elements of the Group's systems for internal control and risk management related to the financial reporting process is discussed in section 10 above.
Business Development at Storebrand. She has previously worked as project manager at
National Insurance scheme, the pension from your employer and your own savings.
Net cash flow from operations before financial assets and banking customers -7,057 -706
IASB has been working for several years on a new accounting standard for insurance contracts, which is often referred to as IFRS 4,
Net premium income includes the year's premiums written (including savings elements), premium reserves transferred and ceded reinsurance. Annual premiums are generally accrued on a straight-line basis over the coverage period. Fees for issuing Norwegian interest guarantees and profit element risk are included in the premium income.
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 profit 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 beneficiaries are repaid the amount originally paid in for annuity insurance and for guaranteed account (Garantikonto).
The current year's net unrealised gains/losses on financial assets at fair value in the group portfolio in Storebrand Livsforsikring AS are allocated to/reversed from the market value adjustment reserve in the statement of financial position assuming the portfolio has a net unrealised excess value. The portion of the current year's net unrealised gains/losses on financial current assets denominated in foreign currencies that can be attributed to fluctuations in exchange rates is not transferred to the market value adjustment reserve. 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 profit and loss account. The foreign exchange fluctuations associated with investments denominated in foreign currencies are largely hedged through foreign exchange contracts on a portfolio basis. Pursuant to accounting standard for insurance contracts (IFRS 4) the market value adjustment reserve is shown as a liability.
Storebrand Group has share-based remuneration for key personnel. The fair value of the share options is determined on the date of the allocation. Valuation is made on the basis of recognised valuation models adjusted to the characteristics of the actual options. The value determined on the date of the allocation is accrued in the income statement over the option's vesting period with a corresponding increase in equity. The amount is recognised as an expense and is adjusted to reflect the actual number of share options earned. The vesting period is the period of time from when the scheme is established until the options are fully vested.
Key elements included in valuations that require exercising judgment are: • Market rent and vacancy trends
(paid-up policies), which allows the company to retain up to 20 per cent of the profit from returns after any allocations to additional statutory reserves. The modified profit sharing model means that any negative risk result can be deducted from the customers’ interest profit before sharing, if it is not covered by the risk equalisation fund.
The Storebrand Group are represented in the following countries: Segment/Country Norway Sweden Lithuania Ireland Guernsey Latvia
All managers at level 2 and level 3, as well as the managing directors at lower organisational levels, must each year confirm compliance with risk management and internal control through a separate manager confirmation.
2. Compliance with laws, regulations and other relevant regulatory framework. (Compliance function)
In traditional insurance with an interest rate guarantee, SPP bears the risk of achieving a return equal to the guaranteed interest on the policyholders’ assets and that the level of the contracts’ assets is greater than the present value of the insurance liabilities. Profit sharing becomes relevant in SPP if the total return exceeds the guaranteed yield. In the case of some products a certain degree of consolidation, i.e. the assets are greater than the present value of the liabilities by a certain percentage, is required in order for the owner to have earnings. If the assets in an insurance contract in the company are smaller than the market value of the liability, an equity contribution is allocated that reflects this shortfall. This is termed a deferred capital contribution (DCC) and changes in its size are recognised in the profit and loss account as they occur. The contracts’ buffer capital must be intact in order for profit sharing to represent a net income for the owner. When the contracts’ assets exceed the present value of the liabilities, a buffer, which is termed the conditional bonus, is established. Changes in this customer buffer are not, however, recognised in the profit and loss account.
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 difference 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 has occurred.
See risk result note 4 for the principles for distributing the risk result between customers and the owner.
The other companies in the Storebrand Group are not included in the sensitivity analyses, as there is little market risk in these areas.
Most of the risk for the Storebrand ASA Group relates to the guaranteed life insurance businesses. These risks are consolidated in the
The European supervisory authority (EIOPA) has introduced formal requirements for preparations for Solvency II with effect from 1
Occupational Pensions Act will enter into force from 2014. The new Act allows for a defined contribution-based hybrid product with the possibility of premiums of up to 7 per cent of loans up to 7.1 G and 25.1 percent of salaries between 7.1 and 12 G. The product shall have mortality inheritance and gender-differentiated premiums will be used as a basis. The pension payments can be lifelong or timelimited for at least10 years and until a minimum age of 80. The company can choose whether the occupational pension is to include wage adjustment, zero guarantee or individual investment choices . The product's management of the life expectancy risk and interest rate risk are well adapted to Solvency II.
The Act relating to paid-up policies with investment options was approved by the Storting on 10 December 2012, however will enter into force during 2014. The Ministry of Finance submitted for consultation a proposal that conversion can first take place in accordance with the escalation to mortality basis K2013 and more detailed rules pertaining to information and advisory requirements for paid-up policies with investment options. The deadline for submissions was set for 17 January 2014. The Ministry of Finance then asked the Financial Supervisory Authority of Norway to assess and propose more detailed rules regarding disbursement profiles. These will also be submitted for consultation.
The proposal is an adaptation to the National Insurance scheme where disability benefits are amended from 2015. The new disability product will give the right to a disability pension regardless of earnings after the period of service. Upon resignation and termination of employment, the right to a paid-up policy will be cancelled unless this is agreed.
LOANS TO CUSTOMERS/LIABILITIES TO CREDIT INSTITUTIONS/LIABILITIES ESTABLISHED BY ISSUING SECURITIES FOR
SUBORDINATED LOAN CAPITAL: The fair value of subordinated loan capital is valued based on registered trades of the bonds and prices quoted by brokers.
Realised losses on loans where no provisions have previously been made -3 -6
The retirement age for SPP's CEO is 62 years. The CEO is also covered by a defined contribution pension plan, which implies that the company pays 35 per cent of the CEO's fixed salary in pension premiums. In addition, he has a predefined pension plan that implies a lifetime pension of 16.25 per cent of the fixed salary in the interval from 30 to 50 times the "basic income amount". The retirement pension from age 62 to 65 amounts to 65 per cent of the fixed salary, limited to a maximum of SEK 4,045,000. The pension terms comply otherwise with the pension agreement between BAO and Union of Financial Sector Employees or SACO, respectively (BTP plan). The company secures its pension liabilities through the payment of insurance premiums during the employment period.
5) Earned bonus at 31.12.13 Senior executives are contractually entitled to performance related bonuses . 50% of the earned bonus is paid in cash. The remaining amount is converted to synthetic shares based on the market priice. These are registered in a share bank with a lock-in period of three years. At the end of three years, the value of the synthetic share is calculated at a new market price. Half of the amount paid from the share bank shall, after tax, be used to purchase shares in Storebrand ASA at market price, with a new three-year lock -in period.
The Board of Directors of Storebrand ASA has had a special Compensation Committee since 2000. The Compensation Committee is tasked with providing a recommendation to the Board of Directors concerning all matters to do with the Company’s remuneration of its Chief Executive Officer. The Committee is responsible for keeping itself informed and proposing guidelines for the determination of remuneration for executive employees in the Group. In addition, the Committee is an advisory body for the CEO with respect to remuneration regimes that cover all employees in the Storebrand Group, including Storebrand’s bonus system and pension scheme. The
Specific quantitative goals for how the value creation in the Company will fund bonuses are set each year. The value creation target is based on the risk-adjusted result, which excludes market dependent-results and profit sharing. Significant one-time effects must also be eliminated by adjustment. Funding is calculated on the basis of value creation in the last two years. For 2014 the value creation will be an average of the percentage of goals achieved in 2013 and 2014. The overall group result must also be in excess of a predetermined level to prevent curtailment of bonus earnings based on the risk-adjusted result. Negative group profit before tax gives a full deduction and zero bonus. In addition, an RoE (before tax) greater than 5 per cent and satisfactory financial strength are required.
Tax effect of realised/unrealised shares 11 -38 permanent differences 344 -6 recognition/write-down of tax assets -68 -224 change in tax rules 24
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Other current liabilities 1,053 758 1) As of January 2014 the partisipants are able to claim redemption on a yearly basis. The redemption are conditioned to a total demand of NOK 100 million.
An external legal assessment has been obtained with respect to Supreme Court judgements relating to structured products, and possibly the extent of the judgement, to determine the significance for Storebrand Bank's complaints now under consideration by the Norwegian
this will entail an adjustment of SPP AB's estimated insurance liabilities for which a different yield curve is used for credit assessment
Companies in the Storebrand Group have transactions with close associates who are shareholders in Storebrand ASA and senior employees. These are transactions that are part of the products and services offered 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 25 for further information about senior employees.
Actuarial gains or losses and the effect of changes in assumptions are recognised directly against equity. The effect of changes in the pension plan is recognised on an ongoing basis, unless the changes are conditional upon the future accrual of pension entitlements. The effect is distributed on a straight-line basis over the period until the benefit is fully accrued. The employer's National Insurance contributions are included as part of the pension liability and as part of the actuarial gains/losses shown in the total comprehensive income.
Expected premium payments are estimated to be NOK 25 million and the payments from operations are estimated to be NOK 15 million
ACTUARIAL ASSUMPTIONS: In Norway, there are standardised assumptions for mortality/disability trends, and other demographic factors, that have been prepared by Finance Norway. In a letter of 8 March, the Financial Supervisory Authority of Norway determined that a new mortality basis K2013 would be introduced for group pension insurance in life insurance companies and pension funds effective from 2014. Based on the expected increase in life expectancy, the new mortality basis will entail an increase in the pension liabilities in accordance with IAS 19.
4) The Control Committee covers all the Norwegian companies in the group which are required to have a control committee.
Short-term holdings of interest-bearing securities AAA AA A BBB NIG Totalt
Externally managed properties: Energy consumption 238 kWh/m2 232 kWh/m2 Reduce 5 % to 226 kWh/ m2
Primary capital is capital eligible to satisfy the capital requirements under the authorities' regulations. Primary capital may consist of core (tier 1) capital and tier 2 capital.
Reserves for the compensation of insured events that have occurred, but not yet been reported to the insurance company.
The income consists of fees based on the size of customer assets, premium volumes or numbers in the form of unit prices. Operating costs consist of, among other things, personnel costs, marketing, commissions and IT costs.