SPP We will become the leading provider in the Nordic region
No. of employees (full time equivalents) 2,434 2,151 1,429 1,295 1,224
Reduced by 19% since 2006 221 kwh/m2 Reduced by 16% since 2006
NOK 470 million per annum. The realisation of synergies as per the close of 2008 was ahead of this revised plan.
Storebrand’s most important task Storebrand’s most important task is to manage financial assets on behalf of our customers.
customers deposit for savings in a well-defined manner. The company prepares suitable investment strategies for this. Through the manner that the savings and insurance contracts are formulated, the risk is divided between the customers and Storebrand’s shareholders. The risks for the customers can for example be that their capital will not achieve a rate of return equally as high as the risk-free interest rate for a given period of time. Storebrand as a company assumes risk that Storebrand is paid for through margins, distribution of surpluses and prices for guaranteed rates of return. The risk hence arises that developments in the capital markets will not fully give the results from the investments that are necessary to fulfil the contract that was entered into. This consideration is handled through various mechanisms for buffer capital. Buffer capital is built up both by the customers and by the shareholders of Storebrand. The revenues of Storebrand are, among other things, connected to the size of the risk the equity is exposed to. It is thus important that there be a framework for the enterprise that ensures that the risk that arises has a corresponding return. Risk taking without such a corresponding return is negative for all the parties concerned, the customers as well as the owners.
Risk management Risk management at Storebrand is thus connected to the choice of a suitable asset portfolio and on-going adaptations of risk to the buffer level the company has at any given point in time. This is the background to why
At the start of the year Storebrand was looking into 70 allegations relating to issues such as corruption, serious environmental harm and breaches of human rights. The allegations analysed are complex and the research is often very demanding. A great deal of weight is given to maintaining dialogues with alleged companies before a decision is made to exclude them from investments.
Investments) Profit before amortisation for the investment enterprise was NOK 218 million in 2008 compared with NOK 138 million the preceding year. The result consists on
Master’s Degree in Economics (Cand.polit.), University of Copenhagen. 1994, Authorised Securities Dealer in the European Economic Area (EEA).
As per 31 December 2008, a total of 80 companies were excluded from investing in
including equities, property, interest rate and credit risk. The banking business area also generates credit risk, and there are solvency and operational risks associated with the operation of the business areas. Continuous monitoring and active management of risk is therefore a central and integral feature of the group’s activities and organisation.
Oslo Stock Exchange (OSE) with the ticker code STB. Storebrand ASA‘s share capital at the start of 2008 was NOK 2,249.5 million.
Financial calendar 11 February Interim results Q4 2008 4 March Embedded Value for 2008 22 April Annual General Meeting 6 May Interim results Q1 2009 17 July Interim results Q2 2009 28 October Interim results Q3 2009
Board of Representatives (CoP section 8) The Board of Representatives in Storebrand
Tomorrow’s winners will be those companies that can combine sustainability and their own profitable growth. Our corporate responsibility ambitions and goals are therefore unaffected by the financial instability in the market.
Swedish holding company financed by both equity and a subordinated loan. The tax rate and payable tax in the Swedish business will be affected by the interest costs on the holding company’s loan, the asset management business’s organisation and the amortisation of intangible assets. The Swedish business’
Nordic and European life and pension insurance market trends support the establishment of transnational activities. Harmonisation of the regulatory framework and products make transnational synergies more apparent and easier to realise. The new regulations also result in capital synergies from geographic diversification. Concrete effects were defined in a number of areas in connection with the acquisition, including quantified synergies of NOK 400 million that were to be realised by 2011. The realisation is proceeding faster than expected and the effects also appear to be greater than first communicated. The new target for synergies is NOK 470 million.
specific premium for the guaranteed return and it was paid for through the allocation of profit between the company and its policyholders.
The profit and loss statement shows the total return, administration and risk results from the business, i.e. both the profit for the customer and for the owner. The result allocated to the owner amounts to NOK 337 million in 2008 compared to NOK 1,622 million in 2007.
The net booked inflow of customer assets to Storebrand amounted to NOK 2,834 in 2008 compared to NOK 1,056 million in 2007.
• Equities • Bonds • Money market • HTM • Real estate • Alpha • Other
During the autumn SPP improved its traditional insurance by splitting the administration into three different portfolios with differentiated investment principles. From the customers’ perspective the change results in a clearer link between guaranteed interest and expected extra return. It also improves the conditions for a higher expected additional return for new capital, i.e. new premiums from both existing and new customers.
Premium income, excluding Euroben, increased by 5 percent in 2008. SPP’s premium income increased during the period because premium income for occupational service pensions increased by 8 percent and retirement pensions increased by 19 percent during the period.
25% increase in swaption implied volatilities 21,089 -1,952 -8% 338 -57 -15%
Positive development in results and margins in a demanding year NOK million
The result before losses developed positively in 2008 and amounted to NOK 155 million compared to NOK 157 million in 2007. The banking activities’ result before losses increased by NOK 19 million to NOK 223 million in 2008. The increase in losses and the weak development of the result in Ring Eiendomsmegling pulls the group result down. Writedowns for losses amounted to NOK 122 million in 2008 compared to a reversal of
In the case of the Swedish activities in SPP, a profit sharing model has been established in which 10 percent of the entire return belongs to the owner, assuming that this exceeds the return guaranteed for the individual policy.
The increase in retail lending is regarded as very important for the bank as a whole with respect to reducing the bank’s risk. Approximately 98 percent of lending to retail customers is well secured by mortgages or the bank’s own equity linked bonds.
Market value adjustment reserve Net unrealised gains/losses for the current year on financial assets at fair value in the group portfolio in Storebrand Livsforsikring AS are applied to the market value adjustment reserve in the balance sheet under the assumption that the portfolio has a net unrealised extra value. That part of the net unrealised gains/ losses for the current year on financial current assets denominated in foreign currencies that can be attributed to movements in exchange rates are not transferred to the market value adjustment reserve if the investment is hedged against currency movements. Similarly, the change in the value of the hedging instrument is not transferred to the market value adjustment reserve, but is charged directly to profit and loss. The foreign exchange risk associated with investments denominated in foreign currencies is to a very large extent hedged through foreign exchange contracts on a portfolio basis. In accordance with the accounting standard for insurance contracts (IFRS 4) the market value adjustment reserve is shown as a liability.
Pensions own employees The discounted current value of pension liabilities depends on the economic and demographic assumptions used in the calculation. The assumptions used must be realistic, mutually consistent and kept up to date in the sense that they should be based on uniform expectations of future economic conditions. The pension obligations as per 31 December were calculated by actuaries. Any changes associated with the expected growth in pay and the discount rate, etc, could have a significant effect on the recognised pension obligations relating to our own employees (IAS 19).
NOK million Balance sheet entry prior to the transaction Adjustments to fair value Amounts included upon takeover
Credit risk Maximum limits for credit exposure to individual debtors and for overall credit exposure to rating categories for Storebrand Life Insurance and other companies in the group are set by the board. Particular attention is paid to ensuring diversification of credit exposure to avoid concentrating credit exposure on any particular debtors or sectors. Storebrand Investments monitors changes in the credit standing of debtors. Storebrand uses published credit ratings wherever possible, supplemented by the company’s own credit evaluation where there are no published ratings.
Policyholder’s funds incl. accrued profit 164,017 165,120 - of which funds with guaranteed return 154,963 150,433
TOTAL group 2007 - of which premium income received in advance 681.0 87.4 51.2 819.6 808.5
Consists of natural disaster pool and the Norwegian Motor Insurance Association.1 This consists of liabilities for insurance subscribed to before the transfer of the insurance enterprise to If in 1999 for agreements that were not renewed by If. This liability has 2 been reinsured in its entirety at If.
Lending Lending is recognised in the balance sheet at its face value and converted using the exchange rate on the balance sheet day.
Storebrand Kapitalforvaltning AS Swedish branch Torsgatan 14 P. O. Box 5541 S-114 85 Stockholm, Sweden www.storebrand.se
Oslo Reinsurance Company ASA Ruseløkkveien 14 P. O. Box 1753 Vika N-0122 Oslo, Norway www.oslore.no