Annual Report 2019
Sustainable Solutions and Investments
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Important notice:
This document may contain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future
events and circumstances that may be beyond the Storebrand Group’s control. As a result, the Storebrand Group’s actual future financial condition, performance
and results may differ materially from the plans, goals and expectations set forth in these forward-looking statements. Important factors that may cause such a
difference for the Storebrand Group include, but are not limited to: (i) the macroeconomic development, (ii) change in the competitive climate, (iii) change in the
regulatory environment and other government actions and (iv) market related risks such as changes in equity markets, interest rates and exchange rates, and
the performance of financial markets generally. The Storebrand Group assumes no responsibility to update any of the forward-looking statements contained in
this document or any other forward-looking statements it may make.
2
STOREBRAND ANNUAL REPORT 2019 Table of contents
Introduction
4
6
Facts and figures 2019
Letter from the Group Chief Executive Officer
1. This is Storebrand
Storebrand at a glance
10
11 Organisation
12
13
14
Executive mangament
Board of Directors
Strategic highlights
2. Climate Risk and
Opportunity
3. Financial Capital and
Investment Universe
26
27
33
Provide a return to the owners and customers
A driving force for sustainable investments
Key performance indicators
4. Customer and Community
Relations
36
38
40
41 Digital trust
42
Financial freedom in all stages of life
Engaging, relevant and responsible advice
Engaging our customers through digital experiences
Key performance indicators
5. People
46
47
48 Diversity and equal opportunities
Key performance indicators
50
A culture for learning
Committed and courageous employees
6. Keeping Our House
in Order
54
54
Anti-corruption
Anti-money laundering, financial crime and terror
financing
Reducing our internal carbon footprint
Sustainable practices throughout our value chain
Corporate citizenship
Key performance indicators
57
58
60
61
7. Shareholder matters
Strategy
Capital situation, rating & risk
Regulatory changes
8. Directors´ report
68
72
74
77 Working environment and HSE
78 Group financial results
83 Official financial statements
9. Annual Accounts
and Notes
Storebrand Group
86
87
88
90
91
93 Notes
Income statement
Statement of total comprehensive income
Statement of finacial position
Statement of changes in equity
Statement of cash flow
Income statement
Storebrand ASA
171
171 Statement of total comprehensive income
172 Statement of finacial position
173 Statement of changes in equity
174 Statement of cash flow
175 Notes
188 Declaration by member of the Board and the CEO
189
Independent auditor´s report
10. Governance
198 Corporate Governance
207 Companies in the Storebrand Group
11. Sustainability assurance
210 TCFD index
212 GRI index
218 Auditor’s statement on sustainability
12. Appendix
222 Definitions key performance indicators
224 Executive management CVs
228 Group board of directors CVs
3
STOREBRAND ANNUAL REPORT 2019
Facts and figures
2019
Group profit* NOK million
Return on equity**
3 037
8.0%
Solvency margin***
NOK billion invested in fossil free funds
176%
277
Assets under Management, NOK billion
Assets under Management
screened for sustainability criteria
831
100%
*) Profit before amortisation
**) After tax, adjusted for amortisation of intangible assets
***) Including transitional rules
4
STOREBRAND ANNUAL REPORT 2019 5
LETTER FROM THE GROUP CHIEF EXECUTIVE OFFICER
Financial freedom
for our customers
Odd Arild Grefstad
Group Chief Executive Officer
6
Financial freedom
for our customers
STOREBRAND ANNUAL REPORT 2019
2019 was an important year for Storebrand, with organisational changes making
us even better equipped to meet our customers’ needs, and to create economic
growth and good returns for both our customers and our shareholders. It was also
a year where we noticed an increased focus on sustainability from financial markets
and our customers, allowing us to further leverage our position as a leading provider
of sustainable financial services.
We continue our focus on delivering products and services
that create good financial returns and are also aligned with the
objectives of the UN Sustainable Development Goals. Almost
one third of our AuM is now invested in fossil-free solutions.
The reduction in carbon emissions from our portfolio is driven
primarily by customer expectations, as well as our duty to
manage financial risk on behalf of our customers and share-
holders. This fits well with our overall ambition to be net carbon
neutral by 2050 - in line with the Paris Agreement. We became
one of the 12 founding members of the Net-Zero Asset Owner
Alliance in 2019. We came second in the Ethical Bank Guide’s
ranking of sustainable financial institutions.
Climate change adaptation and the transition to a low carbon
economy provide both risks and opportunities for Storebrand.
Sustainability is integrated into all investment decisions we
make, and in 2019 we further strengthened climate risk analy-
ses and disclosure through adopting the recommendations of
the Task Force on Climate-related Financial Disclosures (TCFD).
We have set our course. In 2020 we will continue to deliver
new and innovative services to our customers, helping them to
achieve financial freedom to realise their goals and fulfil their
dreams.
Odd Arild Grefstad
is Norway’s
largest private asset manager.
Storebrand
A buoyant financial market combined with prudent man-
agement of assets under management (AuM) resulted in us
managing a total of 831 billion Norwegian kroner on behalf of
our customers at the end of 2019. We had a strong financial
result, delivering a profit before amortisation of NOK 3.037
billion Norwegian kroner.
In a rapidly changing world, no business can take their existence
for granted. The finance sector is undergoing a digital transfor-
mation, and our customers expect seamless experiences from
all the products and services they buy. To meet our customers’
expectations to high quality digital services, we established two
new roles to bring a stronger focus on technology and innova-
tion into our group management team. This is in addition to an
increased focus on digitalisation throughout our business.
In 2019, Storebrand was again ranked first in the annual
Norwegian Customer Survey, which measures satisfaction
and loyalty amongst corporate customers in Norway. We are
committed to creating excellent customer experiences, such
as gathering all occupational pensions in one place, giving cus-
tomers better control over their future finances.
We also made the exciting decision to re-enter the Norwegian
municipal occupational pensions market. This market is esti-
mated to be twice the size of the corporate pensions market,
and we are well-prepared to take part in tender processes for
municipal occupational pensions in 2020.
Our operations in Sweden, under the brand SPP, delivered yet
another impressive result in 2019. Growth in new sales and
transfers is very strong, supported by an increasing portfolio
of digital solutions, including Sajna, a fully digital occupational
pension that won Digital Project of the Year at this year’s CIO
Awards.
7
1
This is Storebrand
We create a future to look forward to by delivering
simple and sustainable pensions and savings.
10 Storebrand at a glance
11 Organisation
12 Executive management
13 Board of directors
14 Strategic highlights
9
STOREBRAND ANNUAL REPORT 2019
Storebrand at a glance
OUR VISION AND DRIVING FORCE
Storebrand is a financial group, headquartered in Oslo, Norway.
We offer pension, savings, insurance and banking products to
individuals, businesses and public enterprises. We work hard
to understand our customers well enough to consistently meet
their expectations. Customers shall be safe in the know ledge
that we put their needs first.
We have been a part of people’s lives for more than 250 years.
Today, we are Norway’s largest private asset manager – with
NOK 831 billion invested in more than 3000 companies world-
wide. More than two million Norwegians and Swedes place
their savings with us. This comes with clear obligations. We
are committed to managing our customers’ money effectively
and responsibly, helping them to fulfil their dream of increased
financial freedom and financial security for the future. Assets
under management shall be invested according to best sustain-
able practices, ensuring good financial returns and a positive
impact on society.
Our purpose is clear - we create a future to look forward to.
Engelsk
W HY
A future to look
forward to
H OW
O
H
W
Customer centric
– simple and sustainable
W
H
A
T
Courageous
pathfinder
Greater security,
freedom to
choose
Storebrand
1847
Christiania Almindelige Brand-Forsikrings-Selskap
1887
Life insurance company
1904
The Norwegian Association
1922
The Association for Norwegian
1936
Storebrand acquire Euro-
referred to as Storebrand
Brage established
of Actuaries established
life insurance companies
peiske, Norway´s leading
established
travel insurance company
1767
Den almindelige
Brand-Forsikrings-Anstalt
established in Copenhagen
1861
Storebrand establish Idun, Norway´s fi rst
privately-owned life insurance company
1900
The Norwegian Association
1917
The Life Insurance company
of Insurers established
Norske Folk (Norwegian People)
established
1966
1978
Association of casualty
Storebrand changes its logo and
insurers (SKAFOR)
introduces “the link”. The name
changes to The
Storebrand Group Ltd
1996
Name changed to
Storebrand ASA
Storebrand Bank established
1991
Storebrand and Uni-Insurance
merge and become UNI-
Storebrand Ltd
1998
Storebrand
Health Insurance
1999
2014
Storebrand’s AuM exceeds
NOK 500 billion
2019
Storebrand Asset Management
acquires Cubera Private Equity
1983
The Nordic Group and the
Storebrand Group merge
Storebrand acquires Finans-
banken (the Finance Bank)
1814
Administration of national fi re
insurance scheme transferred to
Christiania
10
1947
Storebrand celebrate
centenary
1975
Custos
Finance
1984
Norges Brannkasse and
Norske Folk become UNI
Insurance
1982
1995
Association of casualty
Storebrand establishes team
insurers dissolved
of sustainability analytics in
Storebrand Asset Management
2007
Storebrand
acquires SPP
2006
Storebrand re-enters
P&C insurance market
2012
“Our customers
recommend us”
vision launched
2017
2017 Storebrand
acquires SKAGEN
2016
“Our driving force” launched
SECTION 1. THIS IS STOREBRAND
Organisation
LEGAL STRUCTURE (SIMPLIFIED)
Storebrand ASA
Storebrand
Livsforsikring AS
Storebrand
Forsikring AS
Storebrand
Bank ASA
Storebrand
Storebrand
Asset Management AS
Helseforsikring AS (50%)
SPP Pension & Försäkring AB
Storebrand Boligkreditt AS
SPP Fonder AB
SKAGEN AS
Cubera Private Equity AS
Business Segments
Savings
Guaranteed Pension
Insurance
Other
Consists of products that
encompass pension savings
without interest rate
guarantees. This includes
defined contribution pensions
in Norway and Sweden, asset
management and savings and
banking products for private
individuals.
Consists of products that
include long-term pension
savings, where customers
have a guaranteed return.
This area includes
occupat ional pension
schemes in Norway and
Sweden, independent
personal pensions and
pension insurance.
Consists of the Group’s
risk products in Norway and
Sweden. This comprises
health insurance in the
corporate and retail markets,
employer’s liability insurance
and pension-related insurance
in the corporate market as
well ass property, accident,
and personal risk insurance
products in the Norwegian
retail market.
This includes other compa-
nies within the Storebrand
Group, including small
subsidiaries of Storebrand
Life Insurance and SPP.
Storebrand
1847
1887
1904
1922
1936
Christiania Almindelige Brand-Forsikrings-Selskap
Life insurance company
The Norwegian Association
The Association for Norwegian
Storebrand acquire Euro-
referred to as Storebrand
Brage established
of Actuaries established
life insurance companies
peiske, Norway´s leading
established
travel insurance company
1966
Association of casualty
1978
Storebrand changes its logo and
insurers (SKAFOR)
introduces “the link”. The name
changes to The
Storebrand Group Ltd
1996
Name changed to
Storebrand ASA
Storebrand Bank established
1991
Storebrand and Uni-Insurance
1998
Storebrand
2014
Storebrand’s AuM exceeds
NOK 500 billion
2019
Storebrand Asset Management
acquires Cubera Private Equity
merge and become UNI-
Storebrand Ltd
Health Insurance
1999
Storebrand acquires Finans-
banken (the Finance Bank)
1983
The Nordic Group and the
Storebrand Group merge
1947
Storebrand celebrate
centenary
1975
Custos
Finance
1984
Norges Brannkasse and
Norske Folk become UNI
Insurance
1982
Association of casualty
insurers dissolved
1995
Storebrand establishes team
of sustainability analytics in
Storebrand Asset Management
2007
Storebrand
acquires SPP
2006
Storebrand re-enters
P&C insurance market
2012
“Our customers
recommend us”
vision launched
2017
2017 Storebrand
acquires SKAGEN
2016
“Our driving force” launched
11
1767
Den almindelige
Brand-Forsikrings-Anstalt
established in Copenhagen
1861
Storebrand establish Idun, Norway´s fi rst
privately-owned life insurance company
1900
1917
The Norwegian Association
The Life Insurance company
of Insurers established
Norske Folk (Norwegian People)
established
1814
Administration of national fi re
insurance scheme transferred to
Christiania
Executive Management
Back left to right: Heidi Skaaret (Executive Vice President Retail Market), Geir Holmgren (Executive Vice President Corporate Market), Terje Løken
(Executive Vice President Digital and Innovation), Jan Erik Saugestad (Executive Vice President Asset Management), Trygve Håkedal (Executive Vice
President Technology), Lars Løddesøl (Group Chief Financial Officer).
Front left to right: Tove Selnes (Executive Vice President People), Odd Arild Grefstad (Group Chief Executive Officer), Staffan Hansén (Executive Vice
President SPP), Karin Greve-Isdahl (Executive Vice President Sustainability, Communications and Industry Policy).
See appendix on page 224 for complete CVs for the Executive Management Team.
12
STOREBRAND ANNUAL REPORT 2019 SECTION 1. THIS IS STOREBRAND
Board of Directors
From back left to front right: Liv Sandbæk (Member of the Board), Magnus Gard (Employee Representative), Arne Fredrik Håstein (Employee Repre-
sentative), Heidi Storruste (Employee Representative), Martin Skancke (Member of the Board) Karl Sandlund (Member of the Board), Laila S. Dahlen
(Member of the Board), Didrik Munch (Chairman of the Board), Karin Bing Orgland (Member of the Board).
See appendix on page 228 for complete CVs for Board and committee members.
BOARD OF DIRECTORS
The board is ultimately accountable for management of the
Storebrand Group. This means, amongst other things, that the
board will ensure responsible organisation of the business and
establish plans, budgets and procedures. The board oversees
the administrative management of the Group, maintaining in-
sight into the Storebrand Group’s financial position. In addition,
the board shall ensure that business activities, accounting and
asset management are subject to proper scrutiny. All directors
are independent and do not have significant business relations
with Storebrand. All shareholder-elected directors are non-ma-
nagerial staff.
COMMITTEES
The board has appointed three committees to support its role:
the Audit Committee, the Compensation Committee and the Risk
Committee. More information on the role of each committee can
be found on page 202.
Audit Committee
Compensation Committee
Risk Committee
Chairperson
Members
Chairperson
Members
Chairperson
Members
Karin Bing Orgland
Martin Skancke
Didrik Munch
Laila S. Dahlen
Martin Skancke
Didrik Munch
Heidi Storruste
Arne Fredrik Håstein
Magnus Gard
13
Strategic highlights
OVERALL STRATEGIC GOALS
Storebrand’s ambition is to build a world-class savings group,
supported by insurance. We create first-class customer experi-
ences in the core areas of savings and pensions.
Our strategy is built upon three overall goals: maintain a leading
position in occupational pensions, leverage a unique position
in the private savings market and build our asset management
services with strong competitive advantages and good growth
opportunities. Our position as Norway’s leading provider of occu-
pational pensions provides a solid foundation to further build
our business, including as an emerging leader in the Swedish
market. Broad insurance offerings to both retail and corporate
markets are aimed at supporting our strategic goals.
Our strategy is based on a genuine commitment to sustainable
investments. We create long-term returns for both our owners
and customers.
The strategy is strongly affected by several regulatory changes,
such as the introduction of Share Savings Accounts (ASK) and
Individual Pension Savings Accounts (IPS). Due to a restructuring
of pension payments from the state, future pensioners will have
to take greater responsibility for their financial future. We expect
that the changing regulatory framework will result in people
saving more privately.
In 2019, we reviewed our business strategy and the executive
management group, following several developments in the
market:
• Our customers increasingly expect seamless user experi-
•
•
ences and personalised services and products.
Developing robust yet flexible technological platforms is key
to succeeding in satisfying customers’ needs, and in realis-
ing cost efficiencies in operations.
The competition to attract and retain the best talent is as
fierce as ever.
We are experiencing a transformation in the way customers
buy our products, with rapid growth in sales through digital
channels. In response to the increasing digitalisation of finan-
cial services, we implemented a new organisational structure,
introducing three new business areas: Technology, Digital
Innovation and People. Digitalisation creates new opportuni-
ties, enables new business models and partnerships, and the
revised organisational structure will enable the Storebrand
Group to more effectively capitalise on these.2)
2) For more details on our strategy, see Director’s Report
3) The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services
14
SUSTAINABILITY AS CORE BUSINESS
In 2019, the UN released the results of the most thorough
planetary health check ever undertaken, the IPBES3) report on
biodiversity and ecosystem services. In conclusion, the report
made it clear that human society is threatened from the accel-
erating decline of our planet’s natural life-support systems.
The backdrop to this report is the UN special report on global
warming in 2018, which concluded that the transition towards a
low-carbon society requires accelerated action to keep warming
under 2oC. The transition represents huge economic risks and
opportunities that we as investors cannot ignore.
The financial sector has a key role to play in achieving the UN
Sustainable Development Goals (SDGs). Our pensions, savings
and investments are powerful tools to address key challenges
needed to realise the SDGs. As a significant asset owner, insurer
and asset manager, we also see great economic opportuni-
ties in the alignment of investment portfolios to a sustainable
agenda.
Companies with sustainability at the core of their business
strategy are typically financially robust and well positioned to
weather global climate and sustainability risks and to benefit
from opportunities. A growing body of evidence indicates that
companies with a comprehensive strategy in line with the SDGs
and Paris Agreement will create better long-term returns and
may be better positioned to succeed in future markets.
SUSTAINABILITY GOVERNANCE
Sustainability is integrated in our business strategy and imple-
mented across the entire business, including investments,
products and product development, procurement, employ-
ment policies and business management.
Our main objective is to leverage sustainability as a competi-
tive advantage. Members of the executive management group
are responsible for achieving our main strategic goals on
sustainability within their respective business areas. Business
unit goals and targets are reviewed three times a year by the
executive management group and semi-annually by the Board
of Directors.
At an operational level, our work on sustainability is divided into
three areas: people and business management, products and
services and communication and stakeholder engagement.
STOREBRAND ANNUAL REPORT 2019
SECTION 1. THIS IS STOREBRAND
PEOPLE AND BUSINESS MANAGEMENT
The sustainability principles that guide our work are:
• We base our business activities on the UN Sustainable
Development Goals, and collaborate with customers,
suppliers, partners and the authorities to meet these
goals.
• We help our customers to live more sustainably. We
do this by managing our customers’ money in a sus-
tainable manner, in addition to providing sustainable
financing and insurance.
• We are a responsible employer.
• Our processes and decisions are based on sustainabil-
ity outcomes – from the board and management, who
have the ultimate responsibility, to each employee who
promotes sustainability in their respective business
area.
• We use the precautionary principle when it comes to
mitigating social and environmental risk.
• We are transparent about our work and our
sustainability results.
We have identified three SDGs (right) which we can significantly
impact by the way we manage our group’s business and people
processes.
We work actively towards equal
opportunities and gender balance
in work and economic life (target
5.5).
We aim to achieve decent work for
all our employees, and equal pay
for work of equal value (target 8.5).
We aim to protect labour rights and
promote safe and secure working
environments for all our workers,
contractors and suppliers (target 8.8).
We continuously work towards
encouraging and expanding access
to banking, insurance and financial
services for all (target 8.10).
We strengthen resilience and
adaptive capacity to climate-
related hazards and natural
disasters in our operations and in
our investments (target 13.1).
We integrate climate change
measures into our policies, strate-
gies and planning (target 13.2).
PRODUCTS AND SERVICES
Storebrand is a leading player in the Nordic market and a pioneer within the field of sustainable investments. We have been at the
forefront of sustainable investing since the mid 1990’s and were recognised for excellent performance on sustainable investments
by UN PRI (Principles for Responsible Investments) in 2019. When our CEO was invited to speak at the COP 25 in 2019, this was
an important recognition of our actions to reduce carbon emissions from our portfolios. All our assets are managed according to
strict sustainability criteria. In addition, nearly one third of assets under management – NOK 277 billion – was invested in fossil free
funds at the end of 2019. All assets under management in SPP Fonder are now fossil free. We have identified eight SDGs (below)
where we can have the greatest impact through our investment activities. We use these sustainability goals actively in asset man-
agement, for example when applying our sustainability rating. In addition, we consider accountability and anti-corruption (SDG 16)
when engaging with the companies we invest in (see page 28). For specific measures and targets related to these SDGs in our asset
management, see the section Financial Capital and Investment Universe .
15
COMMUNICATION AND STAKEHOLDER ENGAGEMENT
We are transparent about our work on sustainability, and report
in accordance with several leading reporting standards, includ-
ing GRI, TCFD and CDP, in line with expectations from a range
of key stakeholders. Setting clear strategic ambitions, and com-
municating openly on progress towards specific targets are key
success criteria in managing our stakeholder expectations.
We form strong partnerships to realise our sustainability
objectives. This illustrates our firm commitment to SDG 17:
partnering for the goals. In addition, stakeholder engagement
and communication aim to impact on SDG 12 and 13.
K
A
B
F
D
VERY HIGH
I
J
HIGH
C
G
L
M
H
E
MODERATE
Significance of business impact
16
s
n
o
i
s
i
c
e
d
d
n
a
s
t
n
e
m
s
s
e
s
s
a
r
e
d
o
h
e
k
a
t
s
n
o
e
c
n
e
u
fl
n
l
I
We encourage companies to adopt
sustainable practices and to integrate sus-
tainability information into their reporting
cycle (target 12.6).
We strengthen resilience and adaptive
capacity to climate-related hazards and
natural disasters in our operations and in
our investments (target 13.1).
We integrate climate change measures
into our policies, strategies and planning
(target 13.2).
Financial capital and investment universe
A
B
C
Competitive returns to shareholders and
customers
Driving force for sustainable investments
Active ownership
Customer and community relations
D
E
F
G
Financial freedom in all stages of life
Engaging, relevant and responsible advice
Digital trust
Simple and digital customer experiences
Our people
H
I
J
A culture for learning
Committed and courageous employees
Diversity and equal opportunities
Keeping our house in order
K
L
M
Working against corruption and financial crime
Sustainable practices throughout value chain
Corporate citizenship
STOREBRAND ANNUAL REPORT 2019
SECTION 1. THIS IS STOREBRAND
MATERIAL ISSUES
To ensure that we have a comprehensive and long-term
approach to creating value for our shareholders, customers,
employees and society at large, we conducted a materiality
analysis in 2017. This has been adjusted, following ongoing
stakeholder engagement, both in 2018 and 2019.
This integrated report is built around these four focus areas,
with the approach, goals, initiatives and results stipulated
under each section. Key performance indicators for each focus
area are reported to the executive management regularly and
to the board annually.
Our materiality analysis defines the challenges and issues that
Storebrand and our stakeholders perceive as most essential,
and where we have the most significant impact on society and
the environment. The stakeholders we have discussed materi-
ality with are shareholders, customers, employees, authorities
and NGOs. These are defined as our main stakeholders, and
dialogue has taken the form of AGMs, polls and surveys, inter-
views and meetings, as well as participation in committees and
initiatives aimed at addressing a wide range of sustainability
issues. Following an analysis based on dialogue with key stake-
holders, we have identified four focus areas and associated
issues that give a clear prioritisation of long-term challenges,
and how we should approach these. These focus areas are rel-
evant to our most important strategic goals: maintain a leading
position in occupational pensions, have a unique position in
the private savings market and build asset management with
strong competitive advantages and good growth opportunities.
The focus areas and associated issues are presented in our
materiality matrix above.
This report has been prepared in accordance with the GRI
Standards: Core option. Our GRI Index can be viewed on page
212. The guidelines of the International Integrated Reporting
Council (IIRC) have also been used as a basis for reporting.
This report covers Storebrand’s business activities in Norway
and Sweden. Environmental data specified in Section 6 of this
report and in our official CDP Report excludes Skagen and
Cubera offices in Norway as they have recently been integrated
into the Group. From 2020, the boundary for our environmen-
tal data will be increased to include these offices. For more
information on companies within the Storebrand Group, see
page 207.
17
2
Climate Risk
and Opportunity
In developing our climate strategy, we have considered
both how we affect climate change as well as how to
avoid or mitigate being negatively affected by climate
change and climate policy.
19
STOREBRAND ANNUAL REPORT 2019 Climate Risk and Opportunity
Climate change and the transition to a low-emissions society
has a material impact on our business. This may be exacerbated
by changes in the Norwegian economy, which is vulnerable to a
falling oil price and lower activity in the oil and gas industry. In
developing our climate strategy, we have considered both how
we affect climate change as well as how to avoid or mitigate
being negatively affected by climate change and climate policy.
In addition, we have identified some of the opportunities relat-
ing to the transition to a low-emissions economy.
Norway. A potential trigger is if the policy is abruptly strength-
ened to achieve Norway’s goals based on the Paris agreement.
A potential effect is a country-specific fall in interest rate.
We have used the Task force on Climate-Related Financial
Disclosures (TCFD) recommendations as our framework for
disclosing climate-related financial risks. Climate-related dis-
closures are integrated throughout this annual report4), and a
TCFD index can be found in appendix on page 210.
The effects on investments and liabilities may be sudden in the
form of market unrest or unfold gradually over time through
lower average return and persistently low interest rates. A
disorderly transition also poses a risk, for instance if policy
initiatives are too strong relative to technology development
and investment opportunities. Vulnerability from a lower oil-
price and activity in the oil and gas-sector is a particular risk for
4) Further details regarding climate risks and opportunities can be found in Storebrand’s climate reports at https://www.storebrand.no/om-storebrand/barekraft/forpliktelser-utmerkelser-samarbeid#utmerkelser
and https://www.storebrand.no/en/asset-management/sustainable-investments/document-library
20
STOREBRAND ANNUAL REPORT 2019 SECTION 2. CLIMATE RISK AND OPPORTUNITY
SCENARIO ANALYSIS
European Central Banks and Supervisors have established the
Network for Greening the Financial System (NGFS). Storebrand
has used the NGFS framework to assess climate risks in dif-
ferent scenarios. The scenarios differ in two dimensions. One
dimension is the strength of the physical risk and the other
dimension is whether the transition is orderly or disorderly.
The scenario analysis incorporates findings from the Nor-
wegian government’s Climate Risk Commission that relate
to three core business areas: asset management, property
investments, and insurance. Based on the scenarios below,
we
identified the potential risks and opportunities and
assessed them in the short (1-3 years) and medium-long term
(3-10 years)5). A simplified description of the scenarios used
illustrated below:
1. Successful Climate Action
2. Late Transition
3. Drastic Climate Change
1.5oC
2oC
3oC
Successful climate policy that delivers
a swift transition to a low-emission
society, achieving the goal of limiting
average global warming to 1.5oC by
2100. No significant self-reinforcing
mechanisms in the climate system
are triggered. Climate changes are
moderate, and worldwide economic
implications are relatively minor as a
consequence.
Delayed changes to climate policy
result in average global warming
above 2oC by 2100. The economic
and policy implications are consider-
ably more pronounced than in the
first scenario. In the short term, the
transition presents less challenges
for companies than in scenario 1.
Late and more demanding climate
policy increases the risk of financial
instability in the long term.
This is a scenario involving political
failure and/or the triggering of major
self-reinforcing mechanisms in the
climate system, driving average global
warming above 3oC by 2100 and
resulting in economic instability in the
long term.
Main Impacts
Main Impacts
Main Impacts
Low returns
from companies
unable to adapt to a low carbon
economy, such as the risk of
stranded assets6) in the short to
medium term.
Reputational risk from Storebrand
being unable to meet
increas-
ing customer demands for green
investments may affect our market
position.
Low absolute returns and financial
instability due to climate related
issues.
Solution companies and projects
are priced too high in the short
term, creating a valuation bubble
that may burst in the medium to
long term.
impact resulting
The economic implications of the
potentially catastrophic climate
change
from
scenario 3 cannot be meaningfully
quantified. We have therefore
based our assessment on sce-
nari os 1 and 2.
5)Since climate risk has been integrated into our structured risk assessment framework, which only looks at these two terms, we have not included the longer- term risks occurring beyond 10 years
6)Stranded assets are assets that have suffered from unanticipated or premature write-downs, devaluations or conversion to liabilities
21
ASSET MANAGEMENT
Our asset management’s
largest climate-related financial
risks and opportunities are believed to lie in the transition to
a low-emission society. Climate policy and regulations, more
rigorous emission requirements, a changed cost structure and
market preferences may affect our investments. Our most
important initiatives to mitigate these risks and capitalise on
potential opportunities are listed below in sections 3 and 6.
In addition, Storebrand Asset Management stress tested its
investments through the 2 Degrees Investing Initiative scenario
analysis tool PACTA7) in 2019. Transitional risk was mapped
through exposure to high and low carbon technologies in
the most important sectors, including fossil fuels and electri-
fication in the transport sector. The results indicate how our
investments are influenced by different scenarios, compared
to reference portfolios.
We were also one of twenty leading investors in the UNEP
FI investor group on TCFD. The group developed models
to enable scenario-based assessment and disclosure of cli-
mate-related risks and opportunities. The group worked on
methods to determine the value at risk for equity, bond and
real estate portfolios.
TARGETS AND METRICS
•
Carbon footprint in equity investments: 17.4 Tonnes
CO2e per 1 million of sales income NOK/SEK (vs 22.1
Index) 8)
Carbon footprint in bonds investments: 8.4 Tonnes
CO2e per 1 million of sales income NOK/SEK (vs 14.8
Index)9)
•
• Number of active company engagements around cli-
mate-related risk and opportunity: 135.
REAL ESTATE INVESTMENTS
Storebrand had direct real estate investments valued at NOK
42 billion at the end of 2019. Physical risk results largely from
extreme weather impacts on real estate assets.
Transitional risk is associated primarily with medium-long term
uncertainty. We anticipate that the real estate sector will be
subject to new requirements for energy and climate efficiency,
and our ability to adapt to these requirements is crucial to man-
aging risk as well as realising market opportunities.
Mitigation measures that we have already implemented include
real estate certification and Global Real Estate Sustainability
Benchmark (GRESB) rating10) .
In 2019, we participated in the TCFD project for developing a
risk model for real estate investments. The model needs to be
further developed. In addition, we have started developing a
tool for climate accounting and forecasting for real estate. This
should be completed in 2020.
TARGETS AND METRICS
•
100% environmentally certified real estate by 2030
The share of direct property investments that held a green
building certificate in 2019 was 41%. Our target for 2025 is
to increase this to 74%.
•
Sustainability rating of all real estate: Our direct real
estate investments are rated by GRESB in four different
portfolios, with rankings among the best of peers in
Europe. The score increased nearly 7% from last year, to
an average of 82 out of 100, corresponding to a four star
rating out of five on a global basis.
• Number of excluded companies due to serious climate
•
•
and environmental damage: 94.
Equity investments in fossil energy, billion NOK/
percentage of equity investments: 7.5 BNOK/2.6%
In addition, our deforestation policy states that we shall have
completely divested from companies that contribute to illegal
deforestation by 2025. We are currently mapping all compa-
nies with a high risk of contributing to deforestation and will
report annually on this process starting in 2020.
Additional metrics and targets can be found in section 3 below
on page 33.
Commitment to energy efficiency: Continuous
improvements in energy efficiency are achieved through
several operational optimisation initiatives. Total carbon
emissions in direct real estate investments continued
to decrease and was 10,228 tCO2e, equal to 9.12 tCO2e
per m2 in 2019. Our target for 2025 is to reduce this to
6.5tCO2e/m2.
Additional metrics and targets that are relevant for climate-
related risks associated with real estate investments can be
found on pages 33 and 61.
7) Paris Agreement Capital Transition Assessment.
8) Data available up to Q3 2019.
9) Data available up to Q3 2019.
10) GRESB assesses and benchmarks the ESG performance of real estate assets, providing standardised and validated data to capital markets.
22
STOREBRAND ANNUAL REPORT 2019
SECTION 2. CLIMATE RISK AND OPPORTUNITY
INSURANCE
The direct impact on insurance liabilities from climate change
is limited for Storebrand. The greatest climate-related finan-
cial risk for our real estate and casualty insurance business
is physical risk in the form of increased payments due to cli-
mate-related damage. In the long term, rising sea levels and
changes in weather patterns may also have an impact. We
believe that transitional risks, such as changing customer
behaviour, technological developments and new regulations,
will affect the real estate and casualty insurance markets. Our
most important initiatives to mitigate climate risks are:
•
•
•
Risk assessment and pricing: climate factors are included
in risk assessment and pricing in the underwriting process.
Exposure mapping and reinsurance: We reinsure assets
in areas with a high exposure to physical risks associated
with climate change.
Diversified risk through national plan: Participation in
Norwegian natural perils pool is statutory and provides
joint reinsurance protection linked to property insurance
for real estate and housing.
•
•
Pilot project under the auspices of UNEP FI: We are
currently participating as one of 18 insurance companies
to further develop standardised reporting for insurance
providers in accordance with TCFD. The work is expected
to be finalised in 2020.
Rewarding damage prevention: We actively communi-
cate with our customers, encouraging damage prevention
measures, such as securing property during periods prone
to flooding.
TARGETS AND METRICS
Insurance accounts for around 5% of our revenue and, as such,
we do not have quantitative targets relating to climate risk.
We do, however, have a focus on the mitigating initiatives
mentioned above.
23
3
Financial Capital
and Investment
Universe
We have two core objectives: to generate a return to our
shareholders and to provide the best possible return for
our customers on their savings so they can be financially
secure during their retirement. We aim to be a leading
player in the field of sustainable investments.
26 Provide a return to owners and customers
27 A driving force for sustainable investments
33 Key performance indicators
25
Provide a return to owners and
customers
WHY
We are a publicly listed company and one of the largest pro-
viders of pensions in Norway and Sweden. We therefore have
two core objectives: to generate a return to our sharehold-
ers and to provide the best possible return for our customers
on their savings so they can be financially secure during their
retirement.
APPROACH
Our core product is occupational pension plans, offered both
to companies and directly to individuals. Legacy products that
carry an interest rate guarantee shall be managed in a capi-
tal-efficient manner to free up capital for shareholders over
time. Non-guaranteed savings products are experiencing high
growth at a low capital cost – a growth Storebrand is capturing
together with our insurance offering.
GOALS AND AMBITIONS
We have the following operational goals:
• Maintain our leading position within the occupational
•
•
pensions market in Norway
Continue our challenger role in Sweden with dou-
ble-digit annual growth within occupational pensions
Strengthen our Norwegian retail savings position
through double-digit annual growth
• Maintain our leading market position within asset
management in Norway, while strengthening our inter-
national presence
Grow annual insurance premiums by at least 5%, with a
combined ratio of 90-92%
•
Our dividend policy states that the aim is to pay an ordinary
dividend of more than 50% of the group result after tax and
at least the same nominal amount as the previous year. Ordi-
nary dividends will be paid at a solvency margin of more than
150%. If the solvency margin is above 180%, the board intends
to propose special dividends or share buy backs. To create
further value, our ambition is to continue investment in prior-
itised growth areas and deliver an overall return on equity of
at least 10%.
INITIATIVES
In 2019 we announced that we will re-enter the Norwegian
municipal occupational pension market following recent
pension reforms. This opens up a completely new market esti-
mated to be over double the size of the private sector market,
when measured in assets under management (NOK 552 billion
and NOK 248 billion respectively).
26
Storebrand’s asset management team further increased its
focus on ESG-enhanced solutions in 2019. We acquired the
private equity firm Cubera, strengthening our alternative invest-
ment offering. Storebrand asset management also launched
some of its ESG funds for international sales.
RESULTS
Storebrand delivered a return on equity of 8.0%, and the board
proposed to the General Meeting an ordinary dividend of NOK
1,517 million, corresponding to NOK 3.25 per share for 2019.
Fee and administration income grew 6% to NOK 5,308 million,
but lower insurance results in 2019 lead to profit before amor-
tisation of NOK 3,037 million, a reduction by 4% compared to
last year. In Sweden, SPP gained market share through growth
in new sales, premiums and transfers.
STOREBRAND ANNUAL REPORT 2019 SECTION 3. FINANCIAL CAPITAL AND OUR INVESTMENT UNIVERSE
A driving force for sustainable investments
WHY
We manage customers’ pension savings over the span of
decades so a long-term perspective to investing is key. Inter-
national studies support our own observations that the most
sustainable companies on the world’s stock exchanges tend to
outperform their peers financially over time. They have a better
understanding of the global development and how to manage
risks and opportunities. The customers are also increasingly
demanding sustainable investment products and solutions
and 36% of the Norwegian population say they have stopped
buying a product or service due to unsustainable practices in
the company.11)
APPROACH
A key success factor in realising our sustainable investment
strategy is ensuring that portfolio managers have the neces-
sary tools to make well-informed decisions when identifying
sustainability risks and opportunities. Three important tools to
address these issues are solutions-oriented investments, active
ownership and exclusions.
Investing in Solutions
Our investment strategy includes allocating capital towards
more sustainable companies. To accelerate sustainable
development over the next decade, we will be scaling up our
investments in solution-oriented companies. We define solu-
tion-oriented companies as firms that contribute to the UN
Sustainable Development Goals (SDGs), without significantly
hindering other SDGs or the Paris Agreement. Our solution
company whitelist was updated in 2019 and is used in invest-
ment decisions. It is part of the Storebrand sustainability score,
which is based on a wide range of sustainability indicators and
uses both internal analyses and data from third-party vendors.
The score is comprised of both ESG risks and opportunities
linked to the SDGs (see below). The score assesses compa-
nies’ exposure to and management of financially material
sustainability risks. This approach means we effectively iden-
tify companies that offer both long-term financial returns and
contribute to solving sustainability challenges. We invest more
in these companies, and less in companies with a low score.
11) Results from a nationwide study in 2019 conducted by Norstat om behalf of Storebrand
27
STOREBRAND ANNUAL REPORT 2019
SCORING INVESTMENT OUTCOMES FOR SDG OPPORTUNITIES
ENGAGING WITH COMPANIES TO REALISE SDGS
Engage with the world’s largest corporate
greenhouse gas emitters to curb emis-
sions, strengthen climate-related financial
disclosures and improve governance on
climate change.
Reduction of water use and GHG emis-
sions within intensive livestock producers.
Raise environmental standards in key
sectors, such as palm oil.
Raise awareness of international labour
rights, particularly
in high-risk sectors.
Improve policies and performance regard-
ing management-worker relations. Increase
awareness of social issues in the palm oil
industry and raising social standards.
Promote measures to avoid corruption
and bribery related to corporate gover-
nance issues and systematic failure to
detect fraud and corruption. Use voting
rights to encourage greater accountability
and transparency.
Invest in companies that provide climate
solutions and contribute to achieving the
Paris Agreement.
Invest in companies that provide solutions
within sustainable management and effi-
cient use of natural resources. Promote
circular economy and improved waste
management during a product’s life cycle.
to companies
that
Ensure exposure
provide sustainable urbanisation and
transport systems and reduce the envi-
ronmental impact of cities. This includes
companies that improve air quality and
waste management, promote inclusion,
resource efficiency, mitigation and adap-
tation to climate change, or resilience to
natural disasters.
Promote economic productivity through
diversification, technological upgrading
and innovation. Increase access to finan-
cial institutions, banking, insurance and
financial services for all.
Invest in companies that promote energy
efficiency and enable increased produc-
tion, distribution and use of renewable
energy in the global energy mix. Increase
investments in clean energy infrastruc-
ture, grid, storage and technology.
Promote solutions for safe and afford-
able drinking water, improved sanitation,
water quality, water-use efficiency, water
resource management and the resto-
ration of water-related ecosystems.
Promote companies that support pro-
ductive employment and decent work for
all women and men. Increase exposure
to companies that work against discrim-
ination, that provide equal pay for equal
value work, and for equal opportunities in
leadership at all levels of decision-making.
28
SECTION 3. FINANCIAL CAPITAL AND OUR INVESTMENT UNIVERSE
EXCLUSION CRITERIA BASED ON THE SDGS
THE STOREBRAND STANDARD
(APPLIES TO ALL FUNDS)
ADDITIONAL CRITERIA
(APPLIES TO SELECTED FUNDS)
Companies that derive more than 5% of their revenue
from the production or distribution of weapons (small
arms, military contracting and defence).
Companies that derive more than 5% of their revenue
from the production or distribution or fossil fuel
reserves exceeding 100 million tonnes CO2.
Companies involved in systematic corrup-
tion and financial crime.
Government bonds issued by countries
that are systematically corrupt, system-
atically suppress basic social and political
rights, or that are subject to UN Security
Council sanctions.
Companies with more than 5% revenue
from production or distribution of contro-
versial weapons, hereunder nuclear, land
mines, cluster munitions, biological and
chemical weapons.
Companies involved in serious environmen-
tal damage.
Companies with major stakes in coal and
coal utilities and in oil sands.
Companies with severe and/or systematic
unsustainable palm oil production.
Companies that cause or contribute to
serious and systematic breaches of inter-
national law and human rights.
Companies that derive more than 5% of their revenue
from the production or distribution of gambling or
adult entertainment.
Companies with more than 5% of revenue
from the production or distribution of
tobacco or recreational drugs.
Companies that derive more than 5% of their revenue
from the production or distribution of alcohol.
29
Active Ownership
We exercise active ownership in the companies we hold shares in
by voting at general meetings, including proxy voting, and direct
dialogue with the management and boards of these companies.
We prioritise direct dialogue when we believe this is the most
effective way of influencing decisions relating to ESG issues.
Through participation in the UN PRI (Principles for Responsi-
ble Investments), we work with other investors to engage with
companies in relevant areas of sustainable business, including
climate and deforestation.
Storebrand manages direct property investments in Norway and
Sweden totalling NOK 42 billion, accounting for 5% of our invest-
ment portfolio. We place stringent ESG requirements on how the
properties we manage perform, and report on progress through
GRESB .
Exclusions
All companies in our investment portfolio must satisfy the
Storebrand Standard. This stipulates minimum requirements
to human rights and international law, corruption and finan-
cial crime, climate and environmental damage, controversial
weapons and tobacco. It applies to all funds and pension assets
in the Storebrand Group and ensures that customers’ money
is invested in companies that comply with international norms
and conventions. In case of serious violations of the Storebrand
Standard, we use our role as owner to suggest improvements in
dialogue with the company. If our engagement is not successful,
the company is excluded from our investment portfolio.
GOALS AND AMBITIONS
We aim to be a strong agent for achieving lasting change in the
way companies are managed – and at the same time provide
good returns to our owners and customers. We put capital to
work to finance socially beneficial, sustainable solutions and to
reduce exposure to activities that impact society negatively.
We aim to reduce greenhouse gas emissions from the compa-
nies we invest in, and Storebrand as an asset owner is committed
to having a net-zero carbon portfolio by 2050.
Our coal exit strategy commits Storebrand to excluding com-
panies that derive high revenues from coal. Storebrand will
effectively divest from coal investments by 2026.
Storebrand’s ambition is to have an investment portfolio that
does not contribute to deforestation by 2025. A key objective is
to ensure that we do not finance operations that are illegal, fail to
protect high conservation value forests/land or violate the rights
of workers and local people, as reflected in Storebrand’s policy
on deforestation launched in 2019.
All our property management services have a certified environ-
mental management system. Our goal is to certify all individual
properties in accordance with the BREEAM standard.
30
STOREBRAND ANNUAL REPORT 2019
SECTION 3. FINANCIAL CAPITAL AND OUR INVESTMENT UNIVERSE
INITIATIVES
Pathway Towards Decarbonisation
We are members of Climate Action 100+, hailed as one of the
most important global investor initiatives for tackling climate
change, with more than 370 investors and USD 35 trillion in
assets under management.
We joined the UN backed Net-Zero Asset Owner Alliance in 2019,
as one of 12 founding members. The aim is to leverage the role
of active owners in order to reduce emissions in investment
portfolios, whilst holding members publicly accountable for
progress towards intermediate targets in line with Article 4.9 of
the Paris Agreement12). Members commit to working with their
portfolio companies to transition their production methods and
energy sources to low carbon alternatives. In 2019, our CEO was
invited to speak at a high level event at COP 25, representing
the alliance and describing Storebrand’s measures to reduce the
carbon footprint in our portfolios.
We participate in and support the Accounting for Sustainabil-
ity (A4S) initiative13). In 2019, 37 CFOs worldwide, Storebrand’s
included, committed to helping their organisation achieve net
zero emissions.
Our coal exit strategy implies a 5% reduction in revenue from
coal production in the companies we invest in every other year,
meaning we will be effectively divested from coal by 2026. In
2019, we further strengthened our coal exit strategy by introduc-
ing an absolute threshold of 20 million tonnes for coal mining
and 10,000 MW coal power capacity, meaning that large compa-
nies with significant yet relatively small shares of revenues from
coal are also excluded.
We released a deforestation policy in 2019 to encourage the
elimination of deforestation through engagement with com-
panies and investors14). The policy lays out what we expect of
companies regarding their disclosure and management of
deforestation risks.
We also demanded climate action from the International Energy
Agency (IEA), along with over 60 other international companies,
organisations and academics, asking IEA to provide better tools
for governments, investors and companies to align policies,
investments and business strategies with the Paris Agreement.
We have reported on our efforts to reduce greenhouse gas
emissions from the companies we invest in, in line with The
Portfolio Decarbonisation Coalition and Montréal Protocol since
2015. We have continued our dialogue with portfolio companies
to use standardised reporting measures for climate-related dis-
closures.
We are a driving force for recommendations to The Task Force
on Climate-related Financial Disclosures (TCFD). In 2019, we
changed our methodology to report on carbon footprint metrics
according to the TCFD recommendation using weighted average
carbon intensity15). To advance our approach to climate-related
reporting, both Storebrand Asset Management and Storebrand
Life Insurance participated in the UNEP FI TCFD project for inves-
tors and insurers in 2019.
Our CEO also engaged in several initiatives in 2019, in order to
promote climate friendly business practices and share knowl-
edge and experience with other companies. The Norwegian
business initiative Skift and the Nordic initiative Nordic CEOs
for a Sustainable Future, are two examples. Our engagement in
such initiatives will continue.
“To accelerate sustainable
development over the next
decade, we will be scaling up our
investments in solution-oriented
companies.”
Fossil-free investments
277
BNOK
12) http://www.mynewsdesk.com/no/storebrand-asa/pressreleases/storebrand-makes-unprecedented-commitment-to-net-zero-emissions-2919167
13) For more information, see http://www.accountingforsustainability.org/netzero
14) https://www.storebrand.no/en/asset-management/sustainable-investments/exclusions/deforestation-policy
15) Read our carbon footprint reports at https://www.storebrand.no/en/asset-management/sustainable-investments/document-library
31
31
Social and Governance Issues
We continued our focus on deforestation in 2019 by acting as a
lead investor in three different UN PRI initiatives that deal with
soy, cattle and palm oil. Along with 250 investors with more than
16 trillion USD in assets under management, we demanded cor-
porate action on deforestation in 2019.
The call to action was heard both by companies and the Brazilian
government. We co-hosted an event on deforestation, together
with Norsif, to create better awareness about the topic and
encourage Norwegian investors to join collaborative engage-
ments with companies to tackle this issue.
We are a signatory of an Investor letter asking companies to sign
and implement the UN Women Empowerment Principles. The
statement asks that companies strengthen their commitments
and take decisive and concrete action towards gender equality.
We cooperated with the Norwegian NGO Care and the consult-
ing firm PwC in 2019, writing a report on the correlation between
gender balance and corporate performance – and different ways
of implementing these results when investing in companies.
Storebrand is a signatory of the PRI Investor Commitment to
Support a Just Transition on Climate Change launched in May
2019. The initiative intends to engage investors already active
in climate change initiatives to make them aware of the social
dimension linked to the transition to a low-carbon economy. In
2019, Storebrand launched its formal proxy voting policy16), which
focuses on sustainability issues in shareholder resolutions.
RESULTS
We were recognised for excellent leadership in sustain-
able investments by PRI, and were appointed as the only
Norwegian asset owner among the PRI Leaders Group17) in 2019.
Storebrand was included based on our management of external
private equity investments. We also came second in the Ethical
Bank Guide’s ranking of sustainable financial institutions18). SPP
received the top ranking for sustainable investments by both
Max Matthiessen19) and Söderberg & Partners20) in 2019. SPP
Fonder made all their funds fossil free in 2019. As a result, one
third of all AuM, NOK 277 billion, in the Storebrand Group was
fossil free at year end.
Storebrand was one of three lead investors engaging with
Equinor as part of PRI’s Climate Action 100+. The engagement
led to Equinor committing to take significant additional action
on climate change.
The share of environmentally certified real estate investments
increased from 30% of real estate investment in 2018 to 41% in
2019. We work continuously with environmental management
and investment in initiatives to optimise the environmental
performance of the properties we manage, and have reduced
energy and water consumption in Norwegian real estate invest-
ments by around 30 % since 2011.
We had excluded 181 companies from our investment uni-
verse at the end of 2019 due to violations of our sustainability
standard. Of these, 94 were due to serious climate and environ-
mental damage, and 61 due to revenues exceeding 25% from
the coal industry in line with our coal exit strategy.
II) Pay-out ratio is adjusted for extraordinary tax income as per stock exchange release 15 January 2019
I) Adjusted for extraordinary tax income: 8.2%
III) New definition 2018. Did not report in 2017.
IV) Storebrand, SPP and SKAGEN, total AuM.
V) pr. 4th quarter 2018
16) Read our proxy voting policy at https://www.storebrand.no/en/asset-management/sustainable-investments/document-library
17) Read more about the PRI Leaders Group at https://www.investmenteurope.net/news/4004890/storebrand-norwegian-pri-leaders
18) https://etiskbankguide.no/
19) http://viewer.zmags.com/publication/47ce92ac#/47ce92ac/8
20) https://online.flippingbook.com/view/667717/22/
32
STOREBRAND ANNUAL REPORT 2019 SECTION 3. FINANCIAL CAPITAL AND OUR INVESTMENT UNIVERSE
Key performance indicators
For detailed KPI definitions, see page 222.
Key performance indicators
Result 2017
Result 2018
Result 2019
Goal 2020
Goal 2025
Return On Equity
Solvency II
Dividend pay-out ratio
Percentage AuM screened for
sustainability
Billion NOK invested in fossil-free
products 21)
Carbon footprint from equity invest-
ments: tonnes CO2e per 1 million
NOK/SEK sales revenue (vs. index)
Carbon footprint from bonds invest-
ments: tonnes CO2e per 1 million
NOK/SEK sales revenue (vs. index)
Investment in solutions (solution
companies, Green Bonds, and real
estate with Green Building Certifica-
te): Billion NOK/percentage of AuM22)
Investment in green bonds, Billion
NOK/Percentage total bond invest-
11.3%
172%
40%
100%
60
13.7%
173%
68%
100%
68
8.0%
176%
73%
>10%
>150%
>50%
>10%
>150%
>50%
100%
100%
100%
277
N/A
N/A
28 (18)
22 (32)
17 (22)
N/A
N/A
New
New
8(15)
N/A
N/A
New
38.8 BNOK / 5.5%
53.7 BNOK/6.5%
8%
15%
ments
New
8.4 / 2.9%
12.4 / 3.1%
Investment in solution companies,
Billion NOK/Percentage equity
investments
Certified green property, Billion
NOK/Percentage total real estate
investments23)
Number/percentage companies
excluded from investment universe
in Storebrand Group
Number / percentage company enga-
gements to discuss ESG issues24)
Number / percentage votes at AGM
to promote ESG issues25)
Energy intensity, real estate invest-
New
New
New
New
New
New
24.3 / 9.3%
New
17 / 41%
171 / 5.9%
182 / 4.3%
314 / 10.8%
408 / 9.7%
530 / 41,6%
151 / 4.3%
-
-
-
N/A
N/A
N/A
-
-
-
N/A
N/A
N/A
ments
189 kWh/m2
198 kWh/m2
184 kWh/m2
183 kWh/m2
172 kWh/m2
Water intensity, real estate investments
0,36m3/m2
0,38m3/m2
0.43m3/m2
0,34m3/m2
0,32m3/m2
Percentage of real estate investments
with green certificate
CO2 emissions real estate invest-
26%
30%
41%
ments26): total / tonnes CO2e per m2
10551 / 10.25
10818 / 9.96
10228 / 9.12
Percentage waste sorted for
recycling27)
71%
75%
71%
48%
8.6
75%
74%
6,5
80%
21) Fossil-free products are one of several ways to reach our overall goal of becoming net zero and we have therefore not set a specific goal for the amount invested in fossil-free products
22) We have decided to set an overall goal for 2020 and 2025, and not for each asset class
23) We have discontinued reporting total solutions as a percentage of AuM and replaced this with a more granular level of reporting, where the previous figure is divided into solution companies, green bonds and green
certified real estate investments.
24) The number of companies engaged with has increased, while the percentage of investment universe has decreased due to an overall increase in the number of companies in our investment universe.
25) The total number of votes in 2018 was significantly higher in 2018 due to us testing out this model for engagement. In 2019, we launched our policy for voting, incorporating lessons learned from 2018. This has resulted in
a more goal-oriented approach to active ownership, despite a reduction in total votes
26) Emissions factors have increased since we reported in 2018. We have therefore recalculated our emissions for 2017, 2018 and 2019 using the new factors in order to provide comparability over this three-year period
27) Di rect real estate investments in Norway only. Due to an earlier error in our calculation of sorted waste, this number has been revised for 2017 and 2018. Goals for 2020 and 2025 have also been increased to drive
performance further.
33
4
Customer and
Community Relations
We offer customers a range of services designed to meet the
breadth of their financial needs at all stages of their lives.
36 Financial freedom in all stages of life
38 Engaging, relevant and responsible advice
40 Engaging our customers through digital experiences
41 Digital trust
42 Key performance indicators
Financial Freedom in All Stages of Life
INITIATIVES
In 2019 we launched the “Good Money” campaign, aimed at
positioning us more clearly in the market as an investor with
a unique competence in sustainable investments. Our brand
should be recognised for excellence in combining good finan-
cial performance with sustainable investments.
In 2019 we developed an app that will provide customers with
a complete overview of their expected financial situation during
retirement.
We also made improvements to My pension in 2019, aiming to
provide a better overview over individual pension entitlement.
RESULTS
Nearly half a million Norwegians have checked their pension
entitlement through our website since launching the service
in 2013, and nearly 30% of these have purchased at least one
product from Storebrand.
In 2019, 70,000 customers found information relating to their
pension entitlement through our website.
“Customers shall be secure in the
knowledge that we manage savings
in a highly professional manner,
contributing to at good return on
investment”
WHY
Recent reforms to the Norwegian pension system have resulted
in people having a larger responsibility for their own pension.
This is especially true considering that life expectancy has
increased, and that Norwegians can expect less support from
the government to meet living costs throughout retirement. Pen-
sions sit at the heart of our service offerings, and are our most
important tool for helping customers achieve financial freedom.
APPROACH
We aim to increase awareness about personal finance by pro-
viding simplified information and making good advice easily
available for our customers. Developing digital tools and improv-
ing digital communication are central.
Customers shall be secure in the knowledge that we manage
savings in a highly professional manner, contributing to a good
return on investment. We provide information and advice to
our corporate customers so that they can help their employees
making better financial decisions. We focus on building strong
relations with our corporate customers and between Storebrand
and individual employees.
We believe that the reasons we are a preferred provider of
pension services include our customer seminars, easy access to
qualified advisors and a simple communication without complex
financial jargon.
GOALS AND AMBITIONS
My Pension is a digital tool that helps customers calculate
expected pension entitlement, bringing together data from the
State Pension Fund, private pension savings and employers’
pension contributions. The app, together with services such as
our Guide to Financial Security, Smart Pension and Employee
Overview are key to engaging employees, encouraging them to
become private customers at Storebrand.
Our aim is to offer customers a range of services designed to
meet the breadth of their financial needs at all stages of their
lives. We shall offer relevant products and services in banking
and insurance. Our goal for 2020 is a 10% increase in number
of customers who have products from at least one product line.
We continuously work towards encour-
aging and expanding access to banking,
insurance and financial services for all
(target 8.10).
36
STOREBRAND ANNUAL REPORT 2019
SECTION 4. CUSTOMER AND COMMUNITY RELATIONS
37
Engaging, relevant and responsible advice
WHY
Pensions and insurance are perceived by the general public as
complicated. It can be difficult to understand which agreements
and rights are collective and which are personal, as well as which
conditions apply to the various agreements. If we are to succeed
with our strategic goal of creating first-class customer expe-
riences in the area of savings and pensions, we must take this
challenge seriously.
Throughout the various phases of working life, to the point of
retirement, we work to provide our customers with an overview,
necessary insight and understanding of their own pension and
insurance agreements.
APPROACH
The starting point for all customer contact is the principle of
“the customer first”. This is reflected in our service standards:
• Trustworthy – I keep what I promise and I am professional
• Caring – I treat everyone individually and I help them and give
advice
• Enthusiastic – I am positive and I exceed expectations
• Efficient – I make the customer journey easy and I improve my
organisation
Relevant and responsible advisory services are the main prereq-
uisites for customer satisfaction. Our aim is to consistently guide
our customers to buy products and services that are relevant
and appropriate for their particular life situation. If we do this
effectively, we contribute to our vision of being customer centric.
High ethical standards, expert advisory services and a focus on
customer care, are fundamental. Our advisers are authorised
either through a national authorisation scheme for financial
advisers (AFR) or the approval scheme for salespersons and
advisors in the area of property and casualty insurance (GOS).
38
STOREBRAND ANNUAL REPORT 2019 SECTION 4. CUSTOMER AND COMMUNITY RELATIONS
Both schemes are overseen by the Financial Services Industry.
Our authorisation and qualification requirements are communi-
cated to customers across digital platforms.
GOALS AND AMBITIONS
We aim to be known for having the best sustainable savings and
pension solutions.
Our ambition is to become the industry leader when it comes
to customer satisfaction. Our goal for 2019 was to be among
the top three. We also aim to improve customer relations and
revenue per customer by increasing the number of products
each customer has at Storebrand.
Storebrand’s advice shall be based on the customer’s needs, and
our ambition is for 75% of our savings advisors to be authorised
at any given time28).
INITIATIVES
The interaction between digital and physical customer service
is becoming increasingly important. Teams dedicated to digital
and physical customer service work together to prioritise and
develop initiatives.
An important step in 2019 was introducing the Customer
Engagement Platform, a transformational program that is based
on a modern, data-driven CRM platform. This has redesigned
our customer experience, making improvements on smarter
use of data, and a more personalised customer experience,
allowing us to better meet customer needs.
We are working on a project for customers who are nearing
retirement, called Retirement Management. By offering pension
advice, combined with smart digital solutions, we aim to realise
the potential in a customer group with uncovered needs.
In 2019 we launched a new learning program for authorising
new employees. We increased the number of authorised advi-
sors and included bank and insurance advisors in the program.
We also introduced a dedicated learning program for insurance
advisors and started developing an authorisation program for
credit advisors.
RESULTS
We were again ranked first in the Norwegian Customer Barom-
eter’s annual survey of customer satisfaction in the corporate
market.
In the retail market, we maintained an NPS score29) correspond-
ing to fourth place in Norway and fifth place in Sweden.
With a market share of 20% in 2019, we maintained our position
as one of the market leaders in Individual Pension Savings (IPS)
amidst strong competition.
In the market for transferable savings30), we had a market share
of 19.9% in 2019.
In the area of pension and savings, 22 new advisors were autho-
rised according to the Authorised Financial Advisor program,
bringing the total percentage of authorised advisors to 81% of all
advisors at Storebrand.
“Our ambition is to become the
industry leader when it comes to
customer satisfaction.”
Market
position: Pension
#1
Corporate Market
Norway
28) Staff turnover explains why our ambition is not 100%.
29) The Net Promotor System (NPS) is a measurement tool for customer satisfaction, in which the customer gives a score from 0 to 10, with 10 as the best result.
30) Free funds (Retail Market), individual pensions, individual capital, Pension Capital Certificates (PKB), and paid-up policies with investment options (FMI).
39
Engaging our customers through digital
experiences
WHY
Of all the changes affecting our industry, technological progress
and digitalisation are probably the greatest. Technology affects
our entire business: our customers’ behaviour and expectations,
opportunities to deliver services to customers, as well as opportu-
nities to automate and transform how our products are delivered
and experienced.
APPROACH
Digital & Innovation was established as a separate commercial
group unit in 2019, creating better integration of technology
expertise into our business development and operations.
Digital Business Development is an interdisciplinary team,
where product managers, business developers, IT architects,
developers and interaction designers work together to improve
customer experiences and solve customer problems through
digital services.
We maintain a close relationship with our customers in order
to better understand their behaviour, challenges and service
needs.
GOALS AND AMBITIONS
Our overarching ambition is to increase customer satisfaction
and reduce costs through the use of our digital services. We aim
to achieve this by enhancing the user experience, with more
digital sales and self-service.
In 2020 we shall further develop our pension app including all
savings, not limited to pensions. Our goal is to have 130,000 app
installations by the end of 2020.
INITIATIVES
Digital development was a high priority in 2019, and a broad
range of improvements have been made to existing solutions,
while also developing new services.
Digital sales processes were improved across all business areas.
We developed a fully digital mortgage application and approval
process, automated health declarations for life insurance, and
implemented a more intelligent process for helping customers
initiate a savings plan.
and what actions to take in order to ensure that savings generate a
sufficient income throughout retirement. Our app for health insur-
ance Get well was revamped with improved functionality, including
direct booking of appointments and fully automated digital claims
handling. We partnered with Eyr for in-app video consultations with
doctors, Myworkout Go to measure and improve the physical age of
our customers and incentivise better health outcomes, provided
access to the user’s electronic health journal from Helsenorge, and
Eprescription for viewing and renewing electronic prescriptions.
We developed and expanded our cooperation with the app
Dreams, which motivates customers to save through a supportive
community and personalised savings strategies. We developed a
new service in the Dreams application in 2019, which supports
Norwegian households in reducing their debt burden.
My pension was further developed in 2019, making the user expe-
rience more intuitive, catering to the needs of employees of our
corporate customers. This includes a digital savings advisor.
RESULTS
The total number of digital sales reached 150,000 in 2019, cor-
responding to over 40% of total sales, and an increase of almost
15% from 2018 and more than triple compared to 2016.
Results from the Digital Net Promotor System (Digital NPS),
where customers are asked how likely they are to recommend
Storebrand based on their digital experience, showed that more
customers gave a very high score (9 or 10) than those giving a
very low score (6 or lower). This indicates that customer satis-
faction with our digital solutions continued to increase in 2019.
The mobile application My pension, has a high ranking, and had
been installed 17,000 times by the end of 2019.
Get well reached 30% of the individuals with health insurance at
Storebrand in 2019, and was used monthly by over 15,000 cus-
tomers, who book more than 1100 physiotherapy sessions per
month through this digital end-to-end process.
The number of downloads of the Dreams app doubled, from
100,000 to over 200,000 in 2019, making it one of the most
popular savings services on the market.
Employees of our corporate customers are now being served by
My pension. This mobile app helps users understand the value of
their pension schemes, how it influences their total saving needs,
Sajna, a fully digital occupational pension offered to customers in
Sweden, won Digital Project of the Year at this year’s CIO Awards.
40
STOREBRAND ANNUAL REPORT 2019 SECTION 4. CUSTOMER AND COMMUNITY RELATIONS
Digital Trust
WHY
We live in a digital world, where our personal data is increas-
ingly at risk of being misplaced, stolen or shared without our
consent. In our efforts to create industry-leading customer
experiences, it is critical that our customers are confident that
their personal data is managed responsibly.
New technology and intelligent use of information, and per-
sonal data, enable us to better understand our customers and
their needs. We can only do this because we have established
a high level of trust amongst our customers. This will provide
us with the necessary foundation for developing better, more
relevant and more customer-centric products and services.
APPROACH
Our guidelines for the processing of personal data contain
principles for digital trust, such as lawful and transparent
processing, purpose limitation, rights of data subjects, and
requirements for built-in privacy protection. We have imple-
mented an internal control system throughout the entire data
value chain. Through this system, we stipulate requirements,
verify and continuously improve data security throughout the
Group, internally, with our partners and in our customer solu-
tions.
In cases where the risk of a breach is assessed as being either
medium or high, customers are contacted directly by tele-
phone or email. In such cases, we inform customers what has
happened, what measures we have implemented, and, where
necessary, what action the customer should take to protect
their personal data.
INITIATIVES
The managing director of each company in the Group is
responsible for personal data management, including ensur-
ing that internal control procedures are implemented and
reviewed regularly. All managers at Storebrand are responsible
for ensuring that employees with access to personal data have
the necessary competence and are suitably qualified to secure
our customers’ personal data rights, through following our pro-
cedures for information security.
Information security and data protection training are man-
datory for all employees and are a part of our onboarding
program for new employees. Employees who collect, process
or have access to customer data receive mandatory training in
data privacy.
We have been dedicated to implementing the new General Data
Protection Regulation (GDPR). Data protection and information
security are well-integrated into our internal control systems
and risk management processes. We continuously assess the
privacy risk that we may expose our customers to.
We also launched an improved version of our data protection
declaration on our website and improved our online customer
portal to provide individual customers with a better overview of
their data protection settings31).
RESULTS
In 2019 all employees handling customer data received man-
datory training on data protection. All new employees received
the same training. In addition, several topic-specific workshops
were held throughout the Group.
GOALS AND AMBITIONS
Our ambition is to engage our customers and build long-term
relationships through delivering first-class customer experi-
ence in all channels. This requires that we take responsibility
for safeguarding our customers’ rights under the Personal Data
Act.
In 2019, 48 incidents32) related to the processing of personal
data were reported. We reported 10 of these as non-con-
formities (substantiated complaints) to the Norwegian Data
Protection Authority in accordance with the General Data Pro-
tection Regulation.
All registered cases from 2019 were dealt with and are closed.
No fines, warnings or mandatory improvements were issued
to Storebrand by the Norwegian Data Protection Authority
31) Please visit our website: https://www.storebrand.no/en/online-security-and-privacy for more information about digital security and privacy.
32) A customer and process-related incident is defined as an undesired situation that has occurred as a result of a failure of internal processes, operational disruptions, human error, violation of internal/external regula-
tions or external matters. The consequences may be financial loss or gain, extra work, loss of reputation and/or sanctions related to the violation of internal/external regulations.
41
STOREBRAND ANNUAL REPORT 2018
Key performance indicators
For detailed KPI definitions, see page 222.
Key performance indicators33)
Result 2017
Result 2018
Result 2019
Goal 2020
Goal 2025
Customer satisfaction34)
Market Share: Savings, Retail Market
Norway
Market Position: Pension, Corporate
Market Norway
Percentage female: pension savings
Recognised for sustainable value
creation (Retail Market Norway)
Recognised for sustainable value
#4
22%
#1
43%
#4
21%
#1
43%
New 2019
New 2019
creation (Corporate Market Norway)
New 2019
New 2019
Customer satisfaction (Net Promoter
System, Corporate Market Sweden)
Expected pension as percentage of
salary (My Pension)
#8
58%
#7
59%
#4
Top 3
Top 3
20%
Increase
Increase
#1
44%
#3
#1
#5
#1
#1
Increase
Increase
Top 3
#1
#1
#1
Top 3
Top 3
60%
Increase
Increase
33) We have discontinued reporting for two indicators from 2019: a) GDPR courses, due to this being an important indicator to check implementation of new routines. We are however confident that these routines work
well and that all relevant employees receive GDPR training as part of their induction; b) Sustainable Brand Index scores for UK and Sweden are being replaced by other indicators. In addition, complaints are now
discussed under section 6 below.
34) Net Promoter System, Retail Market Norway
42
Key performance indicators
SECTION 4. CUSTOMER AND COMMUNITY RELATIONS
43
5
People
We recruit and develop people who are dedicated to
finding the best solutions for our customers.
46 A culture for learning
47 Committed and courageous employees
48 Diversity and equal opportunities
50 Key performance indicators
A culture for learning
WHY
Providing employees with opportunities for continuous learn-
ing combined with a deep understanding of our customers’
needs are prerequisites for continued competitiveness in an
industry undergoing rapid change. Greater breadth and diver-
sity in expertise will contribute to continued growth and the
ability to meet changing customer expectations. Digital skills,
knowledge of customer preferences and insight into market
developments are important to our success.
APPROACH
We recruit people who are dedicated to finding the best solu-
tions for our customers. At Storebrand, all employees shall be
able to develop in line with the company’s needs. In 2019, we
developed our learning management systems to better facil-
itate access to digital learning resources, strengthening our
employees’ ability to take responsibility for their own learning.
A working life with increased focus on knowledge as competitive
advantage and higher levels of autonomy, requires employees
to master the skill of self-management. A key aspect of this is
the ability to continuously and proactively acquire new knowl-
edge and apply this to create good customer experiences.
GOALS AND AMBITIONS
Our ambition is to build a learning culture marked by inno-
vation, responsibility for one’s own learning and feedback to
ensure continuous improvement.
INITIATIVES
In 2019, we increased the reach of our digital learning platform,
Campus Storebrand. Mandatory training in ethics, anti-corrup-
tion and anti-money laundering is facilitated via this platform.
The platform is widely used by employees for training courses
in sales and customer service, to access pre-reading resources
to a range of courses, and to facilitate our employee training
days under the theme “World-Class Together”.
We continued to extend the reach and use of our Human
Capital Management (HCM) platform to encompass onboard-
ing materials for new employees in addition to materials for
existing employees with regards to security and data privacy.
Our digital program for middle management, Storebrand Lead-
ership Weekly, started in 2018, and continued in 2019 with
more than 20 middle managers from Sweden and Norway par-
ticipating. A key topic in 2019 was trust and transformational
management.
35) Turnover and role relevance explains why it was not 100%.
46
We continued the rollout of our working method “Build,
Measure, Learn”, and our focus on developing an agile mindset
in management training, self-organised learning networks and
other gatherings. We aim to adopt this working method in
product and service design throughout the Group.
We launched our graduate program, Storebrand Future Impact
in 2019. New and current employees with limited work expe-
rience can apply to learn how to hone their skills and meet
the global challenges of our time, responsibly, ethically and
sustainably. The program focuses mainly on developing three
skills; self-leadership, relations and collaboration and complex
problem-solving.
RESULTS
In 2019, we offered 115 courses via the Campus Storebrand
digital learning platform. A total of 1949 people attended one or
more courses and completed a total of 5,696 hours of learning,
with an average of 2.9 hours per person. However, this number
does not accurately reflect all digital learning taking place, given
that many employees complete training on many other web-
based platforms such as Udacity, Coursera and LinkedIn, which
are not tracked for completion. By the end of 2019, more than
70 % of our employees35) had completed training for the new
Personal Data Act.
All participants in Storebrand Leadership Weekly participated
in the research project “Technology-based Management Devel-
opment”. A 360-degree evaluation of managers before and
after the programme documented a positive development in
twelve parameters for “management” and “management per-
formance”, relating to productivity, efficiency and satisfaction
of employees.
Our summer internship programme Sandbox received almost
1000 applications from Norway and Sweden in 2019. Ten stu-
dents were accepted in Norway and six students in Sweden.
The two first gatherings of Storebrand Future Impact were
held in 2019. We received close to 200 applications in June, and
five candidates were selected externally and paired up with
18 internal candidates. The participants represent the whole
breadth of the company and with diverse backgrounds and
skills ranging from IT to sales. During the program, the partici-
pants will develop and present group case studies focusing on
sustainability and organisational impact.
STOREBRAND ANNUAL REPORT 2019
SECTION 5. PEOPLE
Committed and courageous employees
WHY
Our employees are our most important source of innovation,
development and growth. Employees who dare to innovate and
challenge prevailing norms are essential to realising our goal of
becoming a world-class savings group.
APPROACH
Our business relies on the trust of customers, partners,
governments, shareholders and society at large. To gain trust,
our organisation must be professional, capable and marked by
high ethical standards. All employees shall act with due care,
integrity and objectivity.
Employee engagement surveys are conducted on a monthly
or bi-weekly basis to measure well-being, commitment to
work tasks, perception of sustainability and the experience of
self-determination, amongst others. The results are followed
up by the group management regularly.
We encourage a good work-life balance for all employees. We
aim to accommodate our employees’ needs for flexible working
hours. Of our 1742 employees, only 59 (3%) are employed
on a part-time basis (of which 50 are female). This is due to
employee preferences.
We offer permanent employees paid maternity and paternity
leave equalling 100% of their salary, which is above the statu-
tory requirements in Norway and Sweden.
GOALS AND AMBITIONS
Our ambition is to strengthen employee satisfaction, job sat-
isfaction and engagement through meaningful work, good
management, a motivating working environment, development
opportunities and trust in the 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.
INITIATIVES
In 2019 we strengthened our ways of working through contin-
uously using insight about the state of the organisation from
bi-weekly/monthly pulse surveys. These surveys measure
employee engagement across the entire group.
RESULTS
On average, 83% of the employees responded to the engage-
ment surveys at least once during the last quarter of 2019. The
engagement score measured in the surveys increased from 7.9
to 8.0 in 2019, on a scale of 1–10, where 1 is the lowest and 10
is the highest score. In the last half of 2019 the measurements
also showed high scores in drivers regarding equality and diver-
sity, freedom of opinion, high degree of autonomy, trust in open
and honest communication with leaders and trust in colleagues
doing quality work. The results also showed room for improve-
ment on working environment regarding tools and equipment.
Ongoing initiatives aimed at addressing these concerns are the
upgrade of both hardware and software, with the ambition of
fostering agile collaboration across the organisation.
47
Diversity and equal opportunities
WHY
Storebrand’s organisation and business activities should reflect
the customers and market in which we operate. We believe that
diversity contributes to an increased rate of innovation and a
broader understanding across the breadth of our customer
base. This appears to be supported by a number of International
studies showing that companies performing well on diversity
also tend to be more innovative and profitable36).
APPROACH
All Storebrand employees shall be treated equally, regardless of
age, gender, disability, cultural background, religious beliefs or
sexual orientation in recruitment processes and throughout the
employment relationship.
Storebrand works systematically to ensure diversity and equal-
ity in recruitment, reorganisation processes, salary adjustments
and offers of management training and other development ini-
tiatives.
We make a conscious effort to ensure that all employees, regard-
less of cultural and religious backgrounds, experience a high
level of workplace and job satisfaction.
We work actively to achieve a gender balance through targeted
recruitment measures as well as by nominating an equal number
of women and men to executive positions and management
development programmes.
We aim to offer potential employees a transparent and inclusive
recruitment process. We have a zero-tolerance policy against
harassment and discrimination, and we strive towards equal
treatment and equal opportunities in our recruitment and devel-
opment processes.
Storebrand has participated in a tripartite program called the IA
Agreement since 2002. This program is based on the premise
that involvement in activity through work promotes good health
and well-being, and that early, active intervention can prevent
absenteeism. The Group’s managers have established routines
for inclusive follow-up of employees in the event of illness.
GOALS AND AMBITIONS
We aim to offer a good candidate journey throughout the
recruitment process, ensuring that Storebrand is considered an
attractive workplace. We will continue to develop our employ-
ees and promote individual development of management skills
amongst women.
We work actively towards equal oppor-
tunities and gender balance in work and
economic life (target 5.5). Our goal is a
50/50 distribution of men and women
in leading positions, and an equal dis-
tribution of men and women
in our
management development programmes,
as well as recruitment processes for man-
agement positions.
We aim to achieve decent work for all our
employees. We have a goal of equal pay
for work of equal value (target 8.5). Our
policy on discrimination and our active
promotion of good health and well-being
at work support these objectives.
"All Storebrand employees shall
be treated equally, regardless of
age, gender, disability, cultural
background, religious beliefs or
sexual orientation"
36) This was documented in our report Investing in Gender Equality from 2019, made in collaboration with PwC and CARE Norway.
48
STOREBRAND ANNUAL REPORT 2019
SECTION 5. PEOPLE
INITIATIVES
Our main work on diversity includes measures to promote
gender equality. However, at the end of 2019 we established a
diversity and inclusion committee, consisting of six employees
nominated by the business. The committee shall raise aware-
ness and increase the understanding of the importance of a
diverse and inclusive working environment where people feel
they belong. Additional initiatives are planned and will be imple-
mented throughout 2020.
Throughout 2019, we improved our communication with poten-
tial new employees to make it as gender neutral as possible.
There shall be (at least) one female and one male final candidate
for recruitment to management positions. We expanded the use
of social media to promote vacant positions.
Every year, we nominate men and women on a 50/50 basis for our
management programmes, and in cooperation with our elected
representatives, we survey and analyse salary levels for various
positions in order to eliminate differences based on gender.
RESULTS
Our work on diversity and gender equality continues to be
a focus area going forward. At a group level, women account
for 39% of all management level staff. This equates to 35% in
Norway and 53% in Sweden. When it comes to employees, 45%
are women in Norway and 53% are women in Sweden.
In 2019, 44% of Storebrand ASA’s board members were women.
Three of the ten members (30%) of the executive management
team were women. Unfortunately, this is a reduction compared
to 2018. Among the managers who reported directly to the
executive management, 41% were women.
The same number of women and men participated in the man-
agement development offerings of the Storebrand Academy
and Storebrand Leadership Weekly, as well as in the Sandbox
programme for summer interns and Storebrand Future Impact
program for graduates.
The Group salary levels were reviewed in cooperation with the
elected representatives during the salary adjustment process in
2019. We observed a slightly lower average salary for women
than for men.
37) Includes Skagen and Cubera AS.
The average age in the Storebrand Group was 43 at the end
of the year. Average seniority was eleven years in Norway
and ten years in Sweden. The Storebrand Group had 1,742
employees37) as of 31 December 2019.
We have a good gender distribution in both Norway and
Sweden amongst permanent staff, as detailed in the
diagram below.
Gender distribution
Norway
male 718
female 576
Sweden
male 213
female 235
Absence due to illness has been low and stable for several
years. Absence due to illness in our Norwegian operations
was 3.1%, and 2.5% in our Swedish operations. No property
damage was reported in the Storebrand Group in 2019. We
had one reported accident, resulting in a light injury.
49
Key performance indicators
For detailed KPI definitions, see page 222.
All indicators in this table include Skagen, Cubera and Værdalsbruket.
Key performance indicators
Result 2017
Result 2018
Result 2019
Goal 2020
Goal 2025
Indicators
Sick leave Norway
Sick leave Sweden
Number of employees (headcount)
Gender balance, management
Percentage women at management level 1-338)
Percentage men at management level 1-3
Percentage women at management level 3
Percentage men at management level 3
Turnover rate for women for group
Turnover rate for men for group
New recruits to the group
Number women hired during the year
Number men hired during the year
Male employees under 30
Female employees under 30
Male employees 30 - 50
Female employees 30 - 50
Male employees over 50
Female employees over 50
Female in Group Executive Management Team
Female Directors in Group Board
Average salary female employees39), Norway (NOK)
Average salary male employees, Norway (NOK)
Average salary female employees, Sweden (SEK)
Average salary male employees, Sweden (SEK)
Extended top management, share of men's salary per
2017
3.5%
3.5%
New
38%
New
New
New
New
New
New
New
New
New
New
New
New
New
New
New
New
New
New
New
New
New
2018
2.7 %
3.3 %
1667
39%
44%
56%
46%
54%
4.1 %
3.9 %
220
78
116
115
102
526
408
235
284
3 out of 9
5 out of 9
699,228
871,146
608,551
762,151
2019
3.1 %
2.5 %
1742
39%
39%
61%
41%
59%
4.7 %
5.5 %
204
78
126
109
117
531
379
264
302
3 of 10
4 of 9
743 684
914 107
644 484
811 717
2020
<3.5%
<3.5%
N/A
50%
50%
50%
50%
50%
-
-
-
-
-
-
-
-
-
-
-
50%
50%
-
-
-
-
2025
<3.5%
<3.5%
N/A
50%
50%
50%
50%
50%
-
-
-
-
-
-
-
-
-
-
-
50%
50%
-
-
-
-
position category (haygrade 21-23)
New
110.3 %
100.5 %
100%
100%
All employees excluded for senior level staff, women's
share of salary per position category (haygrade 13-20)
CEO - Average worker pay ratio
New
New
99.2 %
New
99.1 %
8.2:1
100%
-
100%
-
38) From 2019 gender indicators for management levels 1-3 will only be reported as percentage
39) Changes to the reported figures for average salaries for 2018 are due to the fact that the boundary for reporting people data now includes Skagen, Cubera and Vardalsbruk.
This also applies to share of salary for men/women using the Hay grade scales.
50
STOREBRAND ANNUAL REPORT 2019 Key performance indicators
51
6
Keeping Our House
in Order
Storebrand work actively to fight corruption and all types
of financial crime throughout our business operations,
with suppliers and other business partners. We aim to be
energy efficient, reduce waste production, increase the
proportion of waste sorted and reduce our carbon footprint.
Anti-money laundering, financial crime and terror financing
54 Anti-corruption
56
57 Reducing our internal carbon footprint
58
60 Corporate citizenship
61 Key performance indicators
Sustainable practices throughout our value chain
53
We expect all employees and contractors to act in manner that
builds trust for both the individual concerned and for the Store-
brand Group.
As a general rule, no-one shall accept any form of benefits,
including services, gifts and invitations, from Storebrand’s busi-
ness relations. In situations where gifts may be accepted, our
anti-corruption guidelines specify threshold values in NOK for
all gifts.
Gifts that are offered on behalf of Storebrand are subject to
the same threshold value. No gifts shall be offered or accepted
where there is an expectation of reciprocity, or to achieve any
form of advantage, privately, or for any Storebrand company.
All events held on behalf of Storebrand shall be consistent with
our role in society, all content shall be professionally relevant,
and shall otherwise adhere to our guidelines for events.
GOALS AND AMBITIONS
We have a zero-tolerance policy towards corruption, and our
ambition is to avoid all incidences of corruption.
All employees and board members shall complete our anti-cor-
ruption program. The aim of this program is to ensure that
employees are capable of making the right decision to avoid
potential cases of corruption.
STOREBRAND ANNUAL REPORT 2019
Anti-corruption
WHY
The nature of Storebrand’s business dictates that we are
dependent upon unwavering trust from customers, authorities,
shareholders and society at large. Trust is dependent upon our
continued professionalism, competence and integrity.
Corruption is a criminal offence under the Norwegian Criminal
Act 2005.
APPROACH
We work actively against corruption throughout our business
operations, with suppliers and other business partners.
Our expectations for employees, temporary staff and con-
sultants are stipulated in our ethical guidelines, approved by
the board of Storebrand ASA and the boards of all subsid-
iaries. We have additional guidelines specifically addressing
anti-corruption, reviewed annually by the compliance team.
The group’s compliance function is responsible for updating
and disseminating material aimed at increasing anti-corruption
competence and awareness.
Our guidelines increase awareness about corruption and
ensure that each employee is capable of identifying potential
corruption risks at an early stage. The guidelines also specify
measures that should be taken to avoid corruption.
All employees are responsible for familiarising themselves
with and acting in accordance with anti-corruption guidelines,
including completing mandatory training, and managers shall
ensure that this is done. All new employees complete manda-
tory training as part of their onboarding process.
Employees shall act with integrity and fully disclose any private
business agreements or business-related services they provide
to companies, individuals, friends or family members.
54
STOREBRAND ANNUAL REPORT 2019 SECTION 6. KEEPING OUR HOUSE IN ORDER
INITIATIVES
The organisation uses e-learning to facilitate training in ethics,
anti-corruption, anti-money laundering and terror financing.
These courses are mandatory to complete every year to ensure
solid business practice in line with our code of conduct.
We have developed a designated area on our intranet for
anti-corruption, with information about our expectations to
business conduct for employees, including routines for dealing
with grievances, harassment and improper conduct. We have
an independent, third-party managed whistle-blowing system40)
where employees and external business partners can register
concerns, including relating to corruption.
Storebrand’s compliance team is also available to discuss issues
relating to corruption with employees, for example concerns
about receiving gifts, invitations to events or other benefits
from business partners that may be in breach of our ethical
and anti-corruption guidelines.
RESULTS
Four issues were received through our third-party managed
whistle-blowing system in 2019. None of these related to cor-
ruption and all four issues were satisfactorily closed during the
year.
In 2019, 87% of our employees and all board members com-
pleted mandatory anti-corruption training.
16.4 We are committed to fighting financial crime.
16.5 We are committed to fighting corruption and bribery in all their forms.
16.6 We are committed to developing effective, accountable and transparent companies.
40) Accessible at https://u.bdo.no/storebrand
55
STOREBRAND ANNUAL REPORT 2018
Anti-money laundering and
terror financing
WHY
We are a key player in the finance market in the Nordics.
Our reputation is contingent upon our ability to avoid being
misused to finance terrorism, launder money or commit any
other type of financial crime.
GOALS AND AMBITIONS
Storebrand shall act consistently and in compliance with rele-
vant legislation regarding cases related to money laundering,
terror financing and financial crime in general.
APPROACH
We have established guidelines to avoid money laundering
(AML) and terror financing, which are reviewed and approved
by the board. These guidelines build upon our ethical guide-
lines.
Each company in the Group shall conduct a risk assessment for
financial crime and terror financing, and implement routines
for identifying and establishing new customers. We conduct
internal audits and regular spot checks to identify and report
suspicious transactions or behavior.
Activity that we suspect is in breach of the Norwegian Mea-
sures Against Money laundering and Terror Financing Act
(2018) is reported to the police.
All employees are required to familiarise themselves with our
guidelines for preventing financial crime, and shall complete
our mandatory training program on AML and terror financing.
All new employees complete mandatory training as part of
their onboarding process.
The training also provides employees with a basic understand-
ing of the regulatory framework concerning financial crime
and terror financing, as well as our requirements to employees
and managers. Senior managers and board members for the
Group and for each subsidiary also receive mandatory training
in financial crime.
We work systematically to ensure that our companies are not
used for money laundering, terror financing or other forms of
financial crime. All employees shall take mandatory training
annually.
INITIATIVES
We have developed a designated area on our intranet for AML
and terror-financing, with information about expected busi-
ness conduct for employees. This applies across the Group’s
companies. Employees shall complete a mandatory e-learning
program in AML and terror financing.
We are an active member of Finance Norway’s Committee on
Financial Crime. The Committee works closely with the authori-
ties in Norway and provides guidance to all member companies.
RESULTS
In 2019, 44 issues relating to financial crime were reported
to the Norwegian National Authority for Investigation and
Prosecution of Economic and Environmental Crime, and six
issues to the police. Issues varied in gravity from suspected
money-laundering, terror financing and tax evasion to docu-
ment falsification.
“We work systematically to
ensure that our companies are
not used for money laundering,
terror financing or other forms
of financial crime.”
56
56
STOREBRAND ANNUAL REPORT 2019 SECTION 6. KEEPING OUR HOUSE IN ORDER
Reducing our internal carbon
footprint
WHY
At Storebrand, sustainability is integrated into our strategy,
and we aim to be a role model. This is relevant for both the
products and services we offer to our customers, but also for
how we run our daily operations.
APPROACH
As early as in 2008, Storebrand became «climate neutral», as
Norway’s first financial group. We achieve this by setting strin-
gent requirements and establishing specific goals to minimise
our carbon footprint. Storebrand’s environmental management
system has been certified by Eco-Lighthouse since 2009, and we
report publicly on environmental performance annually.
Our facility management team monitor energy and water
usage, waste production and waste sorting rate to ensure that
we reach our goal of minimising our footprint. We purchase
electricity generated by renewable energy with a guarantee of
origin.
In order to cut down on business travel, we encourage employ-
ees to use technological solutions such as video conferencing.
Over half of all meeting rooms are equipped with video-confer-
encing facilities. We encourage travelling by train when travel
is necessary.
GOALS AND AMBITIONS
We aim to set science-based targets by the end of 2020, aligned
with the 1.5oC scenario41) covering the whole business, includ-
ing own operations.
We aim to be more energy efficient, reduce waste produc-
tion, increase the proportion of waste sorted and reduce our
carbon footprint arising from air travel and commuting.
INITIATIVES
In 2019, Storebrand committed to setting Science Based
Targets in line with the Paris Agreement. This will include
external verification of our targets once this is available for the
finance industry42).
12.5 We aim to substantially reduce waste
generation through prevention, reduction,
recycling and reuse.
13.1 We strengthen resilience and adap-
tive capacity to climate-related hazards
and natural disasters in our operations
and in our investments.
13.2 We integrate climate change mea-
sures into our policies, strategies and
planning.
Residual CO2 emissions from own operations are compensated
for by purchasing emission quotas and investing in carbon
positive projects.
To reduce unnecessary waste, we removed all plastic water
cups, and introduced a discount for bringing your own cup to
the coffee bar.
We increased our electric car and electric bicycle fleet to make
it easier and more reliable for employees to choose low-
emissions travel where train travel is not feasible.
RESULTS
We saw reduced emissions from our headquarters, but unfor-
tunately saw an increase in air travel and a reduced sorting
rate. We will implement several initiatives, including an internal
carbon price and updating our travel policy. We started working
on re-designing the sorting stations in the cafeteria. Measures
will be followed up closely, and more initiatives implemented if
necessary.
41) So that the goal of limiting the average global heating to 1.5oC by 2100 is reached aligned with the Paris Agreement
42)The Science Based Target initiative is still working on which targets will be recognised as in line with the Paris Agreement
5757
Sustainable practices
throughout our value chain
WHY
Procurement is a key area in our sustainability performance. To
enhance efficiency and cost-effectiveness, we have increased
the use of outsourcing. This demands more rigorous proce-
dures for following up working conditions, safeguarding human
rights and managing environmental impacts in our value chain.
APPROACH
We set clear requirements to our suppliers and business part-
ners, by Storebrand’s Standard Annex for Sustainability. This is
an annex to all tender requests and supplier contracts. In addi-
tion to following our internal procurement guidelines, a key
principle is that goods and services purchased shall support our
key objective of cost effective, sustainable business operations.
Our procurement policy is based on the group’s governing
documents and associated routines43), which are revised
annually. Sustainability is an important part of evaluating and
allocating new contracts and is weighted at least 20%. Decla-
rations concerning sustainability are required during requests
for tenders. Sustainability is part of our evaluation of tenders
and allocation of contracts. Sustainability performance
requirements are specified in all contracts.
The most important and largest purchases we make are for
outsourcing of IT and business processes, health care ser-
vices, claims settlement and management of direct property
investments. We consider the areas with the greatest risk and
opportunities for influencing sustainability to be outsourcing
(including offshoring), claims settlement (cars and property),
as well as property management in general.
For larger and longer-term contracts, sustainability criteria are
used for allocation of contracts and form part of our follow-up
during the contract phase.
43) The governing documents include the “Guidelines for Outsourced Activities”, “Guidelines for Granting
Authorisations”, “Code of Ethics”, “Guidelines for Combating Corruption”, “Guidelines for Combating
Money Laundering, Terrorist Financing and Economic Crime”, “Guidelines for Dealing with Conflicts of In-
terest”, ”Event Guidelines”, “Governing Document for Information Security” and the “Governing Document
for the Processing of Personal Data”.
44) Eco-Lighthouse, EMAS, ISO14001 and Nordic Swan Ecolabel
58
GOALS AND AMBITIONS
A key objective is to ensure that the Group does not enter into
agreements with suppliers whose production processes or
products violate international agreements, national legislation
or internal policies. We shall contribute to sustainable develop-
ment and to ensuring that human rights and labour laws are
not violated.
Our ambition is to increase the share of environmentally certi-
fied procurement44) . We exceeded our 2025 goal already in 2019,
with 57% environmentally certified procurement. We have there-
fore revised our goal for 2025 providing us with an incentive to
further drive environmental stewardship in our supply chain.
8.7 We implement measures to end
modern slavery and eliminate child labour
in our value chain.
8.8 We aim to protect labour rights and
promote safe and secure working environ-
ments for all our workers, contractors and
suppliers.
12.5 We aim to substantially reduce waste
generation in our supply chain.
12.6 We encourage companies to adopt
sustainable practices.
12.7 We promote procurement practices
that are sustainable.
13.2 We integrate climate change measures
into our policies, strategies and planning.
STOREBRAND ANNUAL REPORT 2019 SECTION 6. KEEPING OUR HOUSE IN ORDER
INITIATIVES
We are a member of the United Nations Global Compact. Sup-
pliers and subcontractors must demonstrate that they follow
the same minimum standard for human rights, labour rights,
environmental management and business integrity. For pur-
chases of certain goods, or goods over a certain threshold
value, we ask suppliers to document the life cycle cost and
environmental properties of these products. All suppliers
should observe the Guidelines of the Ethical Trading Initiative
and/or the SA 8000 Standard.
We continuously follow up strategic suppliers in the largest
procurement categories. In 2019, we replaced all PCs for staff
at our head office and through ongoing dialogue with our sup-
plier, have ensured that all these PCs and all future IT hardware
purchases are TCO-certified.
RESULTS
In 2019, contracts exceeding NOK 1 million accounted for
a total spend of NOK 2.6 billion. This represents 91% of our
total spend and includes the management and development
of direct property investments. Of this volume, 57% is environ-
mentally certified in accordance with our procurement policy.
This volume is distributed between 297 suppliers, 65 of which
(22%) are certified against a recognised environmental man-
agement standard.
59
Corporate citizenship
Voluntary community activities are a strong part of the
Norwegian culture, and people from local communities or
sports teams regularly volunteer to help local sports clubs and
activity centres. Our «We cheer for» competition is one way we
can provide financial support to local and global initiatives that
are beneficial for the environment and society.
RESULTS
337 YE start-ups competed in the sustainability category. The
winning team invented a product that reduces micro-plastic
waste from washing machines.
500,000 NOK was awarded to 17 “We cheer for” initiatives
around Norway and 250,000 SEK was awarded to similar initia-
tives in Sweden.
WHY
As a leading financial institution in Norway and Sweden, our
role as a corporate citizen is important. A part of our sustain-
ability work includes being active in the society we operate in
beyond our role as a provider of financial services.
APPROACH
We have three main corporate citizenship activities: collabora-
tions and sponsorships, donations and employee volunteering.
These are aligned with our strategy, and should promote and
increase awareness about sustainability, as well as demon-
strating the connection between sustainability and financial
prosperity.
GOALS AND AMBITIONS
We aim to combine financial contributions and knowledge to
give back to society on topics related to sustainability. We also
want to enable more employees to use their skills and time on
corporate citizenship related activities.
INITIATIVES
Youth Entrepreneurship (YE) is a non-profit organisation
encouraging high school students to establish and run their
own enterprise. By initiating a sustainability award in this
program, we educate students in how to run a sustainable
business. In 2019, Storebrand and YE launched a mentor
system, where the youth could discuss business issues with a
Storebrand employee.
In 2019, for the third consecutive year, ten employees were
given an opportunity to be a mentor to a student with a minority
language background through the Catalyst Mentor Program.
Through monthly meetings at Storebrand, the students gained
insight into Norwegian working life, help in developing them-
selves and advice on school and working life. The program is
a collaboration between Storebrand and the non-profit organ-
isation Catalysts. The objective is to prevent students from
dropping out of high school.
60
STOREBRAND ANNUAL REPORT 2019 SECTION 6. KEEPING OUR HOUSE IN ORDER
Key performance indicators
For detailed KPI definitions, see page 222.
Key performance indicators
Result 2017
Result 2018
Result 2019
Goal 2020
Goal 2025
Environmentally-certified procurement45)
38%
46%
57%
Total GHG emissions46) (Scope 1-3) tCO2e / tCO2e per FTE
1484 / 0.9
1444 / 0.9
1519 / 0.92
Scope 1 emissions tCO2 / tCO2 per FTE
1.9 / 0
1.4 / 0
1.1 / 0
Scope 2 emissions tCO2 / tCO2 per FTE
320 / 0.19
201 / 0.13
179 / 0.11
Scope 3 emissions tCO2 / tCO2 per FTE
1162 / 0.71
1241 / 0.77
1339 / 0.81
tCO2e emissions per FTE from air travel47)
Energy use, main offices (kWh per m2)
Water use48), main offices (m3 per m2)
0.64
151
0.3
0.69
147
0.29
0.74
150
0.32
55%
0.8
-
-
-
-
150
0.31
60%
0.6
-
-
-
-
145
0.3
Total waste Headquarters (total tonnes / kg per FTE)
201 / 122
209 / 130
203 / 123
200 / 121
190 / 110
Amount of waste sorted for recycling, main offices
(percentage total waste)
82%
72%
72%
Paper use, main offices (total kg / kg per FTE)
58952 / 50
41138 / 37
59199 / 36
CDP rating
E-learning49) completed: ethics (total / percentage of FTE)
E-learning completed: anti-corruption (total / percentage of
FTE)
E-learning completed: anti-money laundering and financial
crime (total / percentage of FTE)
Number of complaints handled by the Norwegian Financi-
al Services Complaints Board
B
New
New
New
New
A -
New
A -
1518 / 88.9 %
100%
100%
79%
35
A
82%
30
A
New
1479 / 86.6 %
100%
100%
New
1523 / 89.2 %
100%
100%
135
192
N/A
N/A
45) New goals have been set for 2020 and 2025 on the basis of exceeding performance expectations for 2019.
46) Emissions from Storebrand Group offices in Sweden and Norway. Emissions factors have increased and we have therefore recalculated our GHG emissions for 2017 and 2018 to provide for comparability. GHG
emissions include all greenhouse gases and are therefore expressed as CO2e. We have set a goal for our total GHG emissions not for each scope.
47) We have discontinued reporting on average number of flights per FTE. This is not perceived as a relevant indicator due to the fact that a flight will have a very different impact on the environment depending on the
distance travelled. kgCO2e per FTE relating to air travel therefore replaces this indicator from 2019. CO2 emissions from air travel has been recalculated for 2017 – 2019 due to updates to emissions factors in our
travel agency´s systems.
48) Our paper consumption goal has been revised to further drive performance
49) From 2019 we start reporting for each course separately. Historical data for 2017 and 2018 refers to all courses at an aggregate level, for new employees only. Data for 2019 refers to the percentage of all permanent
employees employed throughout the year. Turnover and new recruits explains the deviation from our goal of 100%.
61
7
Shareholder
matters
63
STOREBRAND ANNUAL REPORT 2019
Shareholder matters
SHARE CAPITAL, RIGHTS ISSUES AND NUMBER OF SHARES
Shares in Storebrand are listed on the Oslo Stock Exchange
(Oslo Børs) under the ticker code STB. Storebrand ASA’s share
capital at the beginning of 2020 was 2,339.1 million kroner. The
Company has 467,813,982 shares with a nominal value of NOK
5. As of 31 December 2019, the Company owned 943,190 trea-
sury shares, which corresponds to 0.2% of the total shares. The
Company has not issued any options that can dilute the existing
share capital.
SHAREHOLDERS
Storebrand ASA is among the largest companies listed on the
Oslo Stock Exchange measured by the number of shareholders.
The Company has shareholders from almost all the munici-
palities in Norway and from 51 countries. In terms of market
capitalisation, Storebrand was the 16th largest company on the
Oslo Stock Exchange at the end of 2019.
SHARE PURCHASE SCHEME FOR EMPLOYEES
Every year since 1996, Storebrand ASA has given its employees
an opportunity to purchase shares in the Company through
a share purchase scheme. The purpose of the scheme is to
involve the employees more closely in the Company’s value
creation. In 2019, each employee was given the opportunity to
buy shares in Storebrand. 820 employees, around 47%, partici-
pated and purchased a total of 361,970 shares.
FOREIGN OWNERSHIP
As at 31 December 2019, foreign ownership totalled 56.2%,
compared to 56.3% at the end of the 2018.
TRADING VOLUME FOR SHARES IN STOREBRAND
In 2019, 335 million shares were traded, compared with 445
million in 2018. The trading volume in monetary terms was NOK
21,348 million in 2019, down from NOK 30,447 million in 2018.
Storebrand was the 14th most traded stock on the Oslo Stock
Exchange in 2019, measured in terms of NOK. In relation to the
average number of shares, the turnover rate for shares in Store-
brand was 72%.
SHARE PRICE PERFORMANCE
Shares in Storebrand yielded a total return (including dividends) of
16.9% during 2019. In the same period, the Oslo Stock Exchange’s
OSEBX Index ended at 16.5%, whereas the European Insurance Index
Beinsur yielded a total return of 24% for the corresponding period.
DIVIDEND POLICY
Storebrand’s dividend policy sates that the aim is to pay an
ordinary dividend of more than 50% of the group result after
tax and at least the same nominal amount as the previous year.
Ordinary dividends will be paid at a solvency margin of more
than 150%. If the solvency margin is above 180%, the board
intends to propose special dividends or share buy backs.
Storebrand share
Highest closing price (NOK)
Lowest closing price (NOK)
Closing price on 31/12 (NOK)
2019
73.98
50.86
69.02
2018
75.20
59.48
61.64
2017
70.45
46.97
66.9
2016
47.10
28.45
45.92
2015
35.98
23.21
34.95
2014
40.65
27.52
29.9
Market cap 31/12 (NOK million)
32,289
28,836
31,296
20,660
15,724
13,137
Annual turnover (1000s of shares)
335,202
445,614
427,632
589,322
707,870
546,156
Average daily turnover (1000s of shares)
Annual turnover (NOK million)
Rate of turnover (%)
Number of ordinary shares 31/12 (1000s of
1,346
21,348
71.7
3,094
30,477
95.3
2,450
25,359
94.9
2,780
21,249
131
2,820
20,907
157.3
2,185
19,123
121.4
shares)
467,814
467,814
467,814
449,910
449,910
449,910
Earnings per ordinary share (NOK)
Dividend per ordinary share (NOK)
Total return (%)
4.43
3.25
16.9
7.89
3.0
-4.22
5.28
2.1
49.1
4.73
1.55
31.4
2.63
0
19.7
4.61
0
-23
64
SECTION 7. SHAREHOLDER MATTERS
CAPITAL GAINS TAXATION
From 2016, new rules came into force in Norway concerning the
taxation of dividends and gains on shares held by private individ-
uals. The shareholder model entails that share dividends over the
standard dividend tax exemption multiplied up by an adjustment
factor (1.44 for the 2019 tax year) are taxed as ordinary income
for the private shareholder (the tax rate is 22%for the 2019 tax
year, which, together with the adjustment factor, gives an actual
taxation of 31.68%).
Share dividends within the standard dividend tax exemption are
tax free. Tax exemption is calculated by multiplying the amount
eligible for a dividend tax exemption by a dividend exemption
interest rate. The dividend exemption interest rate is determined
by the Directorate of Taxes in January following the previous tax
year. It is based on the average three-month interest rate on trea-
sury bills with an additional 0.5 percentage points added to it and
then reduced by the rate for general income tax.
INSIDER TRADING
As one of the country’s leading financial institutions, Storebrand
is dependent on maintaining an orderly relationship with finan-
cial markets and supervisory authorities. The Company therefore
places particular emphasis on ensuring that its routines and
guidelines satisfy the formal requirements imposed by the
authorities on securities trading. In this context, the Company
has prepared internal guidelines for insider trading and own
account trading based on the current legislation and regulations.
The Company has its own compliance system to ensure that the
guidelines are observed.
THE 20 LARGEST SHAREHOLDERS
Fund Manager
Folketrygdfondet
Allianz Global Investors
T Rowe Price Global Investments
Handelsbanken Asset Management
Danske Bank Asset Management
DNB Asset Management
Vanguard Group
KLP
M&G Investment Management
EQT Fund Management
BlackRock
OM Holding AS
Storebrand Asset Management
Deka Investment
HSBC Trinkaus & Burkhardt
Nordea Asset Management
Arrowstreet Capital
Dimensional Fund Advisors
Carnegie Investment Bank (PB)
BMO Global Asset Management (UK)
INVESTOR RELATIONS
Storebrand has a focus on comprehensive and effective com-
munication with financial markets. Maintaining a continuous
dialogue with shareholders, investors and analysts both in
Norway and abroad is a high priority. The Group has a special
Investor Relations unit. This unit is responsible for establishing
and coordinating contact between the Company and external
parties such as the stock exchange, analysts, shareholders and
other investors. All quarterly reports, press releases and pre-
sentations of interim reports are published on Storebrand’s
website: www.storebrand.com/ir.
GENERAL MEETING
Storebrand has one class of shares, each share carrying one vote.
The Company holds its Annual General Meeting each year by the
end of June. Shareholders who wish to attend the General Meeting
must notify the Company no later than 4:00 p.m. three business
days before the General Meeting. Shareholders who do not give
notice of attendance before the deadline expires will be able to
attend the General Meeting, but concede their right to vote.
SHAREHOLDERS’ CONTACT WITH THE COMPANY
Shareholders should generally contact the operator of their
securities account for questions or notification of changes,
such as change of address.
Current Rank
Shares
Ownership in %
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
51 635 337
29 360 824
23 041 438
19 065 179
18 446 682
15 987 409
13 342 814
12 447 973
11 953 592
11 700 000
9 272 853
8 517 075
8 074 788
6 779 598
6 361 427
5 933 499
5 544 992
4 970 961
4 765 300
4 745 455
11.04
6.28
4.93
4.08
3.94
3.42
2.85
2.66
2.56
2.50
1.98
1.82
1.73
1.45
1.36
1.27
1.19
1.06
1.02
1.01
65
8
Directors´ report
68 Strategy
72 Capital situation, rating & risk
74 Regulatory changes
77 Working environment and HSE
78 Group financial results
83 Official financial statements
67
Strategy
1
Buil a world class
Savings business
- support by
insurance
A
B
C
D
Leading position
Occupation Pension
Uniquely positioned
in growing retail
savings marked
Asset manager with
strong competitive
position and clear
growth opportunities
Bolt-on M&A
A. Cost discipline
B. SII capital management framework
C. Increased return
2
Manage balance
sheet and capital
0%
2018
2020
180%
150%
176%
Q4 2019
Manage for capital realease and
increasing dividends
Storebrand follows a twofold strategy, illustrated in the figure
above.
A WORLD CLASS SAVINGS BUSINESS, SUPPORTED BY
INSURANCE
The core of the strategy is to gather savings from Norwegian
and Swedish pension customers, institutional customers and
retail customers. The assets we manage are the most import-
ant revenue drivers. In addition, we aim to capitalise on the
savings and pension relationship by offering complementary
products and solutions within insurance and banking.
Storebrand’s core product, Defined Contribution pension, is
expected to continue its strong growth. In Norway, this is still a
relatively young product where the average policyholder’s age
is about 50 years. This means that premium payments received
exceed pension payments made. In Sweden, the market is
more mature, but SPP’s position as a challenger, with growth
exceeding market growth in 2019, has enabled us to increase
our market share in 2019. Increased competition in the market
has resulted in gradual margin decline, which is expected to
continue. This requires cost reductions and efficiency improve-
ments to achieve profitable growth.
A genuine commitment to a sustainable society and a strong
belief in sustainable investments form the basis of the Group’s
strategy. As a sizeable asset manager, we create long-term
returns for both shareholders and customers, while ensuring
that our business contributes to a more sustainable world.
Storebrand and SPP’s work with sustainability strengthens the
Group’s competitive position, creates value for shareholders
and positive effects on society. Read more about our sustain-
ability work in parts 1 to 6 of this report.
Due to Norwegian pension reforms over the last decade, future
pensioners are expected to receive less pension income from
the state and will have to take greater responsibility for their
financial future. We expect that the changing regulatory frame-
work will result in people saving more privately. Storebrand’s
mission in society is help our customers achieve economic
freedom and financial security. Against, this backdrop, we have
defined the strategic focus areas outlined in the figure above.
We continued to focus on our three strategic growth ambitions
in 2019: Maintain a leading position in occupational pensions,
leverage a unique position in the retail savings market and build
on our asset management with strong competitive advantages
and good growth opportunities. A broad insurance offering in
both the retail and corporate market further supports the stra-
tegic ambitions.
68
STOREBRAND ANNUAL REPORT 2019 SECTION 8. DIRECTORS´ REPORT
We have the following operational goals to succeed with our
strategic ambitions:
• Maintain a market leading position within occupational
pensions in Norway and continue the challenger role in
Sweden with double-digit annual growth within occupa-
tional pensions;
Strengthen the Norwegian retail savings position through
double-digit annual growth in savings;
•
• Maintain a leading market position within asset manage-
ment in Norway while strengthening our international
presence;
Grow annual premiums by 5% within insurance at a com-
bined ratio of 90-92%.
•
A LEADING POSITION IN OCCUPATIONAL PENSIONS
– KEY RESULTS
In 2019, we maintained our leading market position in Norwe-
gian private sector Defined Contribution pensions with a market
share of 29%. The market is experiencing increased competition
in anticipation of new Individual Savings Accounts.
In Sweden, we continued to grow our market share from 13% to
14% through strong sales performance. New digital sales tools
and successful efforts to activate individuals to transfer previ-
ously earned pensions rights to SPP were some key contributors
to the growth.
Altogether, Storebrand’s Unit Linked reserves increased by 23%
in 2019 and are expected to continue to grow by 12-15% annu-
ally under normal market conditions.
The decision to re-enter the municipal market for occupational
pensions in Norway after recent pension reforms is an oppor-
tunity to further strengthen our position as the leading pension
provider.
STRENGTHEN POSITION IN THE RETAIL SAVINGS MARKET
– KEY RESULTS
Within retail savings, the new sustainability concept “Bølge”
gained traction. Our investment solution, focusing on Social
Development Goal 7: Affordable and clean energy, had a return
of 63.7% in 2019. Our partnership with the savings app Dreams
continued to prove popular. The app had 150,000 downloads
in Norway in 2019.
The growth in the bank’s mortgage lending stabilised from pre-
vious high growth levels. The bank’s profitability increased and
ended the year with a return on equity of 10%.
In the retail market, growth initiatives within insurance distri-
bution contributed to an overall growth rate in the Insurance
segment of 5%. The growth is primarily attributed to property
and casualty (P&C insurance) in the retail market where premi-
ums grew by 10% in 2019.
COMPETITIVE ASSET MANAGEMENT SERVICES
– KEY RESULTS
Continued strong growth in occupational pensions and com-
petitive returns to customers contributed to NOK 124 billion in
increased assets under management in 2019. Our role as Nor-
way’s largest private asset manager was affirmed with NOK 831
billion under management at year end.
Return on equity*
Target: >10%
Dividend ratio**
Target: >50%
8.0%
73%
Solvency margin***
(Storebrand Group)
Target: >150%
176%
*) After tax, adjusted for amortisation of intangible assets. This report contains alternative performance measures (APM) as defined by the European Securities and Market Authority (ESMA). There is summary of the
APMs used in financial reporting at storebrand.com/ir.
**) After tax. The profit is based on reported IFRS results for the individual companies.
***) Including transitional rules.
69
During the year, we increased the focus on ESG-enhanced
investment solutions and launched several funds for interna-
tional sales through Skagen’s existing distribution channels in
Europe. To complement our institutional offering of alternative
asset classes, we also acquired the private equity funds-of-
funds provider Cubera. Storebrand was in 2019 identified as
an investor with excellent responsible investment practices in
PRI Leader’s Group and the only Norwegian asset manager to
receive this recognition.
DIVIDEND FOR 2019
The board has established a framework for capital management
that links dividends to the solvency ratio. The dividend policy
shall reflect the growth in fee-based earnings, more volatile
financial market earnings and future capital release from the
guaranteed business that is in long term run-off. The Board’s
ambition is to pay a gradually and growing ordinary dividend.
In addition, the expected release of capital will increase returns
over time, primarily in the form of share buybacks.
Storebrand’s dividend policy:
Storebrand aims to pay a dividend of more than
50% of Group result after tax. The Board of
Directors’ ambition is to pay ordinary dividends
per share of at least the same nominal amount
as the previous year. Ordinary dividends are
subject to a sustainable solvency margin above
150%. If the solvency margin is above 180%, the
Board of Directors intends to propose special
dividends or share buybacks.
The implementation of a common technological platform for
our brands Storebrand, SKAGEN, SPP Fonder and Delphi was
completed during the year. This will contribute to greater effi-
ciency and enable further scalable growth in the future.
MANAGE BALANCE SHEET AND CAPITAL
Historically, the core product used to be Defined Benefit pen-
sions with a guaranteed rate of return. Guaranteed pensions
are now in long-term decline and mostly closed for new busi-
ness. Just over half of the pension assets managed, or NOK
263 billion of reserves, still carry a guaranteed rate of return.
Despite volatile interest rate markets in 2019, we strengthened
our solvency ratio and delivered returns above the guaranteed
rate. This has helped build additional customer buffers against
potential future market shocks. The average policyholder with
such a contract is over 62 years old, which means that the
majority of these pensions will soon be under payment. These
products are managed with strong cost control and a disci-
plined use of capital and risk taking in order to increase return
to shareholders and customers.
The Board proposes to the Annual General Meeting an ordinary
dividend of NOK 1,517 million, corresponding to an ordinary
dividend of NOK 3.25 per share for 2019.
OUTLOOK
The coming years will see important developments in the
market for pensions, especially with the opportunity to enter
the market for public sector pensions in 2020 and with Individ-
ual Pension Accounts being introduced in Norway in 2021. An
overwhelming trend towards sustainable finance is an opportu-
nity for Storebrand to capitalise on its long history of sustainable
investments. Specific developments in the regulatory landscape
and risks are described in separate chapters below.
Market Performance
Financial market developments impact Storebrand’s solvency
margin. Higher interest rates increase the solvency ratio and
makes it easier to achieve returns above the guaranteed rate.
Defined Contribution pension savings have large exposures to
stocks meaning market movements will impact the fee income
earned on assets under management. Currency movements
between the Norwegian and Swedish krone affect the reported
balance and results in SPP on a consolidated level.
Trade tensions and weak economic indicators globally contrib-
uted to financial market uncertainty during 2019. While stock
markets rebounded significantly during the year after sharp
declines towards the end of 2018, global as well as Norwegian
and Swedish long-term interest rates were volatile, ending the
year at a lower level than at the start. However, the Norwegian
and Swedish central banks increased rates in 2019, resulting in
higher short-term rates compared with levels at the start of the
year. The Norwegian central bank forecasts a stable policy rate.
Market risks are managed within a well-established risk frame-
work, described in more detail in the section on risk below.
70
STOREBRAND ANNUAL REPORT 2019 SECTION 8. DIRECTORS´ REPORT
Financial Performance
Financial performance in Storebrand is reported by business
segment. The Savings business is expected to continue to grow
in assets under management. Growth in assets from occupa-
tional pensions in Sweden and Norway is expected at 12-15%
annually. We aim to achieve additional growth in Asset Man-
agement from the sale of our investment solutions to external
clients. This is supported by the newly completed distribution
set up for international sale of funds and increased focus on
co-investment opportunities into alternative asset classes.
Margins are likely to continue to gradually decline in line with a
general trend in the industry and with the introduction of Indi-
vidual Pension Accounts. Efforts to mitigate the effect include
strong cost control, a focus on alternative asset classes and
alternative pricing models.
Our loyalty programme for employees of companies with
an occupational pension plan with Storebrand is important
to succeed in the retail market. Our efforts, enabled by new
digital solutions for our customers, are expected to foster
loyalty to Storebrand and contribute to further growth in both
retail savings and bank lending as well as growth in the Insur-
ance business.
In the insurance business, we aim at 5% annual growth in
portfolio premiums with a combined ratio of 90-92%. Efforts
to increase the sale of P&C and other individual risk products
have been successful. The profitability of the retail and corpo-
rate markets is considered to be satisfactory in general.
The Guaranteed Pension segment has been in long-term
decline and flat growth in reserves is expected over several
years before the reserves start to fall. Pensions are largely
under payment, but the guaranteed return on reserves and
continued build-up of buffers contribute to the flat develop-
ment. Paid-up policies are still increasing as companies convert
their old Defined Benefit plans to Defined Contribution plans
and policyholders are entering retirement.
The Guaranteed segment remains a significant result contrib-
utor, albeit with declining importance and limited potential
in the prevailing low-rate environment. Success in the public
sector pension market will enable new profitable business
within the segment.
We have maintained nominally flat costs between 2012 and
2019. This is despite assets under management nearly dou-
bling in the period and with continued investments in selected
growth initiatives. This implies a reduction in real costs. The cost
ambition is excluding any performance related costs in Asset
Management or potential acquisitions. Lower cost through
automation, digitalisation and partnerships are expected to
cover normal investments in business growth and inflation the
coming years.
Capital Management
The solvency ratio at the end of the fourth quarter was 176%,
against our target of 150%. This means that the Group’s solidity
is robust. We expect a gradual improvement of approximately
5 percentage points net of dividends in the solvency margin in
the coming years form our ongoing business. Reduced capital
requirements in the Guaranteed business may improve the
solvency further. Financial market volatility and changes to regu-
latory requirements may result in short-term movements in the
solvency level. The Board’s ambition is to pay a gradually and
growing ordinary dividend. When the solvency margin reaches
180%, the board intends to initiate a share buyback program.
The purpose of the buyback program is to return excess capital
released from the guaranteed liabilities that are in long-term
run-off. A review of the solvency level and related share buy-
backs will normally be conducted in connection with first half
and full year results, starting first half 2020.
71
Capital situation, rating and risk
CAPITAL SITUATION
We adapt the level of equity and debt in the Group continu-
ously and systematically. The level is adjusted for financial
risk and capital requirements. The growth and composition of
business segments are important drivers behind the need for
capital. Capital management is designed to ensure an efficient
capital structure and maintain an appropriate balance between
internal targets and regulatory requirements.
The Group’s target is to have a solvency margin in accordance
with Solvency II of at least 150%, including use of the transi-
tional rules. The solvency margin for the Storebrand Group was
estimated at 176% at the end of 2019, including transitional
rules. Without the transitional rules, the solvency margin was
174%. Storebrand uses the standard model for the calculation
of Solvency II.
Good risk management and a positive impact of the regulatory
adjustment mechanisms in the solvency regulations more than
compensate for challenging financial markets. The solvency
margin without transitional rules strengthened 2 percentage
points in 2019. The value of the transitional rules remained
marginal throughout the year.
Storebrand Life Insurance Group’s solidity capital consists
of equity, subordinated loan capital, market value adjustment
reserves, additional statutory reserves, conditional bonuses
and risk equalisation reserves. The solidity capital strength-
ened by NOK 3.4 billion to NOK 62.4 billion in 2019. The market
value adjustment reserve increased by NOK 3.3 billion due to
good market performance and amounted to NOK 5.5 billion by
the end of the year. Conditional bonuses increased by NOK 1.1
billion and amounted to NOK 9.3 billion. Additional statutory
reserves increased NOK 0.5 billion due to preliminary applica-
tion of the investment return and amounted to NOK 9.0 billion
at the end of the year. The excess value of bonds and loans that
are assessed at amortised cost decreased by NOK 0.3 billion
due to increases in interest rates and amounted to NOK 4.7
billion as at 31 December 2019. The excess value of bonds and
loans at amortised cost is not included in the financial state-
ments.
50) For detailed information about our work on climate risk, please see pages 19-23.
72
The Storebrand Bank Group had pure core capital adequacy
of 17.5% and capital adequacy of 19.6% at the end of 2019.
The Bank Group has adapted to the new capital requirements.
The company has satisfactory capital adequacy and liquidity
based on its business activities. The lending portfolio consists
primarily of low-risk home mortgages with an average LTV
(loan-to-value) of 57%.
Storebrand ASA (holding) aims to have liquid assets on par
with the Company’s interest-bearing debt and to fund portions
of the liquidity reserve by equity over time. It held liquid assets
of NOK 3.3 billion at the end of the year. Liquid assets consist
primarily of short-term fixed income securities with a good
credit rating. Storebrand ASA’s (holding) total interest-bearing
liabilities were NOK 1.3 billion at the end of the year. This cor-
responds to a net liquidity ratio of 9.8%. The next maturity date
for bond debt for Storebrand ASA is in May 2020. In addition to
the liquidity portfolio, the Company has an unused credit facil-
ity of EUR 200 million, which expires in December 2023, with
the option of an extension for another two years. Storebrand
ASA recognised dividends and group contributions from sub-
sidiaries of NOK 3,230 million for 2019. Dividends allocated to
shareholders amounted to NOK 1,517 million.
RATING
Four companies in the Storebrand Group issue debt securities.
All four companies are rated by the credit rating agency S&P
Global. Storebrand Livsforsikring AS, the main operating entity,
aims for at least an A- rating. In July 2019, the A- rating of Store-
brand Livsforsikring AS and Storebrand Bank ASA was affirmed
with a stable outlook. Storebrand Boligkreditt AS is rated AAA
and the holding company Storebrand ASA is rated BBB.
RISK
Our risk management framework is designed to help protect
customers, owners, employees and other stakeholders from
adverse events or losses and covers all risks to which Store-
brand is or may be exposed. Our main risks are business risk,
financial market risk, insurance risk, counterparty risk, opera-
tional risk, climate risk50) and liquidity risk.
STOREBRAND ANNUAL REPORT 2019 SECTION 8. DIRECTORS´ REPORT
The Board of Directors of Storebrand ASA and the Boards of
subsidiaries adopt a risk appetite and risk strategy at least
annually. Risk-taking should contribute to achieving our stra-
tegic and commercial goals, including customers receiving a
competitive return on their pension assets and Storebrand
receiving adequate payment for assuming risk. Risk appetite
is defined as the overall risk level and what types of risk are
deemed acceptable. The guidelines from the risk appetite are
incorporated in our risk strategy, which sets the targets and
frameworks. Based on these, more detailed strategies are
compiled for different risk categories. Storebrand publishes an
annual Solvency and Financial Condition Report (SFCR) which
helps customers and other stakeholders understand the risks
in the business and how these are managed.
Overall, 2019 saw a positive development in reported incidents.
The number of reported incidents were 6% fewer compared to
2018 and the number of “high” risk incidents decreased by 8%.
The risk picture differs between business units. The main risks
are described per business unit below.
Insurance
Insurance consists of risk products and property and casualty
insurance. The price can normally be adjusted on an annual
basis if the risk changes.
The greatest risk is disability risk. More persons than expected
may be disabled and/or fewer disabled persons will be able
to work again. Some policies provide a pay-out in the event of
death, but Storebrand’s risk from this is limited.
In property and casualty insurance, most of the risk is linked to
developments in claims payments from car and home insur-
ance. Climate change is one factor which may affect future
claims (see page 21-23).
Savings
Savings consists of unit-linked insurance and other non-guar-
anteed pensions, the asset management business and the
banking business.
For unit-linked insurance, the customer bears the financial
market risk. The disbursements are generally time limited,
and Storebrand bears low risk from increased life expectancy.
For Storebrand, the risk from unit-linked insurance is primarily
changes in future income or cost.
The asset management business offers active and passive
management, as well as management of fund-in-fund struc-
tures. Operational risks, including regulatory compliance, are
the greatest risks.
The greatest risks for the banking business are credit risk and
liquidity risk. Virtually the entire loan portfolio is secured by
mortgages, limiting our credit risk.
Guaranteed Pension
Guaranteed Pension encompasses savings and pension prod-
ucts with guaranteed interest rates. The greatest risks are
financial market risk and longevity risk.
A common feature of the products is that Storebrand guaran-
tees a minimum return. In Norway, the return must exceed the
guarantee in each year, while in Sweden it is enough to achieve
the guaranteed return on average over time.
The guaranteed insurance liabilities are sensitive to changes in
interest rates, where lower rates will increase the value of the
liabilities and make it harder to achieve the guaranteed rate.
We aim to control the risk through the investments, but there is
a residual risk from lower interest rates.
The traditional guaranteed products are closed for new busi-
ness, but there is a large back-book of reserves. New premiums
are mainly in Defined Contribution pensions (unit linked) or
hybrid schemes with zero percent guarantee.
Other
The Other unit encompasses the holding company Storebrand
ASA, as well as the company portfolios and smaller subsidiaries
of Storebrand Life Insurance and SPP. The assets in Storebrand
ASA and the company portfolios are invested at low risk, primar-
ily in investment grade short-term interest-bearing securities.
Below are the most significant regulatory changes and their
possible effect on Storebrand.
73
Regulatory changes
EUROPEAN REGULATIONS
Solvency II 2020 review
The European Insurance and Occupational Pension Authority
(EIOPA) has launched a public consultation on changes in the
Solvency II standard model. EIOPA has proposed changes in
the interest rate risk module that appear to increase the sol-
vency capital requirement for NOK and SEK. EIOPA will present
final proposals to the Commission in June 2020, and final con-
clusions drawn by the Commission, the Parliament and the
Council in 2022.
Sustainable finance
The European Commission is working on regulations for sus-
tainable finance. This is in line with the action plan for the
financing of sustainable growth and aims to contribute to more
investments in sustainable businesses, as well as increasing
the robustness of the financial system with respect to climate-
related risk.
Regulations will be introduced in three main areas:
1. A uniform taxonomy defining sustainable economic activities.
2. Requirements for disclosure on sustainable investments
and sustainability risk.
3. Reference values for carbon emissions (carbon benchmarks).
The new EU regulations will establish standards for sustainable
asset management and stipulate requirements for report-
ing and customer information. We consider this a positive
step, providing improved rigour to financial and non-financial
disclosure, better information to key stakeholders, as well as
improved benchmarking through comparable data across the
finance sector. Our current level of disclosure is deemed to be
enough to meet the requirements of the proposed regulations,
and as such do not represent a key risk in terms of compliance.
The Commission will consider developing a labelling scheme
(EU Ecolabel) for sustainable investments based on the taxon-
omy. The taxonomy will come into force in December 2021.
NORWEGIAN REGULATIONS
Individual Pension Accounts
In April 2019 the Norwegian parliament passed legislation that
will introduce individual pension accounts in the private sector
Direct Contributions (DC) market. This is expected to come into
force in 2021. Individual pension accounts will consolidate the
DC market by transferring pension capital certificates from pre-
vious employers to a single pension account with the current
employer’s pension provider. This transfer will occur automat-
ically, unless the employee chooses to opt out. Employees can
choose to transfer their pension earnings to a provider of own
choice.
The employer will cover asset management cost for contri-
butions during current employment (active part) while the
employee will cover asset management costs for previous
earnings (pension capital certificates that are transferred to the
new pension account).
A key aim of the reform is to reduce the costs associated with
the administration of pension contributions from previous
employers. This will in turn entail lower income for the provid-
ers.
The reform will initially transfer pension contributions from
a retail market for Pension capital certificates to a corporate
market for active Defined Contribution schemes. We are well
positioned in this market. Over time, the individual’s option to
transfer the account to a provider of own choice may contrib-
ute to further individualisation of the market for pensions. This
may require Storebrand to further strengthen its position in the
retail market.
Transfers require new digital infrastructure for handling opt-
outs and exchanging information and payments between
companies. It is important for Storebrand to seek solutions that
ensure a good implementation of the reform, while at the same
time limiting additional administrative costs.
We are part of a multi-stakeholder Implementation Committee
established by the Ministry of Finance.
74
STOREBRAND ANNUAL REPORT 2019 SECTION 8. DIRECTORS´ REPORT
Public service pensions
New public sector occupational pensions will be introduced
from 2020. We provide administration and asset management
services for municipal pension funds and decided to enter the
insured municipal pension market in 2019.
When collective guaranteed pension contracts are transferred
to other providers, the provider which the customer transfers
from can withhold market value adjustment reserves up to
two per cent of technical provisions. The Ministry of Finance
has abolished this regulation with effect from December 2019.
Storebrand views this as having a mainly positive impact on
the market for public sector pensions, facilitating competition
by creating a more level playing field and increasing transfer
values for municipal customers moving from KLP.
Contractual pensions (AFP)
The Confederation of Trade Unions (LO) and Confederation of
Norwegian Enterprise (NHO) are working on changes to the AFP
scheme, as a basis for the negotiations during the annual wage
settlement in the spring of 2020. Changes in the collectively
agreed AFP scheme, making this a more predictable benefit for
employees, could have an impact on demand for regular occu-
pational pension.
Regulations for guaranteed products
The Ministry of Finance is considering proposals from the
Financial Supervisory Authority (FSA) regarding changes in guar-
anteed pension regulations. The FSA proposals follow up from
a Working Group report on guaranteed pensions published in
September 2018. The Working Group assessed the regulations
for profit sharing and buffer building, as well as rules regulating
the transfer of pension assets between providers:
•
The opportunity for companies to build up additional stat-
utory provisions separately for individual contracts.
•
• Merging the additional statutory reserves and the market
value adjustment reserve into a new customer-distributed
buffer reserve that could also cover negative returns.
The opportunity for the company to fulfil annual interest
rate guarantees with borrowed equity.
The opportunity for customers to choose faster disburse-
ments for small paid-up policies.
The opportunity for the companies to compensate custom-
ers when transitioning to paid-up policies with investment
options.
•
•
The FSA also proposed removing the ability to book fixed
income investments at amortised cost. Storebrand, alongside
other pension providers, has advocated against this proposal.
In the consultation paper, the Ministry of Finance points to the
arguments against this and emphasises that such a change
only will be considered should it prove to be significantly favor-
able to the customers.
The Ministry of Finance will decide on which proposals to put
forward to parliament after a public consultation which ends
in April 2020.
75
SWEDISH REGULATIONS
Official report on the premium pension (PPM) of the
national retirement pension system
The second report on the PPM was published in November
2019. From January 2021, a new law will require funds on the
platform to be selected through a procurement procedure
under new criteria for fees, quality and sustainability. The
report proposes Sweden’s AP7 fund to be given the authority
to manage the procurement proceedings in addition to man-
aging the default investment option in the PPM system and run
under the new name “Authority for the Premium Pension Fund
Management”. The procurements are expected to start in 2021
and the reform shall be fully implemented by 2024. The PPM
fund platform is a large distribution channel for Storebrand
funds. The new fund platform is expected to offer fewer funds
than what is available on the platform today.
New transfer market regulation
A new regulation with the purpose of increasing the transfer-
ability of pensions policies came into force in January 2020. The
new rules limit the amount of fees that can be charged upon
transferring pensions rights to competing providers. In accor-
dance with the new regulation, SPP adjusted its transfer fees.
SPP is a proponent of increased transfer rights and welcomes
the new regulation. The Swedish government has been asked
by the parliament to propose further measures that could lead
to further adjustments in the fee models.
76
STOREBRAND ANNUAL REPORT 2019 Working environment and HSE
Every year managers must confirm in writing that they have
discussed ethics and ethical dilemmas, information security,
financial crime and HSE in departmental meetings.
There was one injury to a staff member in 2019. No damage
to property was reported, and no accidents were otherwise
reported in the Storebrand Group in 2019.
Storebrand’s absence due to illness has been at a stable low
level for many years. Absence due to illness was 3.1% in Norway
and 2.5% in the Swedish business. Storebrand has been an
“inclusive workplace” (IA) company since 2002, and the Group’s
managers have over the years built up routines for the fol-
low-up of employees who are ill. All managers with Norwegian
employees must complete a mandatory HSE course, in which
following up illness is part of the training.
Storebrand’s work in this area is elaborated on in Chapter 5 –
People and Chapter 6 – Keeping Own House in Order.
77
Group financial results for 2019
The Storebrand Group’s annual financial statements have
been prepared in accordance with the International Finan-
cial Reporting Standards (IFRS). We the Board of Storebrand
ASA confirm that we meet the conditions for preparing finan-
cial statements on the basis of a going concern, pursuant to
Norwegian accounting legislation.
Our financial result is reported by business segment: Savings,
Insurance, Guaranteed Pension and Other as well as on a
consolidated Group level.
The insurance result had a combined ratio of 91% (82%), in line
with target. Higher disability claims in 2019 and the dissolution
of reserves in a 2018 explain the development in the result.
Operational costs amounted to NOK 4,015 million (NOK 3,786),
but adjusted for performance related costs, the consolidation
of Cubera and restructuring costs, the Group’s underlying oper-
ational costs were in line with the cost target. Our goal is to
keep the costs nominally flat between 2012 to 2020, which will
entail a reduction in the real costs.
Overall, the operating profit amounted to NOK 2,298 mil-
lion (NOK 2,516 million). The financial items and risk result
increased 15% due to positive developments in financial mar-
kets compared to 2018.
Amortisation of intangible assets amounted to NOK 444 million
(NOK 360 million). The increase stems partly from the acqui-
sition of Cubera. Ordinary depreciation of intangible assets is
expected to be around NOK 110 million per quarter in 2020.
The Group profit before tax was NOK 2,593 million (2,799 mil-
lion) resulting in a tax of NOK 511 million (NOK -898 million).
In 2018, the booked tax income was a result of transitional
effects related to new tax legislation in Norway. The effective
tax rate is influenced by the different tax rates in the countries
Storebrand has operations in. The tax rate is estimated to be
between 21-23% for 2020. For more information on tax and
uncertain tax positions, see Note 26. Storebrand has a policy
for responsible taxation and publishes a separate tax trans-
parency report52).
GROUP PROFIT
•
•
•
Group profit51) NOK 3,037 million
Solvency margin of 176%
The Board proposes a dividend of NOK 3.25 per share
NOK million
Fee and administration income
Insurance result
Operational cost
Operating profit
2019
2018
5,308
5,011
1,005
1,291
-4,015
-3,786
2,298
2,516
Financial items and risk result life
739
642
Profit before amortisation
3,037
3,158
Amortisation and write-downs of
-444
-360
intangible assets
Profit before tax
Tax
Profit after tax
2,593
2,799
-511
898
2,082
3,697
Storebrand achieved a group profit before amortisation of
NOK 3,037 million (3,158 million). Group profit after tax was
NOK 2,082 million (3,697 million). The figures in brackets show
the comparative figures for the same period last year.
Fee and administration income increased by 6%. The under-
lying income performance is marked by growth in Defined
Contribution occupational pensions. Improved relative perfor-
mance in funds with performance fees contributes as well.
51) Profit before amortisation and taxes
52) See separate report on our website for more information
78
STOREBRAND ANNUAL REPORT 2019
SECTION 8. DIRECTORS´ REPORT
SAVINGS
The Savings business had a year with strong growth in assets
under management fuelled by good market returns, growth in
new business and improved relative fund performance.
Return on standard defined contribution pension
portfolios in the ITP scheme
NOK million
2019
2018
Fee and administration income
3,996
3,709
Operational cost
Operating profit
-2,621
-2,405
1,375
1,303
Financial items and risk result life
-11
-46
Profit before amortisation
1,364
1,257
Financial Performance
Total fee and administration income increased by 8% to NOK
3,996 million (NOK 3,709 million). The increase is attributed
to underlying growth from volume growth, new business and
higher savings rates as well as improved relative fund perfor-
mance in funds with performance fees. Increased competition
contributes to moderate margin pressure both for the Norwe-
gian and the Swedish Unit Linked products. The bank achieved a
higher net interest margins of 1.26% (1.22%) for mortgage lend-
ing to the retail market compared to the previous year. In Asset
Management, growth in index-based products slowly leads to
lower gross margins.
Profit before amortisation grew by 9% and amounted to NOK
1,364 million (1,257 million). Operational costs increased slightly
in 2019 – partly explained by higher performance related costs
but also by underlying growth in the business. The recent acqui-
sition of Cubera is included with a profit of NOK 37 million.
Balance sheet and market performance
Unit Linked premiums grew by 7% and amounted to NOK 17.2 bil-
lion. The total reserves (assets under management) in Unit Linked
increased by 41 billion (23%) compared to the previous year and
amounted to NOK 220 billion at the end of the 2019. Growth
was driven by new sales, higher savings rates, growth from wage
adjustments and good market returns. See the graph above.
20.9%
23.0%
14.8%
7.9%
6.9%
10.5%
8.2%
12.8%
11.3%
8.0%
5.1%
4.7%
3.4%
3.0%
2.5%
Extra Cautious
Cautious
Moderate
Aggressive
Extra Aggressive
2019
3 years
Since inception
In Norway, Storebrand retained its position as the market leader
in Defined Contribution schemes, with a 29% market share. SPP
is the fourth largest provider of non-unionised occupational pen-
sions with a market share of 14%.
Assets under management in Storebrand Asset Management
increased by NOK 124 billion or 18% compared to the previous
year. This includes the consolidation of Cubera with NOK 20 bil-
lion. The increase was attributed to positive inflows and financial
markets in 2019. At the end of year, assets under management
amounted to NOK 831 billion divided into portfolios for Storebrand
Life Insurance and SPP, institutional mandates and distributors, as
well as retail savings.
Key figures – Savings
NOK million
Unit Linked reserves
Unit Linked premiums
AuM Assets Management
Retail Market Lending
2019
2018
219,793
179,299
17,168
16,021
831,204
707,297
48,161
46,526
PENSION SAVINGS NORWAY
296 BN
INSTITUTIONAL MANDATES
AND DISTRIBUTORS*
293 BN
PENSION SAVINGS SWEDEN
AUM
831BN
NOK
DIRECT RETAIL SAVINGS NORWAY
168 BN
42 BN
*)Company capital of NOK 31 billion is not allocated to any of the customer segments but included in the sum
79
INSURANCE
Insurance delivered an overall combined ratio and premium
growth in in line with our ambition, supported by successful
growth initiatives in the retail market. Higher disability claims
in 2019 as opposed to a positive effect from dissolution of
reserves in 2018 resulted in a lower insurance result in 2019.
Key figures – Insurance
Key figures
Claims ratio
Cost ratio
Combined ratio
2019
74%
17%
91%
2018
66%
16%
82%
Balance sheet and market performance
The Insurance segment offers a broad range of products to the
retail market in Norway, as well as to the corporate market in
both Norway and Sweden. The total premiums written for the
segment at the end of 2019 amounted to NOK 4.7 billion (NOK
4.5 billion), an increase of 5% in line with our growth target. Of
these, NOK 1.9 billion (NOK 1.7 billion) is in the retail market
and NOK 2.8 billion (NOK 2.8 billion) in the corporate market.
Our growth in the retail market has increased both within P&C
and Individual Life due to a strong contribution from sales
agents. In combination with our own distribution channels, this
should contribute to profitable growth. Margins within the seg-
ment remain attractive and Storebrand aims to continue grow
its market share from today’s small levels.
The corporate market is competitive and more mature with a
strong focus on price. In Sweden, the disability trend has been
declining for a long time, which has resulted in better results.
Health insurance is a growing market with good profitability
and where Storebrand is one of the market leaders. Storebrand
is a relatively small provider in the market for Group life insur-
ance. The claims ratio has been high, but price increases are
implemented as of January 2020 in order to improve the result.
NOK million
Insurance premiums f.o.a.
Claims f.o.a.
Operational cost
Operating profit
Financial result
Result before amortisation
2019
2018
3,909
3,854
-2,904
-2,562
-648
-614
357
677
83
71
439
748
Financial performance
The Insurance profit was NOK 439 million (748 million), with a
total combined ratio of 91% (82%) in line with our profitability
target. Insurance premiums for own account increased by 1.4%
as a result of new growth initiatives in the retail market. The pre-
mium level was stable in the corporate market. The lower result
and higher combined ratio is due to higher disability claims in
2019, as opposed to 2018 which was positively affected by dis-
solution of reserves. The underlying profitability and efficiency
were good and showed satisfactory performance.
The combined risk result gave a claims ratio of 74% (66%) and
the underlying risk performance was satisfying. P&C insurance
delivered a good underlying result and was further strength-
ened by dissolution gains. Individual life maintained good
profitability. Higher disability claims increase the claims ratio in
Individual life and Group life, while increased price competition
weakened the result in Norwegian Pension related disability
insurance. The result for the Swedish risk products was good
and explained by a lower claims ratio.
The cost percentage was 17% (16%). The increase is mainly
explained by increased commission fees to the sales agents.
The investment portfolio of Insurance in Norway amounted to
NOK 8.3 billion (NOK 8.1 billion), which is primarily invested in
fixed income securities with a short or medium duration. Finan-
cial returns increased in 2019 due to higher short-term rates.
80
STOREBRAND ANNUAL REPORT 2019
SECTION 8. DIRECTORS´ REPORT
GUARANTEED PENSION
Guaranteed Pension delivered a strong financial and risk result
supported by positive market developments.
NOK million
2019
2018
Fee and administration income
1,475
1,440
Operating costs
Operating results
Risk result life & pensions
Net profit sharing
-819
-816
657
624
215
191
157
333
Result before amortisation
1,029
1,148
Financial performance
The profit for Guaranteed Pension amounted to NOK 1,029
million (NOK 1,148 million). While the operating profit and risk
result improved in 2019, net profit sharing in 2019 was lower
than in 2018 due to dissolution of reserves of NOK 200 million
last year.
Fee and administration income in 2019 was in line with the
previous year and amounted to NOK 1,475 million (NOK 1,440
million). This is consistent with the fact that the products are
in long-term decline. Norwegian Paid-up policies had a 12%
increase in income in 2019, while SPP and Norwegian Defined
Benefit experienced 2% and -3% growth, respectively. Operat-
ing costs remained flat compared to 2018 and have declined
over time, as a result of the area being in long-term decline.
The risk result was NOK 215 million (NOK 191 million) in 2019,
largely stemming from the Norwegian paid-up policy portfolio
due to good disability results and reactivation.
The profit-sharing result was NOK 157 million (NOK 333 million)
in 2019. The result has essentially been generated in SPP. The
lower result in 2019 is explained by dissolution of reserves of
NOK 200 million in 2018. Positive investment returns resulted in
lower deferred capital contributions (DCC) in 2019.
Balance sheet and market performance
The products are in long-term decline, but customer reserves
for Guaranteed Pension amounted to NOK 263 billion at the
end of 2019, which is 1% higher than at the start of the year.
This is because the return on policies exceeded the net flow of
premiums and pension claims. The net flow amounted to NOK
-8.2 billion in 2019. The Norwegian Paid-up policy portfolio
grew as Defined Benefit contracts eventually become Paid-up
policies and amounted to NOK 137 billion (NOK 133 billion) at
the end of 2019.
All products achieved a return above the guaranteed rate on
average in 2019, resulting in 16% growth in buffer capital. In
Norway, the average value adjusted return was 5.5% while the
average guaranteed rate was 3.2%. In Sweden, the average
value adjusted return was 7.9% while the average guaranteed
rate was 2.9%.
Key figures – Guaranteed Pension
(NOK mill.)
Guaranteed reserves
2019
2018
263,185
260,573
Guaranteed reserves in % of total reserves
54.5%
59.2%
Net transfers
Buffer capital in % of customer reserves
Norway
-103
8.6%
-165
6.4%
Buffer capital in % of customer reserves
10.7%
8.7%
Sweden
81
OTHER
Satisfactory returns in company portfolios contributed to a
positive financial result in the Other segment.
Results for Other53)
(NOK mill.)
2019
2018
Fee and administration income
51
102
Operating costs
Operating profit
-143
-190
-91
-89
Financial results and risk results life
296
128
Result before amortisation
205
40
Eliminations
NOK million
2019
2018
Fee and administration income
-215
-239
Operating costs
Financial result
Result before amortisation
215
239
-35
-35
Financial performance
The profit before amortisation in the Other segment was NOK
205 million (NOK 5 million) in 2019. The Fee and administration
income as well as the operational costs declined in 2019 due
the sale of Nordben and the run-off of the corporate bank.
The Storebrand Life Insurance Group is funded by a combina-
tion of equity and subordinated loans. Assuming the current
interest rate at the end of 2019, interest expenses are expected
to be approximately NOK 90 million quarterly.
The financial result includes the return on the company
portfolios in Storebrand Life Insurance and SPP, as well as
the financial result of Storebrand ASA. The financial result is
affected by the low interest rate level throughout the year, but
tightened credit spreads contributed to positive returns in the
company portfolios.
53) Excludes eliminations. The segment result consists of the sum total of results for the business activities in Other plus eliminations.
82
STOREBRAND ANNUAL REPORT 2019 SECTION 8. DIRECTORS´ REPORT
Official Financial Statements of Storebrand
ASA
ALLOCATION OF THE PROFIT FOR THE YEAR
Storebrand ASA reported a profit of NOK 2,952 million for 2019,
compared with NOK 3,963 million for 2018.
The Board proposes a dividend of NOK 1,517 million to the
General Meeting, corresponding to an ordinary dividend of
NOK 3.25 per share for 2019 financial year.
Allocation of the profit for the year for Storebrand ASA
NOK million
Profit for the year
Allocations
Transferred to other reserves
Provision for shared dividends
Total allocations
2019
2,952
1,435
1,517
2,952
2018
3,963
2,561
1,402
3,963
Storebrand ASA is the holding company in the Storebrand
Group, and the accounts have been prepared in accordance
with the Norwegian Accounting Act, the generally accepted
accounting policies in Norway and the Norwegian Regulations
relating to annual accounts for insurance companies.
Storebrand ASA reported a pre-tax profit of NOK 3,125 million in
2019, compared with NOK 4,074 million in 2018. Group contribu-
tions from investments in subsidiaries amounted to NOK 3,230
million, compared with NOK 4,131 million for the previous year.
Income statement for Storebrand ASA
NOK million
Group contribution and dividends
Net financial items
Operating expenses
Pre-tax profit/loss
Tax
Profit for the year
2019
3,230
-3
-102
3,125
-173
2,952
2018
4,131
28
-86
4,074
-111
3,963
Statement of comprehensive income
NOK million
Profit for the year
2019
2,952
2018
3,963
Other result elements not to be classified
to profit/loss
Change in actuarial gains or losses
Tax on other income statement components
Total other income statement elements
-8
2
-6
9
-2
6
Total comprehensive income
2,946
3,969
Lysaker, 11 February 2020
Board of Directors of Storebrand ASA
Didrik Munch
Chairman of the Board
Karin Bing Orgland
Laila S. Dahlen
Liv Sandbæk
Martin Skancke
Karl Sandlund
Fredrik Törnqvist
Magnus Gard
Odd Arild Grefstad
Group Chief Executive Officer
83
9
Annual Accounts
and Notes
Income statement
Storebrand Group
86
87 Statement of total comprehensive income
88 Statement of finacial position
90 Statement of changes in equity
91 Statement of cash flow
93 Notes
Storebrand ASA
171 Income statement
171 Statement of total comprehensive income
172 Statement of finacial position
173 Statement of changes in equity
174 Statement of cash flow
175 Notes
188 Declaration by member of the Board and the CEO
189 Independent auditor´s report
8585
STOREBRAND GROUP
Income statement
NOK million
Premium income
Net income from financial assets and properties for the company:
- equities and other units at fair value
- bonds and other fixed-income securities at fair value
- financial derivatives at fair value
- loans at fair value
- bonds at amortised cost
- loans at amortised cost
- profit from investments in associated companies/joint controlled operation
Net income from financial assets and properties for the customers:
- equities and other units at fair value
- bonds and other fixed-income securities at fair value
- financial derivatives at fair value
- loans at fair value
- bonds at amortised cost
- loans at amortised cost
- properties
- profit from investments in associated companies
Other income
Total income
Insurance claims
Change in insurance liabilities
Change in capital buffer
Operating expenses
Other expenses
Interest expenses
Total expenses before amortisation and write-downs
Group profit before amortisation and write-downs
Amortisation and write-downs of intangible assets
Group pre-tax profit
Tax expenses
Profit/loss for the year
Profit/loss for the year due to:
Share of profit for the period - shareholders
Share of profit for the period - hybrid capital investors
Share of profit for the period - minority
Total
Earnings per ordinary share (NOK)
Average number of shares as basis for calculation (million)
There is no dilution of the shares
86
Note
14
15
15
15
15
15
15
29
15
15
15
15
15
15
16
29
17
18
38
19
20, 21, 22, 23
24
25
27
26
2019
32,366
2018
29,631
40
600
7
14
214
802
39
37,318
4,167
1,424
11
3,912
546
1,864
341
3,758
87,422
-26,756
-44,725
-5,892
-4,828
-1,238
-947
-84,385
3,037
-444
2,593
-511
2,082
2,067
12
3
2,082
4.43
466.8
-10
286
50
4
116
665
46
-5,249
737
-2,111
136
4,254
544
1,487
303
4,028
34,918
-25,142
-2,140
1,730
-4,542
-853
-813
-31,760
3,158
-360
2,799
898
3,697
3,684
9
3
3,697
7.89
467.2
STOREBRAND ANNUAL REPORT 2019 STOREBRAND GROUP
Statement of total comprehensive income
NOK million
Profit/loss for the year
Change in actuarial assumptions
Adjustment of value of properties for own use
Total comprehensive income elements allocated to customers
Tax on other comprehensive income elements not to be classified to profit/loss
Total other comprehensive income elements not to be classified to profit/loss
Translation differences foreign exchange
Gains/losses from cash flow hedging
Total other comprehensive income elements that may be classified to profit/loss
Note
21
41
Total other comprehensive income elements
Total comprehensive income
Total comprehensive attribute to:
Share of total comprehensive income - shareholders
Share of total comprehensive income - hybrid capital investors
Share of total comprehensive income - minority
Total
2019
2,082
3
-22
22
12
15
-168
-36
-204
-190
1,892
1,879
12
1
1,892
2018
3,697
-26
48
-48
1
-25
-351
-23
-374
-399
3,297
3,286
9
2
3,297
87
SECTION 9. ANNUAL ACCOUNTS AND NOTES
STOREBRAND GROUP
Statement of Financial Position
NOK million
Assets company portfolio
Deferred tax assets
Intangible assets and excess value on purchased insurance contracts
Pension assets
Tangible fixed assets
Investments in associated companies and joint ventures
Financial assets at amortised cost:
- Bonds
- Loans to financial institutions
- Loans to customers
Reinsurers' share of technical reserves
Investment properties at fair value
Biological assets
Note
31.12.19
31.12.18
26
27
21
28
29
10,30,31
10,30
1,430
6,220
2
1,075
227
8,256
41
10,30,32
29,798
8,33
26
49
67
Accounts receivable and other short-term receivables
30,34
4,824
Financial assets at fair value:
- Equities and other units
- Bonds and other fixed-income securities
- Derivatives
- Loans to customers
Bank deposits
Minority interests in consolidated mutual funds
Total assets company portfolio
Assets customer portfolio
Investments in associated companies
Financial assets at amortised cost:
- Bonds
- Bonds held-to-maturity
- Loans to customers
Reinsurers' share of technical reserves
Investment properties at fair value
Properties for own use
Accounts receivable and other short-term receivables
Financial assets at fair value:
- Equities and other units
- Bonds and other fixed-income securities
- Derivatives
- Loans to customers
Bank deposits
Total assets customer portfolio
Total assets
88
8,12,30,35
323
8,10,12,30,36
28,512
10,12,30,37
32
10,30
1,183
389
3,119
44,933
130,474
29
4,045
10,30,31
10,30,31
10,30,32
8,33
33
30.34
8,12,30,35
8,10,12,30,36
10,12,30,37
32
10,30
89,790
13,377
23,735
69
29,366
1,375
450
194,020
128,127
4,131
6,736
7,475
502,695
633,170
1,972
6,106
5
43
255
8,349
318
28,236
21
50
67
7,005
295
24,055
1,226
220
3,633
29,290
111,145
4,406
86,374
14,403
25,270
48
28,217
1,420
1,012
157,066
133,531
3,421
5,708
5,457
466,331
577,476
STOREBRAND ANNUAL REPORT 2019 NOK million
Equity and liabilities
Paid-in capital
Retained earnings
Hybrid capital
Minority interests
Total equity
Subordinated loan capital
Capital buffer
Insurance liabilities
Pension liabilities
Deferred tax
Financial liabilities:
- Liabilities to financial institutions
- Deposits from banking customers
- Securities issued
- Derivatives company portfolio
- Derivatives customer portfolio
- Other non-current liabilities
Other current liabilities
Minority interests in consolidated mutual funds
Total liabilities
Total equity and liabilities
Note
31.12.19
31.12.18
12,856
20,264
226
52
33,398
8,925
23,825
9,30
38
38,39
477,171
21
26
266
768
9,12,30
9,12,30
9,12,30
10,12,30,37
10,12,30,37
9,30,40
446
14,404
18,729
86
908
1,037
8,274
44,933
599,772
633,170
12,858
19,782
176
57
32,873
8,224
18,983
444,341
322
258
2
14,419
17,529
460
4,147
6,628
29,290
544,604
577,476
89
Lysaker, 11 February 2020
Board of Directors of Storebrand ASA
Didrik Munch
Chairman of the Board
Karin Bing Orgland
Laila S. Dahlen
Liv Sandbæk
Martin Skancke
Karl Sandlund
Fredrik Törnqvist
Magnus Gard
Odd Arild Grefstad
Group Chief Executive Officer
SECTION 9. ANNUAL ACCOUNTS AND NOTES
STOREBRAND GROUP
Statement of changes in equity
NOK million
capital 1)
shares
premium
equity
differences
equity 2)
earnings
capital 3)
interests
equity
Share
Own
Share
paid in
translation
Other
retained
Hybrid
Minority
Total
Statement of changes in equity
Total
Currency
Total
Equity at 31 December 2017
2,339
-5
10,521
12,855
1,426
16,226
17,652
3,684
3,684
-350
-48
-398
226
9
99
3
-1
30,832
3,697
-399
-350
3,636
3,286
9
2
3,297
Equity at 31 December 2018
2,339
-2
10,521
12,858
1,076
18,706
19,782
3
3
48
48
2
2
-1,167
-1,167
-82
43
-82
43
50
4
-48
-9
-1,169
-120
35
32,873
2,082
4
-2
-38
-8
57
3
-50
-9
176
12
2,067
2,067
-166
-22
-188
-2
-190
-166
2,045
1,879
12
1
1,892
Profit for the period
Total other comprehensive
income elements
Total comprehensive
income for the period
Equity transactions with
owners:
Own shares
Issues of shares
Hybrid capital classified as
equity
Paid out interest hybrid capital
Dividend paid
Purchase of minority interests
Other
Profit for the period
Total other comprehensive
income elements
Total comprehensive
income for the period
Equity transactions with
owners:
Own shares
-3
-3
-27
-27
Hybrid capital classified as
equity
Paid out interest hybrid capital
Dividend paid
Other
3
3
50
-12
-1,399
-1,399
27
27
Equity at 31 December 2019
2,339
-5
10,521
12,856
910
19,355
20,264
226
1) 467,813,982 shares with a nominal value of NOK 5.
2) Includes undistributable funds in the risk equalisation fund amounting to NOK 466 million and security reserves amounting NOK 62 million.
3) Perpetual hybrid tier 1 capital classified as equity.
-29
53
-12
-1,399
21
33,398
-7
52
90
STOREBRAND ANNUAL REPORT 2019 STOREBRAND GROUP
Statement of cash flow
NOK million
Cash flow from operational activities
Net receipts premium - insurance
Net payments compensation and insurance benefits
Net receipts/payments - transfers
Net receipts/payments - insurance liabilities
Receipts - interest, commission and fees from customers
Payments - interest, commission and fees to customers
Taxes paid
Payments relating to operations
Net receipts/payments - other operational activities
Net cash flow from operations before financial assets and banking customers
Net receipts/payments - loans to customers
Net receipts/payments - deposits bank customers
Net receipts/payments - mutual funds
Net receipts/payments - investment properties
Net change in bank deposits insurance customers
Net cash flow from financial assets and banking customers
Net cash flow from operational activities
Cash flow from investment activities
Receipts - sale of subsidaries
Payments - purchase of subsidaries
Net receits/payments - sale/purchase of fixed assets
Net receipts/payments - sale of insurance portfolios
Net cash flow from investment activities
Cash flow from financing activities
Receipts - new loans
Repayments of loans
Payments - interest on loans
Receipts - subordinated loan capital
Payments - repayment of subordinated loan capital
Payments - interest on subordinated loan capital
Net receipts/payments - loans to and claims from other financial institutions
Receipts - issuing of share capital / sale of shares to own employees
Payments - repayment of share capital
Payments - dividends
Receipts - hybrid capital
Payments - repayment of hybrid capital
Payments - interest on hybrid capital
Net cash flow from financing activities
Net cash flow for the period
2019
2018
26,343
-20,723
-118
-765
2,426
-503
-21
-4,837
4,786
6,589
-1,419
-15
-3,435
-368
-2,092
-7,329
-740
-308
-96
29
-375
3,001
-1,769
-429
1,052
-253
-365
443
33
-68
-1,399
125
-75
-12
284
-831
25,211
-20,056
-699
-5,140
2,232
-290
-56
-4,633
-303
-3,735
-5,584
-209
10,965
296
-423
5,045
1,310
1,175
-736
-35
156
560
4,177
-3,195
-295
845
-1,501
-373
-153
37
-1,168
100
-150
-9
-1,684
185
91
SECTION 9. ANNUAL ACCOUNTS AND NOTES STOREBRAND GROUP
Statement of cash flow (continue)
NOK million
Net movement in cash and cash equivalents
Cash and cash equivalents at start of the period
Currency translation cash/cash equivalents in foreign currency
Cash and cash equivalents at the end of the period 1)
1) Consist of:
Loans to financial institutions
Bank deposits
Total
2019
-831
3,951
41
3,160
41
3,119
3,160
2018
185
3,780
-14
3,951
318
3,633
3,951
The cash flow analysis shows the Group’s cash flows for operational, investment and financial activities pursuant to the direct method. The cash flows
show the overall change in means of payment over the year.
Operational activities
A substantial part of the activities in a financial group will be classified as operational. All receipts and payments from insurance activities are included
from the insurance companies, and these cash flows are invested in financial assets that are also defined as operational activities. One subtotal is
generated in the statement that shows the net cash flow from operations before financial assets and banking customers, and one subtotal that shows
the cash flows from financial assets and banking customers. This shows that the composition of net cash flows from operational activities for a financial
group includes cash flows from both operations and investments in financial assets. The life insurance companies’ balance sheets include substantial
items linked to the insurance customers that are included on the individual lines in the cash flow analysis. Since the cash flow analysis is intended to
show the change in cash flow for the company, the change in bank deposits for insurance customers is included on its own line in operating activities
to neutralise the cash flows associated with the customer portfolio in life insurance.
Investment activities
Includes cash flows for holdings in group companies and tangible fixed assets.
Financing activities
Financing activities include cash flows for equity, subordinated loans and other borrowing that helps fund the Group’s activities. Payments of interest
on borrowing and payments of share dividends to shareholders are financial activities.
Cash/cash equivalents
Cash/cash equivalents are defined as claims on central banks and loans to and claims from financial institutions. The amount does not include claims
on financial institutions linked to the insurance customers portfolio, since these are liquid assets that not available for use by the Group.
92
STOREBRAND ANNUAL REPORT 2019
STOREBRAND GROUP
Notes to the financial statement
Note 31:
Note 32:
Note 33:
Note 34:
Note 35:
Note 36:
Note 37:
Note 38:
Note 39:
Note 40:
Note 41:
Note 42:
Note 43:
Note 44:
Note 45:
Note 46:
Bonds at amortised cost
Loans to customers
Properties
Accounts receivable and other short-term receivables
Equities and fund units to fair value
Bonds and other fixed-income securities
Derivatives
Technical insurance reserves - life insurance
Technical insurance reserves - P&C insurance
Other current liabilities
OTHER NOTES
Hedge accounting
Collateral
Contingent liabilities
Securities lending and buy-back guarantees
Information about related parties
Sold/liquidated business
Note 1:
Note 2:
Note 3:
Note 4:
Note 5:
Note 6:
Note 7:
Note 8:
Note 9:
Note 10:
Note 11:
Note 12:
Note 13:
Note 14:
Note 15:
Note 16:
Note 17:
Note 18:
Note 19:
Note 20:
Note 21:
Note 22:
Note 23:
Note 24:
Note 25:
Note 26:
BUSINESS AND RISK NOTES
Corporate information and accounting policies
Important accounting estimates and discretionary
judgements
Acquisition
Segment reporting
Risk management and internal control
Operational risk
Insurance risk
Financial market risks
Liquidity risk
Credit risk
Risk concentration
Valuation of financial instruments and properties
Solidity and capital management
PROFIT AND LOSS ACCOUNT NOTES
Premium income
Net income analysed by class of financial instrument
Net income from properties
Other income
Insurance claims
Change in capital buffer
Operating expenses and number of employees
Pensions expenses and pension liabilities
Remuneration to senior employees and elected officers
of the company
Remuneration paid to auditors
Other expenses
Interest expenses
Tax
STATEMENT OF FINANCIAL POSITION NOTES
Note 27:
Intangible assets and excess value on purchased
insurance contracts
Note 28:
Tangible fixed assets Tangible fixed assets and lease
Note 29:
Note 30:
contracts
Investments in other companies
Classification of financial assets and liabilities
93
SECTION 9. ANNUAL ACCOUNTS AND NOTES Note 1: Company information and accounting policies
1. Company information
Storebrand ASA is a Norwegian public limited company that is listed on the Oslo Stock Exchange. The consolidated financial state-
ments for 2019 were approved by the Board of Directors of Storebrand ASA on 11 February 2020.
The Storebrand Group offers a comprehensive range of insurance and asset management services, as well as securities, banking and
investment services, to private individuals, companies, municipalities, and the public sector. The Storebrand Group consists of the
business areas Savings, Insurance, Guaranteed Pensions and Other. The Group’s head office is located at Professor Kohts vei 9, in
Lysaker, Norway.
2. Basis for preparation of the financial statements
The accounting policies applied in the consolidated financial statements are described below. The policies are applied consistently to
similar transactions and to other events involving similar circumstances. There is no required use of uniform accounting policies for
insurance contracts and this exemption is applied for insurance contracts in the consolidated financial statements. This is discussed
in section 14.
Storebrand ASA’s consolidated financial statements are presented using EU-approved International Financial Reporting Standards
(IFRS) and related interpretations, as well as other Norwegian disclosure requirements laid down in legislation and regulations.
Use of estimates when preparing the consolidated financial statements.
The preparation of the consolidated financial statements in accordance with IFRS requires the management to make judgements,
estimates and assumptions that affect assets, liabilities, revenue, expenses, the notes to the financial statements and information on
potential liabilities. Actual amounts may differ from these estimates. See Note 2 for further information.
3. Summary of significant accounting policies for material items on the balance sheet
For the most part, the asset side of the Group’s balance sheet comprises financial instruments and investment properties and a differ-
entiation is made between assets in the company portfolio (shareholders) and assets belonging to the customer portfolio. This split
is due to the fact that the Group has a significant life insurance business in which customer assets must be kept separate from the
company’s assets.
Financial instruments - IFRS 9
IFRS 9 Financial Instruments replaces the current IAS 39, and was generally applicable from 1 January 2018. However, for insurance-
dominated groups and companies, IFRS 4 allows for either the implementation of IFRS 9 to be deferred (deferral approach) or to
enter the differences between IAS 39 and IFRS 9 through other comprehensive income (overlay approach) until implementation of
IFRS 17. The Storebrand Group qualifies for temporary deferral of IFRS 9 because over 90 per cent of the Group’s total liabilities as of
31 December 2015 were linked to the insurance businesses. For the Storebrand Group, IFRS 9 will be implemented together with IFRS
17, which is expected to be applicable from 1 January 2022.
The Storebrand Group has conducted a provisional analysis of the classification and measurement of financial instruments in
accordance with the present IAS 39 for the transition to IFRS 9, based on the current business model for the individual instruments.
For financial instruments that are expected to be classified and measured at amortised cost or fair value through total comprehensive
income upon transition to IFRS 9, a SPPI (“Solely payment of principal and interest”) test is carried out. This is a provisional categorisa-
tion under IFRS 9, based on the present asset allocation. No assessments have been made of any changes in classification and
measurement of financial assets under IFRS 9 in connection with the transition to IFRS 17.
94
STOREBRAND ANNUAL REPORT 2019 IFRS9 - FINANCIAL INSTRUMENTS TO AMORTISED COST AND FVOCI
NOK million
Financial assets
Bank deposits
Bonds and other fixed-income securities
Loans to financial institutions
Loans to customers
Loans to customers
Accounts receivable and other short-term
receivables
Total financial assets
Financial liabilities
Deposits from banking customers
Liabilities to financial institutions
Debt raised by issuance of securities
Subordinatd loan capital
Other current liabilities
Total financial liabilities
IAS 39
IFRS 9
after IAS 39
after IFRS 9
after IAS 39
after IFRS 9
classification
classification
1.1.2019
1.1.2019
31.12.2019
31.12.2019
Booked value
Fari value
Booked value
Fari value
AC
AC
AC
AC
AC
AC
AC
AC
AC
AC
AC
AC
AC
AC
9,090
9,090
10,594
10,594
109,126
114,164
111,424
116,161
318
318
41
41
FVOCI
53,192
53,169
53,245
53,246
AC
AC
AC
AC
AC
AC
AC
316
316
288
288
8,018
8,018
5,273
5,273
180,059
185,075
180,865
185,604
14,419
14,419
14,404
14,404
2
2
446
446
17,529
17,565
18,729
18,728
8,224
6,795
8,218
6,795
8,925
8,274
9,010
8,274
46,969
47,000
50,778
50,862
IFRS9 - FINANCIAL INSTRUMENTS AT FAIR VALUE
NOK million
Financial assets
IAS 39
IFRS 9
after IAS 39
after IFRS 9
after IAS 39
after IFRS 9
classification
classification
1.1.2019
1.1.2019
31.12.2019
31.12.2019
Booked value
Fari value
Booked value
Fari value
Shares and fund units
FVP&L (FVO)
Bonds and other fixed-income securities
FVP&L (FVO)
Loans to customers
FVP&L (FVO)
FVP&L
FVP&L
FVP&L
157,361
157,361
194,343
194,343
157,586
157,586
156,639
156,639
5,928
5,928
7,126
7,126
Derivatives
Total financial assets
Financial liabilities
Derivatives
Total financial liabilities
FVP&L/ Hedge
accounting
FVP&L/ Hedge
accounting
4,646
4,646
5,314
5,314
325,521
325,521
363,421
363,421
FVP&L/ Hedge
FVP&L/ Hedge
accounting
accounting
4,607
4,607
4,607
4,607
994
994
994
994
A large majority of the financial instruments are measured at fair value (the fair value option is used), whilst other financial instruments
that are included in the categories Loans and receivables and Held to maturity are measured at amortised cost. Financial instruments
measured at amortised cost are largely related to Norwegian pension liabilities with annual interest rate guarantee.
Investment properties are measured at fair value.
95
SECTION 9. ANNUAL ACCOUNTS AND NOTES Intangible assets primarily comprise excess value relating to insurance contracts and customer relations acquired in connection with a
business combination. This excess value is measured at historical cost less annual amortisation and write-downs.
For the most part, the liabilities side of the Group’s balance sheet comprises financial instruments (liabilities) and provisions relating
to future pension and insurance payments (insurance liabilities). With the exception of derivatives, financial liabilities are measured at
amortised cost.
Insurance liabilities must be adequate and cover liabilities relating to issued insurance contracts. Various methods and principles are
used in the Group when assessing the reserves for different insurance contracts. A considerable part of the insurance liabilities relate
to insurance contracts with interest guarantees. The recognised liabilities related to Norwegian insurance contracts with guaranteed
interest rates are discounted by the basic interest rate (which corresponds to the guaranteed return/interest rate) for the respective
insurance contracts.
The recognised liabilities related to the Swedish insurance contracts with guaranteed interest rates in the subsidiary SPP are
discounted by an observable market interest rate and by an estimated market interest rate for terms to maturity when no observable
interest rate is available and corresponds essentially to the same interest rate that is used in the Solvency calculations.
In the case of unit-linked insurance contracts, reserves for the savings element in the contracts will correspond to the value of related
asset portfolios.
Due to the fact that the customers’ assets in the life insurance business (guaranteed pension) have historically yielded a return that
has exceeded the increased value in guaranteed insurance liabilities, the excess amount has been set aside as customer buffers
(liabilities), including in the form of additional reserves, value adjustment reserve and conditional bonus.
Insurance liabilities include Incurred But Not Settled (IBNS) reserves, which consist of amounts reserved for claims either incurred
but not yet reported or reported but not yet settled (Incurred But Not Reported “IBNR” and Reported But Not Settled “RBNS”). IBNS
reserves are included in the premium reserve.
IBNS reserves are measured using actuarial models based on historical information about the portfolio.
4. Changes in accounting policies
Anew accounting standard was implemented in 2019 - IFRS 16 Leases. For changes in estimates, see Note 2 for further information.
IFRS 16:
IFRS 16 Leases, replaces the current IAS 17 and is applicable from 1 January 2019. IFRS 16 establishes principles for the recognition,
measurement, presentation and disclosure of leases. The new standard for leases will not result in major changes for lessors, but
will however significantly change accounting by lessees. IFRS 16 requires that, in principle, lessees recognise all leases in the balance
sheet according to a simplified model that resembles the accounting treatment of financial leases in accordance with IAS 17. The
present value of fixed lease payments shall be recognised in the balance sheet as debt and the right to use the leased asset during
the lease period is recognised as an asset. Short-term leases and leases in which the leased asset has a low value are not recognised.
Storebrand has chosen to classify the right to use the asset as tangible fixed assets and the lease liability as other non-current liabili-
ties. The recognised asset is amortised over the lease period and the depreciation expense is recognised as an operating expense on
an ongoing basis. The interest expense on the lease commitment is recognised as a financial expense.
IFRS 16 can be implemented according to either a full retrospective approach or a modified retrospective approach, and Storebrand
has selected the modified retrospective approach. This means that comparative figures are not restated and the effect is entered in
the balance sheet in the implementation year of 2019. Upon implementation, the right of use of the asset and liability will be the same
amount and will not impact on equity. The transition to IFRS 16 increased assets and liabilities by approximately NOK 1.1 billion for the
Storebrand Group on the transition date. Leases with a duration of less than 12 months as at 1 January 2019 and leases that include
assets valued at less than NOK 50,000 will not be recognised in the balance sheet, but will be recognised as an operating expense
over the lease period. For further information regarding the accounting effect of IFRS 16, see Note 28 Tangible fixed assets and leases.
Hedge accounting
Storebrand has selected early implementation of “Interest Rate Benchmark Reform – Amendments to IAS 39 and IFRS 7” that was
issued in September 2019. In accordance with the transitional rules, the amendments have been subsequently applied to hedging
96
STOREBRAND ANNUAL REPORT 2019
arrangements that existed at the start of the reporting period or were identified thereafter and to the amount accumulated in the
cash flow hedge reserve on that date. The amendments provide temporary relief from applying specific requirements for hedge
accounting of hedging arrangements that are directly affected by the IBOR reform. This has the effect that the IBOR reform will
not generally result in the conclusion of hedge accounting. However, all hedge effectiveness will still be recognised in the income
statement. The stipulated amendments also determine when the relaxation of the rules shall no longer apply, which includes the
uncertainty resulting from the Interest Rate Benchmark Reform no longer existing. See the discussion in Note 41.
5. New IFRS that have not entered into force
New standards and changes in standards that have not come into effect
FRS 17:
IFRS 17 replaces IFRS 4 Insurance Contracts and introduces new requirements for the recognition, measurement, presentation and
disclosure of issued insurance contracts. The standard has not been approved by the EU, but is expected to be applicable from 1
January 2022. The purpose of the new standard is to establish uniform practices for the accounting treatment of insurance contracts.
IFRS 17 is a comprehensive and complex standard, with fundamental differences to the present standard for measuring liabilities
and recognising earnings. Insurance contracts must be recognised at the risk-adjusted present value of future cash flows, with the
addition of unearned profit in a group of contracts (Contractual Service Margin = CSM). Loss-making contracts must be recognised
immediately.
As a starting point, IFRS 17 must be retrospectively applied, but modified retrospective application is permitted or application based
on the fair value on the transition date if retrospective application is impracticable.
The implementation date is 1 January 2022, with a requirement that comparable figures are stated.
Storebrand is working on preparing for implementation of IFRS 17, including assessing the effects implementation of IFRS 17 will have
for Storebrand’s consolidated financial statements.
There are no other new or changed accounting standards that have not entered into force that are expected to have a significant
effect on Storebrand’s consolidated financial statements.
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 minority interests being measured as liabilities.
Storebrand Livsforsikring AS, Storebrand Asset Management AS, Storebrand Bank ASA and Storebrand Forsikring AS are significant
subsidiaries owned directly by Storebrand ASA. Storebrand Livsforsikring AS also owns the Swedish holding company Storebrand
Holding AB, which in turn owns SPP Pension & Försäkring AB (publ). On acquiring the Swedish operations in 2007, the authorities
instructed Storebrand to make an application to maintain a group structure by the end of 2009. Storebrand has filed an application
to maintain the existing group structure. A controlling interest in Skagen AS was acquired in 2017 and is owned by Storebrand Asset
Management AS. The Norwegian authorities have granted Storebrand an exemption from the requirement to organise equivalent
businesses in the same company. This exemption expires in 2022.
Investments in associated companies (normally investments of between 20 per cent and 50 per cent of the company’s equity) in which
the Group exercises significant influence, and investments in joint ventures are recognised in accordance with the equity method.
Investments in associated companies and joint ventures are initially recognised at acquisition cost.
Storebrand consolidates certain funds in the Group’s balance sheet when the requirement for control has been met. This
encompasses funds in which Storebrand has an ownership interest of approximately 40 per cent or more, which are managed
by companies in the Storebrand Group. In the Group’s accounts, such funds are consolidated fully in the balance sheet, and the
non-controlling interests are shown on a line for assets and on a corresponding line for liabilities. The non-controlling interests can
demand redemption of their ownership interests and, as a result of this, they are classified as liabilities in the consolidated financial
statements of Storebrand.
97
SECTION 9. ANNUAL ACCOUNTS AND NOTES Currencies and translation of foreign companies’ accounts
The Group’s presentation currency is Norwegian kroner. Foreign companies that are part of the Group and have different functional
currencies are converted to Norwegian kroner. Translation differences are included in the total comprehensive income.
Elimination of internal transactions
Internal receivables and payables, internal gains and losses, interest, dividends and similar between companies in the Group are
eliminated in the consolidated financial statements. Transactions between the customer portfolios and the company portfolio in the
life insurance business and between the customer portfolios in the life insurance business and other companies in the Group will
not be eliminated in the consolidated financial statements. The reason for this is that the result in the customer portfolio is assigned
to the customers each financial year and must not influence the result and equity of the company. Pursuant to the life insurance
regulations, transactions with customer portfolios are carried out at fair value.
7. Business combinations
The acquisition method is applied when accounting for acquisition of businesses. The consideration is measured at fair value. The
direct acquisition expenses are expensed when they arise, with the exception of expenses related to raising debt or equity
(new issues).
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 IFRS 3 is not applied. Among other things, this does not entail provisions for deferred tax such as for business
combinations.
8. Segment information
The segment information is based on the internal financial reporting structure of the most senior decision-maker. At Storebrand, the
executive management is responsible for following-up and evaluating the results of the segments and is defined as the most senior
decision-maker. Four segments are reported for:
•
•
•
•
Savings
Insurance
Guaranteed Pension
Other
There are some differences between the result lines used in the income statement and the segment results. The Group’s income
statement includes gross income and costs linked to both the insurance customers and owners (shareholders). The segment results
only include result elements relating to owners (shareholders) which are the result elements that the Group has performance
measures and follow-up for.
Financial services provided between segments are priced at market terms. Services provided from joint functions and staff are
charged to the different segments based on supply agreements and distribution keys.
9. Income recognition
Premium income
Net premium income includes the year’s premiums written (including savings elements, administration premium, fees for issuing
Norwegian interest rate guarantees and profit element risk), premium reserves transferred and ceded reinsurance. Annual premiums
are generally accrued on a straight-line basis over the coverage period.
Income from properties and financial assets
Income from properties and financial assets are described in Sections 12 and 13.
Other income
Fees are recognised when the income can be measured reliably and is earned. Return-based revenues and performance fees are
recognised when the uncertainty associated with the income is no longer present. Fixed fees are recognised as income in line with
delivery of the service.
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STOREBRAND ANNUAL REPORT 2019
10. Goodwill and intangible assets
Added value when acquiring a business that cannot be directly attributable to assets or liabilities on the date of the acquisition is
classified as goodwill on the balance sheet. Goodwill is measured at acquisition cost on the date of the acquisition. Goodwill arising
from the acquisition of subsidiaries is classified as an intangible asset.
Goodwill is not amortised, instead it is tested for impairment. Goodwill is reviewed for impairment if there are indications that its value
has become impaired. The review is conducted at least annually and determines the recoverable amount of goodwill. If the relevant
discounted cash flow is less than the carrying value, goodwill will be written down. Reversal of an impairment loss for goodwill is
prohibited even if information later comes to light showing that there is no longer a need for the write-down or the impairment loss
has been reduced. Goodwill is allocated to the relevant cash flow generating units that are expected to benefit from the acquisition so
that it can subsequently be tested for impairment.
Intangible assets with limited useful economic lives are measured at acquisition cost less accumulated amortisation and any write
downs. The useful life and amortisation method are measured each year. With initial recognition of intangible assets in the balance
sheet, it must be demonstrated that probable future economic benefits attributable to the asset will flow to the Group. The cost of
the asset must also be measured reliably. The value of an intangible asset is tested for impairment when there are indications that
its value has been impaired. In other respects intangible assets are subject to write-downs and reversals of write-downs in the same
manner as described for tangible fixed assets.
11. Adequacy test for insurance liabilities and related excess values
A liability adequacy test must be conducted of the insurance liability pursuant to IFRS 4 each time the financial statements are
presented. The test conducted in Storebrand’s consolidated financial statements is based on the Group’s calculation of capital.
12. Investment properties
Investment properties are measured at fair value. Fair value is the amount for which an asset could be exchanged between well-
informed, willing parties in an arm’s length transaction. Income from investment properties consists of both changes in fair value and
rental income.
Investment properties primarily consist of centrally located office buildings, shopping centres and logistics buildings. Properties leased
to tenants outside the Group are classified as investment properties. In the case of properties partly occupied by the Group for its
own use and partly let to tenants, the identifiable tenanted portion is treated as an investment property. All properties that are owned
by the customer portfolios are measured at fair value and the changes in value are allocated to the customer portfolios.
13. Financial instruments
13-1. General policies and definitions
Recognition and derecognition
Financial assets and liabilities are included in the balance sheet from such time Storebrand becomes party to the instrument’s
contractual terms and conditions. General purchases and sales of financial instruments are recorded on the transaction date. When a
financial asset or a financial liability is initially recognised in the financial statements, it is valued at fair value.
Initial recognition includes transaction costs directly related to the date of acquisition or issue of the financial asset/liability if it is not a
financial asset/liability at fair value through profit or loss.
Financial assets are derecognised when the contractual right to the cash flow from the financial asset expires, or when the company
transfers the financial asset to another party in a transaction by which all, or virtually all, the risk and reward associated with owner-
ship of the asset is transferred.
Financial liabilities are derecognised in the balance sheet when they cease to exist, i.e. once the contractual liability has been fulfilled,
cancelled or has expired.
Impairment of financial assets
For financial assets carried at amortised cost, an assessment is made on each reporting date as to whether there is any
objective evidence that a financial asset or group of financial assets have incurred losses.
If there is objective evidence that impairment has occurred, the amount of the loss is measured as the difference between the asset’s
carrying amount and the present value of the estimated future cash flows (excluding future credit losses that have not occurred),
99
SECTION 9. ANNUAL ACCOUNTS AND NOTES
discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate calculated at initial recognition).
The amount of the loss is recognised in the income statement.
Losses expected as a result of future events, no matter how likely, are not recognised.
13-2. Classification and measurement of financial assets and liabilities
Financial assets are classified into one of the following categories:
•
•
•
•
Financial assets held for trading.
Financial assets at fair value through profit or loss in accordance with the fair value option (FVO).
Financial assets held to maturity.
Financial assets, loans and receivables.
Held for trading
A financial asset is held for trading if:
•
•
•
it has been acquired principally for the purpose of selling or repurchasing it in the short term,
is part of a portfolio of identified financial instruments that are managed together and there is evidence of a recent actual
pattern of short-term profit-taking, or
it is a derivative that is not designated and effective as a hedging instrument.
With the exception of derivatives, only a limited proportion of Storebrand’s financial assets fall into this category.
Financial assets held for trading are measured at fair value at the reporting date, with all changes in their fair value recognised in profit
or loss.
At fair value through profit or loss in accordance with the fair value option (FVO).
A significant proportion of Storebrand’s financial instruments are classified in the category of fair value through profit or loss because:
•
such classification reduces the mismatch in the measurement or recognition that would otherwise arise as a result of the
different rules for measuring assets and liabilities, or
the financial assets form part of a portfolio that is managed and reported on a fair value basis
•
The accounting is equivalent to that of the held for trading category (the instruments are measured at fair value and changes in value are
recognised in the income statement).
Investments held to maturity
Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity and that a
company has the intention and ability to hold to maturity, with the exception of:
•
•
assets that are designated upon initial recognition as assets at fair value through profit or loss, or
assets that are defined as loans and receivables.
Assets held to maturity are recognised at amortised costs using the effective interest method. The category is used in the Norwegian
life insurance business for assets linked to insurance contracts with interest rate guarantees.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market, with the exception of assets that the company intends to sell immediately or in the near term that are classified as held for
trading and those that the company upon initial recognition designates at fair value through profit or loss.
Loans and receivables are recognised at amortised cost using the effective interest method. The category is used in the Norwegian life
insurance business linked to insurance contracts with a guaranteed interest rate, and in the banking business.
Loans and receivables that are designated as hedged items are subject to measurement under the hedge accounting requirements.
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STOREBRAND ANNUAL REPORT 2019
13-3. Derivatives
Accounting treatment of derivatives that are not hedging
Derivatives that do not meet the criteria for hedge accounting are recognised as financial instruments held for trading. The fair value
of such derivatives is classified as either an asset or a liability with changes in fair value through profit or loss.
The majority of the derivatives used routinely for asset management fall into this category.
Some of the Group’s insurance contracts contain embedded derivatives such as interest rate guarantees. These insurance contracts
do not follow the accounting standard IAS 39 Financial Instruments, but instead follow the accounting standard IFRS 4 Insurance
Contracts, and the embedded derivatives are not continually measured at fair value.
13-4. Hedge accounting
Fair value hedging
Storebrand uses fair value hedging for the interest rate risk. The items hedged are financial liabilities measured at amortised cost.
Derivatives are recognised at fair value through profit or loss. Changes in the value of the hedged item that are attributable to the
hedged risk adjust the carrying amount of the hedged item and are recognised through profit or loss.
Cash flow hedging
Some borrowing in foreign currency is hedged by means of hedging instruments (derivatives). Storebrand uses cash flow hedging of
the foreign exchange risk on the principal amount and foreign exchange risk for the credit margin. The net ongoing changes in value
in the hedging instrument that is considered effective hedging are recognised in total comprehensive income and the non-effective
share must be recognised through profit or loss.
Hedging of net investments
Hedging of net investments in foreign businesses is recognised in the accounts in the same way as cash flow hedging. Gains and
losses on the hedging instrument that relate to the effective part of the hedging are recognised through total comprehensive income,
while gains and losses that relate to the ineffective part are recognised in the income statement. The total loss or gain in equity is
recognised in the income statement when the foreign business is sold or wound up.
13-5. Financial liabilities
Subsequent to initial recognition, all financial liabilities are primarily measured at amortised cost using an effective interest method.
14. Insurance liabilities
The accounting standard IFRS 4 Insurance Contracts addresses the accounting treatment of insurance contracts. Storebrand’s
insurance contracts fall within the scope of this standard. IFRS 4 is a temporary standard until IFRS 17 is to be used. IFRS 4 allows
the use of non-uniform principles for the treatment of insurance contracts in consolidated financial statements. In the consolidated
financial statements, the insurance liabilities in the respective subsidiaries are included as these are calculated on the basis of the
laws of the individual countries. This also applies to insurance contracts acquired via business combinations. In such cases, positive
excess values are capitalised as assets.
Pursuant to IFRS 4, provisions for insurance liabilities must be adequate. When assessing the adequacy associated with recognised
acquired insurance contracts, reference must also be made to IAS 37 Provisions, Contingent Liabilities and Contingent Assets, and
Solvency II calculations.
An explanation of the accounting policies for the most important insurance liabilities can be found below.
14-1. General – life insurance
Claims for own account
Claims for own account comprise claims settlements paid out, less reinsurance received, premium reserves transferred to other com-
panies, and reinsurance ceded.
Changes in insurance liabilities
Changes in insurance liabilities comprise premium savings that are taken to income under premium income and payments, as well as
changes in provisions for future claims This item also includes added guaranteed returns on the premium reserve and the premium
fund, as well as returns to customers beyond the guaranteed returns.
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Insurance liabilities (premium reserve)
The premium reserve represents the present value of the company’s total expected insurance liabilities, including future
administration costs in accordance with the individual insurance contracts, after deducting the present value of agreed future
premiums. In the case of individual account policies with flexible premium payments, the total policy value is included in the premium
reserve. The premium reserve is equivalent to 100 per cent of the guaranteed surrender or transfer value of insurance contracts prior
to any fees for early surrender or transfer and the policies’ share of the market value adjustment reserve.
The premium reserve is calculated using the same assumptions as those used to calculate premiums for the individual insurance
contracts, i.e. assumptions about mortality and disability rates, interest rates and costs. Premium tariffs are based on the observed
level of mortality and disability in the population with the addition of security margins that include expected future developments in
this respect.
The premium reserve includes reserve amounts for future administration costs for all lines of insurance including settlement costs
(administration reserve). In the case of paid-up contracts, the present value of all future administration costs is allocated in full to the
premium reserve. In the case of contracts with future premium payments, a deduction is made for the cash value of the proportion of
future administration costs expected to be financed by future premium receipts.
A substantial proportion of the Norwegian insurance contracts have a one-year interest rate guarantee, meaning that the guaranteed
return must be achieved every year. In the Swedish business, there are no contracts with an annual interest rate guarantee, but there
are insurance contracts with a terminal value guarantee.
Insurance liabilities, special investments portfolio
Insurance liabilities associated with the value of the special investments portfolio must always equal the value of the investments port-
folio 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).
IBNS reserves
Included in the premium reserve for insurance risk are provisions for claims either occurred but not yet reported or reported but not
yet settled. IBNR are reserves for potential future payments when Storebrand has yet to be informed about whether an instance of
disability, death or other instance entailing compensation has occurred. Since Storebrand is neither aware of the frequency nor the
amount payable, IBNR is estimated using actuarial models based on historical information about the portfolio. Correspondingly, RBNS
is a provision for potential future payments when Storebrand has knowledge of the incident, but has not settled the claim. Actuarial
models based on historical information are also used to estimate the reserves.
Transfers of premium reserves, etc. (transfers)
Transfers of premium reserves resulting from transfers of policies between insurance companies are recorded in the income state-
ment as net premiums for own account in the case of reserves received and claims for own account in the case of reserves paid out.
The recognition of costs and income takes place on the date the insured risk is ceded. The premium reserve in the insurance liabilities
is reduced/increased on the same date. The premium reserve transferred includes the policy’s share of additional statutory reserves,
the market value adjustment reserve, conditional bonus and the profit for the year. Transferred additional reserves are not shown as
part of premium income, but are reported separately as changes in insurance liabilities. Transferred amounts are classified as current
receivables or liabilities until the transfer takes place.
Selling costs
Selling costs in the Norwegian life insurance business are expensed, whilst in the Swedish subsidiaries, selling costs are recorded in
the balance sheet and amortised over the expected duration of the contract.
14-2. Life insurance – Norway
Additional statutory reserves
The company is allowed to make allocations to the additional statutory reserves to ensure the solvency of its life insurance business.
These additional reserves are divided among the contracts and can be used to cover a negative interest result up to the interest rate
guarantee. In the event that the company does not achieve a return that equals the interest rate guarantee in any given year, the
allocation can be reversed from the contract to enable the company to meet the interest rate guarantee. This will result in a reduction
in the additional statutory reserves and a corresponding increase in the premium reserve for the contract. For allocated annuities, the
additional statutory reserves are paid in instalments over the disbursement period.
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STOREBRAND ANNUAL REPORT 2019 The additional statutory reserves cannot exceed 12 per cent of the premium reserve. If the limit is exceeded, the excess amount is
assigned to the contract as surplus.
Premium fund, deposit reserve and pensioners’ surplus fund
The premium fund contains premiums prepaid by policyholders as a result of taxation regulations for individual and group pension
insurance and allocated profit shares. The contribution fund contains payments and deposits for employees who have been members
for less than 12 months. Credits and withdrawals are not recognised through the income statement but are taken directly to the
balance sheet.
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.
Market value adjustment reserve
The current year’s net unrealised gains/losses on financial assets at fair value in the group portfolio are allocated to or reversed from
the market value adjustment reserve in the balance sheet 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. The foreign exchange fluctuations associated
with investments denominated in foreign currencies are largely hedged through foreign exchange contracts on a portfolio basis.
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 income statement. Pursuant to accounting standard for insurance contracts (IFRS 4) the market value adjustment
reserve is shown as a liability.
Risk equalisation reserve
Up to 50 per cent of the positive risk result for group pensions and paid-up policies can be allocated to the risk equalisation fund to
cover any future negative risk result. The risk equalisation reserve is not considered to be a liability according to IFRS and is included
as part of the equity (undistributable equity).
14-3. Life insurance Sweden
Life insurance liabilities
The life insurance liabilities are estimated as the present value of the expected future guaranteed payments, administrative expenses
and taxes, discounted by the current risk-free interest rate. Insurance reserves with guaranteed interest rates in SPP use a marked-
based yield curve. A real discount curve is used for risk insurance within the defined-contribution portfolio. For endowment insurance
within the defined-benefit and defined-contribution portfolios, as well as sickness insurance in the defined-benefit portfolio, the
provisions are discounted using the nominal yield curve. As a starting point, the applicable discount rate is determined based on the
methods used for the discount rate in Solvency II.
When calculating the life insurance liabilities, the estimated future administrative expenses that may reasonably be expected to
arise and can be attributed to the existing insurance contracts are taken into account. The expenses are estimated according to the
company’s own cost analyses and are based on the actual operating costs during the most recent year. Projection of the expected
future costs follow the same principles on which Solvency II is based. Any future cost-rationalisation measures are not taken into
account.
Conditional bonus and deferred capital contribution
The conditional bonus arises when the value of customer assets is higher than the present value of the liabilities, and thus
covers the portion of the insurance capital that is not guaranteed. In the case of contracts where customer assets are lower than
liabilities, the owners’ result is charged via deferred capital contribution allocations. The conditional bonus and deferred capital
contribution are recognised on the same line in the balance sheet as part of the buffer capital.
14-4. P&C insurance
Costs related to insurance claims are recognised when the claims occur. The following allocations have been made:
Reserve for unearned premium for own account concerns on-going policies that are in force at the time the financial statements were
closed and is intended to cover the contracts’ remaining risk period.
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SECTION 9. ANNUAL ACCOUNTS AND NOTES The claims reserve is a reserve for expected claims that have been reported, but not settled (RBNS). The reserve also covers expected
claims for losses that have been incurred, but have not been reported (IBNR) at the expiry of the accounting period. In addition, claims
reserves shall include a separate provision for future claims on losses that have not been settled.
15. Pension liabilities for own employees
Storebrand has country-specific pension schemes for its employees. The schemes are recognised in the accounts in
accordance with IAS 19. In Norway, Storebrand has a defined-contribution pension. Storebrand is a member of the Norwegian
contractual early retirement (AFP) pension scheme. The Norwegian AFP scheme is regarded as a defined-benefit scheme, but there is
insufficient quantitative information to be able to estimate reliable accounting obligations and costs.
In Sweden, SPP has agreed, in accordance with the Finance Companies’ Service Pension Plan (BTP Plan), to collective,
defined-benefit pension plans for its employees. A group defined-benefit pension implies that an employee is guaranteed a certain
pension based on the pay scale at the time of retirement on termination of the employment.
15-1. Defined-benefit scheme
Pension costs and pension obligations for defined-benefit pension schemes are determined using a linear accrual formula and
expected final salary as the basis for the entitlements, based on assumptions about the discount rate, future salary increases,
pensions and National Insurance benefits, future returns on pension plan assets as well as actuarial estimates of mortality, disability
and voluntary early leavers. The net pension cost for the period comprises the total of the accrued future pension entitlements during
the period, the interest cost on the calculated pension liability and the calculated return on pension plan assets.
Actuarial gains and losses and the impact of changes in assumptions are recognised in total comprehensive income during the
period in which they arise. Employees who resign before reaching retirement age or leave the scheme will be issued ordinary paid-up
policies.
15-2. Defined-contribution scheme
A defined-contribution pension scheme involves the Group in paying an annual contribution to the employees’ collective pension
savings. The future pension will depend upon the size of the contribution and the annual return on the pension savings. The
Group does not have any further work-related obligations after the annual contribution has been paid. No provisions are made for
ongoing pension liabilities for these types of schemes. Defined-contribution pension schemes are recognised directly in the financial
statements.
16. Tangible fixed assets and intangible assets
The Group’s tangible fixed assets comprise equipment, fixtures and fittings, IT systems and properties used by the Group for its own
activities.
Equipment, inventory and IT systems are valued at acquisition cost less accumulated depreciation and any write-downs.
Properties used for the Group’s own activities are measured at appreciated value less accumulated depreciation and write-downs.
The fair value of these properties is tested annually in the same way as described for investment properties. The increase in value for
buildings used by the Group for its own activities is recognised through total comprehensive income.
Any write-down of the value of such a property is recognised first in the revaluation reserve for increases in the value of the property
in question. If the write-down exceeds the revaluation reserve for the property in question, the excess is expensed over the income
statement.
The write-down period and method are reviewed annually to ensure that the method and period being used both correspond to
the useful economic life of the asset. The disposal value is similarly reviewed. Properties are split into components if different parts
have different useful economic lives. The depreciation period and method of depreciation are measured then separately for each
component.
The value of a tangible fixed asset is tested when there are indications that its value has been impaired. Any impairment losses are
charged to the income statement as the difference between the carrying value and the recoverable amount. The recoverable amount
is the greater of the fair value less costs of sale and the value in use. On each reporting date it is determined as to whether there is a
basis for reversing previous impairment losses on non-financial assets.
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STOREBRAND ANNUAL REPORT 2019
17. Tax
The Group’s tax liabilities are valued in accordance with IAS 12 and clarifications in IFRIC 23.
The tax cost in the income statement consists of tax payable and changes in deferred tax. Tax is recognised in the income statement,
except to the extent that it relates to items recognised in total comprehensive income. Deferred tax and deferred tax assets are
calculated on the differences between accounting and tax values of assets and liabilities.
Deferred tax is calculated on the basis of the Group’s tax loss carryforward, deductible temporary differences and taxable temporary
differences.
Any deferred tax assets shall be recognised if it is considered probable that the tax asset will be recovered. Assets and liabilities
associated with deferred tax are recognised as a net amount when there is a legal right to offset assets and liabilities for tax payable
and the Group has the ability and intention to settle net tax payable.
Changes in assets and liabilities associated with deferred tax that are due to changes in the tax rate are generally recognised in the
income statement.
Reference is made to Note 26 - Tax for further information.
18. Provision for dividends
The proposed dividend is classified as equity until approved by the general meeting and presented as liabilities after this date.
The proposed dividend is not included in the calculation of the solvency capital.
19. Leases
Leases are recognised in the balance sheet. The present value of the combined lease payments shall be recognised on the balance
sheet as debt and an asset that reflects the right of use of the asset during the lease period. Storebrand has chosen to classify the
right to use the asset as tangible fixed assets and the lease liability as other debt. The recognised asset is amortised over the lease
period and the depreciation expense is recognised as an operating expense on an ongoing basis. The interest expense on the lease
liability is recognised as a financial expense. Leases with a duration of less than 12 months and leases that include assets valued at
less than approximately NOK 50,000 will not be recognised in the balance sheet, but will be recognised as an operating expense over
the lease period.
20. Statement of cash flows
The statement of cash flows is prepared using the direct method and shows cash flows grouped by sources and use. Cash is defined
as cash, receivables from central banks and receivables from credit institutions with no agreed period of notice.
21. Biological assets
Pursuant to IAS 41, investments in forestry are measures as biological assets. Biological assets are measured at fair value, which is de-
fined based on alternative fair value estimates, or the present value of expected net cash flows. Changes in the value of biological assets
are recognised in the income statement. Ownership rights to biological assets are recognised at the point in time when the purchase
agreement is signed. Annual income and expenses are calculated for forestry and outlying fields.
Note 2: Critical accounting estimates and judgements
In preparing the consolidated financial statements the management are required to apply estimates, make discretionary assessments
and apply assumptions for uncertain amounts. The estimates and underlying assumptions are reviewed on an ongoing basis and are
based on historical experience and expectations of future events and represent the management’s best judgement at the time the
financial statements were prepared.
A description of the most important elements and assessments in which discretion is used and which may influence recognised
amounts or key figures is provided below and in Note 13 for Solvency II and in Note 26 for Tax.
Actual results may differ from these estimates.
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SECTION 9. ANNUAL ACCOUNTS AND NOTES
Insurance contracts
Insurance risk is the risk of higher than expected payments and/or unfavourable changes in the value of an insurance liability due to
the actual development differing from what was expected when premiums or provisions were calculated.
In the consolidated accounts, insurance liabilities with a guaranteed interest rate are included, but using different principles in the
Norwegian and the Swedish activities. An immaterial asset (value of business in-force – VIF) linked to the insurance contracts in the
Swedish activities is also included. This asset originated from Storebrand’s purchase of the insurance business. There are several
factors that may have an impact on the size of the insurance liabilities including VIF, such as biometric factors relating to higher
life expectancy, future returns and invalidity, as well as the development of future costs and legal aspects, such as amendments to
legislation and judgments handed down in court cases, etc.
In the long term, a low interest rate will represent a challenge for insurance contracts with a guaranteed interest rate and, together
with a reduced customer buffer, may have an impact on the amount recorded that is linked to the insurance contracts. The Norwegian
insurance contracts with guaranteed interest rates are discounted at the premium calculation rate (around 3.2 per cent). The Swedish
insurance liabilities with guaranteed interest rates have been discounted by a yield curve that coincides with the Solvency II yield curve.
In the Norwegian business, a significant share of the insurance contracts have annual interest rate guarantees. Changes in estimates
and valuations may entail a change in the return on the customer portfolios. Depending on the size of any impairment in value, such
impairment may be offset by a reduction in the market value adjustment reserve and additional statutory reserves, so that the effect
on the owner’s result may be limited. Correspondingly, increases in values could, to a large extent, increase the size of such funds.
In the Swedish business, there are no contracts with an annual interest rate guarantee, but there are insurance contracts with interest
rate guarantees which enable them to receive a guaranteed terminal value. These contracts are discounted by a market-based
calculated interest rate where parts of the yield curve used are not liquid. Changes in the discount rate may have a significant impact
on the size of the insurance liabilities and impact the result. 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 cost, mortality and other biometric assumptions may also have a significant impact on
the recognised insurance liabilities. Changes in estimates and valuations may entail a change in the return on the customer portfolios.
Depending on the size of any impairment in value, such impairment may be offset by a reduction in the conditional bonus, so that the
effect on the owner’s result may be limited. If the value of the individual insurance contract is higher than the associated customer
assets, the owner will have to cover the deficient capital.
Further information about insurance liabilities is provided in Notes 7, 38 and 39.
Investment properties
Investment properties are measured at fair value. The commercial real estate market in Norway and Sweden is not particularly liquid,
nor is it transparent. Uncertainty will be linked to the valuations, and they require exercise of professional judgement, especially in
periods with turbulent finance markets.
Key elements included in valuations that require exercising judgement are:
•
•
•
•
•
Market rent and vacancy trends
Quality and duration of rental income
Owners’ costs
Technical standard and any need for upgrading
Discount rates for both certain and uncertain cash flows, as well as residual value
External valuations are also obtained for parts of the portfolio every quarter. All properties must have an external valuation during at
least a 3 year period.
Reference is also made to Note 12 in which the valuation of investment properties at fair value is described in more detail.
Financial instruments at fair value
There will be some uncertainty associated with the pricing of financial instruments, particularly instruments that are not priced in an
active market. This is particularly true for the types of securities priced on the basis of non-observable assumptions, and for these
investments various valuation techniques are applied in order to fix fair value. These include private equity investments, investments
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STOREBRAND ANNUAL REPORT 2019
in foreign properties, and other financial instruments where theoretical models are used in pricing. Any changes to the assumptions
could affect recognised amounts. The majority of such financial instruments are included in the customer portfolio.
There is uncertainty linked to the valuation of fixed-rate loans recorded at fair value, due to variation in the interest rate terms offered
by banks and since individual borrowers often have different credit risks.
Reference is also made to Note 12 in which the valuation of financial instruments at fair value is described in more detail.
Deferred tax and uncertain tax positions
Calculation of deferred tax assets, deferred tax liabilities and the income tax expense is based on the interpretation of rules and
estimates.
The Group’s business activities may give rise to disputes, etc. related to tax positions with an uncertain outcome. The Group makes
provisions for uncertain and disputed tax positions with best estimates of expected amounts, subject to decisions by the tax
authorities in accordance with IAS 12 and IFRIC 23. The provisions are reversed if the disputed tax position is decided to the benefit of
the Group and can no longer be appealed.
Reference is made to further information in Note 26.
Note 3: Acquistion
Cubera
On 11 February, Storebrand Asset Management AS entered into an agreement to acquire Cubera Private Equity AS [Cubera]. Cubera
is a Nordic firm offering investors exposure to Nordic private equity primarily through the secondary market. The firm is a leading
player within Nordic private equity and has around NOK 9 billion under management, mainly from international investors.
The transaction was completed on 1 April 2019.
The purchase price of the acquisition was NOK 329 million and was settled with cash only. The purchase price may increase with up to
NOK 225 million related to fundraising to new funds managed by Cubera.
Business combinations are recognised in accordance with the acquisition method. Upon acquisition of a subsidiary, a fair value anal-
ysis is performed, and assets and liabilities are assessed at fair value at the time of purchase. The residual value in the acquisition will
constitute goodwill.
Excess value of NOK 383 million has been identified before deferred tax in the acquisition analysis. Of the total excess value, NOK 225
million is linked to customer relations, which is amortized over 7 years, while NOK 140 million is linked to customer contracts, which
are amortized over 5 years. In addition, excess value has been identified excess value of NOK 18 million related to IT systems, which
are amortized over 3 years. Deferred tax of NOK 92 million has been calculated for the excess value. Goodwill amounts to NOK 206
million and this item is not depreciated, but is tested yearly against impairment.
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SECTION 9. ANNUAL ACCOUNTS AND NOTES ACQUISITION ANALYSIS CUBERA
NOK million
Assets
- Customer lists
- Customer contracts
- IT systems
Total intangible assets
Other assets
Bank deposits
Total assets
Liabilities
Current liabilities
Deferred tax
Net identifiable assets and liabilities
Goodwill
Fair value at acquisition date
Conditional payment 1)
Cash payment
1) Estimated present value earnout at acquisition date
Note 4: Profit by segments
Book values in the
Excess value upon
company
acquistion
Book values
225
140
18
383
383
92
291
1
6
30
36
7
29
225
140
18
384
6
30
419
7
92
320
206
526
198
329
Storebrand’s operation includes the segments Savings, Insurance, Guaranteed Pension and Other.
Savings
The savings segment includes products for retirement savings with no interest rate guarantees. The segment consists of defined
contribution pensions in Norway and Sweden, asset management and retail banking products. In addition, certain other subsidiaries in
Storebrand Livsforsikring and SPP are included in Savings.
Insurance
The insurance segment 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.
Guaranteed pension
The guaranteed Pension segment includes long-term pension savings products that give customers a guaranteed rate of return.
The area includes defined benefit pensions in Norway and Sweden, paid-up policies and individual capital and pension insurances.
Other
The result for Storebrand ASA is reported under Other, as well as the result for the company portfolios and small subsidiaries of
Storebrand Life Insurance and SPP. In addition, the results associated with loans to commercial enterprises by Storebrand Bank and
the activities at BenCo are reported in this segment. The elimination of intra-group transactions that have been included in the other
segments has also been included.
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STOREBRAND ANNUAL REPORT 2019
Reconciliation between the income 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 consolidated income statement. Below is an overall description of the most important differences.
Fee and administration income consists of fees and fixed administrative income. In the Group’s income statement, the item is
classified as premium income, net interest income from bank or other income depending on the type of activity. The Group’s income
statement also includes savings elements for insurance contracts and possibly transferred reserve.
Price of return guarantee and profit risk (fee incomes) – Storebrand Life Insurance AS
The return guarantees in group pension insurance with a return guarantee must be priced upfront. The level of the return guarantee,
the size of the buffer capital (additional statutory reserves and unrealised gains), and the investment risk of the portfolio in which
the pensions assets are invested determine the price that the customer pays for his or her return guarantee. Return guarantees are
priced on the basis of the risk to which the equity is exposed. The insurance company bears all the downside risk and must carry
reserves against the policy if the buffer reserves are insufficient or unavailable.
The insurance result consists of insurance premiums and claims.
Insurance premiums consist of premium income relating to risk products (insurance segment) that are classified as premium income
in the Group’s income statement.
Claims consist of paid-out claims and changes in provisions for claims incurred but not reported (IBNR) and claims reported but not
settled (RBNS) relating to risk products that are classified as claims in the Group’s income statement.
Administration costs consist of the Group’s operating costs in the Group’s income statement minus operating costs allocated to
traditional individual products with profit sharing.
Financial items and risk result life and pensions include risk result life and pensions and financial result includes net profit sharing and
Loan Losses.
Risk result life and pensions consists of the difference between risk premium and claims for products relating to defined-contribution
pension, unit linked insurance contracts (savings segment) and defined-benefit pension (guaranteed pension segment). Risk premium
is classified as premium income in the Group’s income statement.
The financial result consists of the return for the company portfolios of Storebrand ASA, Storebrand Livsforsikring AS and SPP Pension
& Försäkring AB (Other segment), while returns for the other company portfolios in the Group are a financial result within the segment
which the business is associated with. Returns on company portfolios are classified as net income from financial assets and property
for companies in the Group’s income statement. The financial result also includes returns on customer assets relating to products
within the insurance segment, and in the Group’s income statement this item will be entered under net income from financial assets
and property for customers. In the alternative income statement, the result before tax of certain unimportant subsidiaries is included
in the financial result, while in the Group’s income statement, this is shown as other income, operating costs and other costs.
Net profit sharing
Storebrand Livsforsikring AS
A modified profit-sharing regime was introduced for old and new individual contracts that have left group pension insurance policies
(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’ inter-
est profit before sharing, if it is not covered by the risk equalisation fund.
Individual endowment insurance and pensions written by the Group prior to 1 January 2008 will continue to apply the profit rules ef-
fective prior to 2008. New contracts may not be established in this portfolio. The Group can retain up to 35 per cent of the total result
after allocations to additional statutory reserves.
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SECTION 9. ANNUAL ACCOUNTS AND NOTES
Any negative returns on customer portfolios and returns lower than the interest guarantee that cannot be covered by additional
statutory reserves must be covered by the company’s equity and will be included in the net profit-sharing and losses line.
SPP Pension & Försäkring AB
For premiums paid from and including 2016, previous profit sharing is replaced by a guarantee fee for premium-determined insurance
(IF portfolio). The guarantee fee is annual and is calculated as a percentage of the capital. It goes to the company.
For contributions agreed to prior to 2016, the profit sharing is maintained, i.e. that if the total return on assets in one calendar year for
a premium-determined insurance (IF portfolio) exceeds the guaranteed interest, profit sharing will be triggered. When profit sharing is
triggered, 90 per cent of the total return on assets passes to the policyholder and 10 per cent to the company. The company’s share of
the total return on assets is included in the financial result.
In the case of defined-benefit contracts (KF portfolio), the company is entitled to charge an indexing fee if the group profit allows the
indexing of the insurance. Indexing is allowed up to a maximum equalling the change in the consumer price index (CPI) between the
previous two Septembers. Pensions that are paid out are indexed if the consolidated figures on 30 September exceed 107 per cent,
and half of the fee is charged. The whole fee is charged if the consolidated figures on 30 September exceed 120 per cent, in which
case paid-up policies can also be included. The total fee equals 0.8 per cent of the insurance capital.
The guaranteed liability is continuously monitored. If the guaranteed liability is higher than the value of the assets, a provision must be
made in the form of a deferred capital contribution. If the assets are lower than the guaranteed liability when the insurance payments
start, the company supplies capital up to the guaranteed liability in the form of a realised capital contribution. Changes in the deferred
capital contribution are included in the financial result.
Loan losses:
balance sheet of Storebrand Bank Group. In the Group’s income statement, the item is classified under loan losses. With regard to
loan losses that are on the balance sheet of the Storebrand Livforsikring Group, these will not be included on this line in either the
alternative income statement or in the Group’s income statement, but in the Group’s income statement will be included in the item,
net income from financial assets and property for customers.
Amortisation of intangible assets includes depreciation and possible write-downs of intangible assets established through acquisitions
of enterprises.
GROUP PROFIT BY SEGMENTS
NOK million
Savings
Insurance
Guaranteed pension
Other
Group profit before amortisation
Amortisation of intangible assets
Group pre-tax profit
110
2019
1,364
439
1,029
205
3,037
-444
2,593
2018
1,257
748
1,148
5
3,158
-360
2,799
STOREBRAND ANNUAL REPORT 2019
NOK million
Fee and administation income
Insurance result
- Insurance premiums f.o.a.
- Claims f.o.a.
Operating cost
Operating profit
Financial items and risk result life & pension
Group profit before amortisation
Amortisation of intangible assets1)
Group pre-tax profit
NOK million
Fee and administation income
Insurance result
- Insurance premiums f.o.a.
- Claims f.o.a.
Operating cost
Operating profit
Financial items and risk result life & pension
Group profit before amortisation
Amortisation of intangible assets 1)
Group pre-tax profit
Savings
2019
3,996
2018
3,709
Insurance
Guaranteed pension
2019
2018
2019
1,475
2018
1,440
1,005
3,909
-2,904
-648
357
83
439
1,291
3,854
-2,562
-614
677
71
748
-819
657
372
1,029
-2,621
1,375
-11
1,364
-2,405
1,303
-46
1,257
Other 2)
Storebrand Group
2019
-164
2018
-138
73
-91
296
205
49
-89
93
5
2019
5,308
1,005
3,909
-2,904
-4,015
2,298
739
3,037
-444
2,593
-816
624
525
1,148
2018
5,011
1,291
3,854
-2,562
-3,786
2,516
642
3,158
-360
2,799
1) Amortisation of intangible assets are included in Storebrand Group
2) Includes eliminations of group transactions
STOREBRAND GROUP ARE REPRESENTED IN THE FOLLOWING COUNTRIES:
Segment/Country
Norway
Sweden
UK
Netherlands
Denmark
Germany
Savings
Insurance
Guaranteed pension
Other
X
X
X
X
X
X
X
X
X
X
X
X
X
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SECTION 9. ANNUAL ACCOUNTS AND NOTES KEY FIGURES BY BUSINESS AREA
NOK million
Group
Earnings per ordinary share
Equity
Savings
Premium income Unit Linked
Unit Linked reserves
AuM asset management
Retail lending
Insurance
Total written premiums
Claims ratio
Cost ratio
Combined ratio
Guaranteed pension
Guaranteed reserves
Guaranteed reseves in % of total reserves
Net transfer out of guaranteed reserves
Buffer capital in % of customer reserves Storebrand Life Group 1)
Buffer capital in % of customer reserves SPP 2)
Solidity
Solvency II 3)
Solidity capital (Storebrand Life Group) 4)
Capital adequacy Storebrand Bank
Core Capital adequacy Stobrand Bank
1) Additional statutory reserves + market value adjustment reserve
2) Conditional bonuses
3) See note 13 for specification of Solvency II
2019
2018
4.43
33,398
17,168
219,793
831,204
48,161
4,698
74%
17%
91%
263,185
54.5%
103
8.6%
10.7%
176%
62,442
19.6%
17.5%
7.89
32,873
16,021
179,299
707,297
46,526
4,455
66%
16%
82%
260,573
59.2%
165
6.4%
8.7%
173%
58,978
18.9%
16.6%
4) The term solidity capital encompasses equity, subordinated loan capital, the risk equalisation fund, the market value adjustment reserve, additional statutory reserves, conditional bonuses,
excess value/deficit related to bonds at amortised cost and accrued profit.
Note 5: Risk management and internal control
Storebrand’s income and performance are dependent on external factors that are associated with uncertainty. The most important
external risk factors are the developments in the financial markets and changes in life expectancy in the Norwegian and Swedish
populations. Certain internal operational factors can also result in losses, e.g. errors linked to the management of the customers’
assets or payment of pension.
Continuous monitoring and active risk management are core areas of the Group’s activities and organisation. The basis for risk
management is laid down in the Board’s annual review of the strategy and planning process, which sets the appetite for risk, risk
targets and overriding risk limits for the operations. At the Storebrand Group, responsibility for risk management and internal control
is an integral part of management responsibility.
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STOREBRAND ANNUAL REPORT 2019
Organisation of risk management
The Group’s organisation of the responsibility for risk management follows a model based on three lines of defence. The objective of
the model is to safeguard the responsibility for risk management at both company and Group level.
Board of Directors
CEO
Executive management
CRO Group
Independent control functions
Internal
auditing
Risk
management
Actuary
function
Compliance
Anti-money
laundering (AML)
Privacy
(DPO)
The boards of directors of both Storebrand ASA and the group companies have the overall responsibility for limiting and following up
the risks associated with the activities. The boards set annual limits and guidelines for risk-taking in the company, receive reports on
the actual risk levels, and perform a forward-looking assessment of the risk situation.
The Board of Storebrand ASA has established a Risk Committee consisting of 3 Board members. The main task of the Risk Committee
is to prepare matters to be considered by the Board in the area of risk, with a special focus on the Group’s appetite for risk, risk
strategy and investment strategy. The Committee should contribute forward-looking, decision-making support related to the Board’s
discussion of risk taking, financial forecasts and the treatment of risk reporting.
Managers at all levels in the company are responsible for risk management within their own area of responsibility. Good risk
management requires targeted work on objectives, strategies and action plans, identification and assessment of risks, documentation
of processes and routines, prioritisation and implementation of improvement measures, and good communication, information and
reporting.
Independent control functions
Independent control functions have been established for risk management for the business (Risk Management Function/Chief Risk
Officer), for compliance with the regulations (Compliance Function), for ensuring the insurance liabilities are calculated correctly
(Actuary Function), for data protection (Data Protection Officer), for money laundering (Anti Money Laundering) and for the bank’s
lending. Relevant functions have been established for both the Storebrand Group (the Group) and all of the companies requiring
a licence. The independent control functions are organised directly under the companies’ managing directors and report to the
respective company’s board.
In terms of function, the independent control functions are affiliated with the Group CRO, who is responsible to the group CEO
and reports to the board of Storebrand ASA. The Group CRO shall ensure that all significant risks are identified, measured and
appropriately reported. The Group CRO function shall be actively involved in the development of the Group’s risk strategy and
maintain a holistic view of the company’s risk exposure. This includes responsibility for ensuring compliance with the relevant
regulations for risk management and the consolidated companies’ operations.
The internal audit function is organised directly under the Board and shall provide the boards of the relevant consolidated companies
with confirmation concerning the appropriateness and effectiveness of the company’s risk management, including how well the
various lines of defence are working.
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SECTION 9. ANNUAL ACCOUNTS AND NOTES
Note 6: Operational risk
Operational risk is the risk of loss due to inadequate or failing internal processes or systems, human error or external events. The
definition includes compliance risk: Compliance risk is the risk of loss or public sanctions as a result of non-compliance with external
or internal rules.
Risk management shall ensure that the risk level at any time is compatible with the appetite for risk and within internal and regulatory
frameworks. The Group seeks to reduce operational risk through an effective system for internal control. Risks are followed up
through the management’s risk reviews, with documentation of risks, measures and the follow-up of incidents. In addition, Internal
Audit carries out independent checks through audit projects adopted by the Board.
Contingency plans have been prepared to deal with serious incidents in business-critical processes and recovery plans.
Storebrand’s IT systems are vital for operations and reliable financial reporting. Errors and disruptions may have consequences
for commercial operations and can impact on the trust the Group has from both customers and shareholders. In the worst case,
abnormal situations can result in penalties from the supervisory authorities. Storebrand’s IT platform is characterised by complexity
and integration between different specialist systems and joint systems. The operation of the IT systems has largely been outsourced
to different service providers. A management model has been established with close follow-up of providers and internal control
activities in order to reduce the risk associated with the development, administration and operation of the IT systems, as well as
information security. The bank platform and insurance platform are based on purchased standard systems that are operated and
monitored through outsourcing agreements. There is a greater degree of own development for the life insurance activities, while
parts of the operation of this have also been outsourced. The unit administration linked to the savings part of the group defi-
ned-contributed based occupational pension and unit linked products is managed in a purchased system solution.
Note 7: Insurance risk
Storebrand offers traditional life and pension insurance as both group and individual contracts. Contracts are also offered in which
the customer has the choice of investment.
The insurance risk in Norway is largely standardised for contracts in the same industry as a result of detailed regulation from the aut-
horities. In Sweden, the framework conditions for insurance contracts entail major differences between the contracts within the same
industry.
The insurance risk associated with an increase in life expectancy and thereby an increase in future pension payments (longevity) is the
greatest risk for the Group. Other risks include disability risk and mortality risk. The life insurance risks are:
1.
Long life expectancy – The risk of erroneously estimating life expectancy and future pension payments. Historical
developments have shown that an increasing number of people attain retirement age and live longer as pensioners
than was previously the case. There is a great deal of uncertainty surrounding future mortality development
In the event of longer life expectancy beyond that assumed in the premium tariffs, the owner could risk higher
charges on the owner’s result in order to cover necessary statutory provisions.
Disability – The risk of erroneous estimation of future illness and disability. There will be uncertainty associated with
the future development of disability, including disability pensioners who are returned to the workforce.
Death – The risk of erroneous estimation of mortality or erroneous estimation of payment to surviving relatives.
Over the last few years, a decrease in mortality and fewer young surviving relatives have been registered, compared with
earlier years.
2.
3.
In the Guaranteed Pensions segment, the Group has a significant insurance risk relating to estimation of life expectancy and future
pension payments for group and individual insurance agreements. In addition, there is an insurance risk associated with estimates of
disability and pensions left to spouses and/or children. The disability coverage in Guaranteed Pensions is primarily sold together with
a retirement pension. The risk of mortality is low in Guaranteed Pensions when viewed in relation to other risks. In SPP it is possible
to change the future premiums for the IF portfolio, reducing the risk significantly. In Norway it is also possible to change the future
premiums of group policies, but only for new accumulation, entailing reduced risk.
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STOREBRAND ANNUAL REPORT 2019
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.
In the Savings segment the Group has a low insurance risk. The insurance risk is largely associated with death, with some long-life risk
for paid-up policies with investment options.
In the Insurance segment, the Group has an insurance risk associated with disability and death. In addition, there are insurance risks
associated with occupational injury, critical illness, cancer insurance, child insurance, accident insurance and health insurance. For
occupational injury, the risk is first and foremost potential errors in the assessment of the level of provisions, because the number of
claim years can be up to 25 years. The insurance risk within critical illness, cancer, accident and health insurance is considered to be
limited based on the volume and underlying volatility of the products. Within P&C insurance, the risk of house fire and personal injury
for motor vehicle insurance constitute the main risks.
The Other segment also includes the insurance risk at Euroben, which offers pension products to multinational companies. The
insurance risk primarily relates to group life insurance, early retirement pensions and pensions for expatriate employees. These are
defined-benefit pensions that can be time-limited or lifelong and the insurance risk is limited.
Description of products
Risk premiums and tariffs
Guaranteed Pension
Group pension insurance schemes in Norway follow the premiums for traditional retirement and survivor coverage in the industry
tariff K2013. The premiums for disability pensions are based on the company’s own experience. Expense premiums are determined
annually with a view to securing full cover for the next year’s expected costs.
For individual insurance in Norway, the premiums for death risk and long life expectancy risk are based on tariffs 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 premium for group insurance in Sweden is calculated as an equalised premium within the insurance group, based on the
group distribution of age and gender, as well as the requirement for coverage of next of kin. The risk premium for individual insurance
is determined individually and is based on age and gender.
SPP’s mortality assumptions are based on the general mortality tariff DUS14, adjusted for the company’s own observations.
The new public sector occupational pension enters into force from 2020 and includes retirement pensions in the public sector.
The new scheme is a premium pension and is a net pension recognisable from the private sector. Premium pension means that the
pension is accrued each year based on the employee’s salary. This is as opposed to the previous schemes whereby the pension was
calculated based on the final salary. The premium pension ensures a life-long retirement pension, and the retirement pension can be
fully or partly withdrawn from and including the age of 62 until and including the age of 75. Payment of the pension will start at the
age of 75 regardless. Members who are not entitled to an AFP are given a conditional occupational pension as a supplement to the
retirement pension.
Insurance
Tariffs for group life insurance and certain risk insurances within group pensions also depend on the industry or occupation, in
addition to age and gender. Group life insurance also applies tariffs based on claims experience. The company’s tariff for group life
insurance, both for life and disability cover, is based on the company’s own experience.
Newer individual endowment policies are priced without taking gender into account. The tariffs for all individual endowment policies
are based on the company’s own experiences.
For P&C insurance (occupational injury, property and motor vehicle) the tariffs are based on the company’s own experiences.
Management of insurance risk
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
115
SECTION 9. ANNUAL ACCOUNTS AND NOTES 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 have occurred.
When writing individual risk cover, the customer is subject to a health check. The result of the health check is reflected in the level
of premium quoted. When arranging group policies with risk cover, all employees of small companies are subject to a health check,
while for companies with many employees a declaration of fitness for work is required. In the assessment of risk (underwriting), the
company’s industrial category, sector and sickness record are also taken into account.
Large claims or special events constitute a major risk for all products. The largest claims will typically be in the group life, occupational
injury and personal injury (motor vehicle accidents) segments.
The company manages its insurance risk through a variety of reinsurance programmes. Through catastrophe reinsurance (excess
of loss), the company covers losses (single claims and reserves provisions) where a single event causes more than two deaths or
disability cases. This cover is also subject to an upper limit. A reinsurance agreement for life policies covers death and disability risk
that exceeds the maximum risk amount for own account the company practises. The company’s maximum risk amount for own
account is relatively high, and the risk reinsured is therefore relatively modest.
The company also manages its insurance risk through international pooling. This implies that multinational corporate customers
can equalise the results between the various units internationally. Pooling is offered for group life and risk cover within group
defined-benefit and defined-contribution pensions.
Risk result
The risk result consists of premiums the company charges to cover insurance risks less the actual costs in the form of insurance reserves
and payments for insured events such as death, pensions, disability and accidents.
The table below specifies the risk result for the largest entities in the Group and also states the effect of reinsurance and pooling on the
result. The risk result in the table shows the total risk result for distribution to customers and owner (the insurance company).
SPECIFICATION OF RISK RESULT
NOK million
Survival
Death
Disability
Reinsurance
Pooling
Other 1)
Total risk result
Storebrand Life Insurance AS
SPP Pension & Försäkring AB
2019
-58
416
443
2
22
-101
724
2018
2019
2018
2
367
643
47
52
-29
1,081
-39
19
92
-1
-14
-4
53
21
-4
69
-2
-15
-209
-140
1) Change in estimate linked to closed risk product in SPP.
Adequacy test
In accordance with the accounting standard IFRS 4 Insurance Contracts, the insurance liabilities that are included shall be adequate
and a liability adequacy test shall be performed. Storebrand satisfies the adequacy tests for 2019, and these therefore had no impact
on the results in the financial statements for 2019.
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STOREBRAND ANNUAL REPORT 2019
Note 8: Financial market risk
Market risk means changes in the value of assets as a result of unexpected volatility or changes in prices on the financial markets.
It also refers to the risk that the value of the insurance liability develops differently to that of the assets.
The most significant market risks for Storebrand are interest rate risk, share market risk, property price risk, credit risk, and exchange
rate risk.
For the life insurance companies, the financial assets are invested in a variety of sub-portfolios. Market risk affects Storebrand’s
income and profit differently in the different portfolios. There are three main types of sub-portfolio: company portfolios, customer
portfolios without a guarantee (unit linked insurance) and customer portfolios with a guarantee.
The market risk in the company portfolios has a direct impact on the profit.
The market risk in unit linked insurance is at the customers’ risk and expense, meaning Storebrand is not directly affected by changes
in value. Nevertheless, changes in value do affect Storebrand’s profit indirectly. Income is based largely on the size of the reserves,
while the costs tend to be fixed. Lower than expected returns on the financial market will therefore have a negative effect on
Storebrand’s future income and profit.
For customer portfolios with a guarantee, the net risk for Storebrand will be lower than the gross market risk. The extent of measures
to reduce risk depends on several factors, the most important being the size and flexibility of the customer buffers and level and
duration of the return guarantee. If the investment return is not sufficient to meet the guaranteed interest rate, the shortfall may be
met by using customer buffers built up from previous years’ surpluses.
For guaranteed customer portfolios, the risk is affected by changes in the interest rate level. Falling interest rates are positive for
the investment return in the short term due to price appreciation for bonds and interest rate swaps, but negative in the long term
because it reduces the probability of achieving a return higher than the guarantee. Long-term interest rates fell slightly in both
Norway and Sweden in 2019. Short-term money market rates increased slightly in both Norway and Sweden.
The composition of the assets within each sub-portfolio is determined by the company’s investment strategy. The investment strategy
also establishes guidelines and limits for the company’s risk management, credit exposure, counterparty exposure, currency risk, use
of derivatives, and requirements regarding liquidity
ASSET ALLOCATION
Properties at fair value
Bonds at amortised cost
Money market
Bonds at fair value
Equities at fair value
Loans at amortised cost
Total
Customer portfolios
Customer portfolios
with guarantee
without guarantee
Company portfolios
11%
38%
2%
28%
8%
14%
100%
2%
4%
15%
79%
25%
3%
72%
100%
100%
Storebrand aims to take low financial risk for the company portfolios, and most of the funds were invested in short and
medium-term fixed income securities with low credit risk.
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SECTION 9. ANNUAL ACCOUNTS AND NOTES
The financial risk related to customer portfolios without a guarantee is borne by the insured person, and the insured person can
choose the risk profile. Storebrand’s role is to offer a good, broad range of funds, to assemble profiles adapted to different risk
profiles, and to offer systematic reduction of risk towards retirement age. The most significant market risks are share market risk and
exchange rate risk.
The most significant market risks facing guaranteed customer portfolios are linked to equity risk, interest rate risk, credit risk and
property price risk. There were no major changes in the investment allocation during 2019. In Norway, most of the credit risk is linked
to securities, which are carried at amortised cost. This reduces the risk to the company’s profit significantly.
The market risk is managed by segmenting the portfolios in relation to risk-bearing capacity. For customers who have large customer
buffers, investments are made with higher market risk that give increased expected returns. Equity risk is also managed by means of
dynamic risk management, the objectives of which are to maintain good risk-bearing capacity and to adjust the financial risk to the
buffer situation and the company’s financial strength. By exercising this type of risk management, Storebrand expects to create good
returns both for individual years and over time.
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.
Foreign exchange risk primarily arises as a result of investments in international securities, including as a result of ownership in SPP.
In the consolidated financial statements, the value of assets and results from the Swedish operations are affected by changes in the
value of the Swedish krone. Storebrand Livsforsikring AS has hedged parts of the value of SPP through forward foreign exchange
contracts and borrowings in Swedish kroner..
FINANCIAL ASSETS AND LIABILITIES IN FOREIGN CURRENCIES
NOK million
Net in balance sheet
Net sales
in currency
in NOK
Balance sheet items exclu-
ding currency derivatives
Forwad contracts
Net position
DKK
CAD
EUR
GBP
JPY
SEK
USD
NOK1)
157
127
1,098
123
26,214
212,671
3,655
33,945
-256
-327
-1,273
-217
-45,381
-456
-5,132
-1,890
Other currency types
Insurance liabilities in foreign exchange
-209,425
Total net currency positions 2019
Total net currency positions 2018
1) Equity and bond funds denominated in NOK with foreign currency exposure in i.a. EUR and USD NOK 28 billion.
-100
-201
-183
-94
-19,167
211,978
-1,478
32,039
-209,425
-131
-1,365
-1,739
-1,101
-1,556
206,694
-12,960
32,202
-1,653
-204,526
13,866
5,152
The table above shows the currency positions as at 31 December 2019. The currency exposure is primarily related to investments in
the Norwegian and Swedish insurance business.
Storebrand Life Insurance:
The company hedges most of the foreign exchange risk in the customer portfolios on an ongoing basis. Foreign exchange risk exists
primarily as a result of investments in international securities, as well as subordinated loans in a foreign currency to a certain extent.
Hedging is performed by means of forward foreign exchange contracts at the portfolio level, and the currency positions are monito-
red continuously against a total limit. Negative currency positions are closed out no later than the day after they arose. In addition,
separate limits have been defined so that active currency positions can be taken. Storebrand employs a currency hedging principle
called block hedging, which makes the execution of currency hedging more efficient.
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STOREBRAND ANNUAL REPORT 2019 SPP
SPP uses currency hedging for its investments to a certain degree. Currency exposure may be between 0 and 30 per cent in
accordance with the investment strategy.
Banking business
Storebrand Bank ASA hedges net balance sheet items by means of forward contracts.
The permitted limit for the bank’s foreign exchange position is 0.50 per cent of primary capital, which is approximately
12 million at present.
Guaranteed customer portfolios in more details.
Storebrand Livsforsikring
The annual guaranteed return to the customers follows the basic interest rate. New premiums were taken in with a basic
interest rate of 2.0 per cent, and pensions were adjusted upwards with a basic interest rate of 0.5 per cent.
The percentage distribution of the insurance reserves by the various basic annual interest rates as at 31 December is as follows:
Interest rate
6%
5%
4%
3.4%
3%
2.75%
2.50%
2.00%
0.50%
0%
The table includes premium reserve excluding IBNS
Average interest rate guarantee in per cent
Individual endowment insurance
Individual pension insurance
Group pension insurance
Paid-up policy
Group life insurance
Total
The table includes premium reserve including IBNS
2019
0.3%
0.3%
44.4%
0.3%
29.0%
1.8%
11.0%
11.2%
1.3%
0.5%
2019
2.6%
3.8%
2.5%
3.3%
0.1%
3.2%
2018
0.3%
0.3%
45.8%
0.4%
29.5%
1.8%
11.0%
9.5%
1.0%
0.5%
2018
2.6%
3.8%
2.5%
3.3%
0.1%
3.2%
There is a 0 per cent interest rate guarantee for premium funds, defined-contribution funds, pensioners’ surplus funds and additional
statutory reserves.
The interest rate guarantee must be fulfilled on an annual basis. If the company’s investment return in any given year is lower than the
guaranteed interest rate, the equivalent of up to one year’s guaranteed return for the individual policy can be covered by transfers
from the policy’s additional statutory reserves.
To achieve adequate returns with the present interest rates, it is necessary to take an investment risk. This is primarily done by
investing in shares, property and corporate bonds.
Interest rate risk is in a special position because changes in interest rates also affect the fair value of the insurance liability for the
solvency calculation. Since pension disbursements may be many years in the future, the insurance liability is particularly sensitive to
changes in interest rates. In the Norwegian business, greater interest rate sensitivity from the investments will entail increased risk
119
SECTION 9. ANNUAL ACCOUNTS AND NOTES
that the return is below the guaranteed level. The risk management must therefore balance the risk of the profit for the year
(interest rate increase) with the reinvestment risk if interest rates fall below the guarantee in the future. Bonds at amortised cost are
an important risk management tool.
SPP Pension & Forsäkring
The guaranteed interest rate is determined by the insurance company and is used when calculating the premium and the guaranteed
benefit. The guaranteed interest rate does not entail that there is an annual minimum guarantee for the return as is the case in
Norway.
New premiums in individual defined-contribution pensions (IF) have a guarantee of 1.25% for 85% of the premium. Group
defined-benefit pension (KF) is closed to new members.
SPP bears the risk of achieving a return equal to the guaranteed interest on the policyholders’ assets over time and that the level of
the contracts’ assets is greater than the present value of the insurance liabilities. For IF, profit sharing becomes relevant in SPP if the
return exceeds the guaranteed yield. The contracts’ buffer capital must be intact in order for profit sharing to represent a net income
for SPP. In the case of KF, a certain degree of consolidation, i.e. that the assets are greater than the present value of the liabilities by a
certain percentage, is required in order for the owner to receive profit-sharing income (indexing fee).
If the assets in an insurance contract in the company are less 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 DCC are recognised in the
income statement as they occur. 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 recognised in the income statement.
Interest rate
5.20%
4,5%-5,2%
4.00%
3.00%
2,75%-4,0%
2.70%
2.50%
1.60%
1.50%
1.25%
1,25% *
0,5%-2,5%
0.00%
* 1,25% på 85% av Premien
Average interest rate guarantee in per cent
Individual pension insurance
Group pension insurance
Individual occupational pension insurance
Total
2019
12.7%
0.4%
3.7%
48.8%
5.4%
0.1%
6.2%
0.0%
2.6%
4.1%
7.6%
4.0%
4.1%
2019
3.1%
2.6%
3.1%
2.9%
2018
13.0%
0.4%
1.6%
47.0%
7.0%
0.1%
6.9%
0.0%
4.1%
4.6%
5.1%
4.3%
5.9%
2018
3.3%
2.5%
3.1%
2.8%
In the Swedish operations management of interest rate risk is based on the principle that the interest rate risk from assets shall
approximately correspond to the interest rate risk from the insurance liabilities.
Sensitivity analyses
The tables show the fall in value for Storebrand Life Insurance and SPP’s investment portfolios as a result of immediate changes in
value related to financial market risk. The calculation is model-based and the result is dependent on the choice of stress level for each
category of asset. The stresses have been applied to the company portfolio and guaranteed customer portfolios as at 31 December
2019. The effect of each stress changes the return in each profile.
120
STOREBRAND ANNUAL REPORT 2019
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 effect of a falling market will not directly affect the result or buffer capital.
The amount of stress is the same that is used for the company’s risk management. Two stress tests have been defined. Stress test
1 is a fall in the value of shares, corporate bonds and property in combination with lower interest rates. Stress test 2 is a somewhat
smaller fall in the value of shares, corporate bonds and property in combination with higher interest rates.
Level of stress
Interest level (parallel shift)
Equity
Property
Credit spread (share of Solvency II)
2019
-100bp
-20%
- 12%
50%
2018
+100bp
- 12%
- 7%
30%
Because it is the immediate market changes that are calculated, dynamic risk management will not affect the outcome. If it is assumed
that the market changes occur over a period of time, then dynamic risk management would reduce the effect of the negative
outcomes and reinforce the positive to some extent.
As a result of customer buffers, the effect of the stresses on the result will be lower than the combined change in value in the table.
As at 31 December 2019, the customer buffers are of such a size that the effects on the result are significantly lower.
Stresstest 1
Sensitivity
Interest rate risk
Equtiy risk
Property risk
Credit risk
Total
Stresstest 2
Sensitivity
Interest rate risk
Equtiy risk
Property risk
Credit risk
Total
Storebrand Livsforsikring
SPP Pension & Försäkring
NOK million
Share of portfolio
SEK million
Share of portfolio
3,341
-3,201
-2,388
-850
-3,098
1.6%
-1.5%
-1.1%
-0.4%
-1.5%
421
-2,038
-1,170
-704
-3,490
0.5%
-2.2%
-1.3%
-0.8%
-3.8%
Storebrand Livsforsikring
SPP Pension & Försäkring
NOK million
Share of portfolio
SEK million
Share of portfolio
-3,341
-1,920
-1,393
-510
-7,164
-1.6%
-0.9%
-0.7%
-0.2%
-3.4%
-421
-1,223
-682
-422
-2,749
-0.5%
-1.3%
-0.7%
-0.5%
-3.0%
121
SECTION 9. ANNUAL ACCOUNTS AND NOTES
Storebrand Livsforsikring
For Storebrand Livsforsikring it is stress test 2, which includes an increase in interest rates, that makes the greatest impact.
The overall market risk is NOK 7.2 billion, which is equivalent to 3.4 per cent of the investment portfolio.
If the stress causes the return to fall below the guarantee, it will have a negative impact on the result if the customer buffer is not
adequate. Other negative effects on the result are a lower return from the company portfolio and that there is no profit sharing from
paid-up policies and individual contracts.
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 3.5
billion, which is equivalent to 3.8 per cent of the investment portfolio.
The buffer situation for the individual contracts will determine if all or portions of the fall in value will affect the financial result. Only
the portion of the fall in value that cannot be settled against the customer buffer will be charged to the result. In addition, the reduced
profit sharing or loss of the indexing fees may affect the financial result.
Other operations
The other companies in the Storebrand Group are not included in the sensitivity analysis, as there is little market risk in these areas.
The equity of these companies is invested with little or no allocation to high-risk assets, and the products do not entail a direct risk for
the company as a result of price fluctuations in the financial market.
Note 9: Liquidity risk
Liquidity risk is the risk that the company is unable to fulfil its obligations without incurring substantial additional expenses in the form
of reduced prices for assets that must be realised, or in the form of especially expensive financing.
For the insurance companies, the life insurance companies in particular, the insurance liabilities are long-term and the cash flows
are generally known long before they fall due. In addition, liquidity is required to handle payments related to operations, and there
are liquidity needs related to derivative contracts. The liquidity risk is handled by liquidity forecasts and the fact that portions of the
investments are in very liquid securities, such as government bonds. The liquidity risk is considered low based on these measures.
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 principles for liquidity management, and limits stipulated
by the Board for different minimum liquidity and financing indicators. 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.
Separate liquidity strategies have also been drawn up for other subsidiaries in accordance with the statutory requirements. These
strategies specify limits and measures for ensuring good liquidity and a minimum allocation to assets that can be sold at short notice.
The strategies define limits for allocations to various asset types and mean the companies have money market investments, bonds,
equities and other liquid investments that can be disposed of as required.
In addition to clear strategies and the risk management of liquidity reserves in each subsidiary, the Group’s holding company has
established a liquidity buffer. The development of the liquid holdings is continuously monitored at the Group level in relation to
internal limits. A particular risk is the fact that during certain periods the financial markets can be closed for new borrowing. Measures
for minimising the liquidity risk are to maintain a regular maturity structure for the loans, low costs, an adequate liquidity buffer and
credit agreements with banks which the company can draw on if necessary.
122
STOREBRAND ANNUAL REPORT 2019 UNDISCOUNTED CASH FLOWS FOR FINANCIAL LIABILITIES 1)
NOK million
0-6 months
7-12 months
2-3 years
4-5 years
> 5 years
cashflows
booked value
Subordinated loan capital2)
1,161
75
2,469
5,359
976
10,040
8,925
Total
Total
Liabilities to financial
institutions
Deposits from bank
customers
Debt raised from issuance
of securities
Other current liabilities
Uncalled residual liabilities
Limited partnership
Unused credit lines
lending
Lending commitments
Total financial
liabilities 2019
Derivatives related to
funding 2019
Total financial liabilities 2018
Derivatives related to funding
446
14,399
4,115
8,194
7,297
3,072
1,466
5
497
11,381
80
4,037
-8
446
446
14,404
14,404
18,729
8,274
20,022
8,274
7,297
3,072
1,466
40,150
576
13,930
9,395
968
65,020
50,778
-115
32,471
98
1,403
-50
12,280
-114
11,834
2,049
-181
60,036
-5
46,803
2018
-111
29
-76
-159
-317
23
1) Liabilities for which repayment may be demanded immediately are included in the 0-6 month column.
2) In the case of perpetual subordinated loans the cash flow is calculated through to the first call date.
SPECIFICATION OF SUBORDINATED LOAN CAPITAL1)
Nominal value
Currency
Interest
Maturity
Book value
NOK million
Issuer
Perpetual subordinated loan capital2)
Storebrand Livsforsikring AS
Storebrand Livsforsikring AS
Dated subordinated loan capital
Storebrand Livsforsikring AS
Storebrand Livsforsikring AS
Storebrand Livsforsikring AS
Storebrand Livsforsikring AS
Storebrand Livsforsikring AS
Storebrand Bank ASA
Storebrand Bank ASA
Total subordinated loans and hybrid tier
1 capital 2019
Total subordinated loans and hybrid tier 1
capital 2018
872
1,100
1,000
1,000
300
750
900
150
125
NOK
NOK
SEK
SEK
EUR
SEK
SEK
NOK
NOK
Variable
Variable
Variable
Variable
Fixed
Variable
Variable
Variable
Variable
2020
2024
2022
2024
2023
2021
2025
2022
2025
1) Storebrand Bank ASA has issued hybrid tier 1 capital bonds/hybrid capital that is classified as equity. See the statement of changes in equity.
2) In the case of perpetual subordinated loans the cash flow is calculated through to the first call date.
874
1,100
939
940
3,243
709
844
151
125
8,925
8,224
123
SECTION 9. ANNUAL ACCOUNTS AND NOTES SPESIFICATION OF LIABILITIES TO FINANCIAL INSTITUTIONS
NOK million
Call date
2019
2020
Total liabilities to financial institutions
SPECIFICATION OF SECURITIES ISSUED
NOK million
Call date
2019
2020
2021
2022
2023
Total securities issued
Book value
2019
446
446
Book value
2019
3,769
4,916
6,023
4,021
18,729
2018
2
2
2018
2,779
4,314
4,414
4,519
1,503
17,529
The loan agreements and credit facilities contain covenants.
Covered bonds
For issued covered bonds, a regulatory requirement for over-collateralisation of 102 per cent and an over-collateralisation require-
ment of 109.5 per cent for bonds issued before 21 June 2017 apply.
Credit facilities
Storebrand ASA has an unused credit facility of EUR 240 million, expiration December 2024.
FINANCING ACTIVITIES - MOVEMENTS DURING THE YEAR
NOK million
Book value 1.1.19
Admission of new loans/liabilities
Repayment of loans/liabilities
Change in accrued interest
Translation differences
Change in value/amortisation
Book value 31.12.19
Subordinated loan
Liabilities to financial
capital
institutions
Securities issued
8,224
1,052
-253
1
-101
1
8,925
2
446
-2
17,529
4,500
-3,290
-5
-5
446
18,729
124
STOREBRAND ANNUAL REPORT 2019 Note 10: Credit risk
Storebrand is exposed to risk of losses as a result of counterparties not fulfilling their debt obligations. This risk also includes losses
on lending and losses related to the failure of counterparties to fulfil their financial derivative contracts.
The maximum limits for credit exposure to individual counterparties and for overall credit exposure to rating categories are set by the
boards of the individual companies in the Group. Particular attention is paid to ensuring diversification of credit exposure in order to
avoid concentrating credit exposure on any particular debtors or sectors. Changes in the credit standing of debtors are monitored
and followed up. Thus far, the Group has used published credit ratings wherever possible, supplemented by the company’s own credit
evaluation.
Underlying investments in funds managed by Storebrand are included in the tables.
Credit risk by counterparty
BONDS AND OTHER FIXED-INCOME SECURITIES AT FAIR VALUE
NOK million
Fair value
Fair value
Virkelig verdi
Fair value
Fair value
AAA
AA
A
BBB
NIG
Not rated
Fair value
Total
Fair value
Government and go-
vernment guaranteed
bonds
Corporate bonds
Structured notes
22,890
20,926
14,431
7,089
415
25,389
Collateralised securities
3,587
554
335
27,169
1
734
259
12,109
201
38,331
93,416
1
4,341
Total interest bearing
securities stated by
rating
Bond funds not mana-
ged by Storebrand
Non-interest bearing
securities managed by
Storebrand
Total 2019
Total 2018
47,403
22,073
25,805
27,505
734
12,569
136,089
47,403
43,974
22,073
28,548
25,805
34,613
27,505
26,452
734
3,630
12,569
7,142
16,846
10,440
163,375
163,294
125
SECTION 9. ANNUAL ACCOUNTS AND NOTES INTEREST BEARING SECURITIES AT AMORTISED COST
Category of issuer or guarantor
NOK million
Fair value
Fair value
Fair value
Fair value
Fair value
Fair value
Fair value
AAA
AA
A
BBB
NIG
Not rated
Total
10,669
25,843
504
37,016
40,127
14,276
10,385
290
24,952
25,945
2,976
41,435
44,411
25,220
12,905
12,905
10,168
11,810
19,327
1,220
20,547
25,253
AAA
AA
A
BBB
NIG
Fair value
Fair value
Fair value
Fair value
Fair value
Not rated
Fair value
3,224
1,734
53
596
167
109
18
3,057
1,625
53
578
2,484
3,606
1,490
7,837
77
494
596
108
-110
1,370
494
27,921
109,895
1,510
504
139,830
138,524
Total
Fair value
5,607
294
5,313
4,646
12,348
1,754
Government and govern-
ment guaranteed bonds
Corporate bonds
Structured notes
Collateralised securities
Total 2019
Total 2018
Counterparties
NOK million
Derivatives
Of which derivatives in
bond funds, managed
by Storebrand
Total derivatives
excluding derivatives
in bond funds 2019
Total derivatives exclu-
ding derivatives in bond
funds 2018
Of which bank deposits
in bond funds, mana-
ged by Storebrand
Total bank deposits
excluding bank
deposits in bond
funds 2019
Total bank deposits
excluding bank deposits
Bank deposits
303
303
3,716
6,466
108
10,594
in bond funds 2018
376
6,303
2,218
15
159
19
9,090
Loans to financial
institutions
Rating classes based on Standard & Poor’s.
NIG = Non-investment grade.
20
21
41
126
STOREBRAND ANNUAL REPORT 2019 INVESTMENTS SUBJECT TO NETTING AGREEMENTS/CSA
Sikkerhetsstillelser
NOK million
fin. assets
fin. liabilites
assets/ liabilities
(+/-)"
(+/-) Net exposure
Booked value
Booked value
Net booked fin.
"Cash
Securities
Investments subject to netting agree-
ments
Investments not subject to netting agre-
ements
Total 2019
Total 2018
5,260
994
4,266
2,586
-322
2,002
53
5,313
4,926
994
4,607
53
4,319
319
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS (FVO)
NOK million
Booke value maximum exposure for credit risk
Net credit risk
This year's change in fair value due to change in credit risk
Storebrand has none related credit derivatives or collateral
2019
159,045
159,045
-276
2018
155,902
155,902
-712
127
SECTION 9. ANNUAL ACCOUNTS AND NOTES CREDIT RISK FOR THE LOAN PORTFOLIO
COMMITMENTS BY CUSTOMER GOUPS
Lending to
and receiva-
bles from
Total
Unimpaired
Impaired
Individual
defaulted
Net
Unused
commit-
commit-
commit-
NOK million
customers
Guarantees
credit-lines
ments
ments
ments
Sale and operation of
real estate
Other service providers
Wage-earners and
others
Others
Total
- Individual write-downs
+ Group write-downs
Total loans to and
receivables from
customers 20191)
Total loans to and
receivables from
customers 20182)
1) 2019:
- Of whcih Storebrand
10,597
1
47,540
2,581
60,719
-28
-32
60,659
59,436
1
1
1
1
3,129
25
3,155
10,598
2
50,669
2,606
63,875
-28
-32
3,155
63,815
3,444
62,881
72
2
73
73
71
22
30
52
52
59
Bank
30,187
1
3,072
33,260
73
52
- Of which Storebrand
Livsforsikring
30,472
83
30,555
write-
downs
commit-
ments
-9
-11
-8
-28
13
91
-7
97
-28
97
-21
108
-20
-8
105
-8
2) 2018:
- Of whcih Storebrand
Bank
28,456
1
3,362
31,819
71
59
21
108
- Of which Storebrand
Livsforsikring
30,980
83
31,062
The majority of the loans at Storebrand consist of home loans to retail market customers. The home loans are approved and
administered by Storebrand Bank, but a significant share of the loans have been transferred to Storebrand Livsforsikring as a part
of the investment portfolio. Storebrand Livsforsikring and SPP also have loans to companies as part of the investment portfolio.
Storebrand Bank’s corporate market segment has largely been discontinued.
As of 31 December 2019, Storebrand had loans to customers totalling NOK 60.7 billion net after provisions for losses of
NOK 0.1 billion. Of this, NOK 13.2 billion was to the corporate market and NOK 47.5 billion to the retail market.
The corporate market portfolio consists of income generating properties and development properties with few customers and low
level of default that are primarily secured by mortgages in commercial property. Storebrand Bank’s corporate market loans segment
has largely been discontinued.
In the retail market, most of the loans are secured by means of home mortgages. Customers are evaluated according to their capacity
and intent to repay the loan. In addition to their capacity to service debt, checks are conducted of customers in relation to policy rules
and they are given a credit rating.
128
STOREBRAND ANNUAL REPORT 2019 The weighted average loan-to-value ratio for home loans is approximately 58 per cent. Over 97 per cent of home loans have a loan to
value ratio within 85 per cent and approximately 99.3 per cent are within a 100 per cent loan to value ratio. Approximately 50 per cent
of the home loans are within a 60 per cent LVR. The portfolio is considered to have a low to moderate credit risk.
TOTAL COMMITTMENTS BY REMAINING TERM
2019
2018
Loans to
and receiva-
bles from
Loans to
Total
and receiva-
Total
Unused
commit-
bles from
Unused
commit-
NOK million
customers
Guarantees
credit line
ments
customers
Guarantees
credit line
ments
Up to one month
1 - 3 months
3 months - 1 year
1 -5 years
More than 5 years
Total gross commit-
ments
20
259
806
10,639
48,995
60,719
5
23
121
758
2,248
25
282
928
11,397
51,243
234
318
1,782
9,527
47,679
3,155
63,875
59,540
1
1
4
35
139
881
2,385
238
353
1,922
10,408
50,064
3,444
62,985
1
1
Commitments are regarded as non-performing and loss exposed when a credit facility has been overdrawn for more than 90 days
and when an instalment loan has arrears older than 90 days and the amount is at least NOK 2000.
CREDIT RISKS BY CUSTOMER GROUPS
NOK million
ming commitments
write-downs
commitments
during the period
Gross non-perfor-
Individual
performing
value changes
Net non-
Total recognised
Sale and operation of real estate
Wage-earners and others
Others
Total 2019
Total 2018
22
102
2
125
129
9
11
-8
11
-28
13
91
2
105
108
-1
-1
-80
In the case of default, Storebrand Bank ASA will sell the securities or repossess the properties if this is most suitable.
TOTAL ENGAGEMENT AMOUNT BY REMAINING TERM TO MATURITY
NOK million
Overdue 1-30 days
Overdue 31-60 days
Overdue 61-90 days
Overdue more than 90 days
Total
2019
2018
Loans to and
Loans to and
receivables
Unused
Total
receivables
Unused
Total
from
credit-
commit-
from
credit-
commit-
customers
lines
ments
customers
lines
ments
285
58
46
91
480
285
58
46
91
481
155
54
2
71
281
1
156
54
2
71
2
283
129
SECTION 9. ANNUAL ACCOUNTS AND NOTES
Note 11: Concentrations of risk
Most of the risk for the Storebrand Group relates to the guaranteed pension products in the life insurance companies. These risks
are consolidated in the Storebrand Life Insurance Group, which includes Storebrand Livsforsikring AS, SPP Livförsäkring AB and the
business in Ireland (BenCo). Other companies directly owned by Storebrand ASA that are exposed to significant risks are Storebrand
Forsikring AS, Storebrand Helseforsikring AS, Storebrand Asset Management Group and Storebrand Bank Group.
For the life insurance businesses, the greatest risks are largely the same in Norway and Sweden. The financial market risk will depend
significantly on global circumstances that influence the investment portfolios in all businesses. The insurance risk may be different for
the various companies, and long life in particular can be influenced by universal trends.
Both the insurance business and the banking business are exposed to credit risk. The insurance business primarily has a credit risk
relating to bonds with significant geographical and industry-related diversification, while the bank is mostly exposed to direct loans for
residential property in Norway. There is no significant concentration risk across bonds and loans.
The financial market and investment risks are largely related to the customer portfolios in the life insurance business. The risk
associated with a negative outcome in the financial market is described and quantified in Note 8, financial market risk. The banking
business has little direct exposure to types of risk other than credit.
In the short term, an interest rate increase will negatively impact on the returns for the life insurance companies. An interest rate
increase can also result in bank customers having lower debt-servicing capacity and increased losses for the banking business.
The risk from the P&C insurance and health insurance risk in Storebrand Skadeforsikring AS and Storebrand Helseforsikring AS has a
low correlation with the risk from the rest of the businesses in the Group.
In the asset management business, the principal risk is operational risk in the form of behaviour that can trigger claims and/or
impact on reputation. Since the asset management business is the principal manager of the insurance businesses, errors in asset
management could result in errors in the insurance businesses.
Note 12: Valuation of financial instruments and properties
The Group conducts a comprehensive process to ensure that financial instruments are valued as closely as possible to their market
value. Publicly listed financial instruments are valued on the basis of the official closing price on stock exchanges, supplied by Reuters
and Bloomberg. Fund units are generally valued at the updated official NAV prices when such prices exist. Bonds are generally valued
based on prices collected from Nordic bond pricing and Bloomberg. Bonds that are not regularly quoted will normally be valued using
recognised theoretical models. This principally applies to bonds denominated in Norwegian kroner. Discount rates composed of the
swap rates plus a credit premium are used as a basis for these types of valuations. The credit premium will most often be specific to
the issuer.
Unlisted derivatives, such as forward exchange contracts and interest rate and foreign exchange swaps, are also valued theoretically.
Money market rates, swap rates and exchange rates that form the basis for valuations are supplied by Reuters and Bloomberg. The
valuations of currency options and swaptions are provided by Markit.
The Group carries out continual checks to safeguard the quality of market data that has been collected from external sources.
This involves controlling and assessing the likelihood of unusual changes.
The Group categorises financial instruments valued at fair value on three different levels, which are described in more detail below.
The levels express the differing degrees of liquidity and different measurement methods used. The company has established valuati-
on models to gather information from a wide range of well-informed sources with a view to minimising the uncertainty of valuations.
Level 1: Financial instruments valued on the basis of quoted prices for identical assets in active markets
This category encompasses listed equities that over the previous three months have experienced average daily trading equivalent
to approximately NOK 20 million or more. Based on this, the equities are regarded as sufficiently liquid to be included at this level.
130
STOREBRAND ANNUAL REPORT 2019 Bonds, certificates or equivalent instruments issued by national governments are generally classified as level 1. When it comes to
derivatives, standardised stock index futures and interest rate futures will also be included at this level.
Level 2: Financial instruments valued on the basis of observable market information not covered by level 1
This category encompasses financial instruments that are valued on the basis of market information that can be directly observable
or indirectly observable. Market information that is indirectly observable means that the prices can be derived from observable
related markets. Level 2 includes shares or equivalent equity instruments for which market prices are available, but where the volume
of transactions is too limited to fulfil the criteria in level 1. Shares in this level will normally have been traded during the last month.
Bonds and equivalent instruments are generally classified in this level. Moreover, interest rate and foreign exchange swaps, as well
as non-standardised interest rate and foreign exchange derivatives are classified as level 2. Fund investments, with the exception of
private equity funds, are generally classified as level 2, and encompass equity, interest rate, and hedge funds.
Level 3: Financial instruments valued on the basis of information that is not observable in accordance with level 2
Equities classified as level 3 are primarily investments in unlisted/private companies as well as funds consisting of these. These include
investments in forestry, microfinance, infrastructure and property. Private equity is generally classified at this level through direct
investments or investments in funds. Private customer loans and funds consisting of these are also at level 3.
The types of mutual funds classified as level 3 are discussed in more detail below with a reference to the type of mutual fund and
the valuation method. Storebrand is of the opinion that the valuation method used represents a best estimate of the mutual fund’s
market value.
Equities
Forestry represents most of the value of the level 3 shares. An external valuation was carried out as at 31 December which forms the
basis for the valuation of the company’s investments. The valuation is based on models that include non-observable assumptions.
Alternative investments organised as limited liability companies (such as microfinance, property and infrastructure) are equity
investments that are valued based on the value-adjusted equity reported by external sources when available.
In the case of direct private equity investments, the valuation is normally based on either the most recent transaction or a model in
which a company that is in continuous operation is assessed by comparing the key figures with groups of equivalent listed companies.
Fund units
Of the fund units, it is primarily private equity investments and property funds that represent the majority at level 3. Moreover, there
are also some other types of funds, such as infrastructure funds and microfinance, loan funds and property funds here. The majority
of Storebrand’s private equity investments are investments in private equity funds. These fund investments are valued based on the
value reported by the funds. Most of the funds report on a quarterly basis, while a few report less often. Reporting typically takes
place with a few months’ delay. The most recently received valuations are used as a basis, adjusted for cash flows and market effects
in the period from the most recent valuation until the reporting date. For private equity, the market effect is calculated based on the
development in value in the relevant index, multiplied by the estimated beta in relation to this index.
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 flows 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.
Loans to customers
The value of fixed-rate loans is determined by discounting the agreed cash flows over the remaining maturity by the current discount
rate adjusted for market spread. The discount rate that is used is based on a swap interest rate (mid swap) with a maturity that
corresponds to the remaining lock-in period for the underlying loans. The market spread that is used on the balance sheet date is
determined by assessing the market conditions, market price and the associated swap interest rate. However, the fair value of loans
to corporate customers with margin loans is lower than the amortised cost because certain loans run with lower margins than they
would have done if they had been taken up as of the end of 2019. The value shortfall is calculated by discounting the difference
between the agreed margin and the current market price over the remaining duration.
131
SECTION 9. ANNUAL ACCOUNTS AND NOTES Corporate bonds
Among level 3 bonds, non-performing loans will be left for estimated expected payment.
Investment properties
The investment properties primarily consist of office buildings located in Oslo and Stockholm and shopping centres in Southern
Norway.
Office properties and shopping centres in Norway:
When calculating fair value, Storebrand uses an internal cash flow model. The required rate of return is of greatest importance when
calculating the fair value for investment properties. Net cash flows for the individual property are discounted by an individual required
rate of return. A future income and expense picture for the first 10 years has been estimated for the office properties and a final value
has been calculated for the end of the 10th year based on market rent and normal operating costs for the property. In the net income
stream, consideration has been made to existing and future loss of income due to vacancy, necessary investments and an assessment
of the future development in the market rent. The majority of new contracts that are entered into have a duration of five or ten
years. The cash flows from these lease agreements (contractual rent) are included in the valuations. To estimate the long-term, future
non-contractual rental incomes, a forecasting model has been developed. The model is based on historical observations in Dagens
Næringsliv’s property index (adjusted by CPI) and market estimates. A long-term, time-weighted average of the annual observations is
calculated in which the oldest observations are weighted with the lowest importance. For non-contractual rent in the short-term, the
current rental prices and market situation are used.
An individual required rate of return is determined for each property. The required rate of return is viewed in connection with the
related cash flow for the property. The knowledge available about the market’s required rate of return, including transactions and
appraisals, is used when determining the cash flow.
The required rate of return is divided into the following elements:
•
•
•
•
•
•
•
•
•
Risk-free interest
Risk premium, adjusted for:
Type of property
Location
Structural standard
Environmental standard
Duration of contract
Quality of tenant
Other factors such as transactions and perception in the market, vacancy and general knowledge about the market
and the individual property.
External valuation:
For properties in the Norwegian business, a methodical approach is taken to a selection of properties that are to be externally
valued each quarter so that all properties have had an external valuation at least every three years. In 2019, external valuations were
obtained for properties worth NOK 16 billion (77 per cent of the portfolio’s value as of 31 December 2019).
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.
132
STOREBRAND ANNUAL REPORT 2019
VALUATION OF FINANCIAL INSTRUMENTS AND PROPERTIES AT FAIR VALUE
NOK million
Assets:
Equities and units
- Equities
- Fund units
Total equities and fund units 31.12.19
Total equities and fund units 31.12.18
Loans to customers
- Loans to customers - corporate
- Loans to customers - retail
Loans to customers 31.12.19
Loans to customers 31.12.18
Bonds and other fixed-income securities
- Government bonds
- Corporate bonds
- Structured notes
- Collateralised securities
- Bond funds
Total bonds and other fixed-income securities 31.12.19
Total bonds and other fixed-income securities 31.12.18
Derivatives:
- Equity derivatives
- Interest derivatives
- Currency derivatives
Total derivatives 31.12.19
- of which derivatives with a positive market value
- of which derivatives with a negative market value
Total derivatives 31.12.18
Properties:
Investment properties
Properties for own use
Total properties 31.12.19
Total properties 31.12.18
Level 1
Level 2
Level 3
Non-
Quoted
Observable
observable
prices
assumptions
assumptions
31.12.19
31.12.18
28,007
197
28,205
23,379
226
156,365
156,591
125,493
10,638
180
10,818
13,839
21,618
60,040
3,648
55,010
140,316
140,370
1
2,537
1,781
4,319
5,314
-995
39
532
9,016
9,548
8,489
6,736
389
7,125
5,928
15
5,490
5,505
3,377
29,415
1,375
30,790
29,686
28,765
165,578
194,343
6,736
389
7,125
32,256
60,055
3,648
60,680
156,639
1
2,537
1,781
4,319
5,314
-995
29,415
1,375
30,790
24,038
133,323
157,361
5,708
220
5,928
34,347
50,890
79
22,793
49,478
157,586
2,820
-2,781
4,646
-4,607
39
28,266
1,420
29,686
MOVEMENTS BETWEEN QUOTED PRICES AND OBSERVABLE ASSUMPTIONS
NOK million
Equities and fund units
From quoted prices to
From observable assump-
observable assumptions
tions to quoted prices
48
37
Movements from level 1 to level 2 reflect reduced sales value in the relevant equities and bonds in the last measuring period. On the
other hand, movements from level 2 to level 1 indicate increased sales value in the relevant equities and bonds in the last measuring
period.
133
SECTION 9. ANNUAL ACCOUNTS AND NOTES FINANCIAL INSTRUMENTS AND REAL ESTATE AT FAIR VALUE - LEVEL 3
NOK million
Equities
Fund units
customers
bonds
Bond funds
properties
for own use
Loans to
Corporrate
Investment
Properties
Book value 01.01.19
640
7,849
5,928
Net gains/losses on financial
instruments
Supply
Sales
Translation differences
Other
Book value 31.12.19
30
22
-9
-6
-145
532
1,300
1,076
-1,112
-98
94
2,350
-874
-208
-165
56
2
-42
-1
3,321
28,266
1,420
-49
2,681
-356
-107
716
551
-360
242
-34
43
-2
-92
40
9,016
7,125
15
5,490
29,415
1,375
As of 31.12.19, Storebrand Livsforisikring had NOK 4.044 million invested in Storebrand Eiendomsfond Norge KS and Ruseløkkveien
26, Oslo. The investments are classified as “Investment in associated Ccmpanies and joint ventures” in the Consolidated Financial
Statements.
VALUATION OF FINANCIAL INSTRUMENTS AT AMORTISED COST
NOK million
Financial assets
Loans to and due from financial
institutions
Loans to customers - corporate
Loans to customers - retail
Bonds held to maturity
Bonds classified as loans and receiva-
bles
Total financial assets 31.12.2019
Total financial assets 31.12.2018
Financial liabilities
Debt raised by issuance of securities
Liabilities to financial institutions
Deposits from banking customers
Subordinatd loan capital
Total financial liabilities 31.12.2019
Total financial liabilities 31.12.2018
Level 1
Level 2
Level 3
Non-
Total
Total
Quoted
Observable
observable
fair value
Book value
fair value
Book value
prices
assumptions
assumptions
31.12.19
31.12.19
31.12.18
31.12.18
41
14,433
100,191
114,665
114,798
18,728
446
14,404
9,010
42,589
40,205
6,180
47,327
41
6,180
47,327
14,433
41
318
6,206
6,981
47,327
46,508
13,377
15,679
318
6,999
46,508
14,403
1,537
101,728
98,046
98,485
94,723
55,044
53,173
169,709
164,997
167,971
162,951
18,728
18,729
17,565
17,529
446
14,404
9,010
42,589
446
2
2
14,404
14,419
14,419
8,925
8,218
8,224
42,504
40,205
40,175
134
STOREBRAND ANNUAL REPORT 2019 SENSITIVITY ASSESSMENTS
Equities
It is primarily investments in forests that are classified under equity at level 3. Forestry investments are characterised by, among other
things, very long cash flow periods. There can be some uncertainty associated with future cash flows 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.
NOK million
Change in fair value per 31.12.19
Change in fair value per 31.12.18
Change in value at change in discount rate
Increase + 25 bp
Decrease - 25 bp
-19
-56
21
57
Fund units
Large portions of the portfolio are private equity funds invested in companies priced against comparable listed companies The
valuation of the private equity portfolio will thus be sensitive to fluctuations in global equity markets. The private equity portfolio has
an estimated Beta relative to the MSCI World (Net – currency hedged to NOK) of around 0.46
NOK million
Change in fair value per 31.12.19
Change in fair value per 31.12.18
Change MSCI World
Increase + 10 %
Increase + 10 %
413
455
-413
-455
The valuation of indirect property investments will be sensitive to a change in the required rate of return and the expected future cash
flow. Remaining indirect property investments are no longer leveraged.
NOK million
Change in fair value per 31.12.19
Change in fair value per 31.12.18
Change in value underlying real estate
Increase + 10 %
Decrease - 10 %
1
1
-1
-1
Loans to customers
The value of fixed-rate loans is determined by discounting the agreed cash flows over the remaining maturity by the current discount
rate adjusted for market spread. The discount rate that is used is based on a swap interest rate (mid swap) with a maturity that
corresponds to the remaining lock-in period for the underlying loans. The market spread that is used on the date of the balance sheet
is determined by assessing the market conditions, market price and the associated swap interest rate.
Loans from SPP Pension & Försäkring AB are appraised at fair value. The value of these loans is determined by future cash flows being
discounted by an associated swap curve adjusted for a customer-specific credit spread
NOK million
Change in fair value per 31.12.19
Change in fair value per 31.12.18
Change in marketspread
+ 10 bp
-29
-34
- 10 bp
29
34
135
SECTION 9. ANNUAL ACCOUNTS AND NOTES Corporate bonds
Corporate bonds at level 3 are typical non-performing loans and convertible bonds.
They are not priced by a discount rate as bonds normally are, and therefore these investments are included in the same sensitivity
test as private equity.
NOK million
Change in fair value per 31.12.19
Change in fair value per 31.12.18
Properties
The sensitivity assessment for properties includes investments properties.
Change MSCI World
Increase + 10 %
Decrease - 10 %
0
3
0
-3
The valuation of property is particularly sensitive to a change in the required rate of return and the expected future cash flow. A chan-
ge of 0.25 per cent in the required rate of return when everything else remains unchanged will result in a change in the value of Sto-
rebrand’s property portfolio of approximately 4.5 per cent. About 25 per cent of the property’s cash flow is linked to lease agreement.
This means that the changes in the uncertain parts of the cash flow by 1 per cent result in a change in value of 0.75 per cent.
NOK million
Change in fair value per 31.12.19
Change in fair value per 31.12.18
Change in required rate of return
0,25 %
-1,560
-1,373
-0,25 %
1,699
1,522
Note 13: Solidity and capital management
The Storebrand Group is an insurance-dominated, cross-sectoral financial group with capital requirements in accordance with
Solvency II. Storebrand calculates Solvency II according to the standard method as defined in the Solvency II Regulations.
Consolidation is carried out in accordance with Section 18-2 of the Norwegian Act relating to Financial Undertakings and Financial
Groups. The solvency capital requirement and minimum capital requirement for the group are calculated in accordance with Section
46 (1)-(3) of the Solvency II Regulations using the standard method and include the effect of the transitional arrangement for shares
pursuant to Section 58 of the Solvency II Regulations.
Capital management
Storebrand places particular emphasis on continually and systematically adapting the levels of equity in the Group. The level is
adapted to the financial risk and capital requirements in the business, where growth and the composition of segments are impor-
tant motivating factors for the need for capital. The purpose of capital management is to ensure an efficient capital structure and
provide for an appropriate balance between in-house goals and regulatory and rating company requirements. If there is a need for
new capital, this is raised by the holding company Storebrand ASA, which is listed on the stock exchange and is the ultimate parent
company.
The Storebrand companies are subject to various capital requirements depending on the type of business. In addition to the capital
requirements for the Storebrand Group and insurance companies, the banking and asset management businesses have capital
requirements in accordance with CRD IV. The companies in the group governed by CRD IV are included in the group’s solvency capital
and solvency capital requirements with their respective primary capital and capital requirements.
Storebrand has the goal of paying a dividend of more than 50% of the Group profit after tax. The board has the ambition of ordinary
dividends per share being, at a minimum, at the same nominal level as the previous year. The normal dividend is paid with a
sustainable solvency margin of more than 150%. If there is a solvency margin of more than 180%, the board’s intention is to propose
extraordinary dividends or share buy-backs. In general, equity in the Group can be controlled without material limitations if the capital
requirement is met and the respective legal entities have sufficient solvency.
136
STOREBRAND ANNUAL REPORT 2019 SOLVENCY CAPITAL
NOK million
Share capital
Share premium
Reconciliation reserve
Subordinated loans
Deferred tax assets
Risk equalisation reserve
Minority interests
Unavailable minority interests
Deductions for CRD IV subsidiaries
Expected paid out dividend 2019
Total basic solvency capital
Subordinated capital for subsidiaries regulated in
accordance with CRD IV
Total solvency capital
Total solvency capital available to cover the
31.12.19
Group 1
limited
Group 2
Group 3
1,114
6,536
466
268
57
-41
1,114
7,002
285
Group 1
unlimited
2,339
10,521
27,169
-2,970
-1,517
35,542
Total
2,339
10,521
27,169
7,651
268
466
57
-41
-2,970
-1,517
43,943
2,970
46,913
minimum capital requirement
38,614
35,542
1,114
1,958
SOLVENCY CAPITAL REQUIREMENT AND -MARGIN
NOK million
Market
Counterparty
Life
Health
P&C
Operational
Diversification
Loss-absorbing tax effect
Total solvency capital requirement - insurance company
Capital requirements for subsidiaries regulated in accordance with CRD IV
Total solvency capital requirement
Solvency margin with transitional rules
Minimum capital requirement
Minimum margin
2019
22,040
779
10,702
761
307
1,493
-7,207
-4,847
24,028
2,683
26,711
176%
9,788
394%
31.12.18
Total
2,339
10,521
23,444
7,780
873
234
56
-37
-3,311
-1,402
40,498
3,311
43,808
34,623
2018
20,917
625
10,412
713
278
1,485
-6,838
-4,764
22,827
2,482
25,309
173%
9,711
357%
Storebrand has the goal of paying a dividend of more than 50% of the Group profit after tax. The board has the ambition of ordinary
dividends per share being, at a minimum, at the same nominal level as the previous year. The normal dividend is paid with a
sustainable solvency margin of more than 150%. If there is a solvency margin of more than 180%, the board’s intention is to propose
extraordinary dividends or share buy-backs. In general, equity in the Group can be controlled without material limitations if the capital
requirement is met and the respective legal entities have sufficient solvency.
137
SECTION 9. ANNUAL ACCOUNTS AND NOTES
CAPITAL- AND CAPITAL REQUIREMENT IN ACCORDANCE WITH THE CONGLOMERATE DIRECTIVE
NOK million
Capital requirements for CRD IV companies
Solvency captial requirements for insurance
Total capital requirements
Net primary capital for companies included in the CRD IV report
Net primary capital for insurance
Total net primary capital
Overfunding
2019
2,937
24,028
26,966
2,970
43,943
46,913
19,947
2018
2,714
22,827
25,541
3,311
40,498
43,808
18,267
Under Solvency II, the capital requirement from the CRD IV companies in the Group is included in accordance with their respective
capital requirements. In a multi-sectoral financial group, all the capital requirements of the CRD IV companies are calculated based
on their respective applicable requirements, including buffer requirement for the largest company in the Group (Storebrand Bank).
This increases the total requirement from the CRD IV companies in relation to what is included in the Solvency II calculation. As at 31
December 2019, the difference amounted to NOK 255 million.
Note 14: Premium income
NOK million
Savings:
Unit Linked Storebrand Life Insurance
Unit Linked SPP
Total savings
Of which premium reserve transferred to company
Insurance:
P&C & Individual life1)
Group life2)
Pension related disability insurance
Total insurance
Of which premium reserve transferred to company
Guaranteed pension:
Defined Benefit (fee based) Storebrand Life Insurance
Paid-up policies Storebrand Life Insurance
Traditional individual life and pension Storebrand Life Insurance
SPP Guaranteed Products
Total guaranteed pension
Of which premium reserve transferred to company
Other:
BenCo
Total other
Total premium income
Of which premium reserve transferred to company
138
1) Individual life and disability, property and caualty insurance
2) Group life, workers comp. And health insurance
2019
14,204
8,751
22,955
5,784
1,915
662
1,188
3,765
34
3,110
103
234
2,169
5,616
420
30
30
32,366
6,239
2018
13,173
7,326
20,499
4,479
1,817
732
1,151
3,700
10
3,086
-50
238
2,068
5,342
77
90
90
29,631
4,566
STOREBRAND ANNUAL REPORT 2019 Note 15: Net income analysed by class of financial instrument
Net gains and
Net
Dividend/
losses on
revaluation
interest
financial
on
Of which
NOK million
income etc.
assets
investments
Total 2019
Company
Customer
Profit on equities and fund units
1,357
3,858
32,143
37,358
40
37,318
Profit on bonds and other fixed-
income securities at fair value
Profit on financial derivatives
Profit on loans
Total gains and losses on financial
assets at fair value
- of which FVO (fair value option)
- of which trading
Net income bonds to amortised
cost, loans and accounts receivables
Net income loans
Total gains and losses on financial
assets at amortised cost
LOSSES FROM LOANS
NOK million
2,424
915
25
4,720
3,781
2,271
4,115
1,348
5,463
156
540
4,554
10
11
11
2,188
-24
4,767
1,431
25
34,307
43,581
-16
-6
3,775
2,266
4,126
1,348
600
7
14
661
138
-6
214
802
4,167
1,424
11
42,920
3,912
546
2018
-5,258
1,023
-2,061
140
-6,155
3,158
1,152
4,370
1,209
5,474
1,016
4,457
5,579
2019
2018
Write-downs/income recognition for loans and guarantees for the period
Change in individual loan write-downs for the period
Change in grouped loan write-downs for the period
Other corrections to write-downs
Realised losses on loans where provisions have previously been made
Realised losses on loans where no provisions have previously been made
Recovery of loan losses realised previously
Write-downs/income recognition for loans and guarantees for the period
1
16
-1
-21
1
-3
22
-12
1
-25
-11
3
-23
139
SECTION 9. ANNUAL ACCOUNTS AND NOTES Note 16: Net income from properties
NOK million
Rent income from properties 1)
Operating expenses (including maintenance and repairs) relating to properties that have
provided rent income during the period 2)
Result minority defined as liabilities
Total
Change in fair value
Total income properties
1) Of which real estate for own use
2) Of which properties for own use
Allocation by company and customers:
Customer
Total income from properties
Note 17: Other income
NOK million
Fee and commission income, banking
Net fee and commission income, banking
Management fees, asset management
Net agio/disagio Bank
Management fees
Return commissions/Kick-back
Insurance related income
Revenue from companies other than banking and insurance
Other income
Total other income
2019
1,556
-346
-59
1,151
713
1,864
82
-29
1,864
1,864
2019
107
107
2,111
10
17
1,117
250
115
32
3,758
2018
1,357
-327
1,030
457
1,487
74
-29
1,487
1,487
2018
106
106
1,937
221
364
764
187
125
325
4,028
140
STOREBRAND ANNUAL REPORT 2019 Note 18: Insurance claims
NOK million
Savings:
Unit Linked Storebrand Life Insurance
Unit Linked SPP
Total savings
Of which premium reserve transferred to company
Insurance:
P&C & Individual life1)
Group life2)
Pension related disability insurance
Total insurance
Of which premium reserve transferred to company
Guaranteed pension:
Defined Benefit (fee based) Storebrand Life Insurance
Paid-up policies Storebrand Life Insurance
Traditional individual life and pension Storebrand Life Insurance
SPP Guaranteed Products
Total guaranteed pension
Of which premium reserve transferred to company
Other:
BenCo
Total other
Total net premium income
Of which premium reserve transferred to company
1) Individual life and disability, property and caualty insurance
2) Group life, workers comp. And health insurance
The table below shows the anticipated compensation payments
DEVELOPMENT IN EXPECTED INSURANCE CLAIM PAYMENTS - LIFE INSURANCE
NOK billion
0-1 year
1-3 years
> 3 years
Total
Storebrand Life Insurance
16
40
233
289
2019
-6,758
-3,732
-10,490
-6,020
-1,255
-715
-158
-2,128
-45
-1,218
-6,182
-1,368
-4,961
-13,729
-291
-409
-409
-26,756
-6,357
SPP
6
13
159
178
2018
-4,614
-3,487
-8,101
-4,238
-1,065
-622
-147
-1,833
-32
-1,219
-5,829
-1,395
-5,710
-14,153
-995
-1,054
-1,054
-25,142
-5,265
BenCo
1
7
8
141
SECTION 9. ANNUAL ACCOUNTS AND NOTES DEVELOPMENT IN INSURANCE CLAIM PAYMENT - P&C INSURANCE, EXLUSIVE RUN-OFF
NOK million
2014
2015
2016
2017
2018
2019
Total
Calculated gross cost of claims
At end of the policy year
- one year later
- two years later
- three years later
- four years later
- five years later
Calculated amount 31.12.19
Total disbursed to present
Claims reserve
Claims reserve for previous years
(before 2014)
Total claims reserve
513
501
500
489
478
472
462
10
685
687
661
648
641
613
28
793
774
750
741
797
764
756
760
749
825
698
43
694
62
664
86
514
311
3,645
539
9
548
The overview shows the development in the estimate for occurred insurance claims over time and the remaining claims reserve.
The overview also excludes the ”Naturskadepool”, Norwegian Motor Insurers’ Bureau (TFF), reinsurance and claim settlement costs on
all products.
Note 19: Change in capital buffer
NOK million
Change in market value adjustment reserve
Change in additional statutory reserves
Change in conditional bonuses
Total change in capital buffer
Note 20: Operating expenses and number of employees
OPERATING EXPENSES
NOK million
Personnel expenses
Amortisation/write-downs
Other operating expenses
Total operating expenses
142
2019
-3,255
-779
-1,858
-5,892
2019
-2,281
-231
-2,316
-4,828
2018
1,462
-68
336
1,729
2018
-2,143
-147
-2,252
-4,542
STOREBRAND ANNUAL REPORT 2019 PECIFICATION OF AMORTISATION/WRITE-DOWNS
NOK million
Amortisation/write-downs tangible fixed assets
Amortisation/write-downs IFRS 16 assets
Amortisation/write-downs IT systems
Amortisation/write-downs properties for own use
Total amortisation/write-down in income statement
NUMBER OF EMPLOYEES 1)
Number of employees 31.12
Average number of employees
Number of person-years 31.12
Average number of person-years
1) Including Storebrand Helseforsikring with 100 per cent.
see note 28
see note 28
see note 27
see note 33
2019
-6
-132
-92
-2
-231
2019
1,759
1,774
1,739
1,753
2018
-6
-139
-2
-147
2018
1,789
1,766
1,767
1,747
Note 21: Pension expenses and pension liabilities
Storebrand Group has country-specific pension schemes.
Storebrand’s employees in Norway have a defined-contribution pension scheme. In a defined-contribution scheme, the company
allocates an agreed contribution to a pension account. The future pension depends upon the amount of the contributions and the
return on the pension account. When the contributions have been paid, the company has no further payment obligations relating to
the defined-contribution pension and the payment to the pension account is charged as an expense on an ongoing basis. For regulatory
reasons, there can be no savings in the defined-contribution pension for salaries that exceed 12G (G = National Insurance Scheme basic
amount). Storebrand has pension savings in the savings product Extra Pension for employees with salaries exceeding 12G.
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 99,858 at
31 December 2019)
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.
•
•
•
Employees and former employees who had salaries in excess of 12G until 31 December 2014 were offered a cash redemption option
for their accrued rights with payment at the start of 2015. For employees who were a part of the executive management team, these
payments were distributed over 5 years, with last payment in 2019.
The Norwegian companies participate in the Joint Scheme for Collective Agreement Pensions (AFP). The private AFP scheme provides a
lifelong supplement to an ordinary pension and is a multi-employer pension scheme, but there is no reliable information available for
inclusion of this liability on the statement of financial position. The scheme is financed by means of an annual premium that is defined as
a percentage of salaries from 1 G to 7.1 G, and the premium rate was 2.5 % in 2019. Storebrand employees in Norway who were born
before 1 January 1956 can choose between drawing an AFP scheme pension or retiring at the age of 65 and receiving a direct pension
from the company until they reach the age of 67. Employees can choose to receive benefits from the AFP scheme from the age of 62 and
still continue to work.
Employees who were on sick leave and partiality disabled during the transition to the defined-contribution pension, remain in the
defined-benefit pension scheme. There are also pension liabilities for the defined-benefit scheme related to direct pensions for certain
former employees and former board members.
143
SECTION 9. ANNUAL ACCOUNTS AND NOTES
The pension plan for employees at SPP in Sweden follows the plan for bank employees in Sweden (BTP).
SPP has a defined-contribution occupational pension known as BTP1. All new employees were enrolled in this pension agreement
from and including 1 January 2014. In BTP1, the employer pays a premium for pension savings that is calculated based on
pensionable salary up to 30 times the ”basic income amount” (inkomstbasbelopp). The insurance includes retirement pension with
or without mortality inheritance, disability pension and children’s pension. The premium is calculated independently of age and is
calculated primarily based on the monthly salary. The premium is paid monthly in two parts, a fixed part that is 2.5 per cent of the
pensionable salary up to and including 7.5 times the “basic income amount”. The optional part of the premium is 2 per cent of salary
up to and including 7.5 times the “basic income amount” and 30 per cent of salary between 7.5 and 30 times the “basic income
amount”.
The pension in the BTP2 agreement (defined-benefit occupational pension that is a closed scheme) amounts to 10 per cent of the
annual salary up to 7.5 times the “basic income amount” (which was SEK 64,400 in 2019 and will be SEK 66.800 in 2020), 65 per
cent of salary in the interval from 7.5 to 20, and 32.5 per cent in the interval from 20 to 30. No retirement pension is paid for the
portion of salary in excess of 30 times the ”basic income amount”. Full pension entitlement is reached after 30 years of member-
ship in the pension scheme. In addition to the defined-benefit part, the BTP plan has a smaller defined-contribution component.
Here the employees can decide themselves how assets are to be invested (traditional insurance or unit-linked insurance). The
defined-contribution part is 2 per cent of the annual salary.
The ordinary retirement age is 65 in accordance with the pension agreement between the Employer’s Association of the Swedish
Banking Institutions (BAO) and the trade unions that are part of BTP, and will be changed to age 68 from 2020.
The retirement age for SPP’s CEO is 65 years. The CEO is covered by BTP1. In addition, the CEO has a defined-contribution based
additional pension with SPP. The premium for this insurance is 20 per cent of salary that exceeds 30 times the “basic income amount”.
The pension for the employees at Euroben Life and Pension LTD is covered by a defined-contribution scheme.
RECONCILIATION OF PENSION ASSETS AND LIABILITIES IN THE STATEMENT OF FINANCIAL POSITION
NOK million
Present value of insured pension liabilities
Fair value of pension assets
Net pension liabilities/assets insured scheme
Present value of unsecured liabilities
Net pension liabilities recognised in statement of financial position
Includes employer contributions on net under-financed liabilities in the gross liabilities
BOOKED IN STATEMENT OF FINANCIAL POSITION
NOK million
Pension assets
Pension liabilities
2019
1,062
-994
68
196
264
2019
2
266
2018
1,018
-913
105
213
317
2018
5
322
144
STOREBRAND ANNUAL REPORT 2019 CHANGES IN THE NET DEFINED BENEFIT PENSION LIABILITIES IN THE PERIOD
NOK million
Net pension liabilities 01.01
Pensions earned in the period
Pension cost recognised in period
Estimate deviations
Gain/loss on insurance reductions
Pensions paid
Changes to pension scheme
Pension liabilities additions/disposals and currency adjustments
Net pension liabilities 31.12
CHANGES IN THE FAIR VALUE OF PENSION ASSETS
NOK million
Pension assets at fair value 01.01
Expected return
Estimate deviation
Premiums paid
Pensions paid
Changes to pension scheme
Pension liabilities additions/disposals and currency adjustments
Net pension assets 31.12
Expected premium payments (pension assets) in 2020
Expected premium payments (contributions) in 2020
Expected AFP early retirement scheme payments in 2020
Expected payments from operations (uninsured scheme) in 2020
2019
1,231
13
25
84
2
-53
-4
-37
1,259
2019
914
18
87
32
-21
-4
-32
995
21
203
15
40
PENSION ASSETS ARE BASED ON THE FINANCIAL ASSETS HELD BY STOREBRAND LIFE INSURANCE/SPP
COMPOSED AT 31.12:
Storebrand Livsforsikring
SPP
NOK million
Real estate at fair value
Bonds at amortised cost
Loans at amortised cost
Equities and units at fair value
Bonds at fair value
Other short-term financial assets
Total
2019
13%
36%
13%
15%
20%
1%
100%
2018
14%
36%
14%
12%
24%
1%
100%
2019
12%
14%
11%
63%
2018
1,260
15
17
18
-4
-55
-21
1,231
2018
928
21
-15
27
-27
-20
914
2018
12%
11%
9%
68%
100%
100%
The table shows the percentage asset allocation of pension assets at year-end managed by Storebrand Livsforsikring and SPP.
Realised return on assets
2019
3.6%
2018
2.2%
2019
8.8%
2018
2.3%
145
SECTION 9. ANNUAL ACCOUNTS AND NOTES NET PENSION EXPENSES BOOKED TO PROFIT AND LOSS ACCOUNT, SPECIFIED AS FOLLOWS
NOK million
Current service cost
Net interest cost/expected return
Changes to pension scheme
Total for defined benefit schemes
The period's payment to contribution scheme
The period's payment to contractual pension
"Net pension cost recognised in profit and loss account
in the period"
OTHER COMPREHENSIVE INCOME (OCI) IN THE PERIOD
NOK million
Actuarial loss (gain) - change in discount rate
Actuarial loss (gain) - change in other financial assumptions
Actuarial loss (gain) - experience DBO
Loss (gain) - experience Assets
Investment manage cost
Asset ceiling - asset adjustment
Remeasurements loss (gain) in the period
MAIN ASSUMPTIONS USED WHEN CALCULATING NET PENSION LIABILITY 31.12
NOK million
Discount rate
Expected earnings growth
Expected annual increase in social security
pensions
Expected annual increase in pensions payment
Disability table
Mortality table
Storebrand Livsforsikring
2019
2.2%
2.00%
2.00%
0,0%
KU
2018
2.8%
2.50%
2.00%
0.0%
KU
2019
13
7
3
23
188
17
229
2019
119
-25
-10
-99
12
-4
SPP
2019
1.5%
3.5%
2018
15
8
-4
19
166
17
203
2018
59
-17
-36
27
-5
28
2018
2.3%
3.5%
2.0%
2.0%
K2013BE
K2013BE
DUS14
DUS14
Financial assumptions:
The financial assumptions have been determined on the basis of the regulations in IAS 19. Long-term assumptions such as future
inflation, real interest rates, real wage growth and adjustment of the basic amount are subject to a particularly high degree of
uncertainty.
In Norway, a discount rate based on covered bonds is used. Based on the market and volume trends observed, the Norwegian
covered bond market must be perceived as a deep market.
Specific company conditions including expected direct wage growth are taken into account when determining the financial
assumptions.
Actuarial assumptions:
In Norway standardised assumptions on rates of mortality and disability as well as other demographic factors are prepared by Finance
Norway. With effect from 2014 a new mortality basis, K2013, has been introduced for group pension insurance in life insurance
companies and pension funds. Storebrand has used the mortality table K2013BE (best estimate) in the actuarial calculations at
31 December 2019.
146
STOREBRAND ANNUAL REPORT 2019
The actuarial assumptions in Sweden follow the industry’s mutual mortality table DUS14 adjusted for corporate differences.
The average employee turnover rate is estimated to be 4 per cent p.a.
Sensitivity analysis pension calculations
Storebrand’s risk associated with the pension scheme relates to the changes in the financial and actuarial assumptions that must be
used in the calculations and the actual return on the pension funds. The pension liabilities are particularly sensitive to changes in the
discount rate. A reduction of the discount rate will in isolation entail an increase in pension liabilities.
For the Norwegian companies that have converted to defined contribution pensions as of 1 January 2015, the sensitivity has not been
calculated, and the figures below illustrate the sensitivity for the Swedish companies.
The following estimates are based on facts and circumstances as of 31 December 2019 and are calculated for each individual when all
other assumptions are kept constant:
SWEDEN
Percentage change in pension:
- Pension liabilities
- The period's net pension costs
Discount rate
Expected earnings growth
expected life expectancy
1,0%
-1,0%
1,0%
-1,0%
+ 1 year
- 1 year
Mortality - change in
-10%
-12%
12%
15%
-1%
7%
-4%
-6%
2%
-1%
-2%
-1%
Note 22: Remuneration to senior employees and elected officers of the
company
NOK thousand
Senior employees
Odd Arild Grefstad
Lars Aa. Løddesøl
Geir Holmgren
Heidi Skaaret
Staffan Hansén
Jan Erik Saugestad
Jostein Dalland 5)
Karin Greve-Isdahl
Wenche Annie Martinussen5)
Trygve Håkedal6)
Tove Selnes6)
Terje Løken6)
Total 2019
Total 2018
Total
Post
remunera-
Pension
terminati-
Ordinary
Other
tion for the
accrued for
on salary
No. of
shares
salary 1)
benefits 2)
year
the year
(months)
Loan 3)
owned 4)
6,899
5,339
4,529
4,447
5,547
5,893
3,608
2,590
2,845
2,523
2,858
2,542
191
205
207
180
32
157
138
41
131
35
172
151
7,090
5,545
4,736
4,627
5,579
6,050
3,745
2,631
2,976
2,558
3,031
2,693
49,621
40,010
1,639
1,311
51,260
41,321
1,353
1,031
848
851
1,200
1,144
628
468
514
378
421
342
9,180
7,467
24
18
12
12
12
12
12
12
12
6,780
162,269
10,564
100,026
7,051
3,254
1,200
-
67,089
69,690
66,689
58,411
-
15,569
12,861
-
7,695
7,264
3,199
78,150
51,509
-
8,034
14,964
8,921
568,954
471,313
1) A proportion of the executive management’s fixed salary will be linked to the purchase of physical STB shares with a lock-in period of three years. The purchase of shares will take place once a year.
2) Comprises company car, telephone, insurance, concessionary interest rate, other taxable benefits.
3) Employees can borrow up to NOK 7.0 million at a subsidised interest rate, which is set at 42 bp below the best current market interest rate. Excess loan amounts will be subject to market terms.
4) The summary shows the number of shares owned by the individual, as well as his or her close family and companies where the individual exercises significant influence, cf. the Accounting Act, Section 7-26..
5) Senior employee only part of the year
6) Senior employee from August. Reported remuneration is for the total year
147
SECTION 9. ANNUAL ACCOUNTS AND NOTES NOK thousand
Board of Directors
Didrik Munch
Laila Synnøve Dahlen
Martin Skancke
Karin Bing Orgland
Jan Chr. Opsahl2)
Liv Sandbæk
Karl Sandlund2)
Heidi Storruste
Arne Fredrik Håstein
Ingvild Pedersen
Magnus Gard
Total 2019
Total 2018
Remuneration
Loan
No. of shares
owned 1)
855
392
628
523
93
438
327
446
366
124
315
4,507
4,371
32,000
12,500
22,000
17,000
-
-
3,925
5,404
1,964
613
95,406
1,171,947
340
3,135
2,030
5,381
10,886
9,401
1) The summary shows the number of shares owned by the individual, as well as his or her close family and companies where the individual exercises significant influence, cf. the Accounting Act, Section 7-26.
2) Board member only part of the year
Loans to Group employees totalled NOK 2.819 million.
STOREBRAND ASA – THE BOARD OF DIRECTORS’ STATEMENT ON THE FIXING OF SALARIES AND OTHER REMUNERATION OF
EXECUTIVE PERSONNEL
The Board of Directors’ statement on the fixing of the salaries and other remuneration of executive personnel, cf. Section 6-16 (a)
of the Norwegian Public Limited Companies Act, shall be presented to the General Meeting for an advisory vote with regard to the
indicative guidelines for the next financial year and a separate advisory vote with regard to binding guidelines for shares, subscription
rights, etc. for the next financial year.
The statement is worded as follows:
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 Officer. The Committee is responsible for keeping itself informed and proposing guidelines for the determination of
remuneration of executive employees in the Group. The Committee also acts as an advisory body to the Chief Executive Officer with
regard to remuneration schemes that encompass all employees of the Storebrand Group, including Storebrand’s bonus and pension
schemes. The Compensation Committee satisfies the follow-up requirements set forth in the remuneration schemes.
Storebrand Asset Management AS has two subsidiaries, Skagen AS and Cubera Private Equity AS, each of which has its own
board-appointed compensation committee and separate guidelines for financial remuneration. The Group’s guidelines will therefore
not directly apply for these two subsidiaries in 2020.
1. ADVISORY GUIDELINES FOR THE COMING FINANCIAL YEAR
Storebrand aims to base remuneration on competitive and motivating principles that help attract, develop and retain highly qualified
staff.
Storebrand shall have an incentive model that supports the strategy, with emphasis on the customers’ interests and long-term
perspective, an ambitious model of cooperation, as well as transparency that enhances the Group’s reputation. Therefore, the
Company will primarily stress a fixed salary as a means of overall financial compensation, and utilise variable remuneration to a limited
extent.
148
STOREBRAND ANNUAL REPORT 2019 The salaries of executive employees are determined based on the position’s responsibilities and level of complexity. Comparisons with
equivalent external positions are regularly made in order to adjust the salary level to the market rates. Storebrand does not wish to
be a pay leader in relation to the industry.
Bonus scheme and other benefits
The Group’s executive management team and executive personnel who have a significant influence on the Company’s risk receive
only fixed salaries. Some members of the executive management have fringe benefits in the form of a car allowance and fixed
amounts for coverage of expenses for newspaper, telephone and electronic communication. These are arrangements linked to
employment contracts entered into in the past and are not included in new contracts.
Pension scheme and insurance
The Company shall arrange and pay for ordinary group pension scheme common to all employees, from the moment employment
commences, and in accordance with the pension rules in force at any given time. All employees are also included in group insurance
schemes which apply in the event of illness, disability or death. Since 2015, the Company has had defined-contribution pension
schemes for all employees. For executive management, the calculated cash value of pension rights for pay above 12 G that was
already earned as of the transition to a defined-contribution scheme was paid out over a five-year period, with the final payment in
2019. The payment period was fixed, regardless of whether the employee left the company before the end of that period.
Severance pay
The CEO is entitled to 24 months of severance pay. Other members of the executive management have severance pay agreements
of up to 18 months from the agreed resignation date. The amount of potential severance pay will be subject to an assessment in
accordance with the individual agreements and relevant rules pertaining to remuneration.
The severance pay corresponds to the pensionable salary at the end of the employment, excluding any bonus schemes. Deductions are
made to the severance pay for all work-related income, including fees from the provision of services, offices held, etc.
2. BINDING GUIDELINES FOR SHARES, SUBSCRIPTION RIGHTS, OPTIONS, ETC. FOR THE UPCOMING 2020
FINANCIAL YEAR
To ensure that the Group’s executive management team has incentive schemes that accord with the long-term interests of the
owners, a proportion of the fixed salary will be linked to the purchase of physical Storebrand shares with a lock-in period of three
years. The Chief Executive Officer may decide that a limited group of employees shall be covered by an equivalent scheme. The
purchase of shares will take place once a year.
Like other employees of Storebrand, executive employees have an opportunity to purchase a limited number of shares in Storebrand
ASA at a discount in accordance with the share programme for employees.
3. STATEMENT ON THE EXECUTIVE EMPLOYEE REMUNERATION POLICY DURING THE PREVIOUS FINANCIAL YEAR
The guidelines for the executive remuneration policy set for 2019 have been followed. The annual independent assessment of the
guidelines and the practising of these guidelines in connection with bonuses to be paid in 2020 will be carried out during 2020.
4. STATEMENT ON THE EFFECTS OF SHARE-BASED REMUNERATION AGREEMENTS ON THE COMPANY AND
THE SHAREHOLDERS
A proportion of the executive management’s fixed salary will be linked to the purchase of physical Storebrand shares with a lock-in
period of three years. The purchase of shares will take place once a year.
In the opinion of the Board of Directors, this has a positive effect on the Company and the shareholders, given the structure of the
scheme and the size of each executive vice president’s portfolio of shares in Storebrand ASA.
149
SECTION 9. ANNUAL ACCOUNTS AND NOTES Note 23: Remuneration paid to auditors
NOK million
Statutory audit
Other reporting duties
Tax advice
Other non-audit services
Total remuneration to auditors
The amounts are excluding VAT.
Note 24: Other expenses
NOK million
Incurance related expenses
Losses on claims, insurance
Management fees
Earnout
Other expenses
Total other expenses
Note 25: Interest expenses
NOK mill.
Interest expenses subordinated loan
Interest expenses financial institutions
Interest expenses deposits from banking customers
Interest expenses IFRS 16 liabilities
Other interest expenses
Total interest expenses
2019
-10
-1
-1
-1
-12
2019
-267
-762
-157
-51
-1,238
2019
-374
-413
-99
-25
-35
-947
2018
-10
-1
-1
-1
-13
2018
-53
-118
-618
-40
-24
-853
2018
-373
-344
-84
-12
-813
150
STOREBRAND ANNUAL REPORT 2019 Note 26: Tax
TAX EXPENSES IN THE RESULT
NOK million
Tax payable
Change in deferred tax
Total tax charge
RECONCILIATION OF EXPECTED AND ACTUAL TAX EXPENSES
NOK million
Pre-tax profit
Expected income tax at nominal rate
Tax effect of
realised/unrealised shares
share dividends received
associated companies
permanent differences
deferred tax on the increase in value of properties for customer assets 1)
deferred tax on the increase in value of properties for customer assets covered by
customer returns 1)
change in tax rate
Changes from previous years
Total tax charge
Effective tax rate 2)
2019
-16
-495
-511
2019
2,593
-648
-64
32
3
52
-451
451
16
99
-511
20%
2018
-17
915
898
2018
2,799
-700
-112
12
11
1,681
6
898
-32%
1) Provisions are made for deferred tax on the increase in value during the ownership of real estate in SPP Fastigheter AB in accordance with IAS 12 and guiding principles for consolidation.
The real estate investments are made on behalf of the customer assets. Each real estate is owned by a separate investment company, and a sale of real estate itself would entail a tax
expense that will reduce the return on the customer assets and will not affect the income tax for SPP / Storebrand. The deferred tax is in the consolidated financial reporting recognised as
a claim on the customer funds and will not affect the income tax expense for SPP / Storebrand. Deferred tax relating to real estate investments in the customer assets is not netted against
other temporary differences in the balance sheet.
2) The effective tax rate is influenced by the fact that the Group has operations in countries with tax rates that are different from Norway. The income tax expense is also influenced by tax
effects relating to previous years. The tax rate for companies in Norway was changed from 23 to 22 per cent with effect from 1 January 2019. It was also agreed to keep the rate at 25 per cent
for companies subject to the financial tax. The Storebrand Group includes companies that are both subject to and not subject to the financial tax. Therefore, when capitalising deferred tax/
deferred tax assets in the consolidated financial statements, the company tax rate that applies for the individual companies is used (22 or 25 per cent). The tax rate for companies in Sweden
was changed from 22 per cent in 2018 to 21.4 per cent in 2019.
151
SECTION 9. ANNUAL ACCOUNTS AND NOTES CALCULATION OF DEFERRED TAX ASSETS AND DEFERRED TAX ON TEMPORARY DIFFERENCES AND LOSSES CARRIED FORWARD
NOK million
Tax-increasing temporary differences
Securities
Properties
Fixed assets
Gains/losses account
Other
Total tax-increasing temporary differences
Tax-reducing temporary differences
Securities
Fixed assets
Provisions
Accrued pension liabilities
Other
Total tax-reducing temporary differences
Carryforward losses
Net basis for deferred tax and tax assets
Net deferred tax assets/liabilities in balance sheet
Recognised in balance sheet
Deferred tax assets
Deferred tax
2019
283
2,126
8
78
1,377
3,872
-7
-22
-30
-166
753
527
-6,685
-2,287
-663
1,430
768
2018
8
67
1,202
1,278
-144
-51
-26
-183
86
-318
-7,808
-6,848
-1,714
1,972
258
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
related to the former booked tax loss (appears as a reduction in the loss carryforward and, in isolation, gave an associated increased tax expense for 2017 of approximately NOK 0.4 billion). In
May 2019, Storebrand Livsforsikring AS received a draft decision from the Norwegian Tax Administration claiming changes in the tax return from 2015. Storebrand disagrees with the notice
from the Norwegian Tax Administration and submitted its response in October 2019. The company considers it to be preponderance that Storebrand’s understanding of the tax legislation will
be accepted by a court of law and thus, no uncertain tax position has been recognised in the financial statements based on the recieved draft decision. If the Norwegian Tax Administration’s
position is accepted, Storebrand estimates that a tax expense for the company of approximately NOK 1.2 billion will arise. There will also be negative effects for returns on customer assets
after tax. The effects are based on best estimates and following a review with external expertise.
B. New tax rules for life insurance and pension companies were introduced for the 2018 financial year. These rules contained transitional rules for how the companies should revalue/
write-down the tax values as at 31 December 2018. In December 2018, the Norwegian Directorate of Taxes published an interpretive statement that Storebrand does not consider to be
in accordance with the wording of the relevant act. When presenting the national budget for 2020 in October 2019, the Ministry of Finance proposed a clarification of the wording of the
transitional rules in line with the interpretive statement from the Norwegian Directorate of Taxes. The clarification was approved by the Norwegian Parliament in December 2019. Storebrand
considers there to be uncertainty regarding the value such subsequent work on a legal rule has as a source of law, and which in this instance only applies for a previous financial year. In
the tax return for 2018, Storebrand Livsforsikring AS applied the wording in the original transitional rule, but in October 2019 received a notice of adjustment of tax assessment in line
with the interpretive statement from the Norwegian Directorate of Taxes and the clarification from the Ministry of Finance. Storebrand Livsforsikring AS disagrees with the Norwegian Tax
Administration’s interpretation, but considers it uncertain as to whether the company’s interpretation will be accepted if the case is decided by a court of law. The uncertain tax position has
therefore been recognised in the financial statements. Based on our best estimate, the difference between Storebrand’s interpretation and the Norwegian Tax Administration’s interpretation
is approximately NOK 4.2 billion in an uncertain tax position. If Storebrand’s interpretation is accepted, a deferred tax expense of approximately NOK 1 billion will be derecognised from the
financial statements.
152
STOREBRAND ANNUAL REPORT 2019
C. The outcome of the interpretation of tax rules for group contributions referred to above under (A) will have an impact when calculating the effect from the transitional rules for the new tax
rules referred to under point (B). An equivalent interpretation to that described under (A) has been used as a basis in the financial statements when calculating tax input values on property
shares owned by customer assets for 2016 and 2017. There is thus an uncertain tax position relating to the effect from the transitional rules described in (B). This effect will depend on the
interpretation and outcome of (A). If Storebrand’s position is accepted under (A), Storebrand will recognise a tax income of approximately NOK 0.8 billion. If the Norwegian Tax Administration
prevails with its argument under point (A), Storebrand will recognise a tax expense of approximately NOK 0.6 billion.
The timeline for the continued process with the Norwegian Tax Administration is unclear, but if necessary, Storebrand will seek clarification from the court of law for the aforementioned
uncertain tax positions.
Note 27: Intangible assets and excess value on purchased insurance contracts
Intangible assets
Other
intangible
assets
1,368
VIF 1)
9,950
Goodwill
2,292
2019
14,604
2018
14,434
384
206
124
92
590
-69
56
137
281
-48
-26
1,727
-31
2,467
-440
14,901
-256
14,604
NOK million
Acquisition cost 01.01
Additions in the period
- Developed internally
- Purchased separately
- Purchased via acquistion/merger
Disposals in the period
Currency differences on converting
foreign units
Acquisition cost 31.12
Accumulated depreciation and
write-downs 01.01
Write-downs in the period
Amortisation in the period
Disposals in the period
Currency differences on converting
foreign units
Acc. depreciation and write-downs
31.12
Book value 31.12
IT systems
993
124
92
-69
-7
1,133
-567
-35
-57
69
-590
543
-376
9,574
-6,745
-341
258
-6,827
2,747
-880
-104
25
-959
768
1) Value of business-in-force, the difference between market value and book value of the insurance in SPP and Silver.
SPECIFIACTION OF AMORTISATION OF INTANGILBE ASSETS
NOK million
Amortisation in the period - VIF
Amortisation in the period - other intangible assets
Negative GW - booked as income
Total write-downs//amortisation of intangible assets in income statement
Write-downs/amortisation of IT-systems are booked as operating expenses
-305
-8,498
-8,139
-35
-502
69
284
-8,681
6,220
-305
2,162
2019
-341
-104
-444
-29
-504
28
147
-8,498
6,106
2018
-343
-55
38
-360
153
SECTION 9. ANNUAL ACCOUNTS AND NOTES
SPECIFICATION OF INTAGIBLE ASSETS
NOK million
IT systems
Value of business in force SPP
Value of business in force Silver
Customer lists Skagen
Customer lists Cubera
Customer contracts Cubera
Brand name Skagen
Database Cubera
Total
Useful economic life
Depr. rate
Depr. method
Book value 2019
5 years
20 years
10 years
10 years
7 years
5 years
10 years
3 years
20%
5%
10%
10%
14%
20%
10%
33%
Straight line
Straight line
Straight line
Straight line
Straight line
Straight line
Straight line
Straight line
543
2,522
225
318
201
120
115
14
4,057
GOODWILL DISTRIBUTED BY BUSINESS ACQUISITION
Acquisition cost
write-downs
Accumulated
Supply/
disposals/
NOK million
Business area
01.01
01.01
Book value 01.01
currency effect
Book value 31.12
Delphi Fondsforvaltning
Storebrand Bank ASA
SPP
SPP Fonder
Skagen
Cubera
Total
Savings
Other
Guarant.
pension/Savings
Savings
Savings
Savings
35
422
780
48
1,007
-4
-300
32
122
780
48
1,007
2,292
-304
1,988
32
122
750
45
1,007
206
2,162
-30
-3
206
174
Goodwill is not amortised, but is tested annually for impairment.
Intangible assets linked to acquisition of SPP
In 2007, Storebrand Livsforsikring AS acquired SPP Pension & Försäkring AB and its subsidiaries (SPP). The majority of the intangible
assets linked to the acquisition of SPP include the value of business in force (VIF), for which liability adequacy tests are conducted in
accordance with the requirements in IFRS 4. To determine whether goodwill and other intangible assets linked to SPP have declined in
value, an estimate is made of the recoverable amount by calculating the entity specific value of the business. SPP is considered to be a
separate cash flow generating unit.
In calculating the entity specific value, the management have made use of budgets and forecasts approved by the Board of Directors
for the next three years (2020-2022). The management has made assessments for the period from 2023 to 2029, and the annual
growth rate for the elements in the income statement have been estimated. When calculating the terminal value, a growth rate
equivalent to Sveriges Riksbank’s inflation target of 2.0 per cent is used. The primary drivers of improved long-term results will be the
return on total assets, underlying inflation and salary increase in the market (which drives premium growth). The entity specific value is
calculated using discount rate after tax of 5.2 per cent. The discount rate is calculated as the risk-free interest rate included a premium
that reflects the risk of the business.
Calculations related to the future are uncertain. The value will be impacted by various growth parameters, expected return and the
required rate of return used as a basis, etc. The aim of the calculations is to achieve a satisfactory level of certainty that the recoverable
amount, cf. IAS 36, is not lower than the value recognised in the accounts.
Intangible assets linked to the banking business
When assessing the recoverable amount for the banking business an estimate for the entity specific value has been found by using a
discounted cash flow model of the expected profits after tax. Budgets and forecasts approved by the Board of Directors for the next
three years (2020 to 2022) are used as the basis for the valuation.
154
STOREBRAND ANNUAL REPORT 2019
The cash flow is based on two elements, profit/loss after tax to equity and the expected change in regulatory capital. It is also assumed
that all capital in addition to regulatory tied-up capital, can be distributed to the owner at the end of each period. For the period after
2022, a growth rate of 2.0 percent has been used. The same growth rate is used in the calculation of the terminal value. The entity
specific value is calculated using a discount rate after tax of 5.1 per cent. The discount rate is calculated as the risk-free interest rate
included a premium that reflects the risk of the business.
There is uncertainty related to the assumptions that have been made in the valuation. The value will be affected by the assumptions for
the interest rate margin, expected losses on lending, growth parameters and capital requirements, the discount rate. The aim of the
calculations is to achieve a satisfactory level of certainty that the recoverable amount, cf. IAS 36, is not lower than the value recognised
in the accounts.
Intangible assets linked to the acquisition of Skagen
Storebrand Asset Management AS acquired Skagen AS in 2017. The intangible assets linked to Skagen are customer lists, the Skagen
brand and goodwill. Budgets and forecasts approved by the Board of Directors for the next three years (2020 to 2022) are used as the
basis for the valuation. For the period from 2023 to 2025, a growth rate in line with the expected return from the stock market is used
for the revenue and the expected inflation rate for the costs. A growth rate equivalent to Norges Bank’s inflation target of 2.0 per cent is
used for calculating the terminal value. The entity specific value is calculated using a discount return after tax of 10 per cent.
There is uncertainty related to the assumptions that have been made in the valuation. The value will be influenced by changes in the
assumptions regarding expected returns of the financial markets, costs, management fees, growth parameters, and the discount rate.
The aim of the calculations is to achieve a satisfactory level of certainty that the entity specific value, cf. IAS 36, is not lower than the
value recognised in the accounts.
Intangible assets linked to the acquisition of Cubera Private Equity
Storebrand Asset Management AS acquired Cubera Private Equity AS in 2019. The intangible assets linked to Cubera are customer lists,
customer relations and information regarding the private equity market. Budgets and forecasts approved by the Board of Directors for
the next three years (2020 to 2022) are used as the basis for the valuation. For the period from 2023 to 2025, a growth rate in line with
the private equity market has been used as a basis for revenues and a fixed relationship between revenues and costs has been used to
estimate the costs. A growth rate equivalent to Norges Bank’s inflation target of 2.0 per cent is used for calculating the terminal value.
The entity specific value is calculated using a discount return after tax of 10 per cent.
There is uncertainty related to the assumptions that have been made in the valuation. The value will be influenced by changes in the
assumptions regarding expected returns of the financial markets, costs, management fees, growth parameters, and the required rate
of return that is used as the discount rate. The aim of the calculations is to achieve a satisfactory level of certainty that the entity specific
value, cf. IAS 36, is not lower than the value recognised in the accounts.
Intangible assets linked to the acquisition of Silver
Storebrand Livsforsikring AS acquired Silver Pensjonsforsikring AS (Silver) in 2018 and the company was merged with Storebrand
Livsforsikring AS the same year. The intangible assets linked to the acquisition of Silver include the value of business in force (VIF), which
is included in Storebrand Livsforsikring’s liability adequacy test in accordance with the requirements in IFRS 4. To determine whether
intangible assets linked to Silver have declined in value, an estimate is made of the recoverable amount for the contracts in the acquired
business. The recoverable amount is determined by calculating the entity specific value of the business. Silver has been integrated
into Storebrand Livsforsikring’s business and is predominantly part of the savings segment. The assessment of the intangible assets is
done by estimating the value of the contracts that were purchased, despite these not being a separate cash-generating unit. The assets
under management and income margins are forecasted based on observable developments since the acquisition and expected natural
negative growth in the portfolio.
There is uncertainty related to the assumptions that have been made in the valuation. The value will be influenced by the assumptions
regarding expected returns in the financial markets, costs, transfers, income development and the discount rate. The aim of the
estimation is to achieve a satisfactory level of certainty that the entity specific value, cf. IAS 36, is not lower than the value recognised in
the accounts.
155
SECTION 9. ANNUAL ACCOUNTS AND NOTES
Note 28: Tangible fixed assets and lease agreements
NOK million
Book value 01.01
Additions
Disposals
Addition via acquisition/merger
Depreciation
Book value 31.12
Vehicles/ equipment
Real estate
2019
42
12
-1
-6
48
1
1
For specifiaction of write-downs and depreciation, see note 20.
DEPRECIATION PLAN AND FINANCIAL LIFETIME:
Depreciation method:
Vehicles/equipment
Fixtures & fittings
Properties
Straight line
3-10 years
3-8 years
15 years
SPECIFICATION OF TANGIBLE FIXED ASSETS AND LEASE AGREEMENTS IN BALANCE SHEET
NOK million
Tangible fixed assets
IFRS 16 assets
Book value 31.12
Allocation by company and customers
Tangible fixed assets - company
Total tangilbe fixed assets and lease agremments
LEASE AGGREMENTS
43
12
-1
-6
49
2019
49
1,026
1,075
1,075
1,075
2018
543
3
-492
-1
-9
43
2018
43
43
43
43
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
Book value 01. 01
Additions
Book value 31. 12
Accumulated write-downs/depreciations 01.01
Depreciation
Currency differences from converting foreign units
Accumulated write-downs/depreciations 31.12
Booked value 31.12
Buildings
IT-equipment
Other equipment
1,019
78
1,097
-115
-7
-123
975
68
68
-16
-3
-19
50
1
1
2
1
Total
1,088
79
1,167
-132
-10
-141
1,026
156
STOREBRAND ANNUAL REPORT 2019 Applied practical solutions
The Group also leases PCs, IT equipment and machinery with contract terms from 1 to 3 years. The Group has decided not to
recognise leases when the underlying asset has a low value and therefore does not recognise lease liabilities and right-of-use assets
for any of these leases. Instead, the lease payments are expensed as they are incurred. The Group also does not recognise lease
liabilities and right-of-use assets for short-term leases of less than 12 months.
LEASE LIABILITIES
NOK million
Less than 1 year
1-2 years
2-3 years
3-4 years
4-5 years
Mote than 5 years
Total non-discounted lease liabilities 31. 12.2019
CHANGES IN LEASE LIABILITIES
NOK million
Upon initial adoption 01.01.2019
New/changed lease liabilities recognised during the period
Payment of principal
Payment of interest
Exchange rate differences when converting foreign unit
Total lease liabilities 31. 12.2019
OTHER LEASE EXPENSES INCLUDED IN THE INCOME STATEMENT
NOK million
Lease agreement with lower value
Total lease expenses included in operating expenses
Amount
142
135
132
111
105
511
1,136
Amount
1,080
87
-146
25
-10
1,037
Amount
-10
-10
157
SECTION 9. ANNUAL ACCOUNTS AND NOTES Note 29: Investments in other companies
Applies to subsidiaries with a significant minority, associated companies and joint ventures.
IFRS 10 establishes a model for evaluating control that will apply to all companies. Control exists when the investor has power over the
investment object and possesses the right to variable yields from the investment object and simultaneously possesses the power and
possibility to steer activities in the investment object that affect the yield.
In the Group’s financial statements, securities funds in which Storebrand has an ownership percentage of around 40 per cent or more,
and which are also managed by management companies within the Storebrand Group, are consolidated 100 per cent on the balance
sheet. Minority ownership interests in consolidated securities funds are shown on one line for assets and correspondingly on one
line for liabilities. In consequence of other investors in the funds being able to request redemption of their ownership interests from
the respective funds, such are deemed to be minority interests that are classified as liabilities in Storebrand’s consolidated financial
statements.
SPECIFICATION OF SUBSIDARIES WITH SUBSTANTIAL MINORITY (100% FIGURES)
NOK million
Assets
Liabilities
Equity - majority
Equity - minority
Ownership intereest - minority
Voting rights as a percentage of the total number of shares
Income
Result after tax
Total comprehensive income
Dividend paid to minority
2019
Benco
10,712
10,200
512
51
10
10
882
32
32
2018
Benco
16,376
15,877
449
50
10
10
486
30
30
2
SPECIFICATION OF ASSOCIATED COMPANIES AND JOINT VENTURES CLASSIFED AS SUBSTANTIAL (100% FIGURES)
Storebrand Helseforsikring AS
Storebrand Helseforsikring AS
2019
2018
Equity-method
Insurance
Joint venture
Equity-method
Insurance
Joint venture
584
66
50
373
28
735
47
47
130
700
38
66
363
29
689
64
64
79
NOK million
Accounting method
Type of operation
Type of interest
Current assets
Fixed assets
Short term liabilities
Long term liabilities
Cash and cash equivalents
Income
Result after tax
Total comprehensive income
Dividend paid
158
STOREBRAND ANNUAL REPORT 2019
PROFIT AND OWNERSHIP INTERESTS IN ASSOCIATED COMPANIES AND JOINT VENTURES
NOK million
Associated companies
Inntre Holding AS
Handelsboderna i Sverige Fastighets AB 1)
Storebrand Eiendomsfond Norge KS
Joint ventures
Försäkringsgirot AB
Ruseløkkveien 26 AS
Storebrand Helseforsikring AS
Total 2019
Booked in the statement of financial position
Investments in associated companies - company
Investments in associated companies - customers
Total 2019
Total 2018
1) Handelsbodarna in Sverige Fastighets AB is sold during 2019
Business location Ownership share
Profit
Book value 31.12
Steinkjær
Stockholm
Bærum
Stockholm
Oslo
Lysaker
34.3%
0.0%
20.2%
25.0%
50.0%
50.0%
14
1
177
1
164
24
379
39
341
379
341
109
2,426
4
1,619
113
4,272
227
4,045
4,272
4,045
Note 30: Classification of financial assets and liabilities
Investments,
Loans and
held to
Fair value,
Liabilities at
amortised
receivables
maturity
held for sale
Fair value
cost
Total
NOK million
Financial assets
Bank deposits
Shares and fund units
10,594
0
Bonds and other fixed-income securities
98,046
13,377
Loans to financial institutions
Loans to customers
Accounts receivable and other short-term
receivables
Derivatives
Total financial assets 2019
Total financial assets 2018
41
53,534
5,273
167,488
165,375
13,378
14,403
Financial liabilities
Subordinated loan capital
Liabilities to financial institutions
Deposits from banking customers
Securities issued
Derivatives
Other current liabilities
Total financial liabilities 2019
Total financial liabilities 2018
194,343
156,639
7,126
58
358,166
320,970
10
10
72
5,256
5,256
4,831
932
932
4,535
8,925
446
14,404
18,729
62
8,264
50,831
46,803
10,594
194,343
268,062
41
60,659
5,273
5,314
544,287
505,579
8,925
446
14,404
18,729
994
8,274
51,772
51,410
159
SECTION 9. ANNUAL ACCOUNTS AND NOTES Note 31: Bonds at amortised cost
LOANS AND RECEIVABLES
NOK million
Government bonds
Corporate bonds
Structured notes
Collateralised securities
Total bonds at amortised cost
Storebrand Bank
Modified duration
Average effective yield
Storebrand Life Insurance
Modified duration
Average effective yield
Distribution beween company and customers
Loans and receivables company
Loans and receivables customers with guarantee
Total
BONDS HELD TO MATURITY
NOK million
Corporate bonds
Collateralised securities
Total bonds at amortised cost
Modifed duration
Average effective yield
Distribution beween company and customers:
Bonds held to maturity - customers with guarantees
Total
2019
2018
Book value
Fair value
Book value
Fair value
27,964
71,750
1,510
504
101,728
0.1
1.9 %
6.2
3.3%
26,249
69,772
1,525
501
98,046
2.7%
8,256
89,790
98,046
26,994
65,944
1,484
300
94,723
2.7%
8,349
86,374
94,723
28,945
67,757
1,482
301
98,485
0.2
1.4%
6.4
3.4%
2019
2018
Book value
Fair value
Book value
Fair value
13,377
14,433
14,433
3.8
4.4%
13,377
2.4%
13,377
13,377
13,880
523
14,403
2.7%
14,403
14,403
15,109
570
15,679
4.3
4.5%
A yield is calculated for each bond, based on both the paper’s book value and the observed market price (fair value). For fixed income
securities with no observed market prices the effective interest rate is calculated on the basis of of the fixed interest rate period
and classification of the individual security with respect to liquidity and credit risk. Calculated effective yields are weighted to give an
average effective yield on the basis of each security’s share of the total interest rate sensitivity.
160
STOREBRAND ANNUAL REPORT 2019 Note 32: Loans to customers
NOK million
Corporate market 1)
Retail market
Gross loans
Write-downs of loans losses
Net loans 2)
1) Of which Storebrand Bank
2) Of which Storebrand Bank
Of which Storebrand Livsforsikring
Allocation by company and customers:
Net loans to customers - company
net loans to customers - customers with guarantee
Total
NON-PERFORMING AND LOSS-EXPOSED LOANS
NOK million
Non-performing and loss-exposed loans without identified impairment
Non-performing and loss-exposed loans with identified impairment
Gross non-performing loans
Individual write-downs
Net non-performing loans 1)
1) The figures apply in their entirety Storebrand Bank
For further information about lending, see note 10 Credit risk.
2019
12,943
47,768
60,712
-53
60,658
13
30,187
30,472
30,187
30,471
60,658
2019
73
52
125
-20
105
2018
12,756
46,742
59,498
-63
59,435
33
28,456
30,979
28,457
30,978
59,435
2018
71
59
129
-21
108
161
SECTION 9. ANNUAL ACCOUNTS AND NOTES Note 33: Properties
NOK million
31.12.19
31.12.18
of return % 1)
(years) 3)
m2
31.12.19
Average dura-
Required rate
tion of lease
Office buildings (including parking and storage):
Oslo-Vika/Filipstad Brygge
Rest of Greater Oslo
Office buildings in Sweden
Shopping centres (including parking and storage)
Rest of Norway
Housing Sweden 2)
Car parks
Multi-storey car parks in Oslo
Other properties:
Cultural/conference centres Sweden 2)
Housing properties Sweden 2)
Hotel Sweden 2)
Service properties Sverige 2)
Properties under development Norway
Conference centres Norway
Total investment properties
Properties for own use
Total properties
Allocation by company and customers:
Properties - company
Properties - customers with guarantee
Properties - customers without guarantee
Total
7,682
4,360
719
5,955
2,137
7,201
4,102
693
6,101
2,131
898
924
239
2,143
2,563
2,016
653
49
29,415
1,375
30,790
49
26,901
3,839
30,790
224
1,775
2,508
1,923
635
50
28,266
1,420
29,686
50
26,333
3,303
29,686
4,00 - 4,45
4,00 - 5,63
4.48
4,75 - 6,69
5.67
4.30
6.50
4.25
4.38
4.73
7.60
4.6
4.7
4.8
3.4
3.8
2.0
12.7
0.2
10.3
10.2
3.75
4.3
94,332
85,247
16,987
157,113
86,316
27,393
18,757
60,306
35,872
64,089
38,820
685,231
19,528
704,759
1) The properties are valued on the basis of the following effective required rate of return (included 2.0 per cent inflation)
2) All of the proporties in Sweden are appraised externally. The appraisal is based on the required rates of return in the market (including 2 per cent inflation)
3) The average duration of the leases has been calculated proportionately based on the value of the individulal properties.
As of 31.12.19, Storebrand Life Insurance had NOK 4.044 million invested in Storebrand Eiendomsfond Norge KS and Ruseløkkveien 26,
Oslo.
The investments are classified as “Investment in associated Ccmpanies and joint ventures” in the Consolidated Financial Statements.
Storebrand Eiendomsfond Norge KS and Ruseløkkveien 26, Oslo invest exclusively in real estate at fair value.
Vacancy
Norway
The vacancy rate for lettable areas was 6.3 per cent (6.1 per cent) at the end of 2019.
The vacancy rate for areas with ongoing development projects is 57.2 per cent (76.9 per cent).
At the end of 2019, a total of 12.1 per cent (12.7 per cent) of the floor space in the investment properties was vacant.
Sweden
At the end of 2019, there was practically no vacancy in the investment properties
Transactions:
Purchases: Further NOK 193 millions in property acquisitions in SPP have been agreed on in 4th quarter 2019 in addition to the
figures that has been finalised and included in the finacial statements as of 31 December 2019
162
STOREBRAND ANNUAL REPORT 2019 Sale: No further property sales has been agreed on in Storebrand/SPP in addiition to the figures that has been finalised and included
in the finacial statements as of 31 December 2019
PROPERTIES FOR OWN USE
NOK million
Book value 01.01
Additions
Revaluation booked in balance sheet
Depreciation
Write-ups due to write-downs in the period
Currency differences from converting foreign units
Other change
Book value 31.12
Acquisition cost opening balance
Acquisition cost closing balance
Accumulated depreciation and write-downs opening balance
Accumulated depreciation and write-downs closing balance
Allocation by company and customers:
Properties for own use - customers
Total
2019
1,420
6
-34
-13
11
-55
40
1,375
545
551
-664
-677
1,375
1,375
Depreciation method:
Depreciation plan and financial lifetime
Straight line
50 years
Note 34: Accounts receivable and other short-term receivables
NOK million
Accounts receivable
Receivables in connection with direct insurance
Pre-paid expenses
Fee earned
Claims on insurance brokers
Prepayment of yield tax
Client funds
Collateral
Tax receivable
Activated sales costs (Swedish business)
Pre-paid tax abroad
Other current receivables
Book value 31.12
Allocation by company and customers:
Accounts receivable and other short-term receivables - company
Accounts receivable and other short-term receivables - customers
Total
2019
711
310
188
358
290
225
1,086
1,309
583
213
5,273
4,824
450
5,273
2017
1,408
6
39
-13
12
-31
1,420
534
540
-587
-600
1,420
1,420
2018
633
539
215
72
395
408
34
1,894
2,975
553
106
192
8,017
7,005
1,012
8,017
163
SECTION 9. ANNUAL ACCOUNTS AND NOTES AGE DISTRIBUTION FOR ACCOUNTS RECEIVABLE 31.12 (GROSS)
NOK million
Receivables not fallen due
Past due 1 - 30 days
Past due 31 - 60 days
Past due 61 - 90 days
Past due > 90 days
Gross accounts receivable
Provisions for losses
Net accounts receivable
Note 35: Equities and fund units
NOK million
Equities
Private Equity fund investments
Fund units
Total equities and fund units
Allocation by company and customers:
Equities and fund units - company
Equities and fund units - customers with guarantee
Equities and fund units - customers without guarantee
Total
Note 36: Bonds and other fixed-income securities
NOK million
Government bonds
Corporate bonds
Structured notes
Collateralised securities
Bond funds
Total bonds and other fixed-income securities
Allocation by company and customers:
Bonds and other fixed-income securities - company
Bonds and other fixed-income securities - customers with guarantee
Bonds and other fixed-income securities - customers without guarantee
Total
164
2019
685
27
4
1
5
721
-9
711
2019
Fair value
28,768
1,471
164,104
194,343
323
25,677
168,344
194,343
2019
Fair value
32,256
60,055
3,648
60,680
156,639
28,512
83,881
44,245
156,639
2018
619
12
1
1
1
635
-2
633
2018
Fair value
24,038
1,418
131,904
157,361
295
23,402
133,664
157,361
2018
Fair value
34,491
51,028
79
22,510
49,478
157,586
24,055
91,894
41,637
157,586
STOREBRAND ANNUAL REPORT 2019 Modified duration
Average effective yield
Storebrand
Fair value
Life
SPP Pension
Storebrand
Storebrand
Storebrand
Insurance
& Insurance
Euroben
7.2
2.4%
7.3
0.7%
4.3
0.5%
Bank
0.2
1.9%
Insurance
0.5
2.1%
ASA
0.5
2.1%
The effective yield for each security is calculated using the observed market price. Calculated effective yields are weighted to give an
average effective yield on the basis of each security’s share of the total interest rate sensitivity. Interest derivatives are included in the
calculation of modified duration and average effective interest rate.
Note 37: Derivatives
Nominal volume
Financial derivatives are related to underlying amounts which are not recognised in the statement of financial position. In order to
quantify the scope of the derivatives, reference is made to amounts described as the underlying nominal principal, nominal volume,
etc. Nominal volume is arrived at differently for different classes of derivatives, and provides some indication of the size of the position
and risk the derivative presents.
Gross nominal volume principally indicates the size of the exposure, while net nominal volume provides some indication of the risk
exposure. However , nominal volume is not a measure which necessarily provides a comparison of the risk represented by different
types of derivatives. Unlike gross nominal volume, the calculation of net nominal volume also takes into account which direction of
market risk exposure the instrument represents by differentiating between long (asset) positions and short (liability) positions.
A long position in an equity derivative produces a gain in value if the share price increases. For interest rate derivatives, a long
position produces a gain if interest rates fall, as is the case for bonds. For currency derivatives, a long position results in a positive
change in value if the relevant exchange rate strengthens against the NOK. Average gross nominal volume are based on daily
calculations of gross nominal volume.
Gross nominal
Gross booked
value fin. liabi-
Gross booked
volume 1)
value fin. assets
lities
Fin. assets
Fin. liabilities
Net amount
Net amounts taken into account
netting agreements
NOK million
Equity derivatives
Interest derivatives
Currency derivatives
Total derivater 31.12.19
Total derivater 31.12.18
80,259
72,146
1
3,501
1,811
5,313
4,646
834
160
994
4,607
89
Distribution between company and customers:
Derivatives - company
Derivatives - customers with guarantee
Derivatives - customers without guarantee
Total
1) Values 31.12.
1
2,667
1,651
4,319
39
1,097
2,320
902
4,319
165
SECTION 9. ANNUAL ACCOUNTS AND NOTES Note 38: Technical insurance reserves - life insurance
SPECIFICATION OF BUFFER CAPITAL ITEMS CONSERNING LIFE INSURANCE
NOK million
pension
Savings
Insurance *)
BenCo
Guaranteed
Additional statutory reserves
Conditional bonus
Market value adjustment reserve
Total buffer capital
9,023
7,802
5,348
22,173
152
152
SPECIFICATION OF BALANCE SHEET ITEMS CONSERNING LIFE INSURANCE
NOK million
Premium reserve
- of which IBNS
Pension surplus fund
Premium fund/deposit fund
Other technical reserves
- of which IBNS
Supplerende avsetning
Guaranteed
pension
240,372
1,825
2,016
Savings
Insurance 1)
219,803
10
4,854
2,916
649
607
Total Store-
Total Store-
brand Group
brand Group
2019
9,023
9,302
5,500
2018
8,494
8,243
2,245
1,500
1,500
23,825
18,983
BenCo
8,346
61
Total Store-
Total Store-
brand Group
brand Group
2019
2018
473,375
440,504
4,813
2,016
649
607
4,883
4
2,153
622
562
8
Total insurance liabilities - life insurance
242,388
219,803
5,502
8,346
476,040
443,290
1) Including personal risk and employee insurance of the Insurance segment.
MARKET VALUE ADJUSTMENT RESERVE
NOK million
Equities
Interest-bearing
Total market value adjustment reserves at fair value
2019
4,424
1,076
5,500
NOK million
Total insurance liabilities - life insurance 01.01
Premium income
Capital return
Insurance claims
Other1)
Translation differences
Guaranteed
pension
244,890
5,907
9,711
-13,206
-1,985
-2,929
Savings
Insurance
179,300
23,096
32,397
-10,537
-1,314
-3,139
5,298
2,384
210
-1,197
-1,193
Total insurance liabiliteis - life insurance 31.12.
242,388
219,803
5,502
2018
1,776
469
2,246
Total
443,290
31,417
43,146
-25,349
-10,075
-6,390
476,040
BenCo
13,802
30
828
-409
-5,583
-322
8,346
1) Including sale of Nordben
See note 39 for insurance liabilities - P&C.
166
STOREBRAND ANNUAL REPORT 2019 Note 39: Technical insurance reserves - P&C insurance
ASSETS AND LIABILITIES - P&C INSURANCE
NOK million
Reinsurance share of insurance technical reserves
Total assets
Premium reserve
Claims reserve
- of which IBNS
- of which administration reserve
Total liabilities
See note 38 for insurance liabilities - life insurance.
Note 40: Other current liabilities
NOK million
Accounts payable
Accrued expenses
Appropriations earnout
Other appropriations
Governmental fees and tax withholding
Collateral received derivates in cash
Liabilities in connection with direct insurance
Liabilities to broker
Liabilities tax/tax appropriations
Minority SPP Fastighet KB
Other current liabilities
Book value 31.12
SPECIFICATION OF RESTRUCTURING RESERVES
NOK million
Book value 01.01
Increase in the period
Amount recognised against reserves in the period
Book value 31.12
2019
26
26
537
594
566
28
1,131
2019
169
965
423
162
298
2,929
1,196
500
29
1,140
465
8,274
2019
38
50
-32
57
2018
21
21
470
581
553
28
1,051
2018
260
701
105
290
313
1,709
1,485
319
63
891
492
6,629
2018
49
7
-18
38
167
SECTION 9. ANNUAL ACCOUNTS AND NOTES Note 41: Hedge accounting
Fair value hedging of interest rate risk and cash flow hedging of foreign exchange risk
Storebrand uses fair value hedging for the interest rate risk. The hedged items are financial liabilities measured at amortised cost.
Derivatives are recognised at fair value through profit or loss. Changes in the value of the hedged item that are attributable to
the hedged risk adjust the carrying amount of the hedged item and are recognised through profit or loss. Hedge effectiveness is
monitored at an individual security level.
Storebrand uses cash flow hedging of the foreign exchange risk for the principal and the foreign exchange risk for the credit margin.
The hedged items are liabilities measured at amortised cost. Derivatives are recognised at fair value. The proportion of the profit or
loss on the hedging instrument that is deemed to be effective hedging is recognised in total comprehensive income. The proportion is
subsequently reclassified to profit or loss in step with the hedged item’s effect on earnings.
HEDGING INSTRUMENT/HEDGED ITEM
2019
Book value 1)
2018
Book value 1)
Contract/
nominal
Recog-
nised of
compre-
Contract/
hensive
nominal
Recog-
nised of
compre-
hensive
NOK million
value
Assets
Liabilities
Booked
income
value
Assets Liabilities
Booked
income
Interest rate swaps
Subordinated loans
Debt raised through
3,073
-2,238
1,073
issuance of securities
800
3,243
798
-15
-5
21
-55
53
4,623
-2,238
2,350
1,171
3,255
2,406
-60
-14
45
-12
14
1) Book values as at 31.12.
Hedging of net investment in Storebrand Holding AB
In 2019, Storebrand used hedge accounting for its net investment in Storebrand Holding AB. Three-month rolling currency derivatives
were used, and the spot element of these was used as a hedging instrument. A time-limited subordinated loan of SEK 1,000 million
was taken up in 2019. The loan was used as a hedging instrument linked to the hedging of the net investment in Storebrand Holding
AB. The effective share of the hedging instruments is recognised in total comprehensive income. There is partial hedging of the net
investment in Storebrand Holding AB and it is therefore expected that the hedge effectiveness in the future will be about 100 per
cent.
HEDGING INSTRUMENT/HEDGED ITEM
2019
Book value 1)
2018
Book value 1)
Contract/
Contract/
nominal value
Assets
Liabilities
nominal value
Assets
Liabilities
-4,700
-3,650
27
3,426
-5,302
-2,650
222
2,588
9,045
9,242
NOK million
Currency derivatives
Loan used as hedging instrument
Underlying items
1) Book values at 31.12.
Storebrand hedges an exposure in the reference interest rate EURIBOR 3M.
Storebrand hedges an exposure of EUR 300 million nominal value in EURIBOR 3M.
168
STOREBRAND ANNUAL REPORT 2019
Storebrand follows market developments relating to the discontinuation of reference interest rates. New reference interest rates will
influence the management of customer portfolios, but the scope and efficiency will particularly depend on the future for NIBOR and
STIBOR .
LIBOR for different currencies will be available until the end of 2021, but the transition to new “overnight interest rates” appears
to be progressing faster than first assumed. This may result in some of the “Panel banks” not providing data to maintain the LIBOR
interest rates until the end of 2021. This could make the LIBOR interest rates less attractive to use and the transition to new “over-
night” reference interest rates” before the end of 2021 may be in all of the parties’ interests. The transition to new reference interest
rates and specification of “fallbacks” will be calculated by ISDA and published by Bloomberg. To ensure the wording of the agreements
between the market players, ISDA will release a “Protocol” at the end of Q1 2020 and it is expected that most market players will
accede to the “Protocol”. Storebrand Asset Management has the ambition of acceding to the “Protocol” on behalf of the life insurance
companies in the Group. NIBOR and STIBOR will not be immediately affected, and the administrator of these reference interest rates
has an ambition of also continuing these beyond 2021. GBP LIBOR is expected to be replaced by SONIA (Sterling Overnight Index
Average). USD LIBOR is expected to be replaced by SOFR (Secured Overnight Financing Rate), and EUR LIBOR will be replaced by EUR
ESTER. The transfer to “overnight interest rates” for the major currencies may also influence the continuation of NIBOR. NIBOR will
then be able to be replaced with NOWA (Norwegian Overnight Weighted Average).
The derivative that hedges the EURIBOR 3M risk is a cross currency swap of EUR 300 million nominal value.
Note 42: Collateral
NOK million
Collateral for Derivatives trading
Collateral received in connection with Derivatives trading
Total received and pledged collateral
2019
477
-3,939
-3,462
2018
4,055
-1,669
2,385
Collateral pledged in connection with futures and options are regulated on a daily basis in the daily margin clearing on individual
contracts. Collatrals are received and given both as cash and securities.
NOK million
Book value of bonds pledged as collateral for the bank's lending from Norges Bank
Booked value of securities pledged as collateral in other financial institutions
Total
2019
904
151
1,055
2018
1,205
151
1,355
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
none F-loan in Norges Bank as per 31.12.2019.
Of total loans of NOK 30.1 billion, NOK 20,4 billion has been mortgaged in connection with the issuing of covered bonds (covered
bond rate) in Storebrand Boligkreditt AS.
Loans in Storebrand Boligkreditt AS are security for covered bonds in the company, and these assets have therefore been mortgaged
through the bondholders’ pre-emptive rights to the security in the company. Storebrand Boligkreditt AS has overcollateralization (OC)
of 39,5 per cent, but committed OC is 11.59 per cent. Storebrand Boligkreditt AS therefore has security that is NOK 3.8 billion more
than was committed in the loan programme. Storebrand Bank ASA considers the risk associated with the transfer rate of mortgages
to Storebrand Boligkreditt AS as low.
169
SECTION 9. ANNUAL ACCOUNTS AND NOTES
Note 43: Contingent liabilities
NOK million
Guarantees
Unused credit limit lending
Uncalled residual liabilities re limited partnership
Loan commitment retail market
Total contingent liabilities
2019
1
3,072
7,297
1,466
11,837
2018
1
3,362
5,818
1,672
10,853
1) The debt instrument is conditional upon the company being released from administration
Guarantees principally concern payment guarantees and contract guarantees.
Unused credit facilities concern granted and unused overdrafts and credit cards, as well as unused facility for credit loans secured by
property.
Storebrand Group companies are engaged in extensive activities in Norway and abroad, and are subject for client complaints and may
become a party in legal disputes.
Note 44: Securities lending and buy-back guarantees
COVERED BONDS - STOREBRAND BANK GROUP
NOK million
Transferred bonds still recognised on the statement of financial position
Liabilities related to the assets
2019
403
403
2018
Transferred bonds that are included in buyback agreements (repos) are not derecognised, since all risk and return on the securities
are retained by Storebrand Bank ASA.
Note 45: Information related parties
Companies in the Storebrand Group have transactions with related parties 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 22 for further information about senior
employees.
Internal transactions between group companies are eliminated in the consolidated financial statements, with the exception of
transactions between the customer portfolio in Storebrand Livsforsikring AS and other units in the Group. See note 1 Accounting
Policies for further information.
For further information about close associates, see notes 29 and 40.
Note 46: Sold/liquidated business
Nordben Life and Pension Insurance Co. Ltd og Interben Trustees Ltd are sold out from the Group during 2019.
170
STOREBRAND ANNUAL REPORT 2019 STOREBRAND ASA
Income statement
NOK million
Operating income
Income from investments in subsidiaries
Net income and gains from financial instruments:
- equities and other units
- bonds and other fixed-income securities
- financial derivatives/other financial instruments
Other financial income
Operating income
Interest expenses
Other financial expenses
Operating expenses
Personnel expenses
Amortisation
Total operating expenses
Total expenses
Pre-tax profit
Tax
Profit for year
Note
2019
2
3
3
3
4, 5, 6
13
3,230
2
50
-6
1
3,278
-51
-40
-62
-102
-153
3,125
7
-173
2,952
Statement of total comprehensive income
NOK million
Profit for year
Other result elements not to be classified to profit/loss
Change in estimate deviation pension
Tax on other result elements
Total other result elements
Note
2019
2,952
5
-8
2
-6
2018
4,131
1
26
-7
33
4,184
-60
35
-41
-44
-86
-111
4,074
-111
3,963
2018
3,963
9
-2
6
Total comprehensive income
2,946
3,969
171
SECTION 9. ANNUAL ACCOUNTS AND NOTES
STOREBRAND ASA
Statement of financial position
NOK million
Fixed assets
Deferred tax assets
Tangible fixed assets
Shares in subsidiaries and associated companies
Total fixed assets
Current assets
Owed within group
Other current receivables
Investments in trading portfolio:
- equities and other units
- bonds and other fixed-income securities
- financial derivatives/other financial instruments
Bank deposits
Total current assets
Total assets
Equity and liabilities
Share capital
Own shares
Share premium reserve
Total paid in equity
Other equity
Total equity
Non-current liabilities
Pension liabilities
Securities issued
Total non-current liabilities
Current liabilities
Debt within group
Provision for dividend
Other current liabilities
Total current liabilities
Total equity and liabilities
Note
31.12.19
31.12.18
7
13
8
17
9
10, 12
11, 12, 15
12
5
14, 15
17
41
27
20,042
20,110
3,166
16
44
3,260
3
34
6,523
26,633
2,339
-5
10,521
12,856
9,794
22,650
154
1,309
1,463
900
1,517
103
2,520
26,633
47
26
19,286
19,359
4,092
21
22
1,820
9
34
5,998
25,357
2,339
-2
10,521
12,858
8,395
21,253
161
1,813
1,974
597
1,402
131
2,130
25,357
Lysaker, 11 February 2020
Board of Directors of Storebrand ASA
Didrik Munch
Chairman of the Board
Karin Bing Orgland
Laila S. Dahlen
Liv Sandbæk
Martin Skancke
Karl Sandlund
Fredrik Törnqvist
172
Magnus Gard
Odd Arild Grefstad
Group Chief Executive Officer
STOREBRAND ANNUAL REPORT 2019
STOREBRAND ASA
Statement of changes in equity
NOK million
Share capital 1)
Own shares
Share premium
Other equity
Equity at 31. December 2017
2,339
-5
10,521
Profit for the period
Total other result elements
Total comprehensive income
Provision for dividend
Own share bought back 2)
Employee share 2)
Equity at 31. December 2018
2,339
Profit for the period
Total other result elements
Total comprehensive income
Provision for dividend
Own share bought back 2)
Own share sold 2)
Employee share 2)
Equity at 31. December 2019
2,339
1) 467 813 982 shares with a nominal value of NOK 5.
3
-2
-5
2
-5
Total
equity
18,648
3,963
6
3,969
-1,402
50
-13
21,253
2,952
-6
2,946
5,793
3,963
6
3,969
-1,402
48
-13
8,395
2,952
-6
2,946
10,521
-1,514
-1,514
-63
36
-6
-68
38
-6
10,521
9,794
22,650
2) In 2019, Storebrand ASA has bought 1 000 000 own shares. In 2019, 487 950 shares were sold to our own employees. Holding of own shares 31. December 2019 was 943 190.
173
SECTION 9. ANNUAL ACCOUNTS AND NOTES STOREBRAND ASA
Statement of cash flow
NOK million
Cash flow from operational activities
Receipts - interest, commission and fees from customers
Net receipts/payments - securities at fair value
Payments relating to operations
Net receipts/payments - other operational activities
Net cash flow from operational activities
Cash flow from investment activities
Net receipts - sale of subsidiaries
Net payments - sale/capitalisation of subsidiaries
Net receipts/payments - sale/purchase of property and fixed assets
Net cash flow from investment activities
Cash flow from financing activities
Payments - repayments of loans
Receipts - new loans
Payments - interest on loans
Receipts - sold own shart to employees
Payments - buy own shares
Payments - dividends
Net cash flow from financing activities
Net cash flow for the period
Net movement in cash and cash equivalents
Cash and cash equivalents at start of the period
Cash and cash equivalents at the end of the period
174
2019
67
-1,475
-128
4,157
2,621
-629
-1
-630
-500
1
-58
33
-68
-1,399
-1,991
0
0
34
34
2018
47
-477
-89
2,247
1,728
33
-131
2
-95
-450
1
-72
37
-1,168
-1,651
-19
-19
53
34
STOREBRAND ANNUAL REPORT 2019 STOREBRAND ASA
Notes to the financial statement
Note 1:
Note 2:
Note 3:
Note 4:
Note 5:
Note 6:
Note 7:
Note 8:
Note 9:
Accounting policies
Income from investments in subsidiaries
Net income for various classes of financial instruments
Personnel costs
Pensions costs and pension liabilities
Remuneration to the CEO and elected officers of the company
Tax
Parent company’s shares in subsidiaries and associated companies
Equities
Note 10:
Bonds and other fixed-income securities
Note 11:
Financial derivatives
Note 12:
Financial risks
Note 13:
Tangible fixed assets
Note 14:
Securities issued
Note 15:
Hedge accounting
Note 16:
Shareholders
Note 17:
Information about close associates
Note 18:
Number of employees/person-years
175
SECTION 9. ANNUAL ACCOUNTS AND NOTES Note 1: Accounting policies
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.
Use of estimates and discretionary assumptions
In preparing the annual financial statements, Storebrand has made assumptions and used estimates that affect the reported value of
assets, liabilities, revenues, costs, as well as the information provided on contingent liabilities. Future events may cause these estimates
to change. Such changes will be recognised in the financial statements when there is a sufficient basis for using new estimates. The most
important estimates and assessments are related to the valuation of the company’s subsidiaries and the assumptions used for pension
calculations.
Classification and valuation policies
Assets intended for permanent ownership and use are classified as fixed assets, and assets and receivables due for payment within one
year are classified as current assets. Equivalent policies have been applied to liability items.
Profit and loss account and statement of financial position
Storebrand ASA is a holding company with subsidiaries in the fields of insurance, banking and asset management. The layout plan in the
Regulations relating to annual financial statements for nonlife insurance companies has not been used, a custom layout plan has been
used.
Investments in subsidiaries, dividends and group contributions
In the company’s accounts, investments in subsidiaries and associated companies are valued at the acquisition cost less any write-downs.
The need to write down is assessed at the end of each accounting period. Storebrand ASA’s primary income is the return on capital
invested in subsidiaries. Group contributions and dividends received in respect of these investments are therefore recorded as ordinary
operating income. Proposed and approved dividends and group contributions from subsidiaries at the end of the year are recognised in
the financial statements of Storebrand ASA as income in that financial year.
A prerequisite for recognition is that this is earned equity by a subsidiary. Otherwise, this is recognised as an equity transaction, which
means that the ownership interest in the subsidiary is reduced by dividends or group contributions.
Tangible fixed assets
Tangible fixed assets for own use are recognised at acquisition cost less accumulated depreciation. Write-downs are made if the book value
exceeds the recoverable amount of the asset.
Pension liabilities for company’s own employees
Storebrand ASA have defined-contribution pension, but have some pension obligation that are recorded as defined-benefit pension.
The defined-contribution pension scheme involves the company paying an annual contribution to the employees’ collective pension
savings. The future pension will depend upon the size of the contribution and the annual return on the pension savings. The company does
not have any further work-related obligations after the annual contribution has been paid. No provisions are made for ongoing pension
liabilities for these types of schemes. Defined-contribution pension schemes are recognised directly in the financial statements.
Tax
The tax cost in the profit and loss account consists of tax payable and changes in deferred tax. Deferred tax and deferred tax assets are
calculated on the differences between accounting and tax values of assets and liabilities. Deferred tax assets are recorded on the balance
sheet to the extent it is considered likely that the company will have sufficient taxable profit in the future to make use of the tax asset.
Deferred tax is applied directly against equity to the extent that it relates to items that are themselves directly applied against equity.
176
STOREBRAND ANNUAL REPORT 2019 Currency
Current assets and liabilities are translated at the exchange rate on the balance sheet date. Shares held as fixed assets are translated at
the exchange rate on the date of acquisition.
Financial instruments
Equities and units
Equities and units are valued at fair value. For securities listed on an exchange or other regulated market, fair value is determined as the
bid price on the last trading day immediately prior to or on the balance sheet date.
Any repurchase of own shares is dealt with as an equity transaction, and own shares (treasury stock) are presented as a reduction in
equity.
Bonds and other fixed income securities
Bonds and other fixed income securities are included i the statement of financial position from such time the company becomes party
to the instrument’s contractual terms and conditions. Ordinary purchases and sales of financial instruments are recognised on the
transaction date. When a financial asset or a financial liability is initially recognised in the financial statements, it is valued at fair value.
Initial recognition includes transaction costs directly related to the acquisition or issue of the financial asset/liability.
Financial assets are derecognised when the contractual right to the cash flows from the financial asset expires, or when the company
transfers the financial asset to another party in a transaction by which all, or virtually all, the risk and reward associated with ownership
of the asset is transferred.
Bonds and other fixed income securities are recognised at fair value.
Fair value is the amount for which an asset could be sold for, or a liability settled with, between knowledgeable, willing parties in an
arm’s length transaction. For financial assets that are listed on an exchange or other regulated market place, fair value is determined as
the bid price on the last trading day up to and including the balance sheet date, and in the case of an asset that is to be acquired or a
liability that is held, the offer price.
Financial derivatives
Financial derivatives are recognised at fair value. The fair value of such derivatives is classified as either an asset or a liability with changes
in fair value through profit or loss.
Bond funding
Bond loans are recorded at amortised cost using the effective interest rate method. The amortised cost includes the transaction costs
on the date of issue.
Accounting treatment of derivatives as hedging
Fair value hedging
Storebrand uses fair value hedging, and the hedged items are fixed rate funding measured at amortised cost. Derivatives that fall within
this category are recognised at fair value through profit or loss. Changes in the value of the hedged item that relate to the hedged risk
are applied to the book value of the item and recognised through profit or loss
Note 2: Income from investments in subsidiaries
NOK million
Storebrand Livsforsikring
Storebrand Bank ASA
Storebrand Asset Management AS
Storebrand Forsikring AS
Storebrand Helseforsikring AS
Total
Group contribution from Storebrand ASA, see note 8
2019
2,200
244
568
153
65
3,230
2018
3,200
153
415
324
39
4,131
177
SECTION 9. ANNUAL ACCOUNTS AND NOTES Note 3: Net income for various classes of financial instruments
NOK million
rest income
on realisation
sed gain/loss
2019
2018
Dividend/inte-
Net gain/loss
Net unreali-
Net income from equities and units
Net income from bonds and other fixed income securi-
ties
Net income from financial derivatives
Net income and gains from financial assets at fair
value
– of which FVO (Fair Value Option)
– of which trading
54
54
54
-3
-6
-9
-3
-6
2
-1
1
1
2
50
-6
47
52
-6
1
26
-7
20
27
-7
Note 4: Personnel costs
NOK million
Ordinary wages and salaries
Employer's social security contributions
Personnel costs 1)
Other benefits
Total
1) See the spesification in note 5
2019
-20
-6
-8
-6
-40
2018
-21
-6
-9
-6
-41
Note 5 : Pensions costs and pension liabilities
Storebrand Group has country-specific pension schemes.
Storebrand’s employees in Norway have a defined-contribution pension scheme. In a defined-contribution scheme, the company
allocates an agreed contribution to a pension account. The future pension depends upon the amount of the contributions and the
return on the pension account. When the contributions have been paid, the company has no further payment obligations relating to
the defined-contribution pension and the payment to the pension account is charged as an expense on an ongoing basis. For regulatory
reasons, there can be no savings in the defined-contribution pension for salaries that exceed 12G (G = National Insurance Scheme basic
amount). Storebrand has pension savings in the savings product Extra Pension for employees with salaries exceeding 12G.
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 99,858 as at
31 December 2019)
– 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
Employees and former employees who had salaries in excess of 12G until 31 December 2014 were offered a cash redemption option
for their accrued rights with payment at the start of 2015. For employees who were a part of the executive management team, these
payments were distributed over 5 years and the last payment in 2019.
The Norwegian companies participate in the Joint Scheme for Collective Agreement Pensions (AFP). The private AFP scheme provides a
lifelong supplement to an ordinary pension and is a multi-employer pension scheme, but there is no reliable information available for
inclusion of this liability on the statement of financial position. The scheme is financed by means of an annual premium that is defined as
a percentage of salaries from 1 G to 7.1 G, and the premium rate was 2.5 % in 2019. Storebrand employees in Norway who were born
before 1 January 1956 can choose between drawing an AFP scheme pension or retiring at the age of 65 and receiving a direct pension
178
STOREBRAND ANNUAL REPORT 2019
from the company until they reach the age of 67. Employees can choose to receive benefits from the AFP scheme from the age of 62
and still continue to work.
Employees who were on sick leave and partiality disabled during the transition to the defined-contribution pension, remain in the
defined-benefit pension scheme. There are also pension liabilities for the defined-benefit scheme related to direct pensions for certain
former employees and former board members.
RECONSILIATION OF PENSION ASSETS AND LIABILITIES IN THE STATEMENT OF FINANCIAL POSITION
NOK million
Present value of insured pension benefit liabilities
Pension assets at fair value
Net pension liabilities/assets for the insured schemes
Present value of the uninsured pension liabilities
Net pension liabilities in the statement of financial position
CHANGES IN THE NET DEFINED BENEFITS PENSION LIABILITIES IN THE PERIOD:
NOK million
Net pension liabilities 01.01
Interest on pension liabilities
Pension experience adjustments
Pensions paid
Net pension liabilities 31.12
CHANGES IN THE FAIR VALUE OF PENSION ASSETS
NOK million
Pension assets at fair value 01.01.
Pension experience adjustments
Net pension assets 31.12
2019
2
-7
-5
159
154
2019
168
4
8
-19
161
2019
7
-1
7
2018
2
-7
-5
166
161
2018
183
5
-9
-11
168
2018
7
7
Expected premium payments are estimated to be NOK 1 million and the payments from operations are estimated to be
NOK 11 million in 2020.
PENSION ASSETS ARE BASED ON THE FINANCIAL ASSETS HELD BY STOREBRAND LIFE INSURANCE, WHICH ARE
COMPOSED OF AS PER 31.12.:
NOK million
Properties and real estate
Bonds at amortised cost
Loan
Equities and units
Bonds
Other short term financial assets
Total
Booked returns on assets managed by Storebrand Life Insurance were:
2019
13%
36%
13%
15%
20%
1%
100%
3.6%
2018
14%
36%
14%
12%
24%
1%
100%
2.2%
179
SECTION 9. ANNUAL ACCOUNTS AND NOTES NET PENSION COST BOOKED TO PROFIT AND LOSS ACCOUNTS IN THE PERIOD
NOK million
Net interest/expected return
Total for defined benefit schemes
The period's payment to contribution scheme
Net pension cost booked to profit and loss accounts in the period
OTHER COMPREHENSIVE INCOME (OCI) IN THE PERIOD
NOK million
Actuarial loss (gain) - change in discount rate
Actuarial loss (gain) - experience DBO
Loss (gain) - experience Assets
Remeasurements loss (gain) in the period
MAIN ASSUMPTIONS USED WHEN CALCULATING NET PENSION LIABILITY AS PER 31.12.
NOK million
Economic assumptions:
Discount rate
Expected earnings growth
Expected annual increase in social security pension
Expected annual increase in pensions in payment
Disability table
Mortality table
2019
2018
4
4
4
8
2019
8
1
8
2019
2.2 %
2.00%
2.00%
0.0 %
KU
4
4
5
9
2018
-2
-6
-9
2018
2.8%
2.50%
2.50%
0.0 %
KU
K2013BE
K2013BE
Financial assumptions:
The financial assumptions have been determined on the basis of the regulations in IAS 19. Long-term assumptions such as future
inflation, real interest rates, real wage growth and adjustment of the basic amount are subject to a particularly high degree of uncertainty.
In Norway, a discount rate based on covered bonds is used. Based on the market and volume trends observed, the Norwegian covered
bond market must be perceived as a deep market.
Specific company conditions including expected direct wage growth are taken into account when determining the financial assumptions.
Actuarial assumptions:
In Norway standardised assumptions on rates of mortality and disability as well as other demographic factors are prepared by Finance
Norway. With effect from 2014 a new mortality basis, K2013, has been introduced for group pension insurance in life insurance
companies and pension funds. Storebrand has used the mortality table K2013BE (best estimate) in the actuarial calculations at
31 December 2019.
180
STOREBRAND ANNUAL REPORT 2019
Note 6: Remuneration of the CEO and elected officers of the company
NOK thousand
Chief Executive Officer 1)
Salery2)
Other taxable benefits
Total remuneration
Pension costs 3)
Chairman of the Board
Board of Directors including the Chairman
Remuneration paid to auditors
Statutory audit
Other reporting duties
2019
6,899
191
7,090
1,353
855
4,730
1,896
20
2018
6,761
194
6,955
1,253
760
4,371
1,261
33
1) Odd Arild Grefstad is the CEO of Storebrand ASA and the amount stated in the note is the total remuneration from the Group. He has a guaranteed salary for 24 months after the
ordinary period of notice. All work-related income including consulting assignments will be deducted.
2) A proportion of the executive management’s fixed salary will be linked to the purchase of physical Storebrand shares with a lock-in period of three years. The purchase of shares will
take place once a year.
3) Pension costs include accrual for the year. See also the description of the pension scheme in Note 5.
For further information on senior employees, the Board of Directors and the Board’s statement on fixing the salary and other remuneration of senior employees, see note 22 in the
Storebrand Group.
Note 7: Tax
THE DIFFERENCE BETWEEN THE FINANCIAL RESULTS AND THE TAX BASIS FOR THE YEAR IS PROVIDED BELOW.
NOK million
Pre-tax profit
Dividend
Gain/loss equities
Tax-free group contribution
Permanent differences
Change in temporary differences
Tax base for the year
- Use of losses carried forward
Payable tax
TAX COST
NOK million
Payable tax group contribution
Change in deferred tax
Tax cost
2019
3,125
-219
-2,202
-21
-22
662
662
2019
-168
-5
-173
2018
4,074
-39
-28
-3,527
-27
-24
428
-327
101
2018
-25
-86
-111
181
SECTION 9. ANNUAL ACCOUNTS AND NOTES
CALCULATION OF DEFERRED TAX ASSETS AND DEFERRED TAX ON TEMPORARY DIFFERENCES AND LOSSES
CARRIED FORWARD
NOK million
Tax increasing temporary differences
Other
Total tax increasing temporary differences
Tax reducing temporary differences
Securities
Operating assets
Provisions
Accrued pension liabilities
Gains/losses account
Other
Total tax reducing temporary differences
Net tax increasing/(reducing) temporary differences
Net deferred tax asset/liability in the statement of financial position
RECONCILIATION OF TAX COST AND ORDINARY PROFIT
NOK million
Pre-tax profit
Expected tax at nominal rate
Tax effect of:
dividends received
gains on equities
permanent differences
changes from previous year
Tax cost
Effective tax rate 1)
2019
2018
1
1
-9
-1
-154
-2
-165
-165
41
2019
3,125
-781
55
551
3
-173
6%
1
1
-8
-1
-6
-161
-2
-10
-188
-187
47
2018
4,074
-1,018
10
7
890
-111
3%
Note 8: Parent company’s shares in subsidiaries and associated companies
NOK million
Subsidiaries
Storebrand Livsforsikring AS 1)
Storebrand Bank ASA 2)
Storebrand Asset Management AS
Storebrand Forsikring AS 3)
Storebrand Facilities AS
Jointly controlled/associated companies
Storebrand Helseforsikring AS
AS Værdalsbruket 4)
Sum
1) Group contribution in 2019 of NOK 512 million as capital contribution.
2) Group contribution in 2019 of NOK 184 million as capital contribution.
182
3) Group contribution in 2019 of NOK 35 million as capital contribution.
4) 74.9 per cent owned by Storebrand Livsforsikring AS.
Business
office
Interest/
votes in %
Carrying amount
2019
2018
Oslo
Oslo
Oslo
Oslo
Oslo
Oslo
Værdal
100%
100%
100%
100%
100%
50%
25%
14 303
2 493
2 746
394
25
78
4
13 788
2 309
2 748
359
78
4
20 042
19 286
STOREBRAND ANNUAL REPORT 2019 Fair value
2019
44
44
Fair value
2019
3,260
3,260
0.5
2.12%
2018
22
22
2018
363
1,024
433
1,820
0.6
1.13%
Note 9: Equities
NOK million
Equities
Total equities
Note 10: Bonds and other fixed-income securities
NOK million
State and state guaranteed
Company bonds
Covered bonds
Bond funds
Total bonds and other fixed-income securities
Modified duration
Average effective yield
Note 11: Financial derivatives
NOK million
Interest rate swaps 1)
Total derivatives 2019
Total derivatives 2018
1) Used for hedge accounting, also see note 15
Note 12: Financial risks
Gross nominal vo-
Gross booked value
Gross booked fin.
lume 1)
fin. assetsr
liabilities
Net amount
600
600
300
11
11
9
7
7
3
3
9
CREDIT RISK BY COUNTERPARTY
Bonds and other fixed-income securities at fair value
Category of issuer or guarantor
Fair value
Fair value
Fair value
Fair value
AAA
AA
A
BBB
Not rated
Fair value
Total
Fair value
NOK million
State and state guaranteed
Company bonds
Supranational organisations
Other
Total 2019
Total 2018
27
78
17
121
487
173
383
173
431
383
901
29
29
195
2,145
201
2,541
222
2,808
217
13
3,260
1,820
183
SECTION 9. ANNUAL ACCOUNTS AND NOTES
COUNTERPARTIES
NOK million
Derivatives
Bank deposits
AA
3
11
Fair value
A
23
Total
3
34
The rating classes are based on Standard & Poors’s.
Interest rate risk
Storebrand ASA has both interest-bearing securities and interest-bearing debt. A change in interest rates will have a limited effect on
the company’s equity.
Liquidity risk
UNDISCOUNTED CASH FLOWS FOR FINANCIAL LIABILITIES
NOK million
0-6 months
7-12 months
2-3 years
4-5 years
Total value
Securities issued/bank loans
Total financial liabilities 2019
Derivatives related to funding 2019
Total financial liabilities 2018
Derivatives related to funding 2018
517
517
5
19
5
323
323
-10
531
-10
526
526
850
-6
1,366
1,366
-6
1,907
-11
507
Carrying
amount
1,309
1,309
-3
1,813
-9
Storebrand ASA had as per 31 December 2019 liquid assets of NOK 3,3 billion.
Currency risk
Storebrand ASA has low currency risk
Note 13: Tangible fixed assets
EQUIPMENT, FIXTURES & FITTINGS
NOK million
Acquisition cost 01.01
Accumulated depreciation
Carrying amount 01.01
Additions
Disposals
Carrying amount 31.12
Straight line depreciation periods for tangible fixed assets are as follows
Equipment. fixtures and fittings
IT systems
4-8 years
3 years
184
2019
2018
34
-7
26
1
27
36
-7
28
-2
26
STOREBRAND ANNUAL REPORT 2019
Note 14: Bond and bank loans
NOK million
Bond loan 2014/2020 1)
Bond loan 2014/2019
Bond loan 2017/2020
Bond loan 2017/2022
Total bond and bank loans 2)
Interest rate
Currency
value
Net nominal
Fixed
Variable
Variable
Variable
NOK
NOK
NOK
NOK
300
500
500
500
2019
305
502
501
1,309
2018
311
500
501
501
1,813
1) Loans with fixed rates are hedged by interest swaps, which are booked at fair value through profit and loss. Changes in values of loans that can be related to the hedged risk are
included in the carrying amount and included in the result.
2) Loans are booked at amortised cost and include earned not due interest.
Signed loan agreements and drawing facility have covenant requirements.
Storebrand ASA has an unused drawing facility of EUR 200 million, expiration december 2024.
Note 15: Hedge accounting
The company uses fair value hedging to hedge interest rate risk. The effectiveness of hedging is monitored at the individual security
level.
HEDGING INSTRUMENT/HEDGED ITEM – FAIR VALUE HEDGING
Contract/
nominal
2019
Carrying amount 1)
Contract/
nominal
2018
Carrying amount 1)
value
Assets
Liabilities
Booked
value
Assets
Liabilities
Booked
300
300
3
305
-6
6
300
300
9
311
-7
7
NOK million
Interest rate swaps
Securities issued
1) Carrying amount 31.12.
185
SECTION 9. ANNUAL ACCOUNTS AND NOTES
Note 16: Shareholders
THE 20 LARGEST SHAREHOLDERS 1)
Folketrygdfondet
Allianz Global Investors
T Rowe Price Global Investments
Handelsbanken Asset Management
Danske Bank Asset Management
DNB Asset Management
Vanguard Group
KLP
M&G Investment Management
EQT Fund Management
BlackRock
OM Holding AS
Storebrand Asset Management
Deka Investment
HSBC Trinkaus & Burkhardt
Nordea Asset Management
Arrowstreet Capital
Dimensional Fund Advisors
Carnegie Investment Bank (PB)
BMO Global Asset Management (UK)
Foreign ownership of total shares
Note 17: Information about close associates
Senior employees
Odd Arild Grefstad
Lars Aa. Løddesøl
Geir Holmgren
Heidi Skaaret
Staffan Hansén
Jan Erik Saugestad
Karin Greve-Isdahl
Trygve Håkedal
Tove Selnes
Terje Løken
186
Ownership
interest in %
11.0
6.3
4.9
4.1
3.9
3.4
2.9
2.7
2.6
2.5
2.0
1.8
1.7
1.4
1.4
1.3
1.2
1.1
1.0
1.0
56%
Number of
shares 1)
162,269
100,026
67,089
69,690
66,689
58,411
12,861
8,034
14,964
8,921
STOREBRAND ANNUAL REPORT 2019 Board of Directors
Didrik Munch
Laila Synnøve Dahlen
Martin Skancke
Karin Bing Orgland
Liv Sandbæk
Karl Sandlund
Heidi Storruste
Arne Fredrik Håstein
Ingvild Pedersen
Magnus Gard
1) The summary shows the number of shares owned by the individual, as well as his or her immediate family and companies where the
individual exercises significant influence, confer the Accounting Act, Section 7-26.
TRANSACTIONS BETWEEN GROUP COMPANIES
NOK million
Profit and loss account items:
Group contributions and dividends from subsidiaries
Purchase and sale of services (net)
Statement of financial position items:
Due from group companies
Payable to group companies
Note 18: Number of employees/person-years
Number of employees
Number of full time equivalent positions
Average number of employees
2019
3,230
-47
3,166
900
2019
6
6
7
32,000
12,500
22,000
17,000
0
3,000
3,925
5,404
1,964
613
2018
4,131
-26
4,092
597
2018
8
8
8
187
SECTION 9. ANNUAL ACCOUNTS AND NOTES
– Declaration by the members of the Board
and the CEO
On this date, the Board of Directors and the Chief Executive Officer have considered and approved the annual report
and annual financial statements for Storebrand ASA and the Storebrand Group for the 2019 financial year and as at 31
December 2019 (2019 Annual Report).
The consolidated financial statements have been prepared in accordance with the EU-approved International Financial
Reporting Standards (IFRS) and the associated interpretations, as well as the other disclosure obligations stipulated in the
Norwegian Accounting Act that must be applied as at 31 December 2019. The annual financial statements for the parent
company have been prepared in accordance with the Norwegian Accounting Act, Norwegian Regulations relating to annu-
al accounts, etc. for insurance companies and the additional requirements in the Norwegian Securities Trading Act. The
annual report for the Group and parent company complies with the requirements of the Norwegian Accounting Act and
Norwegian Accounting Standard no. 16 as at 31 December 2019.
In the best judgment of the Board and the CEO, the annual financial statements for 2019 have been prepared in acco-
rdance with applicable accounting standards, and the information in the financial statements provides a fair and true
picture of the parent company’s and Group’s assets, liabilities, financial standing and results as a whole as at 31 Decem-
ber 2019. In the best judgment of the Board and the CEO, the annual report provides a fair and true overview of impor-
tant events during the accounting period and their effects on the annual financial statements for Storebrand ASA and the
Storebrand Group. In the best judgement of the Board and the CEO, the descriptions of the most important elements
of risk and uncertainty that the group faces in the next accounting period, and a description of related parties’ material
transactions, also provide a true and fair view.
Lysaker, 11 February 2020
Board of Directors of Storebrand ASA
Didrik Munch
Chairman of the Board
Karin Bing Orgland
Laila S. Dahlen
Liv Sandbæk
Martin Skancke
Karl Sandlund
Fredrik Törnqvist
Magnus Gard
Odd Arild Grefstad
Group Chief Executive Officer
188
STOREBRAND ANNUAL REPORT 2019
To the General Meeting of Storebrand ASA
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Storebrand ASA, which comprise:
• The financial statements of the parent company Storebrand ASA (the Company), which
comprise the statement of financial position as at 31 December 2019, the income statement,
statement of total comprehensive income, statement of changes in equity and statement of
cash flow for the year then ended, and notes to the financial statements, including a summary
of significant accounting policies, and
• The consolidated financial statements of Storebrand ASA and its subsidiaries (the Group),
which comprise the statement of financial position as at 31 December 2019, the income
statement, statement of comprehensive income, statement of changes in equity and statement
of cash flow for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies.
In our opinion:
• The financial statements are prepared in accordance with the law and regulations.
• The accompanying financial statements give a true and fair view of the financial position of the
Company as at 31 December 2019, and its financial performance and its cash flows for the year
then ended in accordance with the Norwegian Accounting Act and accounting standards and
practices generally accepted in Norway.
• The accompanying consolidated financial statements give a true and fair view of the financial
position of the Group as at 31 December 2019, and its financial performance and its cash flows
for the year then ended in accordance with International Financial Reporting Standards as
adopted by the EU.
Basis for Opinion
We conducted our audit in accordance with laws, regulations, and auditing standards and practices
generally accepted in Norway, including International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company and the
Group as required by laws and regulations, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. The group’s activities are largely unchanged
compared to last year.
PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org. no.: 987 009 713 VAT, www.pwc.no
State authorised public accountants, members of The Norwegian Institute of Public Accountants, and authorised
accounting firm
189
SECTION 9. ANNUAL ACCOUNTS AND NOTES
Independent Auditor's Report - Storebrand ASA
Independent Auditor's Report - Storebrand ASA
We have not identified regulatory changes, transactions or other material events that qualified as new
key audit matters for our audit of the 2019 financial statements. Our areas of focus related to
“Valuation of life insurance liabilities”, “Valuation of investment property” and “Valuation of financial
instruments measured at fair value” have been the same in 2019 as the previous year. Due to new tax
regulations among other things we have focused on “New tax regulations and uncertain tax positions”.
Our focus on the groups IT-systems relevant for financial reporting have also been maintained, and the
description of our audit approach is integrated in how we have addressed the other key audit matters.
Key Audit Matter
How our audit addressed the Key Audit Matter
Valuation of life insurance liabilities
We focused on the valuation of the
insurance liabilities because it is
significant estimates in the financial
statements. The estimates involves
complex assessment concerning the
probability that insured events occurs, and
uncertainty related to whether the
provisions are sufficient to cover the total
liabilities to the policyholders. Small
adjustments of the assumptions may have
significant impact on the estimates.
The calculation of the insurance liabilities
will to a large extent depend on good
quality of data in the insurance system and
use of assumptions that are in accordance
with regulatory requirements and
appropriate industry standards.
Refer to note 1, 2, 7 and 38 in the financial
statements where management further
describes the insurance liabilities,
assumptions and uncertainty of the
estimates.
In our audit we have considered and tested the design
and effectiveness of established controls for review of
used assumptions and calculation methods, including
the company’s internal recalculations of the insurance
liabilities. We also examined whether management had
established effective controls that ensured good data
quality for the calculation of the insurance liabilities.
This included controls related to data collection, data
processing, reconciliation of the insurance systems and
IT General Controls relevant for financial reporting.
Those controls we elected to base our audit on, was
working efficiently.
We also performed independent calculations for a
selection of insurance obligations using our internal
actuarial models and compared these with the company’s
calculations. We used our internal actuaries for this
work. The comparison did not indicate any deviations of
significance.
We considered and challenged management’s use of key
assumptions such as risk of death, risk of disability, long
life expectancy, discount rate and other actuarial
assumptions that the estimated insurance liabilities are
based on. We did the same for the method and the
models the management used. We used our own internal
actuaries for parts of this work. Our findings is that
assumptions, methods and models were in accordance
with industry standards, regulatory requirements, and
that they were used consistently.
We also considered and found that the information
regarding the insurance liabilities in notes to the
financial statements is sufficient and adequate.
Valuation of investment properties
The Group has investment properties that
mainly consists of office and retail
Through our audit we have assessed and tested design
and effectiveness of established controls for review of
190
(2)
properties. We have focused on investment
applied assumptions and calculation methods, including
property because it represents an estimate
the company’s internal valuation of investment
and a substantial part of the assets in the
properties. We particularly examined whether
Group’s statement of financial position.
management had established controls to ensure
assessment of market rent and discount rate. We found
that routines to ensure that these elements regularly
were checked against both external valuations and
marked data was established. Those controls that we
elected to base our audit on, was in our view working
efficiently.
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
rate.
internal valuation model and external
valuations. Management obtain
observations of market data from various
expected future cash flows and discount
valuation model. We concluded that the model contains
We obtained, read through and understood the internal
The basis for management’s estimate is an
determining fair value on the Group’s investment
the elements required by the financial reporting
framework and therefore is appropriate as a basis for
properties. We tested whether and concluded that the
model made mathematically correct calculations.
market participants. Management
In our assessment of the valuation, we challenged the
considers reasonableness of their own
assumptions for expected future cash flows and discount
estimates through obtaining valuations
rate by comparing a sample of properties against
from external valuers for a sample of
properties on a continuing basis. The
information from relevant external sources. Substantial
changes in value from previous periods was subject to
valuers were engaged by management.
discussions with management. We concluded that
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.
assumptions were consistent with information from
relevant sources and that explanations regarding
substantial changes in value were based on changes in
the information from relevant sources. We also assessed
the qualifications, competence and objectivity of the
external valuers We reviewed the engagement letters
with the valuers to assess whether there were any clauses
or fee provisions that may have affected their objectivity
or in any other way limited their engagement. We did not
find any indications of such circumstances. We
compared the internal valuations against the valuers
estimates on values for a sample of properties. We
challenged management on substantial deviations and
obtained explanations on deviations. We assessed
management’s explanations as reasonable.
We also assessed and came to the conclusion that the
information about investment properties in the notes to
the financial statements were in accordance with the
accounting principles and provides an adequate
description of the method and the underlying
assumptions that is used for the valuation.
(3)
STOREBRAND ANNUAL REPORT 2019
Independent Auditor's Report - Storebrand ASA
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.
applied assumptions and calculation methods, including
the company’s internal valuation of investment
properties. We particularly examined whether
management had established controls to ensure
assessment of market rent and discount rate. We found
that routines to ensure that these elements regularly
were checked against both external valuations and
marked data was established. Those controls that we
elected to base our audit on, was in our view working
efficiently.
We obtained, read through and understood the internal
valuation model. We concluded that the model contains
the elements required by the financial reporting
framework and therefore is appropriate as a basis for
determining fair value on the Group’s investment
properties. We tested whether and concluded that the
model made mathematically correct calculations.
In our assessment of the valuation, we challenged the
assumptions for expected future cash flows and discount
rate by comparing a sample of properties against
information from relevant external sources. Substantial
changes in value from previous periods was subject to
discussions with management. We concluded that
assumptions were consistent with information from
relevant sources and that explanations regarding
substantial changes in value were based on changes in
the information from relevant sources. We also assessed
the qualifications, competence and objectivity of the
external valuers We reviewed the engagement letters
with the valuers to assess whether there were any clauses
or fee provisions that may have affected their objectivity
or in any other way limited their engagement. We did not
find any indications of such circumstances. We
compared the internal valuations against the valuers
estimates on values for a sample of properties. We
challenged management on substantial deviations and
obtained explanations on deviations. We assessed
management’s explanations as reasonable.
We also assessed and came to the conclusion that the
information about investment properties in the notes to
the financial statements were in accordance with the
accounting principles and provides an adequate
description of the method and the underlying
assumptions that is used for the valuation.
191
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SECTION 9. ANNUAL ACCOUNTS AND NOTES
Independent Auditor's Report - Storebrand ASA
Valuation of financial assets measured at
fair value
We have focused on this area both because
financial assets represent a substantial
part of the assets in the statement of
financial position, and because the fair
value in certain instances will have to be
estimated using valuation models that
apply judgement.
Most of the financial assets that are
measured at fair value is based on quoted
prices in active markets (level 1
investments), or derived from observable
market information (level 2 investments).
Routines and processes that ensures an
accurate basis for the valuation is
important for these assets.
For financial assets that is measured based
on models and certain assumptions that is
not observable (level 3 investments), we
focused on assessing both the models and
the assumptions underlying the valuation.
Refer to note 2 and 12 in the financial
statements for a further description of
management’s valuation of financial assets
measured at fair value.
New tax rules and uncertain tax positions
Tax rules for life insurance companies and
financial groups are complex and has
changed significantly during the last
couple of years. As described in note 26
uncertain tax positions have occurred as
part of the group’s activities related to
liquidation of a subsidiary in 2015 and new
tax rules for life insurance companies in
2018. Management applied significant
judgment in their assessment of whether
the uncertain tax positions should be
recognized in the financial statements. The
uncertain tax positions has therefore been
a focus area.
In our audit we considered design and tested
effectiveness of Storebrand’s established controls over
valuation of financial assets measured at fair value.
Particularly we focused on those controls that ensured
complete and accurate use of quoted market prices and
other observable masterdata, return on investments
controls and IT General Controls relevant for financial
reporting. In our opinion, the controls that we have
chosen to base our audit on are working effectively.
For financial assets measured through use of models and
assumptions that are not observable, we assessed
valuation principles, the models and assumptions that
were used. We found that the models and assumptions
were reasonable and used consistently.
For a sample of investments, we also tested that fair
value was in accordance with external valuations. We
considered the reliability of the sources of information,
when relevant. Our tests did not reveal substantial
deviations.
We also assessed and found that the information in the
notes regarding the Group’s valuation principles and fair
value determination were sufficient and adequate.
We have reviewed and challenged management
assessment of the uncertain tax positions. Management
obtained external legal opinions as a basis for their
conclusions. We evaluated the competence, integrity and
objectivity of the external legal advisors. We evaluated
the external legal opinions, and whether the arguments
used by the legal advisors are reasonable and that the
considerations were neutral.
We also assessed the information regarding the
uncertain tax positions in the financial statements. We
found that the information meets the requirements in
the accounting standards.
192
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STOREBRAND ANNUAL REPORT 2019
Independent Auditor's Report - Storebrand ASA
Other information
Management is responsible for the other information. The other information comprises information in
the annual report, except the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors and the Managing Director for the Financial Statements
The Board of Directors and the Managing Director (Management) are responsible for the preparation
in accordance with law and regulations, including fair presentation of the financial statements of the
Company in accordance with the Norwegian Accounting Act and accounting standards and practices
generally accepted in Norway, and for the preparation and fair presentation of the consolidated
financial statements of the Group in accordance with International Financial Reporting Standards as
adopted by the EU, and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is responsible for assessing the Company’s and the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern. The financial statements of the Company use the going concern basis of accounting insofar as
it is not likely that the enterprise will cease operations. The consolidated financial statements of the
Group use the going concern basis of accounting unless management either intends to liquidate the
Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with laws, regulations, and auditing standards and practices
generally accepted in Norway, including ISAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with laws, regulations, and auditing standards and practices
generally accepted in Norway, including ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
•
identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
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193
SECTION 9. ANNUAL ACCOUNTS AND NOTES
Independent Auditor's Report - Storebrand ASA
Independent Auditor's Report - Storebrand ASA
Opinion on Registration and Documentation
Based on our audit of the financial statements as described above, and control procedures we have
considered necessary in accordance with the International Standard on Assurance Engagements
(ISAE) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial
Information, it is our opinion that management has fulfilled its duty to produce a proper and clearly
set out registration and documentation of the Company’s accounting information in accordance with
the law and bookkeeping standards and practices generally accepted in Norway.
Oslo, 11 February 2020
PricewaterhouseCoopers AS
Magne Sem
State Authorised Public Accountant
Note: This translation from Norwegian has been prepared for information purposes only.
• obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's or the Group's internal control.
•
•
evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company and the Group's ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Company and the Group to cease to continue as a going concern.
•
evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
• obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Board of Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Opinion on the Board of Directors’ report
Based on our audit of the financial statements as described above, it is our opinion that the
information presented in the Board of Directors’ report and in the statements on Corporate
Governance and Corporate Social Responsibility concerning the financial statements, the going
concern assumption and the proposed allocation of the result is consistent with the financial
statements and complies with the law and regulations.
194
(6)
(7)
STOREBRAND ANNUAL REPORT 2019
Independent Auditor's Report - Storebrand ASA
Opinion on Registration and Documentation
Based on our audit of the financial statements as described above, and control procedures we have
considered necessary in accordance with the International Standard on Assurance Engagements
(ISAE) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial
Information, it is our opinion that management has fulfilled its duty to produce a proper and clearly
set out registration and documentation of the Company’s accounting information in accordance with
the law and bookkeeping standards and practices generally accepted in Norway.
Oslo, 11 February 2020
PricewaterhouseCoopers AS
Magne Sem
State Authorised Public Accountant
Note: This translation from Norwegian has been prepared for information purposes only.
195
(7)
SECTION 9. ANNUAL ACCOUNTS AND NOTES
10
Governance
198 Corporate Governance
207 Companies in the Storebrand Group
197197
Corporate governance
Good corporate governance is important to ensure that an
enterprise can achieve its defined goals, including best possible
utilisation of resources and good value creation. The Store-
brand Group (hereinafter referred to as Storebrand) works
continuously on improving both the overall decision-making
processes and the day-to-day management of the company.
The market is kept updated on Storebrand’s goals, strategies
and creation of value through quarterly performance presenta-
tions and other thematic presentations. Read more about the
Company’s goals and main strategies in the Directors’ Report
under the heading Strategy.
Storebrand’s corporate governance principles have been laid
down in accordance with the Norwegian Corporate Gover-
nance Board’s (NUES) Code of Practice. The Board of Directors
of Storebrand ASA (hereafter referred to as the board) and
management an annual review of Storebrand’s corporate gov-
ernance policies and compliance therewith. Storebrand reports
in accordance with section 3-3b of the Norwegian Accounting
Act and the NUES Code of Practice.
Storebrand publishes an integrated report annually presenting
financial, social, environmental and governance issues that are
material for Storebrand. The materiality analysis is discussed
on pages 16-17 above).
Statement on corporate governance (no deviation from
recommentations)
The statement below describes how Storebrand complies with
the 15 sections of the NUES Code of Practice.
1. IMPLEMENTATION AND REPORTING ON CORPORATE GOV-
ERNANCE (NO DEVIATIONS FROM THE CODE OF PRACTICE)
The Board has decided that the Norwegian Code of Practice
for Corporate Governance shall be followed. Compliance with
the Code of Practice is discussed in the Directors’ Report. Store-
brand complies with the Code of Practice without any significant
exceptions. One minor deviation has been accounted for below
under section 3.
2. BUSINESS (NO DEVIATIONS FROM THE CODE OF PRACTICE)
Storebrand ASA is the parent company in a financial group,
and its statutory object is to manage its equity interests in
Storebrand’s subsidiaries in compliance with the current
legislation. Storebrand’s main business areas encompass
pensions and savings, insurance and banking. The Articles of
Association are available in their entirety on the Storebrand’s
website www.storebrand.no.
198
Storebrand aims to be a world-class savings group that deliv-
ers better pensions – simple and sustainable. Storebrand’s
strategy and corporate values are described in the framework
“Our driving force” which represents a common direction for
how Storebrand will deliver attractive results to customers and
owners.
Storebrand’s strategy is to deliver profitable growth within
established focus areas through simple and sustainable solu-
tions. The Board conducts ongoing evaluations of the goals,
strategy and risk profile. More information about “Our driving
force” and focus areas can be found in the section on Store-
brand in the annual report.
Since 1995 Storebrand has been focussed on sustainable invest-
ments, taking an active position on how both the customers
and their own funds are invested. 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.
Our work with sustainable investing is described in detail in
section 3 of our annual report above. This includes our principles
for sustainable investments, which are approved by the group
board and integrated throughout the group’s operations.
Storebrand has conducted a materiality assessment to define
the most important focus areas. These are described in section
1 above. Increased diversity is an important part of Store-
brand’s recruitment policy. Storebrand seeks to maintain and
develop an organisation with real equality. Read more on our
work with diversity in Section 5 above.
Storebrand has its own code of ethics. Guidelines for whis-
tle-blowing, social events, combating corruption, etc. have also
been established. See section 6 Keeping Our House in Order for
more information.
STOREBRAND ANNUAL REPORT 2019 SECTION 10. GOVERNANCE
3. EQUITY AND DIVIDENDS (DEVIATIONS FROM THE CODE OF
PRACTICE)
The Board of Storebrand ASA continuously monitors Store-
brand’s capital adequacy in light of its goals, strategy and risk
profile. Read more under the heading “Capital situation, rating
and risk” in the Directors’ Report.
The Board of Directors has adopted and made known a divi-
dend policy whereby Storebrand aims to pay a dividend of over
50 per cent of the group profit after tax. The ambition of the
Board is to pay an ordinary dividend per share of at least the
same nominal level as in the previous year. Normally, dividends
are paid when there is a sustainable solvency margin of more
than 150 per cent. With a solvency margin above 180 per cent,
the Board’s intention is to propose extraordinary dividends or
the buyback of shares.
The dividend is adopted by the General Meeting, based on a
proposal put forward by the Board of Directors. The General
Meeting may, by simple majority, authorise the Board of Direc-
tors to distribute a dividend pursuant to Section 8-1, second
paragraph of the Norwegian Public Limited Companies Act. This
shall be based on the annual financial statements adopted by
the General Meeting. This authorisation may not be granted for
a period longer than until the next Annual General Meeting. In
addition, the authorisation shall be based on the adopted divi-
dend policy. The General Meeting was not requested to provide
such authorisation in 2019.
Storebrand ASA would like to have various tools available for its
efforts to maintain an optimal capital structure for Storebrand to
contribute to good shareholder returns and financial resilience.
At the 2019 Annual General Meeting, the Board was granted
authorisation to increase the share capital through issuing new
shares for a total maximum value of NOK 233,906,991. This
authorisation may be used for the acquisition of businesses
in consideration for new shares or for increasing the share
capital by other means. The Board of Directors may decide to
waive the shareholders’ preferential rights to subscribe for new
shares in accordance with the authorisation. This authorisation
may be used for one or more new issues. This authorisation is
valid until the next Annual General Meeting.
At the same General Meeting, the Board of Directors was
authorised to buy back shares for a maximum value of NOK
233,906,991. The total holdings of treasury shares must,
however, never exceed 10 per cent of the share capital. The
buyback of treasury shares may be a tool for the distribution of
surplus capital to shareholders in addition to dividends. In addi-
tion, 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 Direc-
tors to buy shares in the market to cover the aforementioned
needs or any other needs. This authorisation is valid until the
next Annual General Meeting. Otherwise, there are no provi-
sions in Storebrand ASA’s Articles of Association that regulate
the buyback or issuance of shares.
Deviation from the Code of Practice: The Board’s authorisations
to increase the share capital and buy back shares are limited
to defined purposes. However, no provision was made for
the General Meeting to vote on each individual purpose to be
covered by the authorisations.
4. EQUAL TREATMENT OF SHAREHOLDERS AND TRANSAC-
TIONS WITH CLOSE ASSOCIATES (NO DEVIATIONS FROM THE
CODE OF PRACTICE)
Storebrand ASA has only one class of share. There are no
specific restrictions on the ownership of shares or voting
rights beyond the restrictions imposed by the Act on Finan-
cial Undertakings and Financial Groups. Through their work,
the management and Board of Directors of Storebrand focus
strongly on the equal treatment of shareholders.
The general competence rules for board members and execu-
tive personnel may be found in the rules of procedure for the
Board of Storebrand ASA, rules of procedure for the boards of
subsidiaries, instructions for the CEO, guidelines for conflicts of
interest and Storebrand’s code of ethics. Board members must
inform the company if they have direct or indirect material
interests in an agreement concluded by one of the compa-
nies in the Storebrand Group. The 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
199
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 financial interest in the matter. Each board
member has a responsibility to continuously assess whether
or not such a situation exists. Transactions with close associ-
ates involving Storebrand’s employees and other officers of the
Group are regulated by Storebrand’s code of ethics. Employ-
ees shall on their own initiative immediately report conflicts of
interest that may arise to their immediate superior as soon as
they become aware of such a situation. In general, an employee
is defined as disqualified if circumstances exist that could result
in others questioning the person’s impartiality in relation to
matters other than Storebrand’s interests.
In the event of capital increases in accordance with the authori-
sation set out in Item 3 above, the Board may decide that the
shareholders’ preferential rights shall be waived. For a com-
plete account of shareholder matters, see section 7 above.
5. FREELY NEGOTIABLE SHARES (NO DEVIATIONS FROM THE
CODE OF PRACTICE)
Shares in Storebrand ASA are listed on Oslo Børs (Oslo Stock
Exchange). The shares are freely negotiable, and the Articles of
Association do thus not contain any restrictions with regard to
the negotiability of the shares. All the shares carry equal rights,
cf. point 4 above.
6. GENERAL MEETING (NO DEVIATIONS FROM THE CODE OF
PRACTICE)
General Meeting
Pursuant to the Articles of Association, Storebrand ASA’s
General Meeting shall be held by the end of June each year. The
General Meeting was held on 10th April 2019. All shareholders
with a known address will receive notice of the General Meeting,
which will be sent out no later than 21 days prior to the General
Meeting. Pursuant to the Articles of Association, the deadline
for giving notice of attendance shall be set at no later than five
calendar days prior to the General Meeting. In accordance with
Storebrand’s Articles of Association, the opportunity to make
other agenda papers available on the Storebrand website is
exercised, cf. Section 5-11a of the Norwegian Public Limited
Companies Act. A shareholder may nevertheless demand to
receive agenda papers by post.
All shareholders may participate at the General Meeting. Store-
brand’s Articles of Association allow shareholders to vote in
advance by means of electronic communication, cf. section
5-8b of the Norwegian Public Limited Companies Act.
It is also possible to vote by proxy. Provisions have been made
so that the proxy form is linked to each individual item to be
considered. We will seek whenever possible to design the
form so that it also allows voting for candidates who are to be
elected. The voting rules for the General Meeting allow sep-
arate votes for each member of the various bodies. Further
information about voting in advance, use of proxies and the
shareholders’ rights to have matters discussed at the General
Meeting is available both in the notice of the General Meeting
and on Storebrand’s website.
The Chairman of the Board, at least one representative from
the Nomination Committee and the external auditor must
attend the General Meeting. The board members of Store-
brand ASA are not obligated to attend, but are encouraged to
attend. The Group Chief Executive Officer, executive manage-
ment team and the Group Legal Director participate from the
management. The minutes of the General Meeting are avail-
able on Storebrand’s website in both Norwegian and English.
The General Meeting is opened by the Chairman. The Board of
Directors endorses an independent meeting chairman elected
by the General Meeting.
The General Meeting shall:
•
•
•
•
•
•
•
consider the annual accounts, consisting of the income
statement, the balance sheet and the annual report,
including the consolidated income statement and balance
sheet, and the auditor’s report,
decide upon adoption of the income statement and
balance sheet,
decide upon adoption of the consolidated income state-
ment and balance sheet,
decide upon the allocation of profit or manner of covering
losses in accordance with the adopted balance sheet, and
upon the distribution of dividends,
elect the auditor,
appoint members to the Nomination Committee, and this
should include the Chairman of the Nomination Commit-
200
STOREBRAND ANNUAL REPORT 2019 SECTION 10. GOVERNANCE
•
•
•
tee, elect members to the Board of Directors, and this
should include the Chairman of the Board Directors,
consider the Board’s statement on the fixing of salaries
and other remuneration to executive personnel,
adopt the remuneration of the members of the Board of
Directors and board committees,
adopt the remuneration of the members of the Nomina-
tion Committee,
adopt the remuneration of the auditor,
•
•
and transact any other business listed on the agenda.
Decisions are generally made on the basis of an ordinary
majority. Pursuant to Norwegian law, however, a special
majority is required for certain decisions, including decisions
about setting aside pre-emptive rights in connection with any
share issues, mergers, spin-offs, amendments to the Articles of
Association or authorisations to increase or reduce the share
capital. Such decisions require approval by at least two-thirds
of both the votes cast and the share capital represented at the
General Meeting.
7. NOMINATION COMMITTEE (NO DEVIATIONS FROM THE
CODE OF PRACTICE)
Storebrand ASA’s Articles of Association regulate the Nomina-
tion Committee, which consists of four or five members and
an observer elected by the employees. For 2019-2020 election
period, the Nomination Committee has four members.
The Chairman of the Nomination Committee and the other
members are elected annually by the General Meeting. The
employees’ representative will participate as a permanent
member of the Committee in discussions and nominations
concerning the election of the Chairman of the Board of Direc-
tors, as well as in other contexts where this would be natural, in
accordance with an invitation from the Chairman of the Com-
mittee.
The majority of the Nomination Committee is independent
of the Board of Directors and the management. The Nomina-
tion Committee is composed with a view to safeguarding the
interests of the community of shareholders. In the General
Meeting’s rules of procedure for the Nomination Committee,
there are provisions concerning the rotation of members of the
Nomination Committee.
The Articles of Association stipulate that the Nomination Com-
mittee should work in accordance with the rules of procedure
adopted by the General Meeting. The Nomination Committee’s
rules of procedure were adopted at the 2019 Annual General
Meeting. In accordance with the rules of procedure, the Nom-
ination Committee shall, for example, give attention to the
following when preparing nominations for representatives for
the companies’ governing and controlling bodies: expertise,
experience, capacity, gender distribution, independence and
the interests of the community of shareholders. More informa-
tion about the members has been published on Storebrand’s
website.
The Nomination Committee annually writes to the Company’s
30 largest shareholders with an invitation to suggest candi-
dates for the Board of Directors and Nomination Committee. A
corresponding request to the shareholders is published on the
company’s website. The Nomination Committee is tasked with
proposing candidates and remuneration for the Board of Direc-
tors and Nomination Committee, through recommendations to
the General Meeting.
An attempt is made to adapt the remuneration of the members
of the Nomination Committee to the nature of the tasks and
time spent on committee work. The Nomination Committee
held 14 meetings in 2019.
8. THE COMPOSITION AND INDEPENDENCE OF THE BOARD
OF DIRECTORS (NO DEVIATIONS FROM THE CODE OF PRAC-
TICE)
The Articles of Association stipulate that between five and
seven Board members shall be elected by the General Meeting
based on nominations from the Nomination Committee. The
Board Chairman shall be elected by the General Meeting.
Two members, or three members if the General Meeting elects
six or seven board members, shall be elected by and from
among the employees. The board members are elected for
one year at a time. The day-to-day management is not repre-
sented on the Board of Directors. At the end of 2019, the Board
consisted of nine members (four women and five men).
None of the members elected by the General Meeting have
any employment, professional or consultancy relationship with
201
Storebrand beyond their appointment to the Board of Direc-
tors. The backgrounds of the individual board members are
described in the annual report and on Storebrand’s website.
The composition of the Board of Directors satisfies the inde-
pendence requirements set forth in the Code of Practice. There
are few instances of disqualification during the consideration
of matters by the Board (none in 2019). An assessment of
the individual board members’ independence is noted in the
list of governing and controlling bodies under the heading
“Members of Storebrand ASA’s Board of Directors and Com-
mittees”. An overview of the number of shares in Storebrand
ASA owned by members of governing bodies as at 31 Decem-
ber 2019 is included in the notes to the financial statements for
Storebrand ASA (Information on related parties). None of the
board members have held office for more than ten years.
The work of the Board is regulated by special rules of procedure
for the Board, which are reviewed annually. In order to ensure
sound and well-considered decisions, importance is attached
to ensuring that meetings of the Board are well prepared so
that all the members can participate in the decision-making
process. The Board prepares an annual schedule for its meet-
ings and the topics it will consider. The agenda for the next
board meeting is normally presented to the Board based on
the approved schedule for the year and a list of matters carried
forward from previous meetings. The final agenda is fixed in
consultation with the Chairman of the Board. Time is set aside
at each board meeting to evaluate the meeting without the
management present. The Board is entitled to appoint external
advisers to help it with its work whenever it deems this neces-
sary. The Board has also drawn up instructions for the CEO.
9. WORK OF THE BOARD OF DIRECTORS (NO DEVIATIONS
FROM THE CODE OF PRACTICE)
Duties of the Board of Directors
In 2019, eleven board meetings were held, of which two meet-
ings were conducted at the subsidiary SPP in Stockholm. The
aggregate rate of Board member participation in 2019 was 99%.
Storebrand’s future strategy is discussed at the Board’s annual
strategy meeting, which establishes guidelines for the manage-
ment’s preparation of plans and budgets in connection with the
annual financial plan, which must be approved by the Board.
The Board shall stay informed about Storebrand’s financial
position and development, and it shall ensure that the Com-
pany’s value creation and profitability are safeguarded in the
best possible manner on behalf of the owners. The Board shall
also ensure that the activities are subjected to adequate control
and ensure that Storebrand has adequate capital based on the
scope of, and risks associated with, its activities.
The Board has established guidelines that give board members
and senior employees a duty to familiarise Storebrand with the
essential interests they may have in matters that the Board is
to consider. This also applies to interests that do not imply dis-
qualification, but which may be necessary to take into account
when matters are considered. Reference is made to Item 4
above.
The Board conducts an annual evaluation of its work and
methods, which provides a basis for changes and measures.
The report from the Board’s evaluation, or relevant excerpts,
will be made available to the Nomination Committee, which will
use the evaluation in its work.
Board Committees
The Board has established three subcommittees in the form
of the Compensation Committee, Audit Committee and Risk
Committee. The composition helps ensure a thorough and
independent consideration of matters that concern internal
control, financial reporting, risk assessment and remuneration
of executive personnel. The committees are preparatory and
advisory working committees and assist the Board with the
preparation of items for consideration. Decisions are made,
however, by the full Board. The committees are able to hold
meetings and consider matters at their own initiative and
without the participation of company management.
The Compensation Committee assists the Board with all
matters concerning the Chief Executive Officer’s remuneration.
The Committee monitors the remuneration of Storebrand’s
executive personnel and proposes guidelines for fixing execu-
tive personnel remuneration and the Board’s statement on the
fixing of executive personnel remuneration, which is presented
to the General Meeting annually. In addition, the Committee
safeguards the areas required by the Compensation Regula-
tions in Norway and Sweden. The Compensation Committee
held three meetings in 2019.
202
STOREBRAND ANNUAL REPORT 2019 SECTION 10. GOVERNANCE
The Audit Committee assists the Board by reviewing, evaluat-
ing and, where necessary, proposing appropriate measures
with respect to the Group’s overall controls, financial and oper-
ational reporting, risk management/control, and internal and
external auditing. The Audit Committee held nine meetings in
2019, including a joint meeting with the Risk Committee. The
external and internal auditors participate in the meetings. The
majority of the Committee members are independent of the
company.
for areas such as risk management, internal control, finan-
cial reporting, handling inside information and share trading
by primary insiders. Guidelines and information about infor-
mation security, contingency plans, measures against money
laundering and other financial criminality have also been drawn
up. Storebrand is subject to statutory supervision in the coun-
tries where it has operations that require a licence, including
the Financial Supervisory Authority of Norway, as well as its
own supervisory bodies and external auditor.
The main task of the Risk Committee is to prepare matters to
be considered by the Group’s Board of Directors in the area of
risk, with a special focus on Storebrand’s risk appetite and risk
strategy, including the investment strategy. The Committee
should contribute forward-looking decision-making support
related to the Board’s discussion of risk taking, financial fore-
casts and the treatment of risk reporting. The Risk Committee
held seven meetings in 2019, including a joint meeting with the
Audit Committee.
10. RISK MANAGEMENT AND INTERNAL CONTROL (NO
DEVIATIONS FROM THE CODE OF PRACTICE)
Management and control
The Board of Directors has drawn up general policies and
guidelines for management and control. These policies deal
with the Board’s responsibility for determining Storebrand’s
appetite for risk and risk profile, approval of the organisation of
the business, assignment of areas of responsibility and author-
ity, requirements concerning reporting lines and information,
and risk management and internal control requirements. The
Board’s and Chief Executive Officer’s areas of responsibility are
defined in the rules of procedure for the Board and the instruc-
tions for the Chief Executive Officer, respectively. The Board of
Directors has drawn up instructions for Storebrand’s subsid-
iaries that are to ensure that they implement and comply with
Storebrand’s management and control policies and guidelines.
The Investor Relations guidelines ensure reliable, timely and
identical information to investors, lenders and other stake-
holders in the securities market.
As an extension of the general policies and guidelines, a code
of ethics has been drawn up that applies to all employees and
representatives of Storebrand, in addition to corporate rules
Risk management and internal control
The assessment and management of risk are integrated into
Storebrand’s corporate governance. This management system
shall ensure that there is a correlation between goals and
actions at all levels of Storebrand and the overall policy of cre-
ating value for Storebrand’s shareholders.
Storebrand’s financial and operational goals are defined annu-
ally in a board-approved business plan. The business plan
builds on separate decisions on risk strategy and investment
strategies, and includes three-year financial forecasts, budgets
and action plans. The Board of Directors receives ongoing
reports on the status of the strategy implementation.
Storebrand Compass is the company’s monitoring tool. It pro-
vides comprehensive reports for management and the Board
concerning financial and operational targets. In addition, the
Board of Directors receives risk reports from the risk manage-
ment function, which monitors the development of key figures
for risk and solidity.
Risk assessment forms part of the managerial responsibilities in
the organisation. Its purpose is to identify, assess and manage
risks that can hinder a unit’s ability to achieve its goals. The
process covers both the risk of incurring losses and failing prof-
itability linked to economic downturns, changes in the general
conditions, changed customer behaviour, etc., and the risk of
incurring losses due to inadequate or failing internal processes,
systems, human error or external events. Developments in the
financial markets are important risk factors in relation to Store-
brand’s earnings and solvency position. In addition to assessing
the effects of sudden shifts in the equity markets or interest rate
levels (stress tests), scenario analysis is used to estimate the
effect of various sequences of events in the financial markets
203
on Storebrand’s financial performance and solvency. This pro-
vides important premises for the Board’s general discussion of
risk appetite, risk allocation and capital adequacy.
The responsibility for Storebrand’s control functions for risk
management and internal control lies with the Chief Risk
Officer function under the management of the Group Chief
Risk Officer. The Group Chief Risk Officer reports directly to
the Chief Executive Office. The Chief Risk Officer function is
responsible for supporting the Board and group management
team with respect to the establishment of a risk strategy and
operationalisation of the setting of limits and monitoring of risk
raking across Storebrand’s business areas.
Storebrand has a common internal audit function, which
conducts an independent review of the robustness of the
management model. The internal audit function’s instructions
and annual plan are determined by the Board pursuant to the
current legislation, regulations and international standards.
The internal audit function produces quarterly reports for the
boards of the respective Storebrand companies.
influences by Storebrand’s accounting results. The division of
work involved in the preparation of the financial statements is
organised in such a way that the Consolidated Accounts Unit
does not carry out valuations of investment assets. Instead it
exercises a control function in relation to the accounting pro-
cesses of the group companies.
A series of risk assessment and control measures have been
established in connection with the preparation of the finan-
cial statements. Assessments relating to significant accounting
items and any changes in principles etc. are described in a sep-
arate document (assessment item memo). The Board’s Audit
Committee conducts a preparatory review of interim financial
statements and annual financial statements, focusing in par-
ticular on the discretionary valuations and estimates that have
been made prior to consideration by the Board.
Monthly and quarterly operating reports are prepared in which
the results by business area and product area are analysed and
assessed against set budgets. The operating reports are recon-
ciled against other financial reporting.
The appraisal of all Storebrand employees is integrated into
corporate governance and is designed to ensure that the
adopted strategies are implemented. The policies for earning
and paying any variable remuneration to Storebrand’s risk
managers comply with the regulations relating to remunera-
tion in financial institutions, cf. Section 12 below. The Chief Risk
Officer and employees with control functions related to risk
management, internal control and compliance only have fixed
salaries.
Financial information and Storebrand’s accounting process
Storebrand publishes four interim financial statements, in addi-
tion to the ordinary annual financial statements. The financial
statements must satisfy legal and regulatory requirements and
be prepared in accordance with the adopted accounting poli-
cies and be published according to the schedule adopted by the
Board of Storebrand ASA.
11. REMUNERATION OF THE BOARD OF DIRECTORS (NO
DEVIATIONS FROM THE CODE OF PRACTICE)
The General Meeting fixes the Board’s remuneration annu-
ally 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 arrange-
ments. Members of the Board and Board Committees do not
receive incentive-based remuneration; instead they receive a
fixed annual compensation, either per year or per meeting the
member attends, or a combination of such remuneration. The
shareholder-elected members of the Board do not participate
in Storebrand’s pension schemes. None of the sharehold-
er-elected members of the Board carry out any duties for
Storebrand beyond their appointment to the Board. More
detailed information on the remuneration, loans and share-
holdings of board members can be found in Note 23 (Group)
and Notes 6 and 17 (ASA). Board members are encouraged to
hold shares in the company.
Storebrand’s consolidated financial statements are prepared
by the Consolidated Accounts Unit, which reports to the Group
Chief Financial Officer. Key managers in the Consolidated
Accounts Unit have fixed annual compensation that is not
12. REMUNERATION OF EXECUTIVE PERSONNEL (NO DEVIA-
TIONS FROM THE CODE OF PRACTICE)
The Board determines the structure of the remuneration of
204
STOREBRAND ANNUAL REPORT 2019 SECTION 10. GOVERNANCE
executive personnel at Storebrand, and a statement on the
fixing of remuneration (executive remuneration statement) is
presented to the General Meeting. The executive remuneration
statement shall clearly specify which guidelines are binding and
which are advisory. The General Meeting shall vote separately
on the binding and advisory guidelines. The remuneration con-
sists of fixed salaries, variable remuneration, 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 utili-
sation 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 posi-
tions in the market.
Storebrand shall have an incentive model that supports
Company strategy, with emphasis on the customer’s interests
and long-term perspective and an ambitious model of cooper-
ation, as well as transparency that enhances the Storebrand’s
reputation. The Group’s executive management only receive
fixed salaries and use a percentage of their fixed salaries to pur-
chase shares in Storebrand with a lock-in period of three years.
This is to clarify that the Storebrand’s top management acts in
accordance with the long-term interests of the owners.
The employees’ performance and achievements are regularly
followed up against the operational goals of the individual busi-
ness areas, directly related to Storebrand’s strategy. This helps
to further strengthen agreement between the owners and the
management.
More detailed information about the remuneration of exec-
utive personnel may be found in Note 23 (Group) and Notes
6 and 17 (ASA), and in the Board’s statement on the fixing of
salaries and other remuneration to executive personnel, which
is included in the notice of the General Meeting and available
at www.storebrand.no. Executive personnel are encouraged to
hold shares in Storebrand ASA, even beyond the lock-in period.
13. INFORMATION AND COMMUNICATION (NO DEVIATIONS
FROM THE CODE OF PRACTICE)
The Board has issued guidelines for the company’s reporting
of financial and other information and for contact with share-
holders other than through the General Meeting. Storebrand’s
reporting with regard to sustainable investments goes beyond
the statutory requirements. Storebrand’s financial calendar is
published on the Internet and in the company’s annual report.
Financial information is published in the quarterly and annual
reports, as described under Item 10 above – Financial informa-
tion and Storebrand’s accounting process. Documentation that
is published is available on Storebrand’s website. All report-
ing is based on the principle of transparency and takes into
account the need for the equal treatment of all participants
in the securities markets and the rules concerning good stock
exchange practices. Storebrand has its own guidelines for han-
dling insider information, see also Item 10 – Management and
control, above.
14. TAKEOVERS (NO DEVIATIONS FROM THE CODE OF PRACTICE)
The Board of Directors has prepared guidelines for how to act
in the event of a possible takeover bid for the company. These
guidelines are based on the Board of Directors ensuring the
transparency of the process and that all the shareholders are
treated equally and given an opportunity to evaluate the bid
that has been made. It follows from the guidelines that the
Board of Directors will evaluate the bid and issue a statement
on the Board’s opinion of the bid, in addition to obtaining a
valuation from an independent expert. In addition, the Board of
Directors will, in the event of any takeover bid, seek whenever
possible to maximise the shareholders’ assets. The guidelines
cover the situation before and after a bid is made.
15. AUDITOR (NO DEVIATIONS FROM THE CODE OF PRACTICE)
The external auditor is elected by the General Meeting of
Storebrand ASA and is responsible for the financial auditing.
The external auditor issues an auditor’s report in connection
with the annual financial statements and conducts limited
audits of the interim financial statements. The external auditor
attends board meetings in which interim financial statements
are reviewed and all meetings of the Audit Committee, unless
the items on the agenda do not require the presence of the
auditor. The Board has decided that the external auditor must
rotate the partner responsible for the audit assignment every
seven years. The external auditor’s work and independence
are evaluated annually by the Board’s Audit Committee. The
auditor shall also meet with the Board of Directors at least once
a year without the management being present. The other com-
panies in Storebrand use the same auditor as Storebrand ASA.
205
OTHER
As one of the largest investors in the Norwegian stock market,
Storebrand has considerable potential influence over the
development of listed companies. Storebrand attaches impor-
tance to exercising its ownership in listed companies based on
straightforward and consistent ownership principles that place
considerable emphasis on sustainability. Storebrand applies
the Norwegian Code of Practice for Corporate Governance in
this role. Storebrand has had an administrative Corporate Gov-
ernance Committee since 2006. The Committee is responsible
for ensuring good corporate governance across Storebrand.
Storebrand Asset Management AS has had a Corporate Gov-
ernance Committee for several years. The Committee has a
mandate to set the level of ambition and establish frameworks
for corporate governance. The Committee shall coordinate
Storebrand’s use of voting rights, including prioritising matters
and ensuring consistency in the work. The Committee shall
meet every quarter. Storebrand has issued guidelines with
respect to employees holding positions of trust in external
companies, which regulate, for example, the number of exter-
nal board positions. Further information on Storebrand’s
corporate governance may be found at www.storebrand.no >
About Storebrand > Facts on Storebrand, where we have also
published an overview of the members of Storebrand’s govern-
ing and controlling bodies, CVs for the members of Storebrand
ASA’s Board of Directors, the Articles of Association, and own-
ership policies.
Statement in accordance with Section 3-3b, second
paragraph of the Norwegian Accounting Act
1. The principles for Storebrand’s corporate governance have
been prepared in accordance with Norwegian law, and they
are based on the Norwegian Code of Practice for Corporate
Governance published by the Norwegian Corporate Gover-
nance Board (NUES).
2. The Norwegian Code of Practice for Corporate Governance is
available at www.nues.no.
3. Any deviations from the Code of Practice are commented on
under each section in the statement above, see the devia-
tions discussed in Item 3.
4. A description of the main elements of Storebrand’s systems
for internal control and risk management related to the
financial reporting process is discussed in Section 10 above.
5. Provisions in the Articles of Association that refer to the
provisions in Section 5 of the Norwegian Public Limited Com-
panies Act with regard to the General Meeting are discussed
in Item 6 above.
6. The composition of the governing bodies and a description
of the main elements in the current rules of procedure and
guidelines can be found in Items 6, 7, 8 and 9 above.
7. The provisions in the Articles of Association that regulate the
appointment and replacement of board members are dis-
cussed in Item 8 above.
A summary of the matters that Storebrand is to report on in
accordance with Section 3-3b, second paragraph of the Nor-
wegian Accounting Act follows below. The items follow the
numbering used in the provision.
8. Provisions in the Articles of Association and authorisations
granting the Board the authority to buy back or issue the
Group’s own shares are discussed in Item 3 above.
206
STOREBRAND ANNUAL REPORT 2019 SECTION 10. GOVERNANCE
Companies in the
Storebrand Group
Organisation number
Ownership interest
STOREBRAND ASA
Storebrand Livsforsikring AS
Storebrand Holding AB
SPP Konsult AB
SPP Spar AB
SPP Pension & Försäkring AB
SPP Fastigheter AB 1)
SPP Hyresförvaltning
Storebrand & SPP Business Services AB
Storebrand Eiendomsfond Invest AS
Storebrand Eiendom Trygg AS
Storebrand Eiendom Vekst AS
Storebrand Eiendom Utvikling AS
Storebrand Finansiell Rådgivning AS
Storebrand Pensjonstjenester AS
Storebrand Infrastruktur AS
AS Værdalsbruket 2)
Norsk Pensjon AS
Benco Insurance Holding BV
Euroben Life & Pension DAC
Storebrand Bank ASA
Storebrand Boligkreditt AS
Ring Eiendomsmegling AS
Storebrand Asset Management AS
SPP Fonder AB
Storebrand Fastigheter AB
SKAGEN AS
Cubera Private Equity AS
Storebrand Forsikring AS
Storebrand Facilities AS
Storebrand Helseforsikring AS
1) Euroben Life & Pension DAC owns 7.3%
2) Storebrand ASA owns 25.1 per cent and Storebrand’s total ownership interest is 100 per cent for AS Værdalsbruket.
916 300 484
958 995 369
556734-9815
556045-7581
556892-4830
556401-8599
556745-7428
556883-1340
556594-9517
995 871 424
876 734 702
916 268 416
990 653 402
989 150 200
931 936 492
991 853 545
920 082 165
890 050 212
34331716
953 299 216
990 645 515
987 227 575
930 208 868
556397-8922
556801-1802
867 462 732
989 580 353
930 553 506
924 353 554
980 126 196
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
74.9%
25.0%
89.96%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
50.0%
207
11
Sustainability
assurance
210 TCFD index
212 GRI index
218 Auditor’s statement on sustainability
SECTION 8. ANNUAL ACCOUNTS AND NOTES
209209
TCFD Index
Governance
Strategy
Disclose Storebrand’s gover-
nance around climate-related
risks and opportunities.
Disclose the actual and potential
impacts of climate-related risks
and opportunities on Store-
brand’s businesses, strategy,
and financial planning where
such information is material.
TCFD Recommended Disclosures
Page
Reference
TCFD Recommended Disclosures
a Describe the board’s oversight
of climate-related risks and
opportunities
72-73
a Describe the climate-related
risks and opportunities Store-
brand has identified over the
short, medium and long term
b Describe the management’s
72-73
b Describe the impact of
role in assessing and managing
climate-related risks and oppor-
tunities
climate-related risks and
opportunities on Storebrand’s
businesses, strategy, and finan-
cial planning
Page
Reference
18-23
14-17, 20-23,
27-31
c Describe the resilience of
Storebrand’s strategy, taking
into consideration different
climate-related scenarios
14-17, 20-23,
27-31
210
STOREBRAND ANNUAL REPORT 2019 SECTION 11. SUSTAINABILITY ASSURANCE
Risk
Management
Metrics and
Targets
Disclose how Storebrand
identifies, assesses and
manages climate-related risks.
Disclose the metrics and targets
used to assess and manage
relevant climate-related risks
and opportunities where such
information is material.
TCFD Recommended Disclosures
Page
Reference
TCFD Recommended Disclosures
Page
Reference
a Describe Storebrand’s pro-
cesses for identifying and
assessing climate-related risks
20-21
a Disclose the metrics used by
20-23, 33, 57, 61
Storebrand to assess climate-
related risks and opportunities
in line with its strategy and risk
management process.
b Describe Storebrand’s
18-23
b Disclose Scope 1, Scope 2 and
33, 61
processes for managing
climate-related risks
Scope 3 GHG emissions, and the
related risks
c Describe how processes for
identifying, assessing and
managing climate-related risks
are integrated into Storebrand’s
overall risk management
19, 72-73
c Disclose the targets used
by Storebrand to manage
climate-related risks and
opportunities and performance
against targets
20-23, 33, 57, 61
211
GRI Index
An index of the GRI indicators we are reporting on and where the report contains information about the indicators follows below.
GRI STANDARDS - COMPULSORY INDICATORS
Text
Section
Subsection
Disclosure
Storebrand ASA
GRI Index
GRI Index
Professor Kohts vei 9, Lysaker, Oslo, Norge
GRI Index
GRI Index
Full
This is Storebrand
Our purpose and vision
Full
This is Storebrand
Our purpose and vision
Full
Director's Report
Companies in the
Storebrand Group
This is Storebrand
Our purpose and vision
This is Storebrand
Our purpose and vision
People
Director's Report
Key Performance
Indicators
Group Financial Results
for 2019
Full
Full
Full
Full
Full
People
People
Keep Own House in
Order
Committed and Coura-
geous Employees
Partial
Key Performance Indi-
cators
Good Environmental
and Working Conditions
Throughout the value
Chain
Full
Group CEO Foreword
Group CEO Foreword
Full
This is Storebrand
Climate Risk and
Opportunity
Finanical Capital
and Our Investment
Universe
Sustainability as Core
Business
Climate Risk and Oppor-
tunity
A Driving Force for
Sustainable Investments
Full
GRI
Ref.
Title
Organizational Profile
102-1
102-2
102-3
Name of the
organisation
Activities, brands, pro-
ducts, and services
Location of headqu-
arters
102-4
Location of operations
102-5
Ownership and legal
form
102-6
Markets served
102-7
Scale of organisation
102-8
Information on
employees and other
workers
102-9
Supply chain
Significant changes to
102-10
the organisation and
its supply chain
102-11
Precautionary Princi-
ple or approach
212212
STOREBRAND ANNUAL REPORT 2019 SECTION 11. SUSTAINABILITY ASSURANCE
Section
Subsection
Disclosure
GRI
Ref.
Title
Text
UN PRI
UN Global Compact
Global Reporting Initiative
UN Sustainable Development Goals
Task Force on Climate-Related Financial
Disclosures (TCFD)
Paris Agreement 2015
Carbon Disclosure Project
Global 100
UN Principles for Responsible Business
This is Storebrand
Sustainability as Core
Conduct
Keep Our Own House
Business
102-12
External initiatives
UN Declaration for Human Rights
in Order
(all sub-sections)
Full
UN environmental conventions
Director’s Report
Corporate Governance
UN Principle for Sustainable Insurance
UNEP Finance Initiaitive
Portfolio Decarbonisation Coalition
Accounting for Sustainability
UN Convention Against Corruption
ILO’s Fundamental Conventions
Montreal Pledge
Tobacco-Free Portfolios
UN Women Empowerment Principles
UNEP FI investor goup on TCFD
Climate Action 100+
This is Storebrand
Sustainability as Core
Net-Zero Asset Owner Alliance
Climate Risk and
Business
Global Real Estate Sustainability Bench-
Opportunity
Climate Risk and Oppor-
mark(GRESB)
NORSIF
Finanical Capital
tunity
Full
and Our Investment
A Driving Force for
PRI Investor Commitment to Support a
Universe
Sustainable Investments
Just Transition on Climate Change
CEO Foreword
CEO Foreword
Full
This is Storebrand
Keep Our Own House
in Order
Director’s Report
Sustainability as Core
Business
(all sub-sections)
Corporate Governance
This is Storebrand
Director’s Report
Organisation
Executive Management
Board of Directors &
Committees Risk Corpo-
rate Governance
Full
Full
213213
102-13
Membership of
associations
Strategy
102-14
Statement from senior
decision maker
Ethics and integrity
102-16
Values, standards,
principles and norms
Governance
102-18 Governance structure
Text
Section
Subsection
Disclosure
GRI
Ref.
Title
Stakeholder Engagement
102-40
102-41
102-42
102-43
List of stakeholder
groups
Collective bargaining
agreements
Identifying and
selecting stakeholders
Approach to stakehol-
der engagement
102-44
Key topics and con-
cerns raised
Reporting Practice
102-45
102-46
Entities included in the
consolidated financial
statements
Defining report
content and topic
Boundaries
102-47
List of material topics
102-48
Restatements of infor-
mation
100% in Norway and 100% in Sweden
GRI Index
GRI Index
Material Issues
This is Storebrand
Material Issues
This is Storebrand
Material Issues
This is Storebrand
All
Material Issues
”Why” section at begin-
ning of each sub-section
Director's Report
Group Financial Results
for 2019
This is Storebrand
Material Issues
This is Storebrand
Material Issues
Finanical Capital
and Our Investment
Universe
Keep Own House in
Order
Key Performance
Indicators
Key Performance
Indicators
102-49
Changes in reporting
No significant changes
GRI Index
102-50
Reporting period
1st January 2019 - 31st December 2019
GRI Index
GRI Index
GRI Index
102-51
Date of previous
report
1st January 2018 - 31st December 2018
GRI Index
GRI Index
102-52
Reporting cycle
Annually
GRI Index
GRI Index
102-53
Contact point
102-54
Claims of reporting in
accordance with the
GRI Standards
https://www.storebrand.no/en/investor-
relations
GRI Index
GRI Index
This is Storebrand
Material Issues
102-55 GRI content index
This table is the GRI Index
GRI Index
GRI Index
102-56
External assurance
Auditor's statement
Auditor's statement
214214
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
STOREBRAND ANNUAL REPORT 2019 SECTION 11. SUSTAINABILITY ASSURANCE
GRI STANDARDS- PERFORMANCE INDICATORS
GRI
Ref.
Title
Economic Performance
103-1
Explanation of the material topic
and its Boundary
103-2
The management approach and
its components
103-3
Evaluation of the management
approach
201-1
Direct economic value genera-
ted and distributed
201-2
Financial implications and other
risks and opportunities due to
climate change
Anti-corruption
103-1
103-2
103-3
205-2
Explanation of the material topic
and its Boundary
The management approach and
its components
Evaluation of the management
approach
Communication and training
about anti-corruption policies
and procedures
Emissions
103-1
Explanation of the material topic
and its Boundary
103-2
The management approach and
its components
103-3
Evaluation of the management
approach
305-4 GHG emissions intensity
Text
Section
Subsection
Disclosure
Director’s Report
This is Storebrand
Financial Capital and our
Investment Universe
Director's Report
Risk; Corporate
Governance
Climate Risk and Opportunity; Scena-
rio Analysis
Providing a return to our owners and
customers
Directors’ Report, Section 2 Financial
capital and our investment universe
Financial Capital and our
Investment Universe
Director’s Report
Providing a return to our owners and
customers
Corporate Governance
Financial Capital and our
Investment Universe
Director’s Report
Providing a return to our owners and
customers
Group Financial Results for 2019
Climate Risk and Oppor-
tunity
Financial Capital and our
Investment Universe
Climate Risk and Opportunity
A Driving Force for Sustainable De-
velopment
Keep Own House in Order
Corruption
Keep Own House in Order
Corruption
Keep Own House in Order
Corruption
Keep Own House in Order
Corruption
Financial Capital and our
Investment Universe
Keep Own House in Order
Financial Capital and our
Investment Universe
Keep Own House in Order
Financial Capital and our
Investment Universe
Keep Own House in Order
A Driving Force for
Sustainable Investments
Reducing our Internal Carbon Foot-
print
A Driving Force for
Sustainable Investments
Reducing our Internal Carbon Foot-
print
A Driving Force for
Sustainable Investments
Reducing our Internal Carbon Foot-
print
Financial Capital and our
Investment Universe
Keep Own House in Order
Key Performance
Indicators
Key Performance
Indicators
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
215215
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
GRI
Ref.
Title
Diversity and Equal Opportunity
103-1
103-2
103-3
405-1
405-2
Explanation of the material topic
and its Boundary
The management approach and
its components
Evaluation of the management
approach
Diversity of governance bodies
and employees
Ratio of basic salary and remu-
neration of women to men
Human Rights Assessment
103-1
Explanation of the
material topic and its Boundary
The management
103-2
approach and its
components
103-3
Evaluation of the
management approach
Significant investment agre-
ements and contracts that
412-3
include human rights clauses or
that underwent human rights
screening
Public Policy
Text
Section
Subsection
Disclosure
People
People
People
People
People
Diversity
Diversity
Diversity
Key Performance
Indicators
Key Performance
Indicators
Financial Capital and our
Investment Universe
Financial Capital and our
Investment Universe
Financial Capital and our
Investment Universe
A Driving Force for Sustainable Invest-
ments
A Driving Force for Sustainable Invest-
ments
A Driving Force for Sustainable Invest-
ments
Financial Capital and our
Investment Universe
A Driving Force for Sustainable Invest-
ments
103-1
103-2
103-3
Explanation of the material topic
and its Boundary
Keep Our Own House in
Order
The management approach and
its components
Keep Our Own House in
Order
Evaluation of the management
approach
Keep Our Own House in
Order
Anti-Corruption; Anti-
money Laundering;
Corporate Citizenship
Anti-Corruption; Anti-
money Laundering;
Corporate Citizenship
Anti-Corruption; Anti-
money Laundering;
Corporate Citizenship
415-1 Political contributions
GRI Index
GRI Index
216216
STOREBRAND ANNUAL REPORT 2019 SECTION 11. SUSTAINABILITY ASSURANCE
GRI
Ref.
Title
Marketing and Labeling
103-1
103-2
103-3
Explanation of the material topic
and its Boundary
The management approach and
its components
Evaluation of the management
approach
Incidents of non-compliance
417-2
concerning product and service
information and labeling
Incidents of non-compliance
417-3
concerning marketing commu-
nications
Customer Privacy
103-1
103-2
103-3
418-1
Explanation of the material topic
and its Boundary
The management approach and
its components
Evaluation of the management
approach
Substantiated complaints con-
cerning breaches of customer
privacy and losses of customer
data
Active ownership
Text
Section
Subsection
Disclosure
Customer and Community
Relations
Customer and Community
Relations
Customer and Community
Relations
Financial Freedom in all Stages of Life;
Digital Trust
Financial Freedom in all Stages of Life;
Digital Trust
Financial Freedom in all Stages of Life;
Digital Trust
Customer and Community
Relations
Digital Trust; Key performance
Indicators
Customer and Community
Relations
Digital trust
Customer and Community
Relations
Customer and Community
Relations
Customer and Community
Relations
Digital Trust; Financial Freedom in all
Stages of Life
Digital Trust; Financial Freedom in all
Stages of Life
Digital Trust; Financial Freedom in all
Stages of Life
Full
Full
Full
Partial
Full
Full
Full
Full
Customer and Community
Relations
Financial Freedom in all Stages of
Life; Digital Trust; Key performance
Full
Indicators
103-1
103-2
103-3
Explanation of the material topic
and its Boundary
Financial Capital and our
Investment Universe
The management approach and
its components
Financial Capital and our
Investment Universe
Evaluation of the management
approach
Financial Capital and our
Investment Universe
Providing a return to our owners and
customers; A Driving Force for Sustaina-
Full
ble Investments
Providing a return to our owners and
customers; A Driving Force for Sustaina-
Full
ble Investments
Providing a return to our owners and
customers; A Driving Force for Sustaina-
Full
ble Investments
Percentage and number of
companies held in the insti-
FS10
tution's portfolio with which
the reporting organisation as
interacted on evironmental or
social issues.
Percentage of assets subject to
FS11
positive and negative environ-
mental or social screening
Financial Capital and our
Investment Universe
A Driving Force for Sustainable Invest-
ments; Key Performance Indicators
Financial Capital and our
Investment Universe
A Driving Force for Sustainable Invest-
ments; Key Performance Indicators
Full
Full
217217
To: Board of Directors in Storebrand ASA
Independent statement regarding Storebrand ASA’s sustainability
reporting
We have examined whether Storebrand ASA has developed GRI Index for 2019 and measurements
and reporting of key performance indicators for sustainability (sustainability reporting) per
06.02.2020.
Storebrand’s GRI Index for 2019 is an overview of which principles, aspects and indicators from
the The Global Reporting Initiative guidelines that Storebrand ASA use to measure and report on
sustainability; together with a reference to where material sustainability information is reported.
Storebrand’s GRI Index 2019 is available on Storebrand’s website
(www.Storebrand.no/sustainability/reports). We have examined whether Storebrand has
developed a GRI Index for 2019 and whether mandatory disclosures are presented according the
Standards published by The Global Reporting Initiative (www.globalreporting.org/standards)
(criteria).
Key performance indicators for sustainability are the tables containing sustainability indicators
that Storebrand ASA measure and control. The tables are available and included in Storebrand
ASA’s annual report 2019, specifically at the end of the four chapters titled «Financial capital and
our investment universe», «Customer and community relations», «People» and «Keeping our
house in order». Storebrand has defined the key performance indicators and explained how they
are measured in the tables (criteria). We have examined the basis for the measurements and
checked the calculations of the measurements.
Tasks and responsibilities of management
Management is responsible for GRI Index 2019 and that the Index is developed in accordance with the
Standards published by The Global Reporting Initiative. Management is also responsible for key
performance indicators for sustainability and that these are developed in accordance with the
definitions given in the tables at the end of the chapters «Financial capital and our investment
universe», «Customer and community relations», «People» and «Keeping our house in order». Their
responsibility includes developing, implementing and maintaining internal controls that ensure the
development and reporting of the GRI Index and key performance indicators for sustainability.
Our independence and quality control
We are independent of the company in accordance with applicable laws and regulations and the Code
of Ethics for Professional Accountants (IESBA Code) and with the ethical requirements that are
relevant to our independent statement, and we have fulfilled our ethical obligations in accordance with
these requirements and IESBA Code. We use ISQC 1 - Quality Control for Firms that Perform Audits
and Reviews of Financial Statements, and Other Assurance and Related Services Engagements and
maintains a comprehensive quality control system including documented policies and procedures of
the ethical standards, professional standards and applicable legal and regulatory claim.
The Auditors responsibilities
Our responsibility is to express an opinion on Storebrand ASA’s sustainability reporting based on our
control. We have performed our work and will issue our statement in accordance with the Standard on
218218
PricewaterhouseCoopers AS, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
STOREBRAND ANNUAL REPORT 2019
Assurance Engagements ISAE 3000: “Assurance engagements other than audits or review of historical
financial information".
Our work involves performing procedures to obtain evidence that Storebrand’s GRI Index 2019 and
key performance indicators for sustainability are developed in accordance with the Standards
published by The Global Reporting Initiative and the criteria for reporting and measurement that are
given in relation to each table containing key performance indicators. The procedures selected depend
on our judgement, including assessments of the risks that the sustainability reporting as a whole are
free from material misstatement, whether due to fraud or error. In making those risk assessments, we
consider internal control relevant to the preparation of the subject matter. Therefore, we design
procedures that are appropriate to the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of internal control. Our control also includes an assessment of whether the applied
criteria are appropriate and an assessment of the overall presentation of the subject matter.
Our controls include meetings with representatives from Storebrand ASA that are responsible for the
key areas covered by the sustainability reporting, including responsible for investing, HR and those
responsible for the sustainability reporting for Storebrand ASA’s own operations and real estate
portfolios; evaluating internal controls and procedures for reporting key performance indicators for
sustainability; collecting and reviewing relevant information that supports the presentation of key
performance indicators; evaluating the completeness and accuracy of the key performance indicators;
and controlling the calculations of key performance indicators based on an assessment of the risk that
the key performance indicators contain information that is incorrect.
In our opinion, sufficient evidence has been obtained and we consider that our work provides an
appropriate basis to form our conclusion.
Conclusion
In our opinion
GRI Index 2019 is, in all material respects, developed and presented in accordance with the
requirements of the Standards published by The Global Reporting Initiative; and
Key performance indicators for sustainability are, in all material aspects, developed, measured and
reported in accordance with the definitions and explanations provided in relation to each table
containing key performance indicators.
Oslo, 11 February 2020
PricewaterhouseCoopers AS
Magne Sem
State authorized public accountant
(This translation from Norwegian has been made for information purposes only)
(2)
219219
12
Appendix
222 Definitions key performance indicators
224 Executive management CVs
228 Group board of directors CVs
SECTION 8. ANNUAL ACCOUNTS AND NOTES
221221
Definitions key performance
indicators
These definitions refer to the tables of key performance indicators in sections
3-6 of this report.
3. FINANCIAL CAPITAL AND INVESTMENT UNIVERSE
Return On Equity: Return on equity
Solvency II: Common European regulatory framework for insurance
regulation. Under Solvency II, the size of the capital requirement will be
determined by how much risk the company is exposed to.
Dividends: (see Dividend Policy on p.70)
Percentage AuM screened for sustainability: All companies in our
investment universe is screened for sustainability according to our
standards:https://www.storebrand.no/en/sustainability/investments.
Fossil-free products: These companies should not have more than 5%
revenue from the production or distribution of fossil fuels, and fossil
reserves should not exceed 100 million tonnes of CO2.
Carbon footprint from investments: Results per Q3 2018 based on
TCFD’s definition. Total carbon footprint is the sum of the companies’
carbon emissions over the companies’ revenues, weighted for our
ownership in the respective companies. The measurement unit shows
carbon emissions per million fund currency in NOK. The method is the
same for equities and bonds.
Investment in solutions (solution companies, Green Bonds,
and real estate with Green Building Certificate): clean tech and
renewable energy and green bonds in both equity and interest investments
in Storebrand and SPP. Direct Real Estate investments under operational
control in Norway and Sweden with a Green building certification.
Investment in green bonds: Green Bonds enable capital-raising and
investment for new and existing projects with environmental benefits.
Investment in solution companies: Investments in sustainable
companies through our portfolio of clean tech and renewable energy
investments in Storebrand and SPP.
Certified green property: Direct real estate investments under
operational control in Norway and Sweden with a Green building
certification.
Energy intensity, real estate investments: Temperature corrected
energy consumption per gross square meter of heated property area
in direct real estate investments under operational control in Norway
and Sweden. Consumption measured by energy suppliers (electricity,
district heating/cooling and other) and registered in the environmental
monitoring system.
222222
Water intensity, real estate investments: Water consumption
in cubic meters per square meter of heated property area in direct
real estate investments under operational control in Norway and
Sweden. Consumption measured and registered in the environmental
monitoring system.
CO2 emissions real estate investments: GHG emissions from direct real
estate investments, per square meter of gross heated area. Includes
direct and indirect emissions (scope1-3), including tenants’ energy and
water consumption as well as waste production. The carbon footprint
is calculated by CemaSys AS according to the GHG protocol. Nordic
mix emission factor is the basis for the calculation of emissions from
electric power with ”location based” method.
Percentage waste sorted for recycling: Rate of waste from building
operations including tenants, sorted at the source for recycling. The
rest fraction is further sorted mechanically at the waste recycling centre,
where non-recyclables goes to incineration with heat recovery. Includes
direct real estate investments under operational control in Norway.
4. CUSTOMER AND COMMUNITY RELATIONS
Net Promoter System: Net Promoter System (NPS) is a measurement
tool for customer satisfaction where the customer gives a score from
0 to 10 with 10 as the best result.
Market Share: Savings, Retail Market Norway Based on Q3 figures
from Finance Norway and VFF (Verdipapirfondenes forening).
Market Position: Pension, Corporate Market Norway: Based on
Q3 figures from Finance Norway.
Percentage female: pension savings: Share of female customers
who are saving for pension.
Recognised for sustainable value creation: Results from survey
asking how many connect the Storebrand brand name with sustainability,
environmental stewardship and corporate responsibility.
Expected pension as percentage of salary: The pension percentage
(median) is the customers expected pension from all sources (including
private savings, folketrygden, AFP and defined benefit/defined contribution
pension), as a percentage of customer’s existing salary.
STOREBRAND ANNUAL REPORT 2019
SECTION 12. APPENDIX
5. PEOPLE
Sick leave: Number of sick leave hours divided by number of hours
worked Storebrand/SPP.
Number of employees: Number of employees working at Storebrand
Norway + SPP Sweden as of 31.12.19.
Gender balance, management: Share of female employees. Defined
as a management position with personnel responsibilities. Project
managers are not included.
Management level 1-3:
Level 1= Chief Executive Officer
Level 2 = Executive management
Level 3 = Reporting to executive management
Turnover rate: Number of exits (excluding retirement) from 1st
January to 31st December / average number of employees during the
same period.
New hires: Number of hires during from 1st January to 31st December
in Norway and Sweden.
Hay Grade: The figures only applies for Storebrand in Norway. Hay Grade
above 24 is not included, as only men are represented here (applies f or
3 positions only). Hay Grade is a widely recognised method to ena ble
organisations to map and align roles. The system is used by several
organisations in Norway and internationally. The systems allows for
comparisons of salaries for positions with similar demands to competence,
experience and complexity. The system is used for comparing salaries
for positions across the organisation and similar positions with similar
Hay Grade in the labor market.
CEO - Average Worker Pay Ratio: Basic salary as a ratio of mean
average salary for all employees.
6. KEEPING OWN HOUSE IN ORDER
Environmentally-certified procurement: Percentage og spend for
contracts with a total value exceeding 1 million NOK with active suppliers
certified or fulfilling requirements according to one or several of the
following environmental certifications: Miljøbas, Eco-Lighthouse, Svanen,
ISO 14001, CO2 neutral, ISO 14001.
GHG emissions (tonnes CO2e / tonnes CO2e per FTE): GHG emissions
pr. FTE from the Group’s Norwegian and Swedish operations. Includes direct
and indirect emissions, including airtravel and other transportation, energy
consumption and waste (scope1-3). The carbon footprint is calculated by
CemaSys AS according to the GHG protocol. Nordic mix emission factor is
the basis for the calculation of emissions from electric power with ”location
based” method.
CO2e emissions from air travel: Total CO2e emissions from air travel
divided by the average number of number of full-time equivalent employees
in Norway and Sweden from 1st January to 31st December.
Scope 1 emissions: Ton CO2-equivalents, measured in accordance to
Greenhouse gas protocol, per FTE.
Scope 2 emissions: Ton CO2-equivalents, measured in accordance to
Greenhouse gas protocol, per FTE.
Scope 3 emissions: Ton CO2-equivalents, measured in accordance to
Greenhouse gas protocol, per FTE.
Energy use: Temperature corrected energy consumption per square
meter heated area in head offices in Norway and Sweden. Consumption
measured by the energy suppliers, electricity and district heating/cooling
and registered in the environmental monitoring system.
Water use: Water consumption in cubic meters per square meter of heated
area in head offices in Norway and Sweden. Consumption measured and
registered in the environmental monitoring system..
Amount of waste sorted for recycling: Rate of waste sorted at the
source for recycling in head offices in Norway and Sweden. Non-sorted
waste is further sorted mechanically at the waste recycling centre, where
non-recyclables go to incineration with heat recovery. Includes direct real
estate investments under operational control in Norway.
Paper use: Consumption of office paper (copy- and bond paper), envelopes,
advertising, including externally reprinted and regulatory letter attachments
in Kg per full time employee in Norwegian and Swedish operations.
CDP rating: Rating received from CDP.
E-learning completed: Employees who are registered as having completed
the e-learning course in our learning management system.
Number of complaints handled by the Norwegian Financial
Services Complaints Board: Complaints being handled by Norwegian
Financial Services Complaints Board (Finansklagenemda) throughout the year.
223223
Executive management CVs
ODD ARILD GREFSTAD (1965)
LARS AA. LØDDESØL (1964)
Group Chief Executive Officer
Group Chief Financial Officer
HEIDI SKAARET (1961)
Executive Vice President,
Storebrand ASA
Education
Storebrand ASA
Education
Retail Market
Education
State-Authorised Public Accountant
MSc in Economics and Business Administration,
Authorised Financial Analyst (AFA)
BI Norwegian Business School
Previous positions
2011–2012: Managing Director,
Storebrand Life Insurance
MBA, Thunderbird School of Global
Management, USA (AGSIM)
Previous positions
2008–2011: Executive Vice President Finance and
2008–2011: Executive Vice President, Life and
Legal, Storebrand ASA
Pensions Norway and Managing Director,
2002–2008: Executive Vice President Finance,
Storebrand Livsforsikring AS
MSc in Economics and Business Administration,
University of Washington, USA
Previous positions
2008–2012: Lindorff Group AB, Executive Vice
President, Scandinavia Region, Managing Director
of Lindorff AS in Norway.
2001–2008: IKANO Finans ASA, Managing Director
1987–2000: Managerial positions at Den norske
Storebrand ASA
2004–2008: Executive Vice President, Corporate
Bank ASA
1998–2002: Manager of the Group Controller
Market Life Insurance, Storebrand Livsforsikring AS
Unit, Storebrand ASA
2001–2004: CFO, Storebrand ASA
1997–1998: Group Controller, Life Insurance,
1994–2001: Vice President/Relationship
Storebrand ASA
Manager, Citibank International plc
1994–1997: Vice President, Internal Auditing,
1990–1994: Asst. Treasurer, Scandinavian
Storebrand ASA
Airlines Systems
1989–1994: External Auditing, Arthur Andersen
1986–1987: Financial Services Officer, Bank of
America, San Francisco, USA
1981–1983: Nord-Video (Aftenposten, Gyldendal,
Mortensen), Sales Secretary
Ownership in Storebrand
Number of shares as at 31 December 2019:
& Co
Ownership in Storebrand
69,690
Number of shares as of 31 December 2019:
Ownership in Storebrand
10,0026
Number of shares as of 31 December 2019:
162,269
224
STOREBRAND ANNUAL REPORT 2019
SECTION 12. APPENDIX
STAFFAN HANSÉN (1965)
Executive Vice President,
SPP
Education
Licentiate degree (Economics),
Åbo Academy, Finland
PhD studies at the Finnish
Doctoral programme in Economics
Stockholm School of Economics
Previous positions
2013 to present: EVP, SPP Livförsäkring AB
2011–2013: CIO, Storebrand Livsforsikring AS
2008–2011: CIO, SPP Livförsäkring AB
2006–2008: Responsible for strategic allocation,
SPP Livförsäkring AB
2003–2006: Head of Government and Covered
JAN ERIK SAUGESTAD (1965)
Executive Vice President,
Asset Management
Education
MSc in Engineering, Norwegian University of
TERJE LØKEN (1975)
Executive Vice President
Digital & Innovation
Education
Master Computer Science, NTNU Norway
Science and Technology (NTNU)
Previous positions
MBA (INSEAD in France)
2017-2019: Chief Digital Officer (CDO),
Previous positions
Storebrand Livsforsikring AS
2013-2016: Head of Digital and Mobile IT,
2006–2015: Investment Director, Storebrand
Storebrand Livsforsikring AS
Asset Management
1999–2006: Senior Portfolio Manager,
Storebrand Asset Management
1997–1999: Sector Head Equities, Energy/
Shipping, Handelsbanken Markets
1995–1997: Partner, Marsoft Capital
1992–1995: Head of Research, Christiania
Markets (now: Nordea Markets)
2009-2013: Chief Architect (CTO), Storebrand
Livsforsikring AS
2008-2009: Enterprise Architect, Storebrand
Livsforsikring AS
2001-2008: Technology Manager (previously
Technical Lead, Sr. Software Engineer, Software
Engineer), Fast Search & Transfer
1999-2001: Computer Engineer, Sintef Tele
Bond trading, Svenska Handelsbanken
1990–1991: Junior Consultant, McKinsey &
og Data
1996–2003: Head of Fixed Income, Alfred Berg
Company
Finland
1994–1996: Trainee, Pohjola Bank (OKOBANK)
Ownership in Storebrand
Ownership in Storebrand
Number of shares as at 31 December 2019:
66,689
Number of shares as of 31 December 2019:
58,411
Ownership in Storebrand
Number of shares as of 31 December 2019:
8,921
225
GEIR HOLMGREN (1972)
Executive Vice President,
Corporate Market
Education
TRYGVE HÅKEDAL (1979)
Executive Vice President
Technology
Education
Cand. Scient degree with actuarial qualifications,
Master of Science, Advanced Computing,
University of Oslo, Norway
MBA, Griffith University Brisbane, Australia
Previous positions
Imperial College London
Bachelor of Science, Computing Science,
Newcastle University
KARIN GREVE-ISDAHL (1979)
Executive Vice President Sustainability,
Communications and Industry Policy
Education
Master of International Relations,
Bond University, Australia
Bachelor of Communications,
Bond University, Australia
2013–2015: Executive Vice President,
Previous positions
Guaranteed Pension, Storebrand ASA
2016-2019 SVP IT Strategy & Architecture,
2011–2012: Manager Customer Service and
Storebrand Group
Product, Storebrand Livsforsikring AS
2013-2015 Chief Architect & Head of IT Strategy,
2003–2011: Product Manager,
Storebrand Group
Storebrand Livsforsikring AS
2009-2013 Enterprise Architect, Storebrand Group
2002–2003: Product Manager Unit linked
2008-2009 Analyst, Goldman Sachs
Insurance, Storebrand Livsforsikring AS
2006-2008 Consultant, Accenture
Previous positions
2014–2017: Vice President Communications,
Opera Software
2009–2014: Communications Director, SN Power
2008–2009: Business Reporter, TV 2
2005–2008: TV Reporter, CNBC/FBC Media
2004–2005: Researcher, CNBC Europe
2000–2002: Product Manager Defined Contribu-
2003-2004 Project Test Manager, Opera Software
Ownership in Storebrand
Ownership in Storebrand
Number of shares as of 31 December 2019: 8,034
Number of shares as of 31 December 2019: 12,861
tion Pensions, Storebrand Livsforsikring AS
1998–2000: Sales International Life Insurance,
Storebrand Livsforsikring AS
1997–1998: Actuary Trainee,
Storebrand Livsforsikring AS
1995–1997: Teacher, University of Oslo
Ownership in Storebrand
Number of shares as at 31 December 2019:
67,089
226
STOREBRAND ANNUAL REPORT 2019 SECTION 12. APPENDIX
TOVE SELNES (1969)
Executive Vice President
People
Education
Master in Law, Oslo University
Previous positions
2015- 2019: HR Director, Storebrand Livsforsikring
2007-2015: Group Driector HR, Opera Software
2004-2007: HR Director, Eltel Networks
1997-2004: HR Manager East Norway Region, Avinor
1995-1997: Legal Advisor, Aetat
Ownership in Storebrand
Number of shares as of 31 December 2019: 14,964
227
Group Board of Directors CVs
DIDRIK MUNCH (1956)
LAILA S. DAHLEN (1968)
Board Chairman Storebrand ASA since 2017
Board member Storebrand ASA since 2013
Position
Self-employed
Education
Norwegian Police University College
Cand. jur law degree
Previous positions
Group Chief Executive Officer, Schibsted Norway (2011–2018)
Group Chief Executive Officer, Media Norway (2008–2011)
Chief Executive Officer, Bergens Tidende (1997–2008)
Division Director, Corporate Market, DNB (1995–1997)
Regional Bank Manager, Corporate Market Bergen, DNB (1992–1995)
Various managerial roles at Nevi and DNB (1987–1992)
Attorney, Kyrre AS (1987–1987)
Police intendant I/II, the Bergen Police Department (1984–1986)
Police inspector, the Oslo/Bergen Police Department (1979–1984)
Positions of trust
Board Chairman, NWT Media AS
Board Director, Grieg Star Shipping
Board Director, Lerøy Seafood Group
Board Chairman, SH Holding (Solstrand Fjord Hotel)
Ownership in Storebrand
Number of shares as at 31 December 2019: 32,000
Position
CPO, Schibsted News Media
Education
State-Authorised Public Accountant, Norwegian School of Economics (NHH)
MSc in Economics and Business Administration, BI Norwegian Business School
Master of Science in Finance, University of Wisconsin, USA
Previous positions
SVP Product and UX, Schibsted Marketplaces/Adevinta ASA (2017-2019)
Product Director, Finn.no AS (2011–2017)
COO, Kelkoo/Yahoo London (2007–2009)
VP Marketplace, Yahoo Europe London (2006–2007)
Regional Manager Scandinavia and the Netherlands, Kelkoo/Yahoo Stockholm
(2003–2006)
VP International Operations, Kelkoo Paris (2000–2001)
Manager, PricewaterhouseCoopers Oslo (1993–2000)
Positions of trust
Board Director, FINN.no AS
Board Chairman, Schibsted Marketplaces Products & Technology AS
Board Director, Lendo AS
Board Director, E24 AS
Ownership in Storebrand
Number of shares as at 31 December 2019: 12,500
228
STOREBRAND ANNUAL REPORT 2019 SECTION 12. APPENDIX
SECTION 6. GOVERNANCE
KARIN BING ORGLAND (1959)
Board member Storebrand ASA since 2015
Position
Self-employed
Education
MSc in Economics and Business Administration
Norwegian School of Economics (NHH)
LIV SANDBÆK (1962)
Board member Storebrand ASA since 2018
Education
State-Authorised Public Accountant Norwegian School of Economics (NHH)
MSc in Economics and Business Administration
BI Norwegian Business School
Previous positions
Senior Managing Director & Technology Lead, Financial Services, EALA,
Top Manager Programme (IMD, BI and Management in Lund)
Accenture (2015–2018)
Previous positions
Chief Technology Officer, Accenture Operations (2013–2015)
Executive Vice President of DNB, and various managerial positions in the same
Managing Director, Technology, Financial Services, EALA, Accenture
group (1985–2013)
(1999–2013)
Consultant, the Ministry of Trade and Shipping (1983–1985)
Employee of Accenture (1990–1998)
Ownership in Storebrand
Number of shares as at 31 December 2019: 0
Board Director and Chairman of the Audit Committee at Norske Skog ASA
Board Director, Norwegian Finance Holding ASA
Board Director, Scatec Solar ASA
Board Director, HAV Eiendom AS
Director of Boligselskapet INI AS, Grønland
Board Chairman of Røisheim Hotell AS and director at Røisheim Eiendom AS
Chairman of Visit Jotunheimen AS
Positions of trust
Board Chairman, Entur AS
Board Chairman, GIEK
Board Director and Chairman of Audit Committee, KID ASA
Board Director and Chairman of Audit Committee , Grieg Seafood ASA
Ownership in Storebrand
Number of shares as at 31 December 2019: 17,000
229
KARL SANDLUND (1977)
Director of the Board at Storebrand ASA since 2019
Position
Executive Vice President & CCO, SAS
Education
MARTIN SKANCKE (1966)
Board member Storebrand ASA since 2014
Position
Independent consultant
Education
MSc Industrial Engineering and Management, University of Linkõping
Authorised Financial Analyst Norwegian School of Economics (NHH)
Previous positions
EVP Commercial, SAS (2017-2019)
EVP & Chief Strategy Officer, SAS (2014-2017)
Vice President, Network, SAS (2009-2014)
Vice President, Commercial, SAS (2007-2008)
Vice President, Corporate Development, SAS (2006-2007)
Director, Business Strategies, SAS (2004-2006)
Consultant, McKinsey & Company (2001-2004)
Ownership in Storebrand
Number of shares as at 31 December 2019: 3,000
MSc Econ,London School of Economics and Political Science
Intermediate level Russian,University of Oslo
International Finance Programme,Stockholm School of Economics
MSc in Economics and Business Administration (MBA) Norwegian School of
Economics (NHH)
Previous positions
Special Adviser, Storebrand (2011–2013)
Deputy Director General and Director General, the Ministry of Finance
(1994–2001, 2006–2011)
Director General, the Office of the Prime Minister (2002–2006)
Management consultant, McKinsey & Company (2001–2002)
Positions of trust
Board Director, Norfund
Board Chairman of the Principles for Responsible Investment (PRI)
Board Director, Storebrand Livsforsikring AS
Board Director, Summa Equity AB
Ownership in Storebrand
Number of shares as at 31 December 2019: 22,000
230
STOREBRAND ANNUAL REPORT 2019
SECTION 12. APPENDIX
SECTION 6. GOVERNANCE
MAGNUS GARD (1978)
ARNE FREDRIK HÅSTEIN (1973)
Employee Representative of the Board at Storebrand ASA since 2019
Employee-elected board member Storebrand ASA since 2014
Position
Sales Manager Pensions and Investment,
Storebrand Finansiell Rådgivning AS
Position
Senior employee representative at Storebrand
Education
Education
Master of Arts in International Finance and Accounting,
MSc Economics and Business Administration (NHH)
University of Newcastle upon Tyne
Previous positions
Authorised Finanical Advisor, Storebrand (2007 – 2014)
Account Manager, Mamut ASA (2004 – 2007)
Sales Executive, Rosa Index AS (2004)
Internship, Centennial AS (2003-2004)
Ownership in Storebrand
Number of shares as at 31 December 2019: 613
Bachelor of Business Administration, Norwegian Business School
(Bl) / University of Texas at Austin
Authorised Portfolio Manager, Norwegian School of Economics (NHH) / NFF
Specialisation in Valuation, Norwegian School of Economics (NHH) / NFF
Previous positions
Expert Adviser, Savings and Pensions, Storebrand Livsforsikring AS (2014–2017)
Sales Manager and Product Manager, Delphi Fondene (2009–2014)
Sales Manager and Key Account Manager, Storebrand Kapitalforvaltning AS
(2005–2009)
Senior Financial Adviser, Focus Bank AS (2003–2005)
Senior Financial Adviser, Storebrand Livsforsikring AS (1999–2003)
Positions of trust
Board Member, Finance Sector Union of Norway at Storebrand
Board Member, Storebrand Art Association
Ownership in Storebrand
Number of shares as at 31 December 2019: 5,404
HEIDI STORRUSTE (1965)
Employee-elected board member Storebrand ASA since 2013
Position
Agile Coach, Digital & Innovation at Storebrand Livsforsikring
Education
Bachelor of Management, Norwegian Business School (Bl)
Certified Executive Coach, Coach Team AS
DNCF Certified Coach, Metaresource AS
Business Economist, Norwegian Business School (Bl)
Previous positions
Team Champion, Digital Business Development , Storebrand Livsforsikring AS (2017 – 2019)
Senior employee representative, Finance Sector Union of Norway,
Storebrand/Storebrand Livsforsikring AS (2013–2017)
Project manager, Storebrand Bank ASA (2011–2013)
Process Owner, Storebrand Bank ASA (2008–2011)
Senior Consultant, Retail Market Credit , Storebrand Bank ASA (1998–2008)
Financial Consultant, Retail Market Credit, Gjensidige Bank AS (1996–1998)
Customer Consultant at Sparebankenes Kredittselskap AS (1987–1996)
Ownership in Storebrand
Number of shares as at 31 December 2019: 3,925
231
Main office:
Professor Kohts vei 9
Postboks 500, 1327
Lysaker, Norway
Phone: +47 915 08 880
storebrand.no