Storebrand ASA Annual Report 2020

Plain-text annual report

Storebrand ASA Annual Report 2020 InnholdIntroduksjon1.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Finansielle mål7.Konsernets resultater 20208.Utbytte for 20209.Kapitalforhold10.Rating11.fremtidsutsikter12.Risiko13.arbeidsmiljø og HMS14.Annual Accounts and notes15.Shareholder matters16.Sustainability assurance17.AppendixTable of contents How to navigate in the Annual Introduction 3 Facts and figures 2020 report 5 Letter from the Group Chief Executive Officer Previous page Next page 7 Chairman’s foreword 1. This is Storebrand 10 About Storebrand 11 Organisation 14 Executive management 15 Board of directors 2. Customer relations 19 Greater financial security and freedom 21 Engaging, relevant and responsible advice 22 Digital innovator in financial services 6. Shareholder matters 7. Annual Accounts and Notes Storebrand Group 78 Income statement 79 Statement of total comprehensive income 80 Statement of financial position 82 Statement of changes in equity 83 Statement of cash flow 85 Notes Storebrand ASA 163 Income statement 23 Simple and seamless customer experiences 163 Statement of total comprehensive income Full screen 24 Key performance indicators 3. People 26 A culture for learning 164 Statement of financial position 165 Statement of changes in equity 166 Statement of cash flow 167 Notes 28 Engaged, competent and courageous employees 180 Declaration by member of the Board and the CEO Table of contents On the left hand side, you will always have access to the table of contents. Here you can easily navigate between the chapters. If you are looking for something you can always go back to this page for a complete overview. 29 Diversity and equality 31 Key performance indicators 4. Keeping Our House in Order 33 Corporate governance and compliance Privacy and combating financial crime 37 Responsible resource use 38 Sustainable practices throughout our value chain 40 Social responsibility 41 Key performance indicators 5. Director´s report 43 Strategy 2021-23 52 Official Financial Statements of Storebrand ASA 53 Outlook 57 A driving force for sustainable investments 66 Risk 68 Climate risks and opportunities 72 Working environment and HSE 73 Progress on our most material sustainability KPIs 181 Independent auditor´s report 8. Governance 189 Corporate Governance 197 Companies in the Storebrand Group 9. Sustainability assurance 199 TCFD-index 201 GRI-index 208 Auditor’s statement on sustainability 10. Appendix 209 Executive management CVs 213 Group Board of Directors CVs 221 Complete list of Sustainability KPIs 223 Definitions 2 Facts and figures 2020 Number of employees Group profit1), NOK million 1,824 2,711 Return on equity2) Solvency margin3) 8.6 % 178 % Assets under Management, NOK billion Assets under Management screened for sustainability criteria 962 100 % Investments in fossil free funds, NOK billion Investments in solutions4), NOK billion 379.2 92.6 Real estate investments with green certificates Rank in Global 100 among insurance companies 43 % #1 1) Profit before amortisation 2) After tax, adjusted for amortisation of intangible assets 3) Including transitional rules 4) Solution companies, Green Bonds and real estate with Green Building Certificate 3 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixDefined Contribution pensions Norway – Annualised return last 5 years* Pension investment profiles Sweden – Annualised return last 5 years**) 8.1 % 7.6 % 7.3 % 7.2 % 7.0 % 8.2 % 7.5 % 7.4 % 6.4 % 5.9 % Storebrand Balansert pensjon Competitors SPP Arbetsliv Competitors Unit Linked reserves (NOK billion) Written portfolio premiums (NOK billion) +22% 268 220 +18% 5.56 4.70 2019 2020 2019 2020 Total assets under management (NOK billion) +16% 962 831 Earnings per share, adj. for amortisation (NOK) +13% 6.07 5.38 2019 2020 2019 2020 *) Returns based on comparable investment portfolios with moderate risk (ca. 50% equity exposure) for active Defined Contribution plans. **) Returns based on comparable investment portfolios with moderate risk (ca. 50% equity exposure) for active pension plans in the accumulation phase with a guaranteed return. 4 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixA rather different year The year 2020 ended up very different from what we had foreseen. Still, we are satisfied by solid results and progress in key areas across the organisation. We delivered value to customers, investors and employees, and we made significant progress in preserving our position as a leading player in sustainable finance. Odd Arild Grefstad Group Chief Executive Officer 5 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixAfter a strong year in 2019, we had a good momentum coming into the new year. Unexpectedly, reports of a seriously infectious virus started spreading rapidly. We soon realised that the world was facing a new pandemic, but none of us could have predicted that the situation would prevail for so long. The health authorities have started vaccinating populations, but it will take time before we can put Covid-19 behind us. Lock-down, layoffs and bankruptcies in the business sector will probably be prevalent for years to come. Storebrand provides products and services that are essential for the functioning of our ociety. The pandemic put us all to the test. I am very proud of our ability to handle the situation in a good way, both for our customers and each other. Customers, authorities and our auditors have given us feedback of a well-organised and effective emergency response. We handled the increased risk well, delivered good returns on the capital we manage on behalf of our customers, paid out pensions and insurance settlements, we issued loans and payment deferrals, and we provided extensive advice to our customers during a period of uncertainty. Most of the work was carried out while working from home. We adopted new ways of interacting and maintaining productivity, using digital tools and a spirit of collaboration. We implemented infection control measures quickly, which meant that we were fortunate enough to avoid outbreaks of infection in connection with work carried out in our premises throughout the year. In the corporate market in Norway, we landed several large new customers in a competitive market. We also received renewed trust from existing customers who announced bids on tenders. We are prepared to roll up our sleeves as individual pension accounts are introduced in Norway in 2021. We will continue to work hard to provide good customer experiences, so that customers will prefer Storebrand. In the Norwegian public service pension market, we are the only challenger to KLP, which has had a monopoly for several years. Through our continuous efforts, we achieved several breakthroughs throughout the year with public enterprises, culminating in the agreement with Vestland County. This is an important step to realise business opportunities in the future. In the market for defined contribution pensions, we have achieved the best return in the market for several of the last five years, which enhances our standing to new and existing customers. Our guaranteed products also had better returns than our competitors, both in Norway and Sweden. This was crucial to preserving financial solvency in a turbulent financial market. The results give us credibility as a professional asset manager and help secure the basis for further growth. Our subsidiary in Sweden, SPP, succeeds in transferring almost 90 per cent of the customer stock to a new technological platform, and is now the fastest growing pension company in Sweden. We continue to focus on the Swedish market, with digitisation, sustainability and service development as our most important value propositions. In the private market in Norway, we established several solid partnerships, including with Huseierne and Coop. Both organisations represent a large number of members and strengthen our distribution and competitiveness towards retail clients all over Norway. The purchase of Insr strengthened our position in non-life insurance. The takeover of the Insr portfolio is well underway. Sales of non-life insurance increased by 15 per cent from 2019 to 2020, and online sales in insurance rose by 63 percent. We see great growth opportunities in non-life insurance in the years to come. In Norway, the “My Money” app was downloaded by over 120,000 people. The cooperation between the savings branch in the retail market, and Storebrand asset management continued its positive development. We will build on our strong position in asset management to strengthen our value proposal to retail clients. Storebrand’s ability to create value contributed to several new international agreements in asset management, including a mandate of NOK 5 billion in England. We currently manage over NOK 960 billion on behalf of our customers and have ambitions for further growth. We are committed to ensuring that our sustainability work leads to real-world results, whether in cooperation with large international organisations to stop deforestation in Brazil, or through good returns in our specialised sustainability funds. In 2020, Storebrand was named the world’s most sustainable insurance company by Corporate Knights Global 100. In addition, the Dow Jones Sustainability Index included the Storebrand stock on its list of the 10 per cent most sustainable companies in the world. Both are important recognitions of our long- term work on sustainability, and on systematic reporting on targets and results. In 2020, we introduced a new climate policy for the whole group, a new climate strategy for Storebrand’s investments and a new purchasing policy with clear expectations for our suppliers. Inspired by 2020, where developing new working habits were essential, we will, through the Future Storebrand project, further develop our workplace and practices so that they are adapted to the needs of individual teams and departments. The aim is to further develop Storebrand as a leading and future-oriented workplace. Although 2020 was a different year, our regular employee surveys showed that we had a high level of engagement among our employees, significantly above the industry average. This is important to the more than 200 new employees who were employed at Storebrand through last year, and all existing employees. For me, I will look back at 2020 as a year whereh we delivered on our social mission in demanding circumstances. We were there when our customers needed us most, and our employees, products and services helped create a future to look forward to for very many. Odd Arild Grefstad 6 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix Looking ahead Storebrand’s business has a huge impact on the society we live in. We will manage this responsibility in a proper manner. Storebrand collaborates with the companies we are invested in, and express clear expectations towards our suppliers, to achieve changes that contribute to a more sustainable world. We also help our customers make informed choices through long-term savings solutions that provide good returns and positive social development. Didrik Munch Chairman, Storebrand ASA In 2020, the pandemic outbreak put all parts of society to the test. Storebrand was conscious of its responsibilities, both as a service provider and an employer. The Board would like to thank all employees for the all their contributions that enabled Storebrand to assist our customers when they needed us most. Everyone at Storebrand has shown great flexibility, ensuring that our critical tasks have been solved in an extraordinary situation. This has made us capable of delivering good results throughout the year. The total return for the year was slightly higher than for comparable European companies5), and defined contribution pensions in Norway Storebrand still has higher average returns over the past five years than our competitors. Within savings, which is Storebrand’s core business, we see increased fee and administration income as a result of strong underlying volume growth in unit linked and asset management. To secure a future to look forward to, we must make good decisions today. We managed the pension and saving of around two million people in Norway and Sweden- and our decisions today will affect their future. In the following, I want to highlight some of the changes I believe will have the greatest impact on our customers, and for Storebrand, over the next few years. In 2021, 1.5 million people will get access to individual pension accounts in Norway. Individual pension account means that pensions saved by current and former employers are collected in a separate pension account in the current employer’s scheme. The purpose is to give employees a better overview and control of their own pension and savings, and ultimately higher payouts. Workers can also choose freely to move the pension savings out of the employer’s pension scheme, to a provider of their choice. The individual retirement account is expected to increase competition, both to attract new customers and retain existing ones. Through this, margins in the industry will be ever more competitive. For Storebrand, this will require more cost- effective services, and upholding our professional management. Our goal is to sustain our position as the leading provider of occupational pensions in the private sector. Also, in Sweden we see that the competition is intensifying. The Swedish occupational pension market is fragmented, with mutual pension companies, bank-owned life and pension companies, and insurance providers. In the past two years, three of the largest brokerage companies have been acquired by private equity firms. This indicates a strong belief in growth in the financial advice market, in an industry that has traditionally been unavailable to new entrants. All competitors express strong growth ambitions. To ensure healthy margins across our markets, we must continue to have cost-effective operations and foster digital innovation power. Digitisation of the entire value chain ensures good distribution and self-service solutions that provide increased flexibility for customers. Customers in the retail market expect ever more individualised services, which we can deliver through customer insights, analysis capacity, value- added services, and good advice from capable employees. Going forward, we will build on newly established partnerships to strengthen distribution possibilities and further develop our value proposal to existing and new customers within savings, insurance and banking. With long traditions, the breadth of our service offering, sustainable and innovative solutions, we are well positioned for further growth in the Norwegian retail market. Storebrand has a great starting point for strengthening our position in the public sector as well. The market potential is significant, and the public 7 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendixservice pension market is ripe for increased competition. Our new focus on public service pensions achieved several important breakthroughs in 2020. Based on our expertise and strong technological platform, and as the sole provider of occupational pensions to both the retail market and the public sector, we have all the prerequisites in place to achieve profitable growth, satisfied customers and efficient customer solutions. In recent years, Storebrand asset management has evolved from a focus on investments in traditional asset classes such as equities and bonds- to an increasingly diversified portfolio including real estate, private equity and infrastructure. Storebrand asset management is now recognised as a leading multi-boutique manager in the Nordic region. We will continue to build on the positive momentum, with the aim of realizing further growth ambitions as a Nordic powerhouse for asset management. Storebrand has 25 years of experience with sustainable investments, and is consistently ranked highly for our efforts, both nationally and internationally. Sustainable finance is high on the EUs agenda and hence important Storebrand and our stakeholders. The EU Action Plan for Sustainable Finance will be a clear premise for the financial industry in the years ahead. The Disclosure Regulation, which comes into force in March 2021, sets clear requirements for the disclosure of environmental aspects, social aspects and corporate governance (ESG) for fund managers and institutional investors. Storebrand has been working systematically on sustainability for decades and is well prepared to adapt to the new regulatory requirement. Climate adaptation and the transition to a low-emission society involve both risks and opportunities for Storebrand. Through the investor initiative Net Zero Asset Owner Alliance (NZAOA), we are committed to adapting our investment portfolio to the 1.5-degree target of the Paris Agreement, which means that the investment portfolio must be carbon neutral by2050, at the latest. This is an ambitious goal that requires close dialogue with the companies we invest in to help reduce their emissions. The time ahead will present a number of exciting challenges for Storebrand. I am convinced that Storebrand’s employees will handle these in an excellent way. There is a high level of engagement in the organisation, and many employees highlight that sustainability gives their work and additional purpose. This will make Storebrand capable of delivering value beyond financial returns to our customers. Storebrand will continue to contribute to lasting and positive changes, in line with our customers and society’s expectations. We will continue to challenge ourselves, the companies in we invest in, our suppliers and partners, so that we all contribute to the transition we all face. At the same time, we will help our customers make good choices so that they have a future to look forward to. In 2020, storebrand employees showed a fantastic ability to adapt, almost overnight, to a life consisting of home office, home school, closed kindergartens and limited social interaction. While still being there for our customers. The experience was demanding for both managers and employees, but contributed to new ways of working together across the organisation. The team spirit was strengthened, and many acquired new knowledge that will be very valuable going forward. 5) Compared to European Insurance Index Bone clock 5) Se kapittel 3, People - dette er fornoten på norsk?! 8 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix1 This is Storebrand 10 About Storebrand 11 Organisation 14 Executive management 15 Board of directors 4 Om Storebrand 5 Organisasjon 6 7 Konsernledelsen Konsernstyret 9 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is StorebrandAbout Storebrand 10Organisation 11Executive management 14Board of directors 152. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix About Storebrand OUR 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 should be confident that we put their needs first. We’ve been a part of people’s lives for more than 250 years. Today we are one of the largest private asset managers in the Nordic region – with NOK 962 billion invested in more than 4,500 com- panies around the world. Over two million people in Norway and Sweden place their savings with us. This comes with clear obli- gations. . 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 sustainable practices, ensuring good financial returns and a posi- tive impact on society. We shall make it easy for our customers to make good choices, both for themselves and society. Our purpose is clear - we create a future to look forward to. Storebrand’ s driving force helps create a future to look forward to. We will be closest to the customer, in a simple and sustainable way, to deliver increased financial security and freedom. We do this by being courageous pathfinders and by leading the way in sustainable investments. 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 1966 1978 Association of casualty Storebrand changes its logo and insurers (SKAFOR) introduces “the link”. The name 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 1996 Name changed to Storebrand ASA Storebrand Bank established 1991 1998 2014 Storebrand’s AuM exceeds NOK 500 billion changes to The Storebrand Group Ltd Storebrand and Uni-Insurance Storebrand merge and become UNI- Health Insurance Storebrand Ltd 1983 The Nordic Group and the Storebrand Group merge 1999 Storebrand acquires Finans- banken (the Finance Bank) 2017 2017 Storebrand 2020 acquires SKAGEN Included in Dow Jones Sustainability Index 1814 Administration of national ﬁ re insurance scheme transferred to Christiania 1010 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 2016 “Our driving force” launched 2019 Storebrand Asset Management acquires Cubera Private Equity ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is StorebrandAbout Storebrand 10Organisation 11Executive management 14Board of directors 152. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix Organisation LEGAL STRUCTURE (SIMPLIFIED) Storebrand ASA Storebrand Livsforsikring AS Storebrand Forsikring AS Storebrand Bank ASA Storebrand Asset Management AS Storebrand Facilities AS Storebrand Helseforsikring AS (50 %) SPP Pension & Försäkring AB Storebrand Boligkreditt AS SPP Fonder AB Storebrand Fastigheter 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 occupational 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 Storebrand Christiania Almindelige Brand-Forsikrings-Selskap Life insurance company Christiania Almindelige Brand-Forsikrings-Selskap The Norwegian Association The Association for Norwegian Life insurance company Storebrand acquire Euro- 1887 1847 1904 1922 1887 1936 1904 The Norwegian Association referred to as Storebrand Brage established referred to as Storebrand of Actuaries established life insurance companies Brage established peiske, Norway´s leading of Actuaries established 1922 The Association for Norwegian 1966 Association of casualty 1936 Storebrand acquire Euro- 1978 Storebrand changes its logo and life insurance companies insurers (SKAFOR) peiske, Norway´s leading introduces “the link”. The name established travel insurance company established travel insurance company changes to The Storebrand Group Ltd Storebrand ASA 1966 Association of casualty Storebrand Bank established 1991 Storebrand and Uni-Insurance insurers (SKAFOR) 1998 Storebrand 1978 Storebrand changes its logo and 2014 Storebrand’s AuM exceeds introduces “the link”. The name NOK 500 billion changes to The Health Insurance Storebrand Group Ltd Storebrand Bank established 1991 Storebrand and Uni-Insurance 1998 Storebrand merge and become UNI- Health Insurance 2014 Storebrand’s AuM exceeds NOK 500 billion 1767 Den almindelige Brand-Forsikrings-Anstalt established in Copenhagen 1861 1767 Storebrand establish Idun, Norway´s ﬁ rst Den almindelige privately-owned life insurance company Brand-Forsikrings-Anstalt established in Copenhagen 1900 1861 1917 The Norwegian Association Storebrand establish Idun, Norway´s ﬁ rst The Life Insurance company The Norwegian Association 1900 1917 The Life Insurance company of Insurers established privately-owned life insurance company Norske Folk (Norwegian People) of Insurers established Norske Folk (Norwegian People) established established merge and become UNI- Storebrand Ltd 1983 The Nordic Group and the Storebrand Group merge 1996 Name changed to 1996 Name changed to Storebrand ASA 1814 Administration of national ﬁ re insurance scheme transferred to Christiania 1814 Administration of national ﬁ re insurance scheme transferred to Christiania 1947 Storebrand celebrate centenary 1975 Custos Finance 1947 Storebrand celebrate 1984 Norges Brannkasse and Norske Folk become UNI centenary Insurance 1982 Association of casualty insurers dissolved 1995 Storebrand establishes team of sustainability analytics in Storebrand Asset Management 1999 Storebrand acquires Finans- banken (the Finance Bank) 1983 The Nordic Group and the 2017 2017 Storebrand Storebrand Group merge acquires SKAGEN Storebrand Ltd 1999 Storebrand acquires Finans- banken (the Finance Bank) 2020 Included in Dow Jones Sustainability Index 2007 Storebrand acquires SPP 1975 Custos Finance 2006 Storebrand re-enters 2012 1984 “Our customers Norges Brannkasse and recommend us” Norske Folk become UNI vision launched Insurance 2019 Storebrand Asset Management acquires Cubera Private Equity 2006 Storebrand re-enters 2007 Storebrand acquires SPP 2017 2017 Storebrand acquires SKAGEN 2020 Included in Dow Jones Sustainability Index 2012 “Our customers recommend us” vision launched 2019 Storebrand Asset Management acquires Cubera Private Equity P&C insurance market 1982 Association of casualty 2016 “Our driving force” launched 1995 Storebrand establishes team P&C insurance market 2016 “Our driving force” launched insurers dissolved of sustainability analytics in Storebrand Asset Management 1111 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is StorebrandAbout Storebrand 10Organisation 11Executive management 14Board of directors 152. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix Sustainability as a core business In 2019, the UN released the results of the most thorough planetary health check ever undertaken, the IPBES6) report on biodiversity and ecosystem services. The report is clear in its conclusion: Loss of biodiversity and ecosystems occurs to a extent that must be limited urgently so as not to entail irreversible consequences. The backdrop for the report is the 2018 UN Special Report on global warming of 1.5°C, which concluded that the transition to a low-emission society requires swift action. The transition represents both financial risks and opportunities for Storebrand as an investor and asset manager. The financial sector plays a key role in helping to achieve the UN Sustainable Development Goalsn(SDGs). Through good management, our pensions, savings and investments can be powerful tools to address key challenges and to realise the Sustainability goals. As a significant asset owner, insurer and asset manager, we also see great economic opportunities in the alignment of investment portfolios to a sustainable agenda, in line with international obligations. In the long term, this will also result in higher returns. Companies with sustainability as a key part of their business strategy have good conditions for managing climate and sustainability risks and capitalizing on the opportunities they represent. There is growing consensus that companies that have a strategy in line with the SDGs and the Paris Agreement have better conditions than others to create long-term returns and may be better positioned to succeed in future markets. integrated Sustainability in Storebrand in our business strategy and is Sustainability implemented across the entire business, including investments, products and product development, procurement, employment policies and business management. Our main objective is to leverage sustainability as a competitive 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: Keeping our house in order, products and services, and communication and stakeholder engagement. Keeping our house in order In our work, we rely on these sustainability principles: • We base our business activities on the UN Sustainable Development Goals. • We help our customers to live more sustainably. We do this by managing our customers’ money in a sustainable manner, in addition to providing sustainable financing and insurance. • We are a responsible employer. • Our processes and decisions are based on sustainability 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 which we can significantly impact by the way we manage our group’s business and people processes.At the end of relevant chapters of this report, figures are provided that show how far we have come in this work. 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 climaterelated 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). 6) The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services 12 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is StorebrandAbout Storebrand 10Organisation 11Executive management 14Board of directors 152. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix Initiative Communication and stakeholder dialogue We are open about our sustainability efforts and report in accordance with several leading reporting standards, including the Global Reporting (GRI), task force on Climate- RelatedFinancial Disclosures (TCFD) and Carbon Disclosure Project (CDP), in line with the expectations of a number of key stakeholders. Strategic ambitions, specific goals, reporting and communication on sustainability are important success criteria in our work. In addition, we engage in international sustainability initiatives such as The Net Zero Asset Owner Alliance and Climate Action 100+ to help our customers have a future to look forward to. We form strong partnerships to realise our sustainability objectives. This illustrates our strong commitment to Sustainable development goal17: collaboration to achieve the goals. In addition, through stakeholder dialogue and communication, we want to influence these sustainability goals: We encourage companies to adopt sustainable practices and sustainability information into their reporting cycle (target 12.6). integrate to 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). Products and Services Storebrand is a leading financial player in the Nordic market and will be a pioneer in sustainable investments. We started with sustainable investments already in the mid-1990s. In 2005, we introduced minimum standards for all our investments through the Storebrand standard, and in 2010 we integrated sustainability into all our funds through a separate ranking methodology. In 2020, Prospera ranked us in first place in the sustainable investment category in both Norway and Sweden, and we achieved the highest score at Mercer within ESG. Furthermore, we scored best among the major financial institutions in the Ethical Banking Guide in Norway and were included on the Dow Jones Sustainability Index’s list of the world’s ten per cent most sustainable companies. important recognitions of the work both with These are operationalization of sustainability throughout our business, and the integration of criteria for sustainability in our investment products. All our funds are managed according to the Storebrand standard. In addition, 9.6 per cent of our capital invested in what we call solutions – companies that contribute to the UN’s sustainability goals, green bonds, and certified green property investments. In addition, almost 40 per cent (379 billion NOK) of our assets under management at the end of 2020, were invested in fossil-free funds. All assets under management in our Swedish branch SPP Funds are invested in funds consisting of companies unaffiliated with the fossil sector. 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 management, 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 62). For Specific measures and objectives related to these sustainability goals in our asset management are described in the chapter a driving force for sustainable investments. 13 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is StorebrandAbout Storebrand 10Organisation 11Executive management 14Board of directors 152. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix Group management From left: Trygve Håkedal (Executive Vice President Technology), Staffan Hansén (CEO, SPP), Terje Løken (Executive Vice President Digital and Innova- tion), Jan Erik Saugestad ((Executive Vice President Ass.Mngt), Odd Arild Grefstad (CEO), Heidi Skaaret (Executive Vice President Retail Market), Karin Greve-Isdahl Executive Vice President Communications, Sustainability and Business Policy), Lars Løddesøl (Group CFO), Tove Selnes (executive vice president People), Geir Holmgren Executive Vice President Corporate Market). See attachments on page 211 for full CVs for group management 14 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is StorebrandAbout Storebrand 10Organisation 11Executive management 14Board of directors 152. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixCorporate Board of Directors From left: Karin Bing Orgland (Member of the Board), Fredrik Åtting (Member of the Board), Bodil Catherine Valvik (Employee Representative), Magnus Gard (Employee Representative), Karl Sandlund (Member of the Board), Laila S. Dahlen (Member of the Board), Didrik Munch (Chairman of the Board), Marianne Bergmann Røren (Member of the Board), Martin Skancke (Member of the Board), Hans-Peter Salvesen (Employee Representative). See attachments on page 215 for full resumes 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 insight 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-managerial staff. 15 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is StorebrandAbout Storebrand 10Organisation11Executive management 14Board of directors 152.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixCOMMITTEES The Board has appointed four committees to support its role: the Audit Committee, the Compensation Committee, the Strategy Committee and the Risk Committee. More information on the role of each committee can be found on page 193. The Strategy Committee The Audit Committee Leader Members Didrik Munch Fredrik Åtting Laila S. Dahlen Hans-Petter Salvesen Leader Members Karin Bing Orgland Martin Skancke Bodil Catherine Valvik The Compensation Committee The Risk Committee Leader Members Didrik Munch Marianne Bergmann Røren Hans-Petter Salvesen Leader Members Martin Skancke Fredrik Åtting Magnus Gard The Nomination Committee Leader Per Otto Dyb Member (shareholder elected) Leiv Askvig, Nils Halvard Bastiansen Anders Gaarud, Margareth Øvrum 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 regularly conduct a materiality analysis. This ensures alignment between our goals and prioritised areas, and our stakeholders’ expectations. The material analysis has been adjusted and updated through ongoing stakeholder dialogue in recent years and was further developed in 2020. The analysis defines the challenges and opportunities that both Storebrand and our stakeholders perceive as most crucial to reaching our long-term strategic goals, and where we have the greatest impact on society and the environment. Our main stakeholders, and those we consider most relevant to the analysis, are shareholders, customers, employees, authorities and NGOs. The analysis is publicly available. 7) The dialogue with stakeholders is conducted through interviews, surveys and direct dialogue. We also extract information that is collected through interaction with stakeholders, such as general meetings, customer surveys and meetings, as well as participation in committees and initiatives aimed at solving a wide range of sustainability issues. Based on the materiality analysis, we identified four focus areas and 7) https://www.storebrand.no/en/sustainability/sustainability-library/_/attachment/download/a66150fc-0f46-4c2d-8aa1-cbb3d5ebc00d:d12bc8eb4126c99c0ae94c0e72b9d8b0e6ad0c1a/Materi- ality%20analysis%20report%202019.pdf 16 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is StorebrandAbout Storebrand 10Organisation 11Executive management 14Board of directors 152. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix VERY HIGH A E G B K C I J L F H HIGH D MODERATE M N i i s n o s 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 Significance of business impact Financial capital and investment universe A B C Competitive long-term returns to share- holders an customers Driving force for sustainable investments Active owners and reducing ESG (Environmen- tal, Social and Governance) risk Customer relations D E F G Greater financial security and freedom Engaging relevant and responsible advice Digital innovator in financial services Simple and seamless customer experiences Our people H I J A culture for learning Engaged, competent and courageous employees Diversity and equal opportunities Keeping our house in order K L M Governance and Compliance: Privacy and combating financial crime Sustainable practices throughout the value chain Corporate citizenship N Responsible resource usage related material topics in 2020, and how we will work on these going forward. The four focus areas are: 1. 2. 3. 4. Financial capital and investment universe Customer relations Our people Keeping our house in order The focus areas and associated themes are presented in the materiality matrix above. The material themes are ranked according to the influence they have on our stakeholders’ assessments and their decisions related to Storebrand, and their significance of business impact. The materiality analysis forms the structure of this annual report and includes input from our stakeholders. The focus area financial capital and investment universe and the three underlying material topics are consistently ranked as very significant among our stakeholders. They are also very relevant to the Group’s strategy and risk management. Therefore, our reporting on this focus area has been included in the Directors Report. Other material themes are also ranked with high importance, including topic E: Engaging, relevant and responsible advice, 17 G: Simple and seamless customer experiences, and K: Governance and compliance: privacy and combating financial crime. These are discussed in relevant chapters in the main part of the annual report. Common for all chapters is that they are divided into four parts; why it is important for Storebrand and for our stakeholders, goals and ambitions, our approach, and reults. The key figures for each focus area are reported to the group management on an ongoing basis, and to the Board of Directors annually. This report has been prepared in accordance with the GRI standards (Core option). Our GRI index can be viewed on page 201. The guidelines of the International Integrated Reporting Council (IIRC) are also used as foundation for the report. This year’s report covers Storebrand’s operations in Norway and Sweden. The environmental data presented in the chapter keeping our house in order includes the head offices of Norway and Sweden as well as Skagen’s head office, representing the office premises of 95 per cent of the group’s employees. The figures do not cover the smaller, local offices or Cubera, as these are not considered material due to their size. See page 197 for more information about companies in the Storebrand Group. ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is StorebrandAbout Storebrand 10Organisation 11Executive management 14Board of directors 152. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix 2 Customer relations 19 Greater financial security and freedom 21 Engaging, relevant and responsible advice 22 Digital innovator in financial services 23 Simple and seamless customer experiences 24 Key performance indicators 18 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relationsGreater financial security and freedom 19Engaging, relevant and responsible advice 21Digital innovator in financial services 22Simple and seamless customer experiences 23Key performance indicators 243.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixGreater financial security and freedom We shall help our customers achieve financial security and freedom to realise small and big dreams by providing holistic solutions and diligently looking after what our customers hold most important. We will motivate our customers to make good decisions in savings, banking and insurance by delivering customer experiences that meet their needs at different stages of life. Through good asset management and structures for risk management, we will ensure that our customers get good returns in a sustainable manner on their investments. Dialogue with our customers takes place through both digital and serviced channels. Our goal is to be closest to the customer, simple and sustainable. Why Recent reforms to the Norwegian and Swedish pension systems require greater responsibility from individuals for their own long- term financial situation, including pensions. 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. Taking an active responsibility for your personal finances is important to lead the life you want, both throughout working life and as a pensioner. Norwegian residents received their own pension account (Egen pensjonskonto) from February 2021. It is intended to provide better oversight and control over your own pension and increase payouts. New rules for retirement savings are also being developed in Sweden. It will be easier and more affordable for employees to move pension funds saved from 1 July 2007 to the present da. Swedish authorities are exploring several measures to limit fees related to insurance and savings schemes, to ensure proper freedom of choice for workers. Goals and ambitions Our aim is to offer customers a range of services designed to meet the breadth of their financial needs at all stages of life. In Norway, we offer relevant products and services in banking and insurance. In Sweden, our offer is limited to savings. Our customers should be confident that we offer relevant and attractive products, and that we manage their savings so that they get the best return possible. We provide information and advice to our corporate customers to enable them to assist their employees in making better financial decisions. We work to build strong relationships with corporate customers and their employees through holistic and customised follow-up. Through digital solutions, customer seminars and consulting, we make it easier for companies to understand their pension schemes, and for their employees to gain oversight and control of their own pension. We value the use of qualified advisors and comprehensible communication. Overall, Storebrand is a preferred provider of pension services. The Storebrand brand in Norway is communicated to the market through the communication concept “Good money”. Storebrand should be known for its ability to create value through sustainable investments, profitable sustainability. In 2020, we developed several products and services that support this strategy. The target for 2021 in Norway is to increase the number of customers who have products from at least one of our product lines by 10 per cent. In Sweden, SPP aims to be the occupational pension company known for being passionate about making occupational pensions easy for the employees of our corporate customers. We offer extensive expertise, digital services, tailored advice, and a complete product offering. We develop attractive benefit packages for employees and focus on sustainable investments, in line with the widespread demand for this type of pension and savings products in the Swedish market. Approach We provide information in an understandable manner and make good advice readily available to help our customers gain oversight of their personal finances. Development of digital tools and the improvement of digital communication are important instruments, both in the Norwegian and Swedish markets. In Norway we launched a new version of “My Money”. The “My Money” app helps our customers get an overview and take control of their pension and other savings. Based on figures from the Norwegian public pension scheme (Folketrygdfondet), private pension savings and employers, customers can calculate their future pensions. We also use the app to encourage our own employees to become private customers at Storebrand. The service “SmartPension” enables customers approaching retirement age to plan their transition to a new phase in their lives. During this phase, we see a higher demand from our customers for counselling. 19 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relationsGreater financial security and freedom 19Engaging, relevant and responsible advice 21Digital innovator in financial services 22Simple and seamless customer experiences 23Key performance indicators 243.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixIn 2020, SPP further developed digital services that make it even easier for companies to manage their occupational pensions. An example is the development of a new interface for calculating and updating pension contributions. In 2020, SPP also developed a fully digital service for employees to choose when and how they want their pension payouts. In the autumn of 2020, we launched a digital tool called “your climate footprint” in Sweden. The tool shows the carbon footprint of the investments associated with an employee’s pensions and savings, compared to the carbon footprint if the investments had been made in funds without a sustainability profile. Companies use the information in communication with employees, in their own sustainability reporting, and to strengthen their own profiling on sustainability. We are continuously working to stimulate, and expand access, to banking and insurance services and financial services for all (target 8.10). “Storebrand shall be known for our ability to create value through sustainable investments.” Results Almost half a million people have checked their pension on Storebrand’ s website in Norway in 2020. Throughout the year, more than 120,000 customers downloaded the “My Money” app, which was launched in a new version in 2020. In Sweden, more than 410,000 customers logged into SPP’s website to attain information about their pension, while 10,000 corporate customers logged in to review and manage the company’s pension solutions. A significant number of corporate customers also chose to enter into an agreement on digital payment of occupational pensions. After the service was introduced, more than 50 per cent of all private customers who retired in 2020 chose a fully digital pension payment solution. 20 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relationsGreater financial security and freedom 19Engaging, relevant and responsible advice 21Digital innovator in financial services 22Simple and seamless customer experiences 23Key performance indicators 243.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixEngaging, relevant and responsible advice Why Pensions and Insurance are often perceived 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. Through the different phases of working life and up to retirement age, our customers receive insight and oversight of their own pension, savings and insurance agreements. Relevant and responsible advisory services are the most important prerequisites for customer satisfaction. We will help customers purchase products and services that are relevant and appropriate in the life situation they are in. Goals and ambitions We aim to provide the customer with financial security and freedom through attractive products and services. Through professional management of capital adapted to the customer’s risk profile and time horizon, and through a wide range of products, we shall contribute to growth in our customers’ pension and savings capital. The goal is also to increase the number of products each customer has purchased through Storebrand. In Norway, we have an ambition that 75 per cent of our advisors across savings, banking and insurance should be authorised at all times. In Sweden, certification8) is required for advisors to carry out counselling, and all our advisers are certified. Approach The starting point for all customer contact is the principle of putting the customer first. This is reflected in our service standards: • Trustworthy – I keep what I promise, and I am a professional. • Caring – I treat everyone individually, help them, and give advice. • Enthusiastic – I am positive and exceed expectations. • Efficient – I make the customer journey easy and improve your organisation. High ethical standards, good quality advisory services and first- class customer care are fundamental. Our advisors in Norway are authorised through the financial advisors authorisation scheme (AFR), the non-life insurance and personal insurance authorisation scheme (AIS and AIP) and/or the authorisation scheme for credit and personal insurance, all under the auspices of the financial industry. Our authorisation and competency requirements are communicated to customers across digital platforms. In 2020, a separate framework for career development was developed among the advisors in the Norwegian retail market. The framework describes the requirements and responsibilities for the various roles, including the requirements for authorisations. The interaction between digital and physical customer service will become increasingly important. In Storebrand, teams work closely together for various forms of customer service to prioritise and develop initiatives. Results In 2020, Storebrand was ranked 2nd in the Norwegian Customer Barometer’s annual measurement of customer satisfaction in the corporate market. The score of 73 points (out of 100) indicates that customers were well satisfied with their customer relationship. Storebrand received the highest score on loyalty among corporate customers. It is also pleasing that sustainability was an important driver of loyalty and trust. This confirmed that Storebrand’ s commitment to profitable sustainability will become an important differentiator in both the corporate and retail markets. In the market for transferable savings9) had a market share of 21.7 per cent at the end of 2020, up from 19.9 in 2019. In the non-life insurance market, we had a market share of 4.5 per cent. In the market for banking we had a market share of 1.7 per cent in 2020. SPP has grown significantly in the Swedish market. Several companies demand sustainable management of employees’ pension funds. In 2020, 25 per cent of transferable funds in the occupational pension market were transferred to the SPP. Market position, pension: #1 corporate market Norway 8) The reason we do not have an ambition of 100 per cent is that there will always be some turnover in the Organization. 9) Free funds (retail market), individual pension, individual capital, pension capital certificate (PKB), and policy of investment choice (FMI). . 21 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relationsGreater financial security and freedom 19Engaging, relevant and responsible advice 21Digital innovator in financial services 22Simple and seamless customer experiences 23Key performance indicators 243.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixDigital innovator in financial services Why Technological development and digitalisation are among the changes that affect the industry the most. Technology affects customer behavior and expectations, our ability to deliver services to the customer, and is a prerequisite for automating and improving both distribution and customer experiences. Results In 2020, we had more than four million visits to Storebrand.no.The number of page views increased by approximately 10 per cent from 2019, and organic traffic increased by 20 per cent. Additionally, the number of digital sales of insurance and savings increased by 25 per cent. Almost half a million people checked their own retirement savings through our website and mobile app in 2020. Storebrand Bank reached record high sales figures for mortgages in 2020. The bank is providing an updated digital service for loan applications- and the number of people taking out loans after using the service increased by 15 per cent. In addition, we entered partnerships for mortgages into with the real estate chain Nordvik and Huseierne. Automation of settlement processes improves customer experiences. Improvements to the processes contributed to a significant increase in fully or partially automated payments of disability pensions in 2020, from 400 to 1 200 payments. Average waiting times were reduced by 75 percent, and the number of cases resolved within one day is increasing steadily. In 2020 we launched the app “My Money”, which is a further development of “My Pension”. The app gives the customer insight of their pensions and other savings at Storebrand overall, making financial planning a lot easier. After six months, nearly 120,000 customers had downloaded and adopted the app. We improved the health insurance app, “Get Healthy,” and added new partnerships during the year. In addition to physiotherapists, Eyr, online psychologist and digital self-help program, our customers now get access to Snapmed(dermatologists online), ExorLive(exercises and programs made by physiotherapists) and Home Doctors(home visits from a doctor). The proliferation and use of the “Dreams” app continued to increase in 2020, and the app cemented its position as one of the most popular savings services in Norway. The number of downloads increased from 200,000 in 2019 to more than 300,000 in 2020. By year- end, customers had saved more than 1billion NOK since the launch of the app in 2019. The new “Debt-free” service in the app helps more and more of our customers get rid of debt faster. Users of the service have reduced their repayment period by two years on average. Goals and ambitions Our overall ambition is to increase the number of satisfied and loyal customers, and streamline the group, through the use of automation and digital services. Digital distribution and self-service enable us to serve our customers more efficiently. At the same time, customers are more satisfied when they can use self-service solutions at times and in channels that suit them. Approach Digital & Innovation was established as a separate commercial group unit in 2019, as a step to further develop our operations and customer experiences using technology and digital services. Digital business development takes place in multidisciplinary teams where product managers, business developers, analysts, developers and designers work together to understand customers, improve customer experiences, and solve the customers’ needs through digital services. By being close to our customers, we can understand their behaviour, challenges and needs. Digital development had a high level of activity in 2020. Multiple improvements were made to existing solutions, while new services were developed throughout the year. We integrated the work with digital trust and information security in the teams, so that they have better conditions for safeguarding privacy and information security both in concept development, design, development, and operation of the services. New working patterns because of Covid-19 resulted in a change of pace in digitalisation among Storebrand’ s customers and employees, as in society at large. Never before have we had so many digital customer meetings, sold as much in digital channels and handled as many settlement cases digitally as in 2020. Digitalisation provides many opportunities for the development and provision of value-added services to our customers, based on their needs. In 2020, we partnered with Aprila Bank for credit to small and medium-sized businesses, with Homely for alarm services, with Justify for legal services and with The Home Doctors for Medical Care. In addition, we strengthened our cooperation with Dreams related to a new debt repayment service. 22 20) 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 regulations 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. ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relationsGreater financial security and freedom 19Engaging, relevant and responsible advice 21Digital innovator in financial services 22Simple and seamless customer experiences 23Key performance indicators 243.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixSimple and seamless customer experiences Why Customers’ requirements and expectations have changed noticeably in recent years, and the bar is raised continuously as different players offer solutions that improve customer experiences. Storebrand invests in technology, services, and concepts to deliver holistic customer experiences, adapted to the individual, across digital and serviced surfaces. Results When introducing the new CRM platform in 2020, we established a customer-journey framework. The framework will help guide for how we meet the customer across our own and paid channels, with communications, concepts, and products. The work will continue in 2021. Goals and ambitions Storebrand aims to create increased perceived value for each customer by delivering personalised and seamless customer experiences across serviced and digital channels. “Smart Pension” is increasingly successful in providing personal advice on pension withdrawals, which helps more people choose to continue their customer relationship after they retire. In 2020, customers placed over 500 million NOK of funds at Storebrand using the “Smart Pension” service. Work on the development of a new concept for wealthy persons began in early 2020. The target group is people who have more than NOK 3 million in placeable wealth. In addition to a personal investment advisor, customers have access to personalised service and follow-up within all Storebrand’ s services in the retail market. The concept will be further developed in 2021. Approach An important step in 2020 was to introduce a new data-driven CRM platform for customer engagement. This work combines two disciplines for improved customer experiences: service design and new technology. The platform allows us to use data in a smarter way to offer solutions tailored to each customer. The platform is scheduled to be in effect for all customers in the retail market during 2021 and will be rolled out in the corporate market in 2022. We are also working to develop holistic customer concepts based on different customer segments, life events and customer needs. In 2020, we established a separate unit with responsibility for developing concepts and holistic value suggestions for different customer segments in the retail market. Based on customer needs and commercial potential, Storebrand has chosen to prioritise people in the establishment phase, wealthy individuals, and people approaching retirement age. One of the concepts is “Smart pension”, a unique service in the Norwegian market. The service is for people who plan the transition to retirement, and makes it possible, among other things, to simulate different withdrawals of their own pension. Through pension advice and digital solutions, we aim to realise the potential of a customer group with unmet needs. We are also launching a dedicated concept for wealthy customers, with holistic follow-up and access to advice within the breadth of Storebrand’ s service spectrum. In addition, a new concept aimed at the general consumer market is under development and testing. 23 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relationsGreater financial security and freedom 19Engaging, relevant and responsible advice 21Digital innovator in financial services 22Simple and seamless customer experiences 23Key performance indicators 243.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixGajda Key performance indicators For detailed KPI definitions, see page 225. Key Performance Indicators10) Customer satisfaction11) Market share: Savings, retail market Norway Market position: Pension, corporate Result 2017 #4 Result 2018 #4 Result 2019 #4 Result 2020 #6 Goal 2021 Top 3 Goal 2025 Top 3 22 % 21 % 20 % 22 % Increase Increase market Norway #1 #1 Recognised for sustainable value creation (Retail Norway) New 2019 New 2019 Recognised for sustainable value creation (Corporate market Norway) New 2020 New 2019 #1 #3 #1 #1 #5 #4 #1 Top 3 #1 #1 #1 #1 10) We have stopped reporting on two indicators from 2019 on a) GDPR course (this is an important indicator for checking that new routines are Implemented, but we are confident that these routines work well and that all a lot of workers receive GDPR training as part of the introductory programme) and b) Sustainable Brand Index-sscores for the UK and Sweden (these indicators are replaced by others). In addition, complaints are now discussed under chapter 5 below. 11) Net Promoter System, Retail Norway 24 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relationsGreater financial security and freedom 19Engaging, relevant and responsible advice 21Digital innovator in financial services 22Simple and seamless customer experiences 23Key performance indicators 243.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.Appendix3 People 26 A culture for learning 28 Engaged, competent and courageous employees 29 Diversity and equality 31 Key performance indicators 25 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. PeopleA culture for learning 26 Engaged, competent and courageous employees 28 Diversity and equality 29 Key performance indicators 314. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixA culture for learning «People first, digital always» is the title of Storebrand’ s HR strategy. The strategy is designed to enable our organisation to adapt to continuous changes in an increasingly digitised world and deliver on ambitious business targets. partners and the learning platform. Due to Covid-19, we also decided to digitise our annual Nordic training day, “the Storebrand Day”. Through the digital learning platform, we facilitated the day with a focus on the development of a customer centric culture: “Closest to the customer – closer to each other”. In 2020, the organisation was put to the test, along with the rest of the world. At short notice, almost all employees had to start working from home, many of us while at the same time dealing with home schooling and closed kindergartens. Everyday life entailed new challenges for our society and for our employees. Many people felt uncertain and worried, and the challenges have unfortunately continued into 2021. Digital tools and employees’ ability to use them, meant that Storebrand was probably better equipped to cope with the situation than many other businesses. We training programs and activities to develop company culture swiftly. Employees initiated and adopted new methods of collaboration, learning and knowledge across disciplines and and organisational units were reported. We are proud of the willingness to change and the flexibility that our employees have shown throughout the year. Many challenging tasks, both directly and indirectly related to the pandemic were solved by making use of the foundations of the HR strategy: Learning, agility, and leadership in a new landscape. redesigned working processes, interactions, increased Why To stay competitive in a rapidly changing industry, we must provide our employees with opportunities to learn throughout their employment. Greater breadth and diversity in employees’ competence will contribute to continued growth and ability to meet changing customer expectations, as well as development opportunities for our employees. Digital skills, knowledge of customer preferences and insight into market development are important success factors. Goals and ambitions Our ambition is to build a learning culture characterised by innovation, responsibility for one’s own and others’ learning, and feedback, to ensure continuous development and improvement. In 2020, we combined the potential of our new communication and interaction tools, with our digital learning platform Campus Storebrand, which enabled increased social learning and learning outcomes. This was in addition to the many courses and offers found in Campus Storebrand, where mandatory training in ethics, combating corruption and anti-money laundering has been facilitated. In 2020, we improved our efforts for coordinated customer dialogue in multiple channels through the introduction of a new customer engagement platform. This was also a competence boost, made possible by an interaction between internal forces, 26 Approach We recruit people who want to contribute to a future to look forward to for our customers and the society as a whole. It is important for us to give our courageous employees space and mandate to create unprecedented customer experiences. Employees are not only responsible for their own learning; by 2020 we stressed the importance of our shared responsibility to develop together, in line with the company’s needs. We do this by continuously acquiring new knowledge through collaboration in cross-functional teams and creating good customer experiences together. Transparency and sharing are prerequisites for achieving the best possible interaction and learning across the group. In 2020, we introduced new communication and interaction tools to support this. More than 100 employees with a commitment to digital tools were engaged to ensure smart and efficient use, and this work will continue in 2021. Instead of offering traditional courses, we will adapt the training to specific needs as they emerge. Due to the pandemic, many of our new employees became acquainted with Storebrand and new colleagues primarily through digital channels. Already in April, we developed a new introductory programme for new employees. Through the program, “Smart Start”, new employees were included in a series of digital learning activities and joint meetings during their first month. In this way, they became well acquainted with each other and Storebrand, even though we could not meet physically at work. The managers closest to the new employees were invited to a group chat to enhance their introduction. More than 35 middle managers participated in our digital “Storebrand Leadership leadership development program, Weekly”, issues of trust and transformation management through strength-based development. In 2010, the program was reinforced with a separate learning course in Campus Storebrand. focusing on In September 2020, 23 employees with up to three years of experience, completed the “Storebrand future impact” program. The program was structured around the development of three skills: self-management, relationships and collaboration, and complex problem solving. The participants completed a project based on agile development principles and used tools from the program to solve global challenges in a responsible, ethical and ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. PeopleA culture for learning 26 Engaged, competent and courageous employees 28 Diversity and equality 29 Key performance indicators 314. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendixsustainable way. The aim of the program is to educate future leaders and change agents in Storebrand. We conducted our summer internship program for students, “Sandbox”, partly digital. Students held weekly presentations over video. In order for participants to get to know each other well before they started, we facilitated a digital introduction (over four meetings) from May to June. The Storebrand Academy for future leaders started up in April 2020 with 20 participants. The first two collections were conducted digitally. Results In 2020, we offered 118 courses via the digital learning platform Campus Storebrand. A total of 1 997 people participated in one or more courses under the auspices of Storebrand. Our employees completed a total of 7 702 hours of learning, an average of 3.9 hours per person. However, this figure does not give a complete picture of all digital learning through last year, as many employees take courses on other online platforms, as well as over Teams, which we do not keep statisticson. By the end of 2020, more than 70 per cent of our employees had completed training in the new Personal Data Act. Storebrand was well equipped for the government-imposed home office situation initiated in March. By the end of 2020, more than 84 per cent of the workforce used Teams for digital meetings. The peakon employee survey showed that employee satisfaction with their own work tools increased from 7.8 to 8.1 on a scale of 1 to 10, where 10 is the highest score. Ten students, out of 650 applicants, were accepted to our summer internship program in Norway, while five students participated in our summer program in Sweden. The participants consisted of nine women and six men, and they had backgrounds in economics, entrepreneurship technology, and design. The students were very pleased with the digital introduction they received. Therefore, the plan is to facilitate digital introduction for future participants as well. development, psychology, Three gatherings were held for the 23 talents in Storebrand Future Impact. Two of sessions were conducted digitally due to Covid-19. The project work, which lasted eight weeks and was carried out according to the Agile Business Exploration method, was facilitated and carried out digitally. Despite the changes explained above, the program achieved a satisfaction score of 84 out of 100. The goal of the program is to enable the participants to become effective ambassadors for change. When evaluating goal achievement on this criterion, participants gave an average score for the program of 4.92 out of 6. 27 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. PeopleA culture for learning 26 Engaged, competent and courageous employees 28 Diversity and equality 29 Key performance indicators 314. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixEngaged, competent and courageous employees Why Storebrand’s employees are our main source of innovation, development and growth. Employees who are courageous pathfinders who dare to innovate, and challenge prevailing norms are essential to realizing our goal of becoming a world-class savings group. Goals and ambitions Our ambition is to strengthen employee satisfaction, job satisfaction and engagement through meaningful work, good management, a motivating working environment, development opportunities and confidence in 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. Transparency is a prerequisite for motivation, trust, and security. All employees should experience that they can raise issues with management and others in the Group. Storebrand has its own ethical guidelines. Approach Storebrand relies on the trust of customers, partners, authorities, shareholders, and society at large. The business must be characterised by high ethical standards in order to gain trust. All employees shall act with due diligence, accountability and legality. The organisation uses e-learning for training in ethics, anti- corruption, anti-money laundering and terror financing, and privacy and digital trust. The courses are mandatory to complete each year to ensure responsible business practices in line with our Code of Conduct. The organisation also has an external third party notification channel through an auditing company (https://u.bdo.no/storebrand). We also have well-established procedures for dealing with complaints, harassment, and other unacceptable behavior. Our driving force is to be closest to our customers and help them to achieve financial safety and freedom, so that they have a future to look forward to. This requires us to act as courageous pathfinders. Every year, an employee from across the group is awarded with the Courageous Pathfinder Award. The nomination process in 2020 was based on transparency, sharing and accessibility through digital platforms, leading to a record turnout and number of nominations. The award process clearly showed that our employees can rethink, innovative and challenge practices internally and globally. Employee surveys are conducted regularly (every two weeks or monthly) to measure workplace engagement and satisfaction with work, management, collaboration, sustainability, perceived self-determination, and freedom of opinion. The objectives are strategically anchored and followed up by the group management. Our goal of being a smart and agile organisation is supported by the tool by allowing us to use real-time data for continuous improvement. In 2020, we strengthened the use of insights about the condition of the organisation to ongoing improvements. At Storebrand, we encourage a good work-life balance for all employees. After the outbreak of the pandemic in 2020, we facilitated an increased flexibility in where and when you work. Although what you deliver is more important than where you are, we see great value in employees meeting physically. Going forward, we will look at the design of the workplace of the future to ensure and maintain a good balance between efficiency, interaction, creativity, competence development and engagement. Results In 2020, an average of 87 per cent of employees completed e-learning courses in ethics, anti-corruption, anti-money laundering and terror financing, and privacy and digital trust. All members of the Board and senior management complete an annual course in ethics, anti-corruption, anti-money laundering and terror financing, and privacy and digital trust, as part of the Group’s risk management. More information about this can be found in the chapter: Corporate governance and compliance. In 2020, our data protection and information security rules were distributed digitally through our HCM system. All employees must review the documents once a year and confirm that they have read and understood the content. An average of 86 per cent of employees responded to the employee engagement survey at least once in the last three months throughout 2020. The score for Our driving force in the employee survey was 7,8 out of 10 in 2020. The overall score for engagement increased from 8,0 to 8,3 out of 10. To strengthen adherence to our driving force, we completed leadership training for all group leaders in 2020. More than 70 per cent of all group leaders completed “Our driving force leadership training” during the year. In the latter half of 2020, employee engagement surveys also showed an improved score on all questions, and particularly on issues of organisational adaptation (including core values, sustainability and equality), self-determination, freedom of opinion, relationship with colleagues, support from the leader and significance of work tasks. The results showed room for improvement in terms of physical working environment. One of several initiatives to address this is experimentation around the workplace of the future to strengthen agile collaboration and work processes across the organisation. 28 Bildetekst Female managers in group 39% ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. PeopleA culture for learning 26 Engaged, competent and courageous employees 28 Diversity and equality 29 Key performance indicators 314. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixDiversity and equality Why It is important that Storebrand’s organisation and business reflects our customers and the market in which we operate. Storebrand aims to be a good workplace for everyone, regardless of their background. We strongly believe in building an agile organisation and a culture of trust, inclusion and belonging. It is important that our employees have freedom and mandate to deliver unprecedented customer experiences regardless of their background. External independent sustainability analyses also show that companies that focus on diversity are more innovative and profitable. Goals and ambitions All employees at Storebrand shall be treated equally regardless of age, gender, disability, cultural background, religious belief, or sexual orientation, both in recruitment processes and throughout their employment. We have zero tolerance for harassment and discrimination. Our goal is greater diversity and an equal distribution of men and women in senior positions in all parts of the Group. One strategy for achieving this is by nominating an increased proportion of women for leadership development programmes and in recruitment processes for leadership positions. For the Board of Storebrand ASA, the requirement is that each gender should be represented by at least 40 per cent. We will contribute to the UN Sustainable Development Goal number 5, gender equality, by promoting gender equality in the workplace. At Storebrand, equal work should be paid equally. Approach Storebrand works systematically to ensure diversity and equality through clearly defined processes in recruitment, reorganisations, salary adjustments, leadership training, and other development initiatives. In 2019, we established a diversity committee with participation from across the group. In 2020, the committee worked on various initiatives in diversity, inclusion and belonging. We are actively working to achieve a gender balance through targeted recruitment initiatives and by nominating an equal number of women and men for leadership positions and leadership development programmes. Candidates and employees should experience a transparent and inclusive recruitment process. Storebrand has participated in the tripartite programmemet Inclusive Working Life (IA) since 2002. The program is based on the assumption that work promotes good health and well-being, and that early, active intervention can prevent absence. The Group’s managers have established procedures for inclusive follow-up of employees in the event of illness. We aim to offer the best candidate journey, so that Storebrand is considered an attractive workplace. 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, an equal distribution of men and women in our management development programmes, as well as recruitment processes for management positions Throughout 2020, we improved our recruitment and interview process to make it as digital and gender neutral as possible at every stage. Women and men shall be represented in the interview team, and there must be at least one female and one male final candidate when recruiting for leadership positions. We offer permanent employees paid parental leave beyond the statutory requirements of Norway and Sweden and pay 100 per cent salary during parental leave. 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 discrimina- tion and our active promotion of good health and well-being at work support these objectives. Results In the period from March 2020, all candidates were invited to digital first-time interviews. We employed over 200 employees who all signed their contracts digitally. Our sustainability work appeals strongly to young professionals seeking work. Storebrand was ranked 13th out of the top 50 companies onthe attractiveness ofthe Young Professional Attraction 29 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. PeopleA culture for learning 26 Engaged, competent and courageous employees 28 Diversity and equality 29 Key performance indicators 314. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixThe group’s salary levels were reviewed in cooperation with the union representatives in connection with the wage adjustment process in 2020. The review showed slightly lower average earnings among female employees than male employees. The average age of an employee in the Storebrand Group was 43 years at the end of the year. The average tenure was eleven years in Norway and ten years in Sweden. As of December 31, 2020, the Storebrand Group had a total of 1,824 employees. We have a good gender distribution among permanent employees in both Norway and Sweden, as can be seen in the table below. Sickness absence has been low and stable for several years. In 2020, the absence rate was 2.3 per cent in our Norwegian operations and 1.8 per cent in our Swedish operations. No physical injuries were reported in the Storebrand Group in 2020. Gender distribution Norway male 718 female 576 Sweden male 213 female 235 Index (YPAI) in 2020, and Storebrand was number one in banking and finance on the same index. The graduate program “Storebrand Future Impact” received more than 200 external applications for five positions. Among the individuals that were hired, there was a predominance of women. Ten women from different parts of the group were included in the talent and leadership development program for women, “FiftyFifty” throughout the year. The program was initiated by Storebrand in cooperation with AFF and Flensby & Partners as part of our 250th anniversary in 2017. The programme is now led in its entirety by AFF. Together with 40 women from other companies, the participants work to develop initiatives that promote equality for themselves, their business and for society as a whole. At the end of the year, the share of women among storebrand managers was 39 per cent. Three out of ten members (30 per cent) of the group management were women. Among the managers who reported directly to the group executive management, 38 per cent were women. 40 per cent of the Board members of Storebrand ASA were women. Among the participants in the “Storebrand Academy” and at “Storebrand Leadership Weekly”, 40 per cent were women and 60 per cent men. In the Summer internship program, “Sandbox”, and in the graduate program “Storebrand Future Impact”, 60 per cent of the participants were female, and 40 per cent were male. “All Storebrand employees shall be treated equally, regardless of age, gender, disability, cultural background, religious beliefs or sexual orientation” 30 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. PeopleA culture for learning 26 Engaged, competent and courageous employees 28 Diversity and equality 29 Key performance indicators 314. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixKey performance indicators Result 2018 Goal 2019 Result 2019 Goal 2020 Goal 2025 243/26 New indicator New indicator E-Learning courses in ethics/anti-corruption 106/136 (14,6%/1,6%) 3.5% 3.5% 38% 3.5% 3.5% 50% 50 % 50% 50% 50% 2.7% 3.3% 39% 25 (44%) 32 (56%) 22 (46%) 26 (54%) 33.3 % 55.6 % 711,653 880,397 631,393 776,513 TBD 3.5% 3.5% 50% 50% 50% 50% 50% 50% TBD 3.5% 3.5% 50% 50% 50% 50% 50% 50% 107% 100% 100% Result 2019 98.8% 100% 100% 1,667 4.1% 3.9% 1,667 220 78 116 115 102 526 408 235 284 Absence due to illness (Norway) Absence due to illness (Sweden) Gender-balanced management Number (share) of women at executive levels 1–3 level 3 Number (share) of men at executive levels 1–3 Number (share) of women at executive Number (share) of men at executive level 3 Number of women in group management Number of women on the Board of Directors Average salary in Norway 2019 Women Average salary in Norway 2019 Men Average salary in Sweden 2019 Women Average salary in Sweden 2019 Men Senior management, women's share of men’s salary per position category (Hay Grade 21-24) I) All employees up to intermediate managers, women’s share of salary per position category Our employees (Hay Grade 13-20) II) Number of employees (Norway + Sweden) Turnover among women in the Group Turnover among men in the Group Number of employees (Norway + Sweden) Number recruited to the Group Number of women recruited Number of men recruited Male employees under 30 Female employees under 30 Male employees 30–50 Female employees 30–50 Male employees over 50 Women employees over 50 I) Based on Hay Grade 21-24. Hay Grade above 24 is not included, as only men are represented here (applies for 3 positions only). For Hay Grade definition, see page 212. II) For Hay Grade definition, see page 212. Key performance indicators For detailed KPI definitions, see page 225. All KPIs in this table include Skagen, Cubera and Værdalsbruket (100% of the groups employees). Key Performance Indicators Women on Board of Directors Women in group executive management Percentage of women at management level 3 Gender balance all managers, proportion of women Extended top management, women’s share of men’s salary per position category (Hay Grade 21-23) Employees up to middle managers, women’s share of men’s salary per position category (Hay Grade 13-20) Result 2018 5 of 9 3 of 9 46% 39% 110% 99% Result 2019 4 of 9 3 of 10 41% 39% 100% 99% Result 2020 4 of 10 3 of 10 38% 39% Goal 2021 40% N/A 50% 50% Goal 2025 40% N/A 50% 50% 104% 100% 100% 97% 100% 100% 31 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. PeopleA culture for learning 26 Engaged, competent and courageous employees 28 Diversity and equality 29 Key performance indicators 314. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix 4 Keeping our house in order 33 Corporate governance and compliance: Privacy and combating financial crime 37 Responsible resource use 38 Sustainable practices throughout our value chain 40 Social responsibility 41 Key performance indicators 32 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance Privacy and combating financial crime 33Responsible resource use 37Sustainable practices throughout our value chain 38Social responsibility 40Key performance indicators 415. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixCorporate governance and compliance: Privacy and combating financial crime Ethical guidelines and ethical practices at all levels of the organisation are prerequisites for gaining trust from customers, authorities, sharehold- ers, and society in general. The trust stems from responsible business practices and employees with high levels of integrity. Breaches to Storebrands code of conduct Category Bribery/corruption Internal misconduct Other violations of ethical rules Discrimination Number 2020 Comment Uncovered two conditions of misconduct at external partner 0 2 0 0 33 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance Privacy and combating financial crime 33Responsible resource use 37Sustainable practices throughout our value chain 38Social responsibility 40Key performance indicators 415. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixPrivacy and digital trust Why We live in a digital world with an increasing risk that personal data may go astray, be stolen or be shared without our consent. Our customers must feel certain that their personal data is in safe hands and handled in a responsible manner. Therefore, we are reliant on proper security measures, established procedures and processes. Moreover, our employees receive training to ensure they have expertise in handling of personal information in a prudent manner. New technology combined with smart use of information and personal data enables us to better understand our customers and their needs. As long as our customers continue to have high levels of trust, we can use this technology to develop better, more relevant and more customer-oriented products and services. Goals and ambitions Our ambition is to engage our customers and build long-term relationships by delivering first-class customer experience across all channels. This requires us to safeguard our customers’ rights in accordance with the Personal Data Act. Approach Our Privacy Policy contains principles of digital trust, such as lawful and transparent processing, purpose limitation, data subject’s rights, and requirements for data protection by design. We work systematically with information security. Through an internal control system, we set requirements for, monitor, and continuously improve information security in our own operations, customer solutions and in cooperation with our partners. If a personal data breach occurs, and the risk to our customers is considered medium-high or high, customers will be contacted directly by phone or email. In such cases, we inform customers about what has happened, what actions we have taken, and, if necessary, what measures the customer should take to protect their personal data. The CEO of each of the legal entities in the Group is responsible for the processing of personal data, including ensuring that internal control procedures are implemented and reviewed regularly. All managers are responsible for ensuring that employees with access to personal data have the necessary expertise and are qualified to protect our customers’ privacy, as well as to follow our procedures and information security policies. Training in information security and privacy is mandatory for all employees and is carried out by e-learning and in thematic groups for each department. The protection of personal data and information security is well integrated into our internal control systems and risk management processes. We continuously assess the ongoing privacy risks that our customers are exposed to. We update our Privacy Policy when changes are made to the use of personal data, and our online customer portal gives the individual customer a better overview of his/her privacy settings.12) In addition, on our website we provide advice and recommendations on how our customers can reduce their risk of online fraud. Results In 2020, a new e-learning course on privacy protection was established. The course is mandatory for all employees. We also conduct specific training for individual departments. In 2020, 41 incidents related to the processing of personal data were reported. We reported six of these as discrepancies (documented substantiated complaints) to the Data Protection Authority, in accordance with the EU General Data Protection Regulation (GDPR). All registered cases from 2020 have been handled properly and closed. The Norwegian Data Protection Authority did not issue any fines, warnings, or orders for improvements to Storebrand due to breaches of the GDPR in 2020. For the seventh year in a row we conducted the Security Awareness Month in October, with several activities and digital presentations that achieved a high turnout from our employees. 40) https://u.bdo.no/storebrand 12) See https://www.storebrand.no/en/security-and-privacy for more information about digital security and privacy. 34 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance Privacy and combating financial crime 33Responsible resource use 37Sustainable practices throughout our value chain 38Social responsibility 40Key performance indicators 415. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix STOREBRAND ANNUAL REPORT 2019 Countering corruption Why Corruption is one of the major causes of poverty in many parts of the world, and work targeting this form of crime is highly relevant in Scandinavia as well. Corruption is prohibited in all countries where Storebrand operates. Corruption is a criminal offence both for the person on the giving end, and on the receiving end. Corporations can be penalised for not taken sufficient measures to avoid corruption. Corruption can result in reduced trust in Storebrand as a company, and to the financial and insurance industry in general. Corruption is detrimental to healthy competition in all industries. Goals and ambitions At Storebrand, we have a zero tolerance for corruption and other economic misconduct. We work methodically to identify areas with increased risk and have taken measures to prevent exploitation. Furthermore, we work systematically with our suppliers and partners. All employees and board members shall complete the Group’s anti- corruption program. Exceptions are made for employees on leave or long-term sick leave. The goal is that 100 per cent of our employees will complete the program each year. Consultants who have been assigned for more than six months shall also carry out the program but are not included in the results for this year’s measurement. Approach Our expectations of employees, temporary staff and consultants are stipulated in our ethical guidelines, approved by the Board of Storebrand ASA and the Boards of all subsidiaries. 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 familiarizing 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 mandatory training as part of their onboarding process. 13) Figures do not include Cubera Private Equity, as this company has its own anti-corruption Program. 35 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. We expect all employees and contractors to act in manner that builds trust for both the individual concerned and for the Storebrand Group. As a general rule, no one shall receive any benefits, including services, gifts and invitations, from Storebrand’s business associates. In situations where gifts can be received, our guidelines specify thresholds in the relevant country’s currency. Gifts given on behalf of Storebrand are subject to the same threshold. No one must give or receive gifts with 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. Storebrand has established both an internal and external notification channel. Employees who suspect corruption or other financial misconduct shall report this in one of these channels. When reported externally, the reporter (whistle blower) can choose to remain anonymous. Results 90 per cent of the group’s employees completed the mandatory course on corruption in 2020.13) No cases related to corruption were uncovered or reported in 2020. Two cases of internal misconduct were uncovered with an external partner. Both matters were handled as personnel matters with dismissal as a result. ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance Privacy and combating financial crime 33Responsible resource use 37Sustainable practices throughout our value chain 38Social responsibility 40Key performance indicators 415. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixAnti-money laundering and terror financing Why We are a key player in the Nordic financial market. Therefore, we have a distinct responsibility to avoid being used in connection with the financing of terrorism, money laundering or other forms of financial crime. Our stakeholders expect us to handle with our responsibilities in an adequate manner. Routines and management are important for maintaining our reputation. Goals and ambitions Storebrand shall act consistently and in compliance with relevant legislation related to money laundering, terror financing and financial crime in general. We work systematically to ensure that our companies are not used for money laundering, terror financing or other forms of financial crime. All employees must carry out compulsory training each year. Approach We have established policies to avoid money laundering (AML) and terror financing. The guidelines have been reviewed and approved by the Board of Storebrand ASA and are based on our code of conduct. Furthermore, we have implemented measures throughout the Group to avoid money laundering, financial crime, and terror financing. Each company in the Group conducts an annual assessment of risks related to the possibility of money laundering, financial crime, and terror financing. We have established clear frameworks and procedures for managing such risks. These include procedures related to the establishment of new customer relationships as well as ongoing reviews of customers who are believed to pose a risk. We conduct internal audits and regular spot-checks to identify and report suspicious transactions or behavior. Any activity that we suspect is in breach of the Norwegian Measures 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 understanding 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 AML, financial crime and terror financing. Measures to prevent money laundering, financial crime and terror financing are described on the Group intranet, along with information on what we expect from our employees in terms of responsible business conduct. The information applies to all companies in the Group. Storebrand is a member of Finance Norway’s economic crime committee. The committee cooperates closely with the authorities in Norway and provides guidance to all member companies. Results In 2020, 46 cases related to suspected financial crime were reported to the police’s Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime, while 29 cases related to suspected fraud were reported directly to the police. The severity of the cases varied, from suspicion of money laundering, terror financing and tax evasion to falsifying documents and attempted insurance fraud. In 2020, 92 per cent of our employees completed the mandatory training course in anti-money laundering, financial crime and terror financing.14) 16.4 We are committed to combating financial crime. 16.5 We are committed to combating corruption and bribery in all their forms. 16.6 We are committed to developing effective, accountable and transparent companies. 14) Figures do not include Cubera Private Equity, as this company has its own anti-corruption Program. 36 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance Privacy and combating financial crime 33Responsible resource use 37Sustainable practices throughout our value chain 38Social responsibility 40Key performance indicators 415. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix Responsible resource use Why At Storebrand, sustainability is an integral part of our business strategy. We express clear expectations to the companies we invest in, our suppliers and partners. At the same time, we want to act as an example to follow. That’s why we work to ensure that our own operations are as sustainable as possible. Approach As early as 2008, Storebrand became Norway’s first “climate neutral” financial group, through reducing emissions and purchasing carbon quotas to compensate for emissions related to our own operations. In 2020 we took this work further and decided on a new climate policy that applies to the whole group. We will impose strict requirements on ourselves and our suppliers and set specific targets to minimise our carbon footprint. We use the precautionary principle when it comes to environmental management. Since 2009, Storebrand has been eco-lighthouse certified, and we report publicly on our environmental impact every year. A dedicated department oversees energy and water consumption, waste production and levels of waste sorting in the office premises to ensure that we reach the lowest possible footprint. We buy electricity from renewable energy sources through purchasing guarantees of origin. We encourage employees to use video conferencing for meeting activities to reduce the scope of businesstravel. More than half of all our meeting rooms are equipped with video conferencing equipment. Nevertheless, corporate air travel increased in 2019. Therefore, we introduced an internal carbon tax on flights of NOK 1 000 per tonne of CO2 in 2020. The cost is charged to the employee’s department and is followed up by management in a newly established system, which ensures increased insight into our travel habits. The funds from the carbon tax are used to buy climate quotas and for other climate-related projects. Due to Covid-19, the number of flights carried out by employees at Storebrand were reduced to a minimum in 2020. However,we updated our policies to encourage employees to assess the need for travel, and to use public transport in the event of necessary travel. In addition, we expanded our electric car and electric bike fleet. In 2020, employees were given the opportunity to buy private electric bikes at a discounted price with an interest-free loan from Storebrand. In order to reduce unnecessary waste, we have decided to remove all disposable cups from our offices. However, the measure was postponed due to Covid-19. The decision means that all employees must bring their own cup. When using your own cup, you also receive a discount in the coffee shop at head office. In addition, we introduced environmental labelling of the food in the cafeteria in order to raise awareness among employees on emissions associated with different types of foods. Emissions that we are incapable of reducing from our own operations are compensated by purchasing emission quotas. Goals and ambitions We are committed to setting science-based targets for our emissions, in line with the Paris Agreement. The plan is to set science-based targets in line with the 1.5-degree target for the entire business, including our own operations, by 2021. For our own operations, we aim to reduce greenhouse gas emissions by 7.615) per cent per annum with 2019 as a baseline year, in line with the 1.5-degree target and the findings of the UN Emissions Gap Report 2019.16) We are continuously working to become more energy efficient, reduce waste production, increase the proportion of waste sorted, and reduce our carbon footprint in connection with flights and commuting. Results Due to Covid-19, our internal emissions and the number of business trips were significantly reduced in 2020. Internal carbon pricing and new travel guidelines were introduced. Carbon emissions from our own operations were reduced significantly in 2020, compared to previous years. However, the reductions are mainly related to restrictions stemming from Covid- 19 restrictions rather than our environmental efforts. 50 employees used the offer to buy electric bikes for personal use at a discounted rate, with a interest-free loan from Storebrand. 12.5 We aim to significantly reduce the amount of waste through prevention, reduction, recycling and reuse. 12.6 We encourage companies to imple- ment sustainability in their practices. 13.1 We strengthen our ability to withstand and adapt to climate-related hazards and natural disasters in our business and in our investments. 13.2 We incorporate action on climate change into our policies, strategies and plans. 15) So that the goal of limiting average global warming to 1.5 °C by 2050 reached, in accordance with the Paris Agreement. 16) https://wedocs.unep.org/bitstream/handle/20.500.11822/30797/EGR2019.pdf?sequence=1&isAllowed=y 37 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance Privacy and combating financial crime 33Responsible resource use 37Sustainable practices throughout our value chain 38Social responsibility 40Key performance indicators 415. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixSustainable practices throughout our value chain Why Procurement is an area where we can have a major impact by influencing our suppliers towards more sustainable practices. In order to focus on what we are good at, and make our business as efficient as possible, we have increased the use of outsourcing. This requires proper procedures to monitor working conditions, safeguarding human rights, and managing environmental issues in the value chain. Goals and ambitions A key objective is to avoid the use of suppliers where production processes or products violate international agreements, national legislation or internal guidelines. Through our own activities 8.7 Through our procurement practices, we strive to contribute to effective efforts to end modern slavery and eliminate child labour in our value chain. 8.8 We aim to protect workers’ rights and promote a safe and secure working envi- ronment for all employees, contractors and suppliers. 12.5 We aim to significantly reduce the amount of waste through prevention, reduction, recycling and reuse in the supply chain. 12.6 We encourage companies to intro- duce sustainable working methods and integrate information about sustainabil- ity into their reporting routines. 12.7 We promote sustainable procure- ment practices. 13.2 We incorporate action on climate change into our policies, strategies and plans. and procurement activities, we aim to contribute to sustainable development, and to ensure that human rights and workers’ rights are not infringed. Our ambition for 2020 was to stabilise the share of environmentally certified purchasing volume of at least 55 percent, following our overachievement of this target in 2019. The target for 202517) was increased to a 60 per cent share of environmentally certified purchasing volume, to stimulate further improvement in the environmental performance of the supply chain. Even though we achieved a higher purchasing volume from environmentally certified suppliers in 2020, the dynamics of our supply chain and market conditions still make the 60 per cent target challenging. Therefore, our aim is to work on maintaining a share of purchases from environmentally certified suppliers of over 60%. In 2020, we concretised our work on sustainability in the supply chain further, and thus also our targets. We have defined three specific climate targets for suppliers and partners: • By 2025, the goal is that all suppliers have set short- and medium- term verifiable emission reduction targets • By 2025, the goal is that all suppliers will be climate neutral 18) • By 2030, the goal is that the entire value chain for our deliveries will be climate neutral Approach We set clear requirements to our suppliers and business partners, by Storebrand’s Standard Annex for Sustainability. This is an annex to all tender requests and supplier contracts. In addition 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. Storebrand shall not purchase goods or services from companies listed on storebrand Kapitalforvaltning’s exclusion list.19), Our purchasing policy is based on the Group’s governing documents and related procedures, which are revised annually. 20) In 2020, we have developed a new framework for follow-up and evaluation of suppliers. Our approach focuses on collaboration for continuous improvement when it comes to sustainability, defined by the questions we ask suppliers and partners. Our approach to sustainable procurement follows the same three-folded strategy as our work with active ownership towards companies we are invested in. 17) Eco-Lighthouse, EMAS, ISO14001 and Swan Mark 18) We work with our suppliers to stimulate emission reductions. Remaining emissions can be compensated through the purchase of climate quotas. 19)https://www.storebrand.no/en/asset-management/sustainable-investments/exclusions/the-storebrand-standard/_/attachment/inline/c00185a1-c1b0-4b0c-a534-29d554b952d1:dba8691dda63ab2554b6870c0124632d- b9a72482/45359A%20Q3%20Liste%20over%20Storebrands%20utelukkelser_ENG.pdf 20) Among the governing documents are “Guidelines for outsourced activities”, “Guidelines for the award of powers of attorney”, “Rules for ethics”, “Guidelines for combating corruption”, “Guidelines for anti-money laundering, ter- rorist financing and financial crime measures”, “Guidelines for handling conflicts of interest”, “Guidelines for events”, “Information Security Management Document”, and “Governing Document for the Processing of Personal Data”. 38 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in OrderCorporate governance and compliance Privacy and combating financial crime 33Responsible resource use 37Sustainable practices throughout our value chain 38Social responsibility 40Key performance indicators 415.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixKAPITTEL 6 - KEEPING OUR HOUSE IN ORDER We select - Sustainability is weighted at least at least 20% in our tender processes. Through the supplier mapping and evaluation, we give an advantage to suppliers that perform well on sustainability. We work actively to influence - We use our position as a major buyer to influence suppliers and business partners for improvement. We do this both when we consider entering into new agreements and evaluating existing ones. We exclude - Storebrand shall not choose vendors, products or services that are in violation of international agreements, national regulations or internal policies. This is described in our sourcing principles. To get an overview of how good our suppliers are when it comes to sustainability, we are now mapping all suppliers with annual sales volume to Storebrand of more than 1 million NOK, through a questionnaire divided into the following main areas: • How sustainability is integrated into suppliers’ strategies • Environmental performance over time and targets • Diversity performance over time and targets • Environmental, quality and management systems To measure progress, annual reporting on sustainability will be effective from 2020. An extended set of questions is also used to evaluate suppliers in purchasing processes. Our most important and largest purchases include contracting IT and business processes, healthcare, damage settlement in insurance and management of direct real estate investments. The areas with the greatest risk and impact on sustainability are, in our judgment, outsourcing (including offshoring), damage settlement (car and property), and property management in general. Results In 2020, contracts worth more than 1 million NOK totaled around 3,2 billion NOK. This accounts for more than 87 per cent of our total purchasing volume and includes the management and development of direct real estate investments. Of this volume, 62 per cent are with suppliers that are environmentally certified in accordance with our purchasing policy. This volume is divided into 290 suppliers, of which 62 (21 percent) are certified according to a recognised environmental management standard. Our first survey of suppliers with over NOK 1 million in turnover was answered by 45 suppliers. Our total purchasing volume from these suppliers was 625 million NOK in 2020, almost 20 per cent of our total purchase volume for the year. We will continue to work on mapping our suppliers’ sustainability work and aim to provide further information on this in the annual report for 2021. 39 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance Privacy and combating financial crime 33Responsible resource use 37Sustainable practices throughout our value chain 38Social responsibility 40Key performance indicators 415. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix Results 353 Young entrepreneurship start-ups competed the sustainability award category. In 2020, CleanAir UB won the awardfor the developmentof DustBuster, a product that allows large vehicles to collect particulate matter from the roads where they operate. The youth company had thought about sustainability throughout the entire value chain. in In 2020, NOK 500 000 was awarded to 17 “We’re rooting for” projects around Norway, and 250 000 SEK were awarded to similar projects in Sweden. All the projects somehow contribute to a future to look forward to. Social responsibility Why As a leading financial institution in Norway and Sweden, we have an important social responsibility. The sustainability work means that we actively engage with the society in which we operate, beyond delivering financial services. Goals and ambitions We will take social responsibility by providing financial support and knowledge in the area of sustainability. We also want to enable more employees to spend time on activities related to corporate social responsibility. Approach We prioritise activities in three areas in terms of corporate social responsibility: Collaboration, financial support and voluntary efforts among employees. These activities will promote and raise awareness of sustainability and demonstrate the connection between sustainability and profitability. Young Entrepreneurship (UE) is a nonprofit organisation that encourages young students to establish and run their own businesses. We have helped create a sustainability award to encourage students to learn more about how to run a sustainable business. In 2020, we continued the popular mentoring scheme where young students can discuss issues related to the establishment of their companies with employees in Storebrand. The Catalysts mentoring program: For the fourth year in a row, ten employees were given the opportunity to mentor a student from a minority background. Through monthly meetings at Storebrand, students gained insight into Norwegian working life, help to develop themselves, and advice on school and working life. The program is a collaboration between Storebrand and the nonprofit Catalysts. The aim is to prevent dropouts in upper secondary school. We’re rooting for: Volunteering is an important part of Norwegian culture, and there is a large amount of work to be done annually, including sports and leisure activities. Through our “We’re rooting for” competition, we provide financial support for various socially useful projects at home and abroad. 40 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance Privacy and combating financial crime 33Responsible resource use 37Sustainable practices throughout our value chain 38Social responsibility 40Key performance indicators 415. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixKey performance indicators For detailed KPI definitions, see page 225. The environmental data in this table includes the head offices in Norway and Sweden as well as Skagen’s head office, representing the office premises of 95 per cent of the group’s employees. Key performance indicators Result 2017 Result 2018 Result 2019 Result 2020 Goal 2020 Goal 2025 Environmentally certified purchases (share of the total expenditure that went to suppliers with certified environmental management system) 21) Share of purchasing volume that has answered survey on sustainability of suppliers 22) Greenhouse gas emissions from own operation (total) scope 1-3: tonnes of 38 % 46 % 57 % 62% 60% 60 % New New New 17% Increse 100% CO2 / tonnes CO2 per FTE 1,484 / 0.9 1,444 / 0.9 1,519 / 0.92 477 / 0.28 0.71 23) 0.6232) Scope 1-emission: tonnes CO2 / tonnes CO2 per FTE 1.9 / 0 1.4 / 0 1.1 / 0 1.2 / 0 Scope 2-emission: tonnes CO2 / tonnes CO2 per FTE 320 / 0.19 201 / 0.13 179 / 0.11 164 / 0.09 Scope 3-emission: tonnes CO2 / tonnes CO2 per FTE 1,162 / 0.71 1,241 / 0.77 1,339 / 0.81 313 / 0.18 CO2e-emissions per FTE due to air travel: Scope 3,tonnes25) CDP rating DJSI score/ percentile global E-learning conducted, ethics: total / share of man-years26) E-learning carried out, anti- corruption work: 0.64 B 69/74 New 0.69 A - 63/74 New 0.74 A - 75/81 89 % - - - - A - - - - A 0.15 A - 81/93 Top 10% 24) Top 10% 24 91% 100 % 100 % total / share of man-years 26) New New 87 % 90% 100 % 100 % E-learning completed, combating money laundering and financial crime: total / share of man-years26) E-learning completed, privacy: total/share of man-years 26) Number of complaints processed by the Financial Appeals Board 27) Number of breaches of code of conduct/Code of Conduct Number of information security incidents Number of privacy events New New New New 3 N/A New New 135 New 0 60 89 % New 192 9 30 48 92% 85% 218 2 20 41 100 % 100 % 100% 100% N/A N/A N/A N/A N/A N/A N/A N/A 21) Even though we achieved a higher purchasing volume from environmentally certified suppliers in 2020, the dynamics of our supply chain and market conditions still make the 60 per cent target challenging. Therefore, our aim is to work on maintaining a share of purchases from environmentally certified suppliers of over 60%. 22) Applies to volume of our purchases in NOK to suppliers with over NOK 1 million in sales to Storebrand 23) We have set a target to reduce our emissions by 7,6% per year by 2025 with a 2019 baseline year. Due to the Covid-19 pandemic, our emissions in 2020 were abnormally low. We will consider adjusting our long-term targets when the pandemic stabilises and working-life becomes more normalised. 24) A top 10% rank entails that Storebrand will be included in the Dow Jones Sustainability Wolrd Index. Score and percentile as expressed in the indicator can therefore not be directly compared with the target expressed here. 25) We have stopped reporting the average number of flights per FTE, as this is not a relevant indicator. The impact of air travel on the environment depends on how far you travel. This indicator is therefore replaced by kg CO2equivalents per FTE related to flights will be replaced from 2019. Emissions from flights have been recalculated for 2017-2019 as a result of updates to the emission factors in our travel agencies’ systems. 26) From 2019, we started reporting for each course separately. Historical data for 2017 and 2018 is therefore not available. Data for 2019 shows the share of all permanent employees throughout the year. The deviation from the 100% target is mainly due to turnover and new hires. 27) The figures apply to our Norwegian enterprises, as these are complaints dealt with in the Financial Complaints Commission. SPP not included here. 41 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance Privacy and combating financial crime 33Responsible resource use 37Sustainable practices throughout our value chain 38Social responsibility 40Key performance indicators 415. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix 5 Directors’ report 43 Strategy 2021-23 44 Strategic highlights 47 Group Results 52 Official Financial Statements of Storebrand ASA 53 Outlook 57 A driving force for sustainable investments 66 Risk 68 Climate risks and opportunities 72 Working environment and HSE 73 Progress on our most material sustainability KPIs 42 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixStrategy 2021-23: Leading the Way in Sustainable Value Creation Future Storebrand Growth focus in capital-light business areas in front book Strategic differentiators Capital Management of capital and back book balance sheet A B C Leading Provider Occupational Pensions Norway & Sweden Nordic Powerhouse in Asset Management Growing Challenger in Norwegian Retail Market D E Leadership in Sustainability Digital Frontrunner I Growing ordinary dividends form earnings II NOK 10bn capital release from back book by 2030 Storebrand aims to help customers achieve financial security and freedom by offering long-term savings and insurance solutions. Our goal is to deliver sustainable solutions tailored to the customer’s individual needs, so that customers can receive the best possible pension in a more sustainable world. This is how we create value for customers, shareholders, and society. Storebrand follows a two-fold strategy that provides an attractive combination of self-funded growth within what we call the “Future Storebrand”, and capital release from the guaranteed pensions business which is in run-off. Storebrand aims to (A) be the leading provider of occupational pensions in both Norway and Sweden (B) continue a strategy of building a Nordic powerhouse in asset management (C) ensure rapid growth as a challenger in the Norwegian retail market for financial services. The interaction between our business areas provides synergies in the form of capital, economies of scale, and value creation based on customer insight. As announced on the capital markets day in December 2020, our ambition is to deliver a group profit (before amortisation and tax) of approximately NOK 4 billion in 2023. We believe the only way to secure a better future is to take part in creating it. We seek to actively use our position to lead the way in sustainable value creation and to differentiate ourselves from competitors. Storebrand offers financial products, services, and customer experiences. Based on an increasingly advanced technology platform, we offer a fully digital business and distribution model. Our position as a digital frontrunner will be a critical success factor in strengthening our competitiveness in the years to come. We aim to both grow the ordinary dividend from our earnings and to ensure capital-efficient management of older products with interest rate guarantees. Our goal is to release an estimated NOK 10 billion of capital by 2030. 43 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixKAPITTEL 8 - ÅRSBERETNING Strategic highlights 2020 Despite the outbreak of the Covid-19 pandemic, Storebrand has been close to fully operational in 2020. Thanks to well defined contingency plans and adaptable staff, we executed on our strategic initiatives according to plan, despite it being an extraordinary year. We quickly adapted to new ways of working with digital processes and home offices for most of the year. Our first priority was to secure Storebrand’s critical operations and to support our customers when they needed our services most. During 2020, we helped a record number of customers with their travel insurance claims, refinanced mortgages, and adjusted repayment schedules. We also provided extensive business and investment advice for companies and individuals. We entered the year with a solid solvency and buffer capital position. This contributed to our resilience towards the market shocks that occurred as the global crisis unfolded. Despite market volatility and declining interest rates, financial risks were therefore mitigated through measures within our normal risk management framework. Strong growth in our core business throughout the year contributed to an increase in the group’s operating profit. However, turbulent financial markets in the first quarter led to significant unrealised investment losses in the beginning of the year. Throughout the remaining quarters, financial markets rebounded and the group ended the year with a positive financial result. The main impact of Covid-19 on Storebrand was the increased risk of lower employment and a subsequent rise in disability in the society. Reserves for insurance products with disability coverage were therefore strengthened in the first quarter, and these were still assessed to be adequate by the end of the year. References to Covid-19 and related information in notes Note Note 2: Key accounting estimates and discretionary assessments Note 2: Key accounting estimates and discretionary assessments Note 7: Insurance risk Note 2: Key accounting estimates and discretionary assessments Note 8: Financial market risk Theme Covid-19 and the effects on key accounting estimates and discretionary assessments. Description of effect on insurance obligations. Discusses insurance risks and shows sensitivities associated with insurance incidents. Description of effect on valuation of financial instruments. Discusses market risk and effects on the profit to shareholders due to deviations from expectations in financial market prices or volatility. Also shows stress test incl. development in the most significant financial instruments for Storebrand’s investments. Note 12: Describes the processes associated with valuation and sensitivities for financial Valuation of financial instruments and properties instruments. Note 2: Key accounting estimates and discretionary assessments Description of the effect on valuation of investment property. Note 8: Financial market risk Discusses market risk and effects on profit to shareholders due to deviations from expectations in valuation of investment property or volatility. Also shows stress test incl. development in value of investment property for Storebrand’s investments. Note 12: Describes the processes associated with valuation and sensitivities for investment Valuation of financial instruments and properties property. Note 2: Key accounting estimates and discretionary assessments Description of effect on estimated expected impairment losses. Note 10: Credit risk Discusses the loan portfolio and shows key figures for this. 44 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixGrowth in capital-light business areas in the front book The core of Storebrand’s strategy is to gather and manage savings from pension and institutional customers in Norway and Sweden, as well as retail customers in Norway. By the end of 2020, we managed NOK 962 billion of assets. This is our main revenue driver. In addition, we will build on existing savings and pension relationships by offering related products and solutions within insurance and banking in Norway. Over the past eight years, Storebrand has succeeded in transforming the business from capital-intensive products with guaranteed returns, to fast-growing and self-funding capital- light products. Total assets under management have more than doubled since 2012. At the end of the year, 71 per cent of the assets under management were related to capital-light business in the front book. Leading provider of occupational pensions in Norway and Sweden The growth within Storebrand’s core product, defined contribution pensions, continued in 2020. Storebrand maintained its leading market position in Norway with a market share of 29 per cent28) . The average policyholder is about 50 years old, which means that premium payments received exceed pension payments made. Corporate customers in Norway also paid an excess of NOK 2 billion in insurance premiums in 2020. In Sweden, where the defined contribution pension market is more mature, SPP increased its market share to 18 per cent from 16 per cent last year, becoming the second largest provider within non-unionised pensions 29). New digital sales tools and a successful strategy to encourage customers to transfer previously earned pension assets to SPP were main drivers for the growth. To further strengthen our market position and growth, Storebrand re-entered the Norwegian market for public occupational pensions in 2020. In the first year, we won contracts worth NOK 9 billion in total assets – funds that will be transferred to Storebrand in 2021. Recent pension reforms have effectively re-opened the market for competition after having been dominated by a municipality-owned monopolist over the last years. Storebrand has a strong value proposition and is the only challenger in the market. Storebrand is also the only provider with a complete product offering within occupational pensions. The market is estimated at more than NOK 450 billion in total assets and NOK 35 billion in annual premiums, thus a larger market than the Norwegian private market. Nordic Powerhouse in Asset Management In 2020, Storebrand’s total assets under management increased to NOK 962 billion, and 43 per cent are now external customers’ funds. We affirmed our position as Norway’s largest and the Nordic’s fifth largest private asset manager. A growing share of external customers drive earnings growth, and the ability to co-invest with our internal pension business provides us with a competitive advantage. Storebrand Asset Management is a world leader in sustainable investments and currently manages NOK 379 billion of fossil-free investments and NOK 93 billion in what we call “solution companies”. These are companies that are particularly well positioned to contribute to realising the UN Sustainable Development Goals. During 2020, Storebrand Asset management took a leading role in efforts to reduce deforestation and natural destruction. We also launched a new climate strategy for investments with innovative anti-lobbying criteria, and we committed to a new climate and infrastructure fund in cooperation with Danish fund managers. Storebrand has developed into a Nordic multi-boutique manager with several brands. SPP Fonder is currently the fifth largest mutual fund company in Sweden. SKAGEN, which was acquired in 2017, has provided Storebrand Asset Management with a common modern technological platform. SKAGEN has also been a catalyst for international expansion and strengthened Storebrand’s position in the retail market for mutual fund savings. With the 2019 acquisition of Cubera, we have also strengthened our capabilities within alternative asset classes, in particular private equity. During 2020, Cubera successfully raised NOK 9 billion in capital. Growing challenger in the Norwegian retail market Through our corporate pensions and asset management offering, we leverage both systems and solutions to deliver savings and insurance products in the retail market. Together with our retail bank, Storebrand offers a digital one-stop-shop with integrated value propositions and cross-selling opportunities. With 250 years of history, the Storebrand brand name stands strong in society. In Norway, 1.3 million people are customers of Storebrand through their pension savings. They are our main target group for additional financial services that enable them to achieve financial freedom and security. Growing our distribution capacity in the retail market was a main priority in 2020. During the year, written insurance premiums increased by 18 per cent. We entered new distribution partnerships with the Norwegian Homeowners Association and Coop, while also exploring new business opportunities with fintech companies such as Dreams, Aprilla Bank, and Finn.no. Storebrand also entered into an agreement with Insr to acquire the right and obligation to renew policies from Insr’s customer portfolios over the coming year. Leadership in sustainability For the past 25 years, Storebrand has pioneered sustainable investments to increase value creation. We strive to create value beyond financial returns. Our sustainable investments and enhanced sustainability funds grew substantially in 2020. We believe that our leading position in sustainable value creation will increase value for our customers and create positive ripple effects for society. We are committed to the Paris Agreement throughout our value chain. Storebrand is determined to lead and develop the sustainability agenda within the financial industry in the years to come. 28) Measured in gross premiums as of Q3 2020. Source: Finance Norway. 45 29) Measured in gross premiums including transfers as of Q3 2020, but excluding Brummer Life. Source: Insurance Sweden ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixKAPITTEL 8 - ÅRSBERETNING Our sustainability position has been highly recognised in 2020. Storebrand was included in the Dow Jones Sustainability Index, recognised among the top 10 per cent most sustainable companies in the world. Corporate Knights also rated Storebrand as the world’s most sustainable insurance company in its Global 100 ranking for a second consecutive year. Our employee satisfaction surveys show that Storebrand employees are proud to be a part of the company, and that our work on sustainability makes their job more meaningful. Our position on sustainability also attracts an increasing number of international talents. More information about our sustainability work is discussed in the section below A Driving Force for Sustainable Investments and in the chapter Keeping our house in order. Digital frontrunner The use of technology makes it possible to combine growth initiatives and measures for increased competitiveness, while at the same time realising cost reductions and efficiency gains. Smart use of data paves the way for new business opportunities and efficiency gains, both through digitalisation and automation. Storebrand is adopting modern cloud solutions, enabling faster time-to-market and better access to new digital capabilities. Digital sales have increased 25 per cent annually over the past three years. The duration of handling disability claims has seen a reduction of up to 75 per cent, while fraud detection increased 85 per cent. Digital customer experiences will be a high priority going forward. More information about our digital initiatives is described in the chapter Customer Relations under the section Digital Innovator in the Financial Sector. Management of capital and balance sheet Storebrand is a blend of fast-growing capital-light business that deliver high returns on equity, and capital-intensive run-off business with low returns on equity. The run-off business of guaranteed pensions ties up more than three-quarters of the group’s equity and yielded a return on equity of 3 per cent in 2020. The growth business, on the other hand, yielded a return on equity of 54 per cent30) . The group’s overall return on equity31) was 8.6 per cent for 2020. At the beginning of 2020, Storebrand’s Board of Directors initially announced an ordinary dividend of NOK 3.25 per share to be paid for the financial year of 2019. The outbreak of the Covid- 19 pandemic led to clearly communicated guidelines from the Norwegian Ministry of Finance, the Norwegian Financial Supervisory Authority and EIOPA to suspend dividend payments until the great uncertainty regarding the economic development was reduced. Based on this, the Board of Storebrand ASA decided to withdraw the proposed dividend for the financial year 2019. However, throughout the year, the Board of Directors maintained that the company’s liquidity, solvency position, and result prognosis supported an ordinary dividend for 2019. The proposed dividend for 2020 is discussed below in separate section. The solvency margin including transitional rules was 178 per cent at the end of 2020 - an increase of 2 percentage points from last year’s 176 per cent, despite occasionally challenging financial markets throughout the year. Without transitional rules, the solvency margin was 166 per cent. This corresponds to a decrease of 8 percentage points from last year’s 174 per cent. The reduction is mainly due to a lower interest rates at the end of 2020. However, this is to a large extent compensated for with transitional rules. Regulatory assumptions in the calculation of solvency ratio, such as reduced volatility adjustment and a lower ultimate forward rate, contributed negatively to the solvency ratio as well. Nevertheless, we were able to improve our solvency position through actions. A dynamic pricing model for interest rate guarantees was introduced, and the result in 2020 also helped to strengthen the solvency ratio by approximately 10 percentage points. Financial targets Storebrand has the following financial targets: Key performance indicators Return on equity 31) Future Storebrand (Savings and Insurance) Goal > 10 % Run-off business (Guaranteed and Other) Dividend pay-out ratio 32) > 50 % Status 2020 8.6 % 54 % 3 % 65 % Solvency 2 ratio33) (Storebrand Group) > 150 % 178 % 30) Based on a pro forma distribution of IFRS equity per line of business. The capital is allocated based on the capital consumption under Solvency II and CRD IV. The segments Savings and Insurance and Other are calibrated to a solvency margin of 150%, while the rest of the capital is allocated to the segment Guaranteed pension. 31) 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. 32) After tax. 33) Including transitional rules. 46 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixThe Group’s results 2020 The Storebrand Group’s financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS). The Board of Storebrand ASA confirms that we meet the conditions for preparing financial statements on the basis of a going concern, pursuant to Norwegian accounting legislation. No significant incidents have occurred after the balance sheet date. Our financial result is reported by the following business segment: Savings, Insurance, Guaranteed Pension and Other, as well as on a consolidated Group level. Group results NOK million Fee and administration income Insurance result Operational cost Operating profit 2020 2019 5,676 5,308 825 1 005 -4,068 -4,015 2,433 2,298 Financial items and risk result life 278 739 Profit before amortisation 2,711 3,037 uncertain macroeconomic situation that occurred and the risk of increased disability in Norway. Operating expenses amounted to NOK -4,068 million (-4,015). Adjusted for costs related to acquired business, performance-based results and currency movements, operating expenses were NOK -3,780 million – in line with the target of keeping costs nominally flat at NOK 3.8 billion from 2018 to 2020. Total operating profit was NOK 2,433 million (NOK 2,298 million). Financial items and risk result life was NOK 278 million (NOK 739 million). The decrease in profits in 2020 is mainly due to a weak disability result in the Norwegian Defined Benefit pensions as well as an increased need for Deferred Capital Contributions in SPP due to lower discount rates and wider credit spreads. Amortisation of intangible assets amounted to NOK -492 million (NOK -444 million). The increase is mainly due to a strengthened Swedish krona. Amortisation and write-downs of intangible assets -492 -444 Profit before tax was NOK 2,219 million (NOK 2,593 million). The Group ended the year with a tax income of NOK 136 million (NOK -511 million). The tax income is the result of new information and interpretation of the transitional rules for 2018. The estimated normal tax rate for the Group is 21-23 per cent, depending on each legal entity’s contribution to the group result. For more information on tax and uncertain tax positions, see note 26. Storebrand also has a policy for responsible taxation and publishes a separate tax transparency report on our website. Group profit after tax was NOK 2,355 million (NOK 2,082 million). Profit before tax Tax Profit after tax 2,219 2,593 136 -511 2,355 2,082 Storebrand achieved a group profit (before amortisation) of NOK 2,711 million (NOK 3,037 million). The figures in parentheses show the corresponding figures for last year. Fee and administration income increased by 7 per cent to NOK 5,676 million (NOK 5,308 million), driven mainly by strong underlying growth in assets under management. Adjusted for a strengthened Swedish krona, the income growth was 3 per cent. The insurance result was NOK 825 million (NOK 1,005 million) and resulted in a combined ratio of 97 per cent (91 per cent). Reserve strengthening in products with disability coverage weakened this year’s performance, as a result of the Covid-19 pandemic with the 47 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixSavings Key figures Savings NOK million 2020 2019 NOK million Fee and administration income 4,392 3,996 Unit linked Reserves Operational cost Operating profit -2,611 -2,621 Unit linked Premiums 1,781 1,375 AuM Asset Management Financial items and risk result life -51 -11 Retail Lending Profit before amortisation 1,730 1,364 2020 2019 268,331 219,793 20,185 17,168 962,472 831,204 49,474 48,161 Financial results Fee and administration income increased to NOK 4,392 million (NOK 3,996 million) as a result of strong underlying volume growth in Unit Linked and asset management. Increased competition contributed to moderate margin pressure for both the Norwegian and Swedish Unit Linked products. Excess returns in mutual funds with performance fees contributed NOK 249 million (NOK 203 million) to the income. A lower net interest income margin in the bank, due to declining interest rates during the year, resulted in a marginally lower contribution from the bank. Operating expenses were NOK 10 million lower in 2020 than in 2019, explained by strong cost control and slightly lower market activity as a result of the Covid-19 pandemic. Model-based provisions for loan losses in the bank contributed to a lower Financial items and risk result life of NOK -51 million (-11 million). Profit before amortisation increased to NOK 1,730 million (NOK 1,364 million) – an increase of 27 per cent in 2020. Balance sheet and market development Assets under management grew significantly in 2020. Unit Linked reserves grew by 22 per cent to NOK 268 billion – driven partly by positive financial market developments, but also by 18 per cent growth in premiums, 46 per cent growth in new sales (measured in APE - Annual Premium Equivalent), and a positive net transfer balance of NOK 5.4 billion (NOK -0.2 billion). Total growth in assets under management within Storebrand Asset Management was NOK 131 billion (16 per cent), also driven by new mandates from external customers. The bank’s retail lending balance grew by NOK 1.3 billion (3 per cent) to NOK 49.5 billion. 48 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixKAPITTEL 8 - ÅRSBERETNING Insurance NOK million Insurance premiums f.o.a. Claims f.o.a. Operational cost Operating profit Financial result Profit before amortisation 2020 2019 4,331 3,909 -3,506 -2,904 -712 -648 113 357 91 83 204 439 Financial results Insurance premiums for own account (f.o.a.) grew by 11 per cent to NOK 4,331 million in 2020 (NOK 3,909 million), driven mainly by strong volume growth, but also price increases in less profitable products. Insurance claims increased to NOK -3,506 million (-2,904 million). As a result of the Covid-19 pandemic and the decline in oil prices, Storebrand conducted a model-based review of the future development of the economic situation. The review led to reserve strengthening for all products with disability coverage of NOK 247 million in the 1st quarter. The total claims ratio for the year was 81 per cent compared to 74 per cent in 2019. Operating expenses were kept nominally flat throughout the year until the 4th quarter when added staff, in connection with the takeover of Insr customers, increased the cost base. Total operating expenses for the year amounted to NOK -712 million (NOK -648 million), resulting in a decrease in the cost ratio to 16 per cent from 17 per cent in 2019. The total combined ratio was 97 per cent (91 per cent) and total operating profit was NOK 113 million (NOK 357 million) for the year. The financial result was NOK 91 million (NOK 83 million). The insurance investment portfolio amounted to NOK 9,0 billion at the end of 2020 (NOK 8,3 billion) and achieved a return of 3.25 per cent. The investments are primarily in high rated fixed income securities either booked at amortised cost or with short duration. Profit before amortisation amounted to NOK 204 million (NOK 439 million). The disability result lowered the result within all reported product segments, except for health insurance. Balance sheet and market development The total growth in written portfolio premiums amounted to 18 per cent in 2020. The highest growth was within P&C and Individual Life (22 per cent), followed by Pension related disability insurance (17 per cent), and Health and Group Life (15 per cent). The written portfolio premiums at the end of the year amounted to NOK 5.6 billion, of which NOK 2.3 billion is in the retail market and NOK 3.2 billion in the corporate market. Key figures Insurance Claims ratio Cost ratio Combined ratio 2020 81 % 16 % 97 % 2019 74 % 17 % 91 % 49 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixGuaranteed pension Key figures Guaranteed Pension NOK million 2020 2019 Fee and administration income 1,455 1,475 Operational cost Operating profit Risk result life & pensions Net profit sharing -842 -819 614 17 144 657 215 157 Profit before amortisation 775 1,029 Financial results The fee and administration income was in line with that of the previous year and amounted to NOK 1,455 million (NOK 1,475 million). Income is expected to gradually decline because the products are in long- term run off and essentially closed for new business. Following the closure of the last major Defined Benefit plan in Norway this year, the income in the product has been reduced while the income from paid-up policies has increased. Operating expenses amounted to NOK -842 million (NOK -819 million). The marginal increase is due to the strengthened Swedish krone and costs associated with new initiatives in the public sector. The risk result life & pensions was NOK 17 million (NOK 215 million). The decrease in results is due to low reactivation levels of people in disability within the Norwegian Defined Benefit pensions. To improve the result, price adjustments have been made with effect in 2021. NOK million Guaranteed reserves 2020 2019 276 755 263 185 Guaranteed reserves in % of total 50.8 % 54.5 % reserves Net transfers Buffer capital in % of customer reserves in Norway Buffer capital in % customer reserves in Sweden 1 427 11,0 % -103 8.6 % 11.4 % 10.7 % Other NOK million 2020 2019 Fee and administration income 65 51 Operational cost Operating profit -139 -143 -75 -91 Financial items and risk result life 76 296 Profit before amortisation 1 205 The table above excludes eliminations. The segment result consists of the sum of the results for the business activities in the Other segment and eliminations. Net profit sharing, after further buffer capital strengthening, amounted to NOK 144 million (NOK 157 million), driven by good returns in both Norwegian and Swedish products. Earnings before amortisation amounted to NOK 775 million (NOK 1,029 million). NOK million 2020 2019 Fee and administration income -236 -215 Operational cost Financial result Profit before amortisation 236 215 - - - - Balance sheet and market development Guaranteed reserves at the end of the year amounted to NOK 277 billion. This is an increase of NOK 13.5 billion in 2020, but adjusted for currency effects, the change is only NOK 4.7 billion. As a share of total reserves, this corresponds to 50.8 per cent (54.5 per cent) at the end of the year, a decrease of 3.7 percentage points since last year. Storebrand’s strategy is to increase the buffer capital to secure customer returns and protect shareholder’s equity under turbulent market conditions. Buffer capital for guaranteed pensions increased to 11.0 per cent (8.6 per cent) of customer reserves in Norway and to 11.4 per cent (10.7 per cent) in Sweden. This corresponds to an overall increase of NOK 5.7 billion since last year. Financial results The operating profit for the Other segment was NOK -75 million, in line with the previous year’s result (NOK -91 million). Financial items and risk result life was NOK 76 million, a decrease from last year’s NOK 296 million. The result is primarily based on returns in the company portfolios in Storebrand Livsforsikring and SPP, as well as the financial result in Storebrand ASA. Unrealised losses on investments in the portfolios that occurred in the first quarter during the market turmoil have been reversed throughout the rest of the year. Profit before amortisation amounted to NOK 1 million (NOK 205 million). 50 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixDividend for 2020 Storebrand has established a framework for capital management that links dividends to the solvency margin. The dividend policy intends to reflect the strong growth in fee-based earnings, the more volatile financial markets related earnings and the future capital release from the guaranteed book. The Board’s ambition is to pay a gradually growing ordinary dividend. When the solvency margin reaches 180% without material use of transitional capital, 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 buybacks will be conducted after the full year results for 2021. The Board has carefully reviewed the solvency position, liquidity position and result prognosis for the company, in light of the Covid- 19 pandemic and the resulting macroeconomic uncertainties. Based on the review, the Board’s assessment is that Storebrand’s financial position supports paying an ordinary dividend. The Board proposes an ordinary dividend of NOK 3.25 per share for 2020, equal to NOK 1,519 million, to the Annual General Meeting. Capital situation We adapt the level of equity and debt in the Group continuously 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. We target a solvency ratio in accordance with Solvency II of at least 150 per cent, including the use of transitional rules. At the end of 2020, the solvency ratio for the Group was 178 per cent including transitional rules. Without transitional rules, the solvency margin was 166 per cent. Storebrand uses the standard model for the calculation of Solvency II. Prudent risk management and regulatory adjustment mechanisms in the solvency regulation compensate for occasionally challenging financial market conditions. Storebrand Livsforsikring Group’ssolidity capital consists of equity, subordinated loan capital, market value adjustment reserves, additional statutory reserves, conditional bonuses and risk equalisation reserves. The solidity capital was strengthened by NOK 10.3 billion in 2020. The market value adjustment reserve increased by NOK 1.7 billion as a result of positive market developments and amounted to NOK 7.2 billion at year-end. Conditional bonuses increased by NOK 1.5 billion and amounted to NOK 10.8 billion. Booked returns have increased the additional statutory reserves. The additional statutory reserves amounted to NOK 11.4 billion at the end of the year, an increase of NOK 2.4 billion for the year. The excess value of bonds and loans that are booked at amortised cost have increased by NOK 4.1 billion during the year and amounted to NOK 8.8 billion at year-end. The excess value of bonds and loans at amortised cost is not included in the financial statements. Storebrand Bank Group had a pure core capital adequacy ratio of 15.1 per cent and capital adequacy ratio of 18.7 per cent at the end of 2020. 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 56 per cent. Storebrand ASA (holding) held liquid assets of NOK 5.0 billion at the end of the year. Liquid assets consist mainly of short-term fixed income securities with high credit ratings. Storebrand ASA’s total interest-bearing liabilities were NOK 1.0 billion at the end of the year. The next maturity on bond debt for Storebrand ASA is in May 2022. In addition to the liquidity portfolio, the company has an unused credit facility of EUR 200 million, which expires in December 2024, with the option for an extension for another two years. Storebrand ASA recognised dividend and group contributions from subsidiaries of NOK 3,148 million in 2020. The dividend allocated to shareholders amounted to NOK 1,519 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 2020, the A- rating of Storebrand 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. Storebrand’s dividend policy: Storebrand aims to pay an ordinary 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 sustain- able solvency margin of above 150%. If the solvency margin is above 180%, the Board of Directors intends to propose special dividends or share buy backs. 51 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixOfficial Financial Statements of Storebrand ASA Storebrand ASA reported a profit of NOK 2,804 million compared to NOK 2,952 million in 2019. The Board proposes a dividend of NOK 1,519 million to the General Meeting, corresponding to an ordinary dividend of NOK 3.25 per share for the financial year 2020. Allocation of the profit for the year for Storebrand ASA NOK million Profit for the year Allocations Trasferred to other reserves Provision for shared dividends Total allocations 2020 2,804 2019 2,952 1,285 1,519 2,804 1,435 1,517 2,952 Storebrand ASA is the holding company in the Storebrand Group, and the financial statements 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 2,975 million in 2020, compared to NOK 3,125 million in 2019. Group contributions from investments in subsidiaries amounted to NOK 3,028 million, compared to NOK 3,230 million the year before. Income statement for Storebrand ASA NOK million Group contribution and dividends Net financial items Operating expenses Pre-tax profit Tax Profit for the year Statement of comprehensive income NOK million Profit for the year Other result elements not to be classi- fied to profit/loss Change in estimate deviation pension Tax on other result elements Total other result elements 2020 3,028 43 -96 2,975 -171 2,804 2019 3,230 -3 -102 3,125 -173 2,952 2020 2,804 2019 2,952 -15 4 -11 -8 2 -6 Total comprehensive income 2,793 2,946 52 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.Appendix Outlook Market development Financial market developments affect both the Group’s solvency ratio and the financial results. Higher interest rates increase the solvency ratio and make it easier to achieve returns above the guaranteed rate. Defined Contribution pensions and asset management are largely exposed to the stock market. Market movements will therefore affect income earned on assets under management. Currency movements between the Norwegian and Swedish krone affect the reported balance sheet and results in SPP at a consolidated level. There is still uncertainty about the consequences of Covid-19 and how it will affect financial markets going forward. With a solid solvency margin of 178 per cent and more than 11 per cent buffer capital in guaranteed products, Storebrand is in a good position to navigate safely through demanding markets. The company also has a robust risk management framework, as described in a separate section below. Read more in note 2 about uncertainties related to the Covid-19 pandemic. Regulatory changes Regulations enacted by the authorities can be of great importance to Storebrand. We describe the most important changes and their significance for Storebrand below. European regulations Solvency II revision In December 2020, the European Supervisory Authority for Insurance and Occupational Pensions (EIOPA) submitted its final proposal for changes to the standard model under Solvency II to the European Commission. One of several proposals by EIOPA concerns changes to the interest rate risk module that could increase the solvency capital requirement for Norwegian and Swedish insurance companies. EIOPA originally planned to submit its final proposals in June 2020, but the timetable was revised due to Covid-19. We expect final conclusions to be drawn by the Commission, the Parliament and the Council in 2022. This will be followed by work on delegated acts and guidelines. Changes are not expected to enter into force before 2026. Sustainable finance The EU Action Plan for Financing Sustainable Growth will, among other things, help meet the commitments set out in the Paris Agreement on reduced carbon emissions. The regulations on sustainable finance follow up the action plan and shall contribute to increased investments in sustainable activities and strengthen the financial system’s ability to manage climate risk. The Financial Supervisory Authority of Norway has prepared proposals for a new law on sustainability reporting that incorporates the disclosure regulation and the classification regulation (taxonomy) in Norwegian law. A consultation period for the proposal was held until 8 January 2021. In Sweden and other EU countries, the disclosure regulation comes into force on 10 March 2021. The taxonomy came into force on 12 July 2020 in the EU, but the requirements will only apply from 2022 to the first two sustainability goals (climate change mitigation and climate change adaptation), and from 2023 for the other four (sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems). The new rules will establish standards for sustainable asset management and clarify reporting requirements and customer information. We regard the regulations for sustainable finance to be positive. It will increase the requirements and improve the quality of financial and non-financial reporting, which in turn will provide better information to stakeholders and improve comparability within the financial sector. Norwegian regulations Individual pension accounts The Individual Pension Account will be introduced in Norway in 2021. The reform applies to Defined Contribution pensions in the private sector. The aim is to give workers a better overview of their pension, and to facilitate more efficient administration and management of pensions. Pension capital certificates accumulated from previous employments are automatically transferred to the Individual Pension Account, which is established at the current employer’s pension provider. Transfers are carried out unless the policyholder makes an active choice to opt-out (“negative acceptance”) and stay with the providers from previous employments. At the same time, it introduces the opportunity for policyholders to choose a provider of their own choice rather than staying with the employer’s collective scheme. Workers wishing to opt-out can do so between 1 February and 30 April 2021, in a joint portal provided by Norsk Pensjon. It will also be possible to move to the provider of own choice from 1 February. 5353 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixTransfers of pension capital certificates that have not opted- out shall be carried out in the period between 1 May and 30 December 2021. Policyholders who do not want to wait may request that pension capital certificates shall be moved to their Individual Pension Account at once. To facilitate an efficient implementation of the reform, the industry has collaborated on the development of a new common digital infrastructure. A separate company, Pensjonskontoregisteret AS, has been established to operate this. A key aim of the reform is to reduce the costs associated with the administration of pension contributions from previous employers. Regulation stipulates that individuals shall pay the same fee for former earning from pension capital certificates transferred to the Individual Pension Account as the employer pays for current contributions. This will lead to significantly lower income related to former earnings for the providers. The impact for Storebrand is described in more detail below under financial results. Storebrand expects a positive net transfer of pension capital certificates with the introduction of Individual Pension accounts. At the same time, workers will be able to move the pension funds (both past and present earnings) to providers of their own choice. All the major labour unions have launched offerings for self- selected Individual Pension Accounts for their members. Storebrand participates in the Ministry of Finance’s implementation group for Individual Pension Accounts. Guaranteed pension The Norwegian Financial Supervisory Authority’s proposed changes to the regulations for guaranteed pension products have been consulted. The Ministry of Finance is yet to decide which of the proposals for legislative changes are to be submitted to the parliament. The Ministry of Finance decided in May 2020 that the Financial Supervisory Authority’s proposal to remove the possibility of booking bonds and loans at amortised costs will not be followed up. Bonds held at amortised costs are a key tool for risk management of paid-up policies, and the clarification provided reassurance that we can continue to make use this tool. The other proposals that the Ministry will now consider include: • The ability for companies to build additional statutory reserves separately for individual contracts. • A new buffer fund model. The Financial Supervisory Authority has primarily proposed merging additional statutory reserves and market value adjustment reserves into a new customer- distributed buffer reserve that can also cover negative returns. As an alternative, a continuation of additional statutory reserves and market value adjustment reserves is proposed, but with the possibility for additional statutory reserves to also cover negative returns. • The ability for the company to fulfil annual interest rate guarantees with borrowed equity. • The ability for customers to choose faster pay-outs for small paid-up policies. • The ability for companies to compensate customers who convert to paid up policies with investment choice. We expect the proposed legislation to be presented in early 2021. 54 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixChanges in IFRS A new accounting standard for insurance contracts, IFRS 17, is expected to be implemented in 2023. Storebrand will also implement IFRS 9 for financial instruments at the same time. The new standards will lead to changes in the valuation of insurance contracts and how profits are recognised. Estimated effects for Storebrand will be presented closer to the implementation date. Swedish regulations Premium pensions (PPM) of the national retirement pension system The report on the Swedish premium pension system (PPM) is still being discussed in the Swedish parliament’s pension group. This will present the final requirements for a procured fund market, before for further processing. The inquiry period has been extended until 31 August 2021 so that the authorities can begin their work with the fund market on 1 September 2021. Today’s fund market is expected to be replaced by a procured market based on new criteria for fees, sustainability and quality. In 2020, it was decided that a body under the Swedish Pension Authority shall be responsible for managing the new fund market and for qualifying funds. The Pension Authority shall also be responsible for dissolving the current fund market and for deciding how pension funds shall be transferred to funds on the new fund market. The PPM fund market is a major distribution channel for SPP’s funds. We anticipate that the new fund market will offer fewer funds at a lower price, but it is too early to say anything about the consequences. New transfer market regulation A new regulation with the purpose of increasing the transferability 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 accordance with the new regulation, SPP adjusted its transfer fees. SPP favours increased transfer rights and welcomes the new regulation. The Swedish government has been asked by the parliament to draw up further proposals for adjustments to the transfer fees for Unit Linked accounts (including deposit insurance). Proposed regulations were presented in October 2020. The new rules, which introduce an upper limit on fees, will come into force on 1 April 2021 and apply to policies dated back to 1 July 2007. An inquiry for policies established before 1 July will be conducted and proposed regulations are expected in September 2021. SPP supports a more transparent and clearer framework for transfers of pensions and hopes full transfer rights will apply to policies established even before 2007. Today, this is voluntary for insurance companies, and something the SPP already allows. We believe that the ability for employees to choose a provider of their own choice should not be affected by how many years they have saved for their pension. Financial results In Norway, the market for private sector occupational pensions has experienced increased competition over the last years in anticipation of the new Individual Pension Accounts (IPA), described under regulatory changes above. As individuals’ contracts are merged into one account, fees will be reduced. The resulting economic effect is expected to be moderate in 2021 and slightly more negative in 2022, before recovering in 2023 through strong underlying growth as well as measures to increase profitability. The market has grown structurally over the past years. High single-digit growth in premiums and double-digit growth in assets under management are expected during the next years. We aim to defend Storebrand’s market leader position, while also focusing on cost leadership and improved customer experience through end-to-end digitalisation. As a leading occupational pension provider in the private sector, Storebrand also has a competitive offering to the public sector market. The public sector pension market is fast growing and larger the private sector, thus representing a potential additional source of revenue generation for Storebrand. The ambition is to gain 1 per cent market share annually, or approximately NOK 5 billion in annual net inflow. In the coming years, Storebrand is looking to leverage customer, product and capital synergies by expanding our insurance offering to corporate clients within P&C. The gradual transfer of contracts from the newly acquired Insr portfolios is expected to support growth within this area in 2021. In Sweden, SPP has become a significant result contributor to the Storebrand Group, driven by earnings growth and ongoing capital release. Growth is expected to continue, driven by an edge in digital and ESG-enhanced solutions, and a strong market position. The market is expected to grow about 8 per cent annually, supported by increasing transfer volumes. Going forward, SPP expects to grow 14-16 per cent annually – twice the overall market growth – through capturing the largest share of transfers. Overall reserves for guaranteed pensions are expected to start decreasing in the coming years. Guaranteed reserves represent a declining share of the Group’s total pension reserves and were 50.8 per cent at the end of the year, 3.7 percentage points lower than last year. Storebrand’s strategy is to secure customer returns and shield shareholder’s equity under turbulent market conditions by building customer buffers. Customer buffers make up more than 11 per cent of customer reserves in both Norway and Sweden. The levels will grow with an expected positive spread over the guaranteed rate on the policies. Storebrand Asset Management is growing its external mandates from institutional and retail investors, both in the Nordics and across Europe, in addition to managing internal pension funds. Storebrand has a full product range including index, factor, and active management. We are also one of the strongest providers 55 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixKAPITTEL 8 - ÅRSBERETNING alternative assets in the Nordic region, asset classes offering prospects of higher margins. In combination with a strong track record with ESG-enhanced mutual funds, Storebrand is aiming to capitalise on these two trends. The overall ambition is to grow assets under management by NOK 250 billion in the coming three years, while maintaining a stable fee margin. The retail market has evolved into and increasingly larger part of Storebrand and accounted for 21 per cent of the group’s profits in 2020. The individualisation of the pension and savings market is expected to increase further and may be reinforced by the introduction of Individual Pension Accounts in Norway. Non-life insurance, particularly P&C insurance, is an important growth area, and the acquisition of insurance customers from Insr will contribute positively in 2021. The ambition is to grow more than 10 per cent annually within savings, mortgage lending and insurance. Our ambition is to report a Group profit (before amortisation and tax) of NOK 4 billion in 2023. Strong cost discipline will be a critical success factor. Adjusted for acquisitions, currency effects and performance related costs in funds with performance fees, the Group has reported flat nominal costs since 2012. Storebrand will continue to reduce underlying costs, but it will also be necessary to make selective investments to facilitate growth. The acquisition of the Insr portfolio, as well as accelerated digital investments, are expected to increase costs in 2021 by NOK 400m. Capital management Storebrand aims to maintain a solvency ratio of at least 150 per cent. At the end of 2020 it was 178 per cent. On an annual basis, a net capital generation of about 6-7 percentage points of solvency is expected over the next few years. Of this, approximately 10 percentage points are generated in the business, 3 additional percentage points are expected as a result of the guaranteed business being in run-off, and around 5-6 per cent are expected to pe paid out as dividend from the annual results. Financial market volatility, especially the development in long interest rates, and regulatory changes, may lead to short term volatility in the solvency ratio. The Board’s ambition is to pay a gradually increasing ordinary dividend. When the solvency ratio exceeds 180 per cent without material use of transitional capital, the Board’s intention is to begin a share buy-back programme. The purpose of the buy-back program will be to return excess capital from the guaranteed business which is in long-term run-off. Under normal circumstances, the solvency ratio can be expected to reach 180 per cent in 2023. During the same period, it is expected that the transitional capital will be phased out as a result of the change in business mix from guaranteed to non-guaranteed business. We expect that approximately NOK 10 billion in capital will be released by 2030. In combination with increased earnings from capital light growth, the business mix shift will also lead to positive developments in return on equity over time. We expect to deliver a return on equity (adjusted for amortisation) of more than 10 per cent by the end of 2023 on a sustainable basis. 56 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixA driving force for sustainable investments Having a long-term perspective is important for Storebrand, as we manage customers’ savings over decades. We fundamentally believe that investments in companies that are well positioned to deliver on the UN Sustainable Development Goals (SDG) will provide better risk-adjusted returns for our customers over time. Companies that rank highly on sustainability indicators have a better understanding of global developments, and how to navigate risks and opportunities, than other businesses. According to international studies, the most sustainable companies on the world’s stock exchanges tend to outperform their peers financially over time. We therefore believe such companies will be the winners of tomorrow and provide better returns for our customers. In order to clarify and measure sustainability, we have defined sustainability as measurable subpoints under the Envionmental, Social and Governance (ESG) categories – environmental and social conditions, and corporate governance. Storebrand is both a significant asset owner and asset manager. With investments in over 4,500 companies worldwide, we are exposed a wide array of ESG risks. We work actively to reduce the risk of our portfolio having a negative impact on the environment and in societies. More specifically, we work to reduce the risk of our investments having indirectly contributed to environmental degradation, violations of international conventions on human rights and international law, suppression of children’s rights, corruption or economic crime. From a financial perspective, it is also crucial for us to reduce ESG risk to avoid negative effects on the value of our investments. In the past few years, the debate on sustainability has mainly considered the importance of reducing the world’s greenhouse gas emissions and limit global warming. The climate crisis remains a central issue today, but in the environmental and climatic areas there is an increasing focus on the importance of avoiding large- scale losses of biodiversity and ecosystems. The Covid-19 pandemic affected us all in 2020, but the impacts were unevenly distributed. Just like the impact of climate change will challenge societies differently. In our work on responsible investments, we see that the pandemic has had major consequences for supply chains in developing countries and has consequently resulted in millions of people losing their livelihoods. The World Bank estimates that for the first time in 20 years the number of extremely poor increased, and it is estimated that around 100 million people have been driven into extreme poverty in 2020. 34) 34) https://www.worldbank.org/en/news/press-release/2020/10/07/Covid-19-to-add-as-many-as-150-million-extreme-poor-by-2021 57 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixWe see a growing demand for sustainable investment products, especially products with a focus on climate solutions. In Sweden, our customers want to reduce the exposure to carbon-related activities in their portfolios. In this market, one-third of our total assets of NOK 962 billion are invested in fossil-free products that exclude companies in coal, oil and gas. In 2020 assets under management in fossil free products increased by more than NOK 130 billion. Our efforts to reduce CO2emissions among companies in our portfolio are driven by customer expectations, as well as our responsibility to manage financial risk on behalf of our customers and investors. Our exposure to companies actively working to achieve the SDGs increased significantly in 2020. These businesses are called “solution companies” in Storebrand. Our investments in solution companies accounted for 13 per cent of our total equity investments in 2020, up from 8 per cent in 2019. We contribute in the debate on sustainable investments and develop methods and frameworks. In 2019, we were one of the founders of the UN-backed Net- Zero Asset Owner Alliance (NZAOA).35) The aim of the alliance is to harness the role as active owners to reduce emissions in investment portfolios. Members of the alliance report openly on progress towards intermediate targets, in line with Article 4.9 of the Paris Agreement. By cooperating with portfolio companies, members are committed to ensure that the portfolio companies succeed in their transition to production methods and energy use from sources that diminish their CO2emissions over time. In 2020, Storebrand chaired the working group of NZAOA and developed a document suggesting methods for how investors can set climate targets in line with the Paris Agreement’s 1.5°C target. The framework includes active ownership, portfolio targets, sector targets and solutions. Investors must set targets every five years on their path to a carbon-neutral investment portfolio by 2050. In line with the scenarios of the Intergovernmental Panel on Climate Change, we aim to reduce emissions by 32 per cent for investments in equities, bonds and real estate by 2025, with a baseline year in 2018. We intend to do this through real-world changes, rather than excluding companies with high emissions. Therefore, we are actively working with the 20 largest emitters in our portfolio to reduce their emissions. In 2021, we will set specific targets for the sectors that account for most of the emissions in our portfolio. In 2020, we launched a new comprehensive climate policy for Storebrand’s investments. The work included a comprehensive analysis to uncover deforestation risks, and direct dialogue on deforestation with Brazilian and Indonesian authorities. We also decided not to invest in companies that engage in deliberate and systematic lobbying to counter the goals of the Paris Agreement. Over time, we have had dialogue with the International Energy Agency (IEA), along with over 60 other international companies, organisations and academic researchers. We have urged the IEA to provide governments, investors and companies with better tools to align policies, investments and business strategies with the Paris Agreement’s goal of reducing global warming. In the “2020 World Energy Outlook,” the IEA included a renewable energy scenario for the first time, with net zero emissions by 2050. This is a positive development that shows that international cooperation works. We will continue to put pressure on the IEA to include a comprehensive 1.5-degree scenario in the World Energy Outlook report in 2021. Throughout 2020, Storebrand’ s CEO continued to engage in several initiatives to promote sustainable business practices and share knowledge and experience with other companies. The Norwegian climate initiative Skift, and the Nordic initiative Nordic CEOs for a Sustainable Future, are two examples. In both working groups, we led work-streams on climate that resulted in all members committing to set targets in line with the Paris Agreement and report public and transparent climate data. In 2020, we also assisted The Science Based Targets Initiative (SBTi) in the development of a methodology to adapt lending and investment portfolios to the ambitions of the Paris Agreement, by providing input on their Temperature Alignment Tool. In addition, we road tested the SBTi methodology to set goals for property investments, contributing to a report where we shared our target and experiences using the framework. As these examples indicate, we expanded our sustainability work through cooperation with different types of stakeholders, as well as strengthening direct dialogue with the companies in which we are invested throughout the year. 35) http://www.mynewsdesk.com/no/storebrand-asa/pressreleases/storebrand-makes-unprecedented-commitment-to-net-zero-emissions-291916 58 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixOur work on sustainable investments We aim to be a driving force for lasting change in the way companies are managed, while ensuring good returns for our owners and customers. We put capital into action to fund socially purposeful, sustainable solutions and reduce exposure to activities that adversely affect society and the environment. Our work on sustainable investments consists mainly of three instruments; solutions, active ownership and exclusions These three instruments enable us to be an active, driving force for sustainable investments that contributes to positive change and development, and to reduce financial risk. Solutions Part of our investment strategy is to move capital to what we call solution companies. These are companies that actively work to contribute to the UN Sustainable Development Goals and do not substantially hinder achievement of other sustainability goals, or the Paris Agreement. Our whitelist of solution companies is updated continuously, used in investment decisions and is part of Storebrand’ s ranking of companies based on sustainability criteria. Below we describe how the investment strategy for solution companies contributes directly to realising different sustainability goals. In order to integrate assessments of companies’ ESG risks and opportunities into the investment process, proper tools are essential. Since 2012, Storebrand has developed and integrated a sustainability score providing a foundation for investment decisions, by ranking the companies on operations, products, and services. In this way, we can effectively identify companies that have the potential to deliver good returns, while helping to solve sustainability challenges. We calculate the sustainability scores of over 4 500 companies and base it on a 0-100 scale. We increase investments in companies that achieve high scores, an reduce investments in companies with low scores. Our target is that 15 per cent of our investments will be invested in solution by 2025, up from 9.6 per cent in 2020. We also invest in green bonds. These secure access to capital for new and existing projects with environmental benefits. By year- end in 2020, we had invested NOK 22.2 billion in green bonds, accounting for 5 per cent of our total bond investments, up from 2 per cent in 2019. Green bonds are part of what we call solutions, and are included in the total target of 15 per cent described above The table below shows how our strategy for increasing investments in solutions contributes positively to the UN Sustainable Development Goals. 59 Alternative investment opportunities By diversifying our investments, Storebrand sees great opportunities in reducing risks while at the same time contributing to sustainable development. For instance, by diversifying investments in alternative asset classes such as real estate, private equity and infrastructure. Infrastructure In 2020 Storebrand teamed up with two of Denmark’s largest pension funds, PKA and PenSam, to establish a new climate and infrastructure fund. Together, we are committed to investing a total of up to NOK 45 billion, making the fund one of the largest of its kind in the Nordic region. This marked the start of Storebrand’ s investments in infrastructure and will further enhance our ability to contribute to the transition to a low-carbon society. Real estate investments Storebrand is a significant player in direct real estate investments with property investments of NOK 49 billion, which accounts for 5 per centof our assets under management. Our experience is that the integration of sustainability aspects int real estate has a positive effect both for society and our tenants, while providing higher returns on property investments. We integrate sustainability throughout our property portfolio and aim to be the Nordic region’s leading player in sustainable management of real estate investments. We increased the share of environmentally certified buildings from 41 per cent in 2019 to 43 per cent in 2020. In addition, we reduced emissions from our real estate investments from 9.1 kg CO2e per m2 in 2019 to 7.9 in 2020. This is affected by reduced activity in a number of our properties due to the Covid-19 pandemic. Our target for next year is therefore somewhat higher than the result for 2020. As a result of our long-term and systematic sustainability work, four out of five funds with direct real estate investments have achieved a 5-star rating from the Global Real Estate Sustainability Benchmark (GRESB). Active ownership Active ownership is a vital tool in Storebrand’ s approach to sustainable investments. The main objectives of reducing risk, and safeguarding and creating value on behalf of shareholders, are closely related to ESG risks. The aim of our engagements with the various companies is that we will influence them to move in a more sustainable direction. Therefore, we prioritise active ownership with companies where we see the greatest potential to foster change through our engagement efforts. We get involved in companies with a long-term perspective for change and collaborate with other investors to exert greater influence. We concentrate our resources on activities that can raise the standards for entire industries, rather than focusing on individual initiatives for each company in our portfolio. Certified green property investments ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixHow we contribute to the UN Sustainable Development Goals We invest in companies that deliver climate solutions and help achieve the Paris Agreement. We invest in solutions for safe drinking water at an affordable price, improved sanitation, water quality, efficient water consumption, water resources management and recovery of water- related ecosystems. We invest in companies that deliver solutions in sustainable management and efficient use of natural resources. Companies that contribute to circular economy and waste reduction in the life cycle of products. We invest in companies that deliver sustainable urban development and sustainable transportation systems and reduce cities’ impact on the environment. More specifically, companies that improve air quality and waste management, promote inclusion, promote resource efficiency, mitigates and adapts to climate change and increases resilience to natural disasters. We invest in companies that promote energy efficiency and enable increased production, distribution and use of renewable energy in the global energy mix. We are increasing investments in infrastructure, energy grids and storage and clean energy technology. 60 We invest in companies that support productive employment and decent work for all women and men. We increase exposure to companies that work against discrimination, which provide equal pay for equal work, and provide equal opportunities for senior positions at all levels of decision-making. We invest in companies that contribute to inclusive, fair and good education for all. We increase exposure to companies that offer products and services that contribute to increased access and accessibility to education, companies that help young people and adults increase their ICT knowledge and contribute to knowledge sharing about sustainability. We invest in companies that contribute to good health and quality of life. We are increasing exposure to companies that contribute to more people accessing essential health services, medicines and vaccines, health insurance, and companies that counteract deaths as a result of unsatisfactory water and sanitation. Certified green property investments ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixWe exercise active ownership towards the companies we are invested in, mainly through investor cooperation, direct dialogue with the management and board of directors, and by voting at general meetings, including by proxy voting. We prioritise direct dialogue when we believe this is the most effective way to influence ESG- related decisions. We have experienced that we have the greatest impact when working with other investors. This is one of the reasons why we participate in investor cooperation through the UN-backed Principles for Responsible Investment (PRI) network, and Climate Action 100+ to achieve dialogue with companies on climate change and deforestation, among other things. In our active ownership, we prioritised four topics in 2020: Decarbonization of companies Our climate change policy aims to reduce investment exposure to climate risk. We are part of several global collaborations where we have a leading role in engaging with companies that are top carbon emitters. With the decision to phase out investments in coal by 2026, we are engaging with investee entities on reducing their exposure to coal production, distribution and consumption. We will also co-file shareholder proposals on two-degree scenario planning and methane emission reduction targets. Conflict areas During 2020, Storebrand has carried out a screening to identify companies with operations in occupied Palestinian territories and occupied Western Sahara. These companies may contribute and profit from the occupation by supplying security and surveillance services and equipment. They may also profit from the maintenance, development and expansion of settlements by providing construction materials and services or directly financing the construction of settlements or by being involved in the exploitation of natural resources without the consent of the occupied people. According to reports from the UN and several Human Right organisations, the occupying powers in these territories continue expanding their occupation which in turn results in continuing violations of human rights. In addition, attention to these issues by companies and investors continues to be low. Therefore, we decided to make conflict areas one of our top engagement priorities. During the year we faced several dilemmas that highlighted the importance of thinking holistically about sustainability. Among other things, we chose to exclude companies with business activity in occupied territories, despite their business contributing to green restructuring. Money laundering Trust in the financial system is at the very core of our modern society. If banks and other financial institutions are used as tools to legitimate criminal activity through money laundering this trust will quickly erode. In recent years major banks all over the world, including major Scandinavian banks, have been implicated in money laundering scandals. We expect all financial institutions to follow international rules and the recommendations from the Financial Action Task Force on Anti-Money Laundering (AML). We will cooperate with other investors, to improve the AML systems in banks we are invested. Deforestation and biodiversity Protecting and restoring forests and other natural ecosystems can contribute as much as a third of what is needed to prevent irreversible climate change. Deforestation is driven by demand for agricultural land and natural resources. Raw materials and products associated with deforestation are part of thousands of global value chains. As one of the world’s first investors, Storebrand launched in 2019 a separate policy on deforestation, committing to deforestation-free investment portfolios by 2025. Therefore, Storebrand has stepped up its work on active ownership and been in dialogue with companies with activities that pose a high risk of deforestation. In collaboration with the Rainforest Foundation and KLP, we produced a report that maps the types of data sources, tools and methods investors can use to work systematically and fact- based with deforestation. Based on the findings of the report, Storebrand conducted a comprehensive risk analysis and identified companies and sectors with high deforestation risk. Further work in this area will be one of our priorities in 2021. Furthermore, Storebrand also initiated an investor coalition on deforestation, the Investors Policy Dialogue on Deforestation (IPDD). The coalition consists of 43 investors who manage approximately USD 6,000 billion and will work systematically towards governments in countries where deforestation is a problem. Storebrand and BlueBay Asset Management share the leadership responsibility for this work. Initially, the coalition focused on Brazil, where we led the dialogue with Brazilian authorities. The work gained great international recognition, and received massive media coverage in Brazil and internationally, giving us a solid starting point for our work to combat deforestation. Loss of biodiversity is a priority for Storebrand. The value of natural goods is estimated to be over NOK 100,000 billion globally, and loss of nature can have major financial consequences for companies. For us, it is important to establish nature-related risk as a concept, in the same way as climate risk is. Internationally, we have been invited to work with governments, companies and other financial institutions to establish the Task Force on Nature- related Financial Disclosures with accompanying standards for better company reporting for biodiversity. Exclusions All companies in our investment portfolio must satisfy the Storebrand Standard. This stipulates minimum requirements to human rights and international law, corruption and financial 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. 6161 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixAt the end of 2020, we had excluded 21536) companies for violating the Storebrand standard for sustainability. Of these exclusions, 139 were due to severe climate and environmental damage, which include conduct based exclusions such as; companies that derive more than 5 per cent of their revenues from coal and oil sands, companies that work against the goals and targets enshrined in the Paris Agreement and companies that are involved in severe and/ or systematic unsustainable production of palm oil, soy, cattle and timber. 10 companies are excluded due to gross corruption, 38 companies are excluded for human rights violations and international law, 25 exclusions on the tobacco criterion, 24 on the controversial weapons criterion and 2 companies that are excluded on our cannabis criterion. Active ownership to realise Sustainable Development Goals We want to raise awareness of international employer rights,especially in high-risk sectors. We seek to improve guidelines and contribute to both better relationships between management and employees and working conditions in supplier chains. As described previously, Covid-19 led to major negative consequences in the supplier industry, and we have had a particular focus on the textile industry. 38). We strive to ensure that the companies we are invested in ensure good health and quality of life for their employees. This year we also demanded that companies established proper practices and measures to protect their employees from Covid-19. In connection with the Covid-19 pandemic, we worked actively with supply chains, mainly in the textile industry. This is to reduce or prevent poverty, and ensure that people in the supply chain do not lose their jobs, or workwithout receiving compensation for work done. We are taking steps to avoid corruption and bribery as a result of inadequate corporate governance and systematic failure to uncover fraud and corruption. We vote to encourage greater accountability and transparency. In 2020 we focused on conflict areas and occupied territories and had dialogue with companies about their activities in such areas. 37) We engage with companies involved in serious and/or systematic unsustainable production of palm oil, soy, cattle and timber. In 2020, we had dialogue with other important stakeholders, including the authorities in Brazil, on measures to reduce biodiversity loss and to prevent deforestation. We engage with companies in the world that emit the most greenhouse gases, to reduce emissions, strengthen climate- related financial reporting and improve climate management. In 2020, we worked to ensure that the companies we are invested in will set climate targets in line with the Paris Agreement and report on climate risks in accordance with the TCFD recommendations. We engage with companies to reduce water consumption and greenhouse gas emissions in intensive livestock production. We raise environmental standards in key sectors, such as palm oil, soy, cattle and timber. In 2020, we analyzed companies with increased deforestation risk, that employ irresponsible production methods. 36) A company can be excluded on several criteria, therefore the total is less than the sum of the individual exclusions 37) https://www.storebrand.no/asset-management/barekraftige-investeringer/aktivt-eierskap/konfliktomrader 38) https://www.storebrand.no/asset-management/barekraftige-investeringer/aktivt-eierskap/storebrand-committed-to-act-in-support-of-the-investor-statement-on-coronavirus-response 62 6262 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExclusion criteria based on Sustainable Development Goals Storebrand standard (applies to all funds) Additional criteria (applies to selected funds) Companies involved in systematic corruption and Companies where more than 5 per cent of their financial crime. revenue comes from the production or distribution of weapons (small arms and military weapons). Companies that cause or contribute to serious and systematic violations of international law and human rights in areas of war. Government bonds issued by countries that are systematically corrupt, which systematically suppress basic social and political rights, or against which the UN Security Council has adopted sanctions. Companies with more than 5 per cent of their revenue come from the production or distribution of controversial weapons, including nuclear weapons, landmines, cluster munitions, biological weapons and chemical weapons. Companies involved in serious environmental damage. Companies with more than 5 per cent of their Companies that receive more than 5 per cent of their revenue come from the production or distribution of revenue from coal or oil sands-based operations. fossil fuels, or that have more than 100 million tons of CO2 in fossil reserves. Companies that contribute to severe and/or systematic deforestation through unsatisfactory production of palm oil, soy, cattle or timber. Companies that deliberately and systematically work and lobby to counter the objectives enshrined in the Paris Agreement. Companies with severe and/or systematic unsustainable palm oil production Companies that cause or contribute to serious and Companies where more than 5 per cent of their systematic violations of workers’ rights. revenue comes from the production or distribution of gambling or pornography. Companies with more than 5 per cent of their revenue Companies where more than 5 per cent of their come from the production or distribution of tobacco revenue comes from the production or distribution or drugs. of alcohol. 63 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.Appendix Case: New ecosystem-based climate strategy for investments In 2020, Storebrand launched a new climate strategy as an addition to the Group’s sustainable investment guidelines. The strategy aims to ensure that we are a driving force for a just transition to a low-carbon society, while helping to reduce climate risk in our investments. 3. Avoid investments that contribute greatly to climate change Storebrand will no longer invest in companies such as: • • • receive more than 5 per cent of its revenues from coal or oil sands-based activities is involved in severe and/or systematically unsustainable production of palm oil, soy, cattle and timber. This can reduce deforestation risk in portfolios, in line with our deforestation policy. deliberately and systematically work against the goals and targets enshrined in the Paris Agreement., for example through lobbying. Two of the world’s largest energy companies, Exxon Mobil and Chevron were excluded from all Storebrand’s funds in 2020 due to this criterion. Exceptions from divestment limits may be made in cases where companies can demonstrate a clear and rapid transition pathway. 4. Use ownership position to stimulate ambitious climate practices at portfolio companies We will seek to build positive dialogue with companies, aiming to support their transition to low carbon and climate-resilient activities. This will be done both through individual dialogue, but also through investor initiatives such as the PRI and Climate Action 100+. The strategy is divided into four main areas: 1 Make investment decisions in line with scientific consensus Using climate scenarios based on the climate models of the Intergovernmental Panel on Climate Change (IPCC) and limiting global warming to 1.5°C with no or with limited overshoot. 2. Reorient capital flows towards low-carbon, climate- resilient and transition companies Using the EU taxonomy for sustainable activities and establishing methods for measuring, monitoring and reporting on climate-related risks and identify investment opportunities. We will use the following metrics to measure, monitor and report climate-related risks and identify investment opportunities: • • • • Climate risk assessment and monitoring: All portfolio managers are responsible for assessing and reporting on the climate risk profile of their portfolios. In addition, we have established a methodology aimed at high emission sectors. Ranking and research: Use data to assess and manage climate-related risks and opportunities. Carbon footprint: Measure the carbon footprint of our portfolios and compare these with relevant indexes to map reduction targets. Use best available reporting practices. Adaptation metrics: Assess the preparedness of investee companies and entities to the physical impact risks associated with climate change. In addition, we will consider adaptation plans for companies that are particularly exposed to climate change. 64 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.Appendix Key performance indicators For detailed KPI definitions, see page 225. Key performance indicators Result 2017 Result 2018 Result 2019 Result 2020 Goal 2021 Goal 2025 Return on equity Solvency margin Dividend ratio Share of total assets screened for 11.3 % 172 % 40 % 13.7 % 173 % 68 % 8.0 % 176 % 0% 8.6% 178% 65% >10 % >150 % >50 % >10 % >150 % >50 % sustainability 100 % 100 % 100 % 100% 100 % 100 % NOK billion invested in fossil-free products 39) Carbon footprint from equity invest- ments: tonnes of CO2e per NOK 1 60 68 277 379 N/A N/A million in sales income (against index) 40) 28 (18) 22 (32) 18 (24) 12 (18) N/A N/A Carbon footprint from bond invest- ments: tonnes of CO2e per NOK 1 million in sales income (against index) 41) New New 7(12) 9 (16) N/A N/A Exposure to high emission sectors: NOK billion / share of equity investments 42) Investments in solutions (solutions companies, green bonds and property with environmental certification): NOK New 37.7 / 19% 34.6 /13% 32.2 /8% N/A N/A billion / share of total assets 43) New 38.8 / 5.5 % 53.7 / 6.5 % 92.6 / 9.6% 10 % 15 % Investments in green bonds, nok/ share of total bond investments New 8.4 / 2.9 % 12.4 / 3.1 % 22.2 / 5.2% Investments in solution companies, nok / share share investments New New 24.3 / 9.3 % 50.3 / 13.1% - - - - Certified green property, nok/ share of total real estate investments New 13 / 30 % 17 / 41 % 20.1 / 43.0% 52 % 74 % Companies that have been contacted to discuss ESG through active ownership: number/share of investment universe New 314 / 10.8 % 408 / 9.7% 572 / 12% CO2emissions real estate investments: total / kg CO2e per m2 10,551 / 10.25 10,818 / 9.96 10,228 / 9.12 8,456 / 7.9 N/A 8.2 N/A 6.5 39) Fossil-free products are one of several ways to achieve our overall goal of net zero emissions, and therefore we have not set a specific target for how much should be invested in fossil-free products. 40) The method of carbon footprint calculations has been further developed for the annual report 2020. Similar indicators for 2017 – 2019 are rendered with the same methodology to ensure a consistent comparison basis. The ratio of funds to index is similar with the current and previous method, but the absolute values on the indicators will thus differ from previous years’ reported figures. 41) The method of carbon footprint calculations has been further developed for the annual report 2020. Similar indicators for 2017 – 2019 are rendered with the same methodology to ensure a consistent comparison basis. The ratio of funds to index is similar with the current and previous method, but the absolute values on the indicators will thus differ from previous years’ reported figures. 42) The figure applies to equity investments. For more information, see the chapter on climate risks and opportunities, especially page 70. See also description in the list of definitions from page 225. 43) We have decided to set an overall target for 2020 and 2025, and not a target for each asset class. 65 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.Appendix Risk Our risk management framework is designed to ensure that we take the appropriate risk for delivering returns to customers and owners, while protecting them, our employees and other stakeholders from adverse events and losses. The framework covers all risks Storebrand may be exposed to. The main risks are business risk, financial market risk, insurance risk, counterparty risk, operational risk, climate risk and liquidity risk. The Board of Storebrand ASA and the directors of the subsidiaries adopt a risk appetite and risk strategy at least once per year. Risk- taking shall contribute to the achievement of our strategic and commercial goals, including customers receiving a competitive return on their pension funds, and that Storebrand receives adequate payment for taking on 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, we saw a positive development in the number of reported incidents in 2020. Fewer customer and process-related incidents were reported compared to 2019. The number of “high-risk incidents” was also fewer than the year before, but their share of total is about the same as last year. Covid-19 had limited impact on Storebrand’s operations, but it caused major fluctuations in the financial markets. The first phase was handled as an emergency situation. Home office and digital meeting places were adopted to prevent the risk for contagion. Work processes were successfully restructured without any significant negative events. Our customer service and deliveries were affected to a small extent. The pandemic and the economic consequences of lock downs to limit contagion both in Norway and internationally resulted in large stock market declines, wider credit spreads, falling interest rates and a lower turnover for many financial assets during the first part of 2020. The unrest, in combination with falling oil prices, resulted in a significant depreciation of the Norwegian krone. In the subsequent three quarters of the year, most markets recovered. Financial markets stabilised, helped by extensive rescue packages from governments. At the beginning of 2021, the interest rate level was still significantly lower than a year earlier, however. The financial market turmoil was handled within our normal framework for risk management in the Group. The persistent need for measures to limit contagion means that the risk is still higher than normally. Covid-19 also affects our insurance risk. The greatest risk is associated with rising unemployment as a result of a weak economy, which has historically led to an increase in disability. Storebrand has strengthened the disability reserves to address the increased uncertainty. Please also read note 2 for more information related to uncertainties arising from the Covid-19 pandemic. 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 people than expected may become disabled and/or fewer disabled people 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 insurance. Climate change is one factor which may affect future claims. Savings Savings consists of unit-linked insurance and other non- guaranteed 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. Managing customer’s assets in a professional and sustainable way, which at that at the same time ensures a good risk-adjusted return, is however important to attract new customers and create growth. The asset management business offers active and passive management, as well as management of fund-in-fund structures. including regulatory compliance, are the Operational risks, 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. 66 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixGuaranteed pension Guaranteed Pension encompasses savings and pension products with guaranteed interest rates. The greatest risks are financial market risk and longevity risk. A common feature of the products is that Storebrand guarantees a minimum return. In Norway, the return must exceed the guarantee in each year, while in Sweden it is 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 business, but there is a large back-book of reserves. New premiums are mainly in Defined Contribution pensions (unit linked) or hybrid schemes with zero per cent guarantee. Storebrand wants to grow in the guaranteed public occupational pension market and received new customers in 2020. Public pension products differ from guaranteed pension products in the private sector because in the public sector, the employer pays for the interest rate guarantee, even for resigned employees and pensioners. 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, primarily in investment grade short-term interest-bearing securities. Tax Changes have been made to the Norwegian tax legislation for the insurance industry in recent years. Storebrand and the Norwegian Tax Administration have interpreted some of the legislation changes and the associated transitional rules differently. Consequently, Storebrand has three significant uncertain tax positions with regards to recognised tax expenses. These are described in more detail in note 8. Should Storebrand’s interpretation be accepted in all three cases, an estimated positive tax result of up to NOK 2.8 billion may be recognised. Should all the Norwegian Tax Administration’s interpretations be the final verdict, a tax expense of NOK 1.8 billion could be recognised. The Norwegian Tax Administration is expected to come with their decision on whether to retroactively change Storebrand’s tax bill in early 2021. However, the timeline for settling the process with the Norwegian Tax Administration might take several years. If necessary, Storebrand will seek clarification from the court of law on the matter. 67 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixClimate risks and opportunities Why Climate change and the transition to a low-carbon society can have a significant impact on our business. This may be further exacerbated by changes in the Norwegian economy, which is vulnerable to falling oil prices and lower activity in the oil and gas industry. In developing our climate strategy, we looked at how Storebrand’ s activities affect climate change, how climate change and climate policy can affect our business, and how we can adapt to avoid or mitigate potential negative impacts. In addition, we identified opportunities as a result of a changing climate and the transition to a low-carbon economy, what these entail for us and how we can capitalise on them in the best possible way. This is described in the chapter A driving force for sustainable investments on page 57. The effects on investments and liabilities may be sudden in the form of market unrest, or they may unfold gradually 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 Norway. A potential trigger is if the policy is abruptly strengthened to achieve Norway’s goals based on the Paris agreement. A potential effect is a country-specific fall in interest rate. As part of our efforts to reduce risk, in 2020 we mapped Storebrand’s exposure to the fossil sector, analyzing revenues from pension premiums, and disability coverage related to the sector and underlying industries. We have used the recommendations of the Task Force on Climate Related Financial Disclosures (TCFD) as a framework44) for our disclosure on climate-related financial risks. The reporting on the impact our business has on climate is reported elsewhere in this report, mainly in the chapter, Keeping our house in order on page 32, and in the chapter A driving for sustainable investments on page 57 and 59.Vi have established a TCFD index, which summarises where the information recommended through the TCFD framework is presented in this report. The index is located as an attachment on page 199. Our approach Storebrand assesses climate risk through the same framework as other risks. The overall risk, including climate risk, is summarised in the Board’s risk review. Risk assessments are broad and include reputational risks associated with Storebrand’s sustainability position. In the Group’s Own Risk and Solvency report (ORSA), the main objective is to assess climate risks for investments, insurance obligations and solvency margins in different scenarios. Climate risk differs significantly from other risks, especially along two dimensions. Climate risk, especially the physical risk, is very long-term. Therefore, the risk is assessed in a longer time frame. In addition, historical events have limited relevance. Different scenarios are used as the basis for the assessment. Storebrand has defined three scenarios based on the framework developed by Network for Greening the Financial System (NGFS). The network is established by central banks and supervisory authorities. The aim is to develop a framework for assessing and managing climate risk and encouraging the financial sector to support the transition to a low-carbon economy. The scenarios will be further developed, including quantitative stress tests, as the basis for the supervision process and analyses of financial stability. Too little, too late Scenario analysis High Disorderly s k s i r n o i t i s n a r t 2 Disorderly 1 Orderly Orderly Low Physicalrisk 3 Hot house world Hot house world High The scenarios are based on two dimensions that affect the risk. • How serious will the impact of global warming be? • (physical risk) Is the transition controlled or disorderly? (transition risk) Storebrand has committed to the Paris Agreement’s goal of limiting global warming to 1.5 degrees and will work for a controlled transition, similar to scenario A. 44) Further details on climate risks and opportunities can be found in Storebrand’s Sustainability Library https://www.storebrand.no/en/sustainability/sustainability-library 68 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.Appendix Scenario analysis Storebrand has used the NGFS framework and associated scenarios to assess climate risk. The scenarios used can be simplified as follows: persistently low interest rates are also relevant to climate risk, where climate change and climate policy could be affected by potentially contributing underlying causes. 1) Controlled: Climate policy is restructured swiftly and with force with the aim of reaching zero emissions by 2050 and limiting global warming to 1.5 degrees. The restructuring is facilitated by the fact that carbon capture becomes technically and economically viable to some extent. 2) Delayed: Varying degrees of climate crisis understanding, complex decision- making and limited technology developments delay a coordinated restructuring of climate policy in relation to the goals of the Paris Agreement. From about 2025, clearer signs of negative climate change are increasing acceptance of costs of severe austerity. Overall, the restructuring will be large enough for global warming to remain below 2 degrees. 3) Warm world: Greenhouse emissions continue to grow, based on continuance of already existing emission-reduction measures. Low sense of crisis, lack of coordination and short-term policy priorities mean that already adopted future restrictions are implemented to a lesser extent. By 2050, emissions are higher than present levels and global warming will be above 3 degrees. The economic implications of the potentially catastrophic climatic changes of scenario 3 cannot be quantified in a meaningful way. Therefore, we have based our assessment on the consequences of the scenarios controlled (1.5 °C) and delayed (> 2 °C). Based on these two scenarios, we have identified potential risks and assessed them in short (1-3 years) and long term (3-10 years). 45) Overall findings Physical climate risk Physical climate change lead to lower returns, both for equities, bonds and property investments. The risk is mainly long-term and most prevalent if climate change is dramatic, expressed in scenario 3. Insurance obligations can also be negatively affected. Storebrand exposure to climate change through direct insurance is very low. Yet, limited economic growth can cause interest rates to remain lower than they would otherwise. This has a negative impact on our guaranteed obligations. The combination of lower returns on assets, and higher insurance liabilities could negatively affect our solvency margin. The effect can hit abruptly in the form of market turmoil, or over time in the form of lower average returns and persistently low interest rates. In practice, climate effects on returns and interest rates are very difficult to isolate from other effects. The risk is therefore considered to be covered by the capital requirements for market risk. The scenarios for negative development in the financial market and Transition risk Transition risk can affect investment returns, even in the short and medium term. Given a rapid transition to a low-carbon economy, exemplified in scenario 1, there is a risk that the oil and gas sector will be particularly affected. Storebrand has adapted its investments to reduce its climate footprint, and a large part of our investments are in fossil-free funds. A large proportion of our real estate investments have green certificates. This contributes to reduced climate risk. On the other hand, there is a risk that future returns for investments in solution companies are overvalued. The risk is greatest if the transition to a low-carbon society is delayed, as expressed in scenario 2. There may be a risk of overvalued valuations also in scenario 1, for example, if powerful government initiatives and restrictions are implemented faster than technology development and investment opportunities. Transition risks can also lead to reduced economic growth, lower investment returns and increased insurance liabilities as a result of lower interest rates. The Norwegian economy is particularly vulnerable to developments in oil prices and activity in the oil and oil services sector. Overall, the transition risk is greatest with a delayed, but more restrictive approach, as expressed in scenario 2. In the short term, we find the swift and forceful climate policy restructures needed in scenario 1 to pose the greatest risk. Storebrand is particularly exposed to developments in the Norwegian economy because higher levels of unemployment normally lead to increased levels of disability. Limited economic growth over time also poses a risk to Storebrand, given that it results in reduced growth in wages and employment, and thus lower growth in pension premiums. The fossil sector poses a particular risk. A review of the customer base shows that Storebrand has a significant exposure, both against disability coverage and pension savings premiums related to employees associated with companies in the fossil sectors. 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 and, in the chapter driving force for sustainable investments. Through Storebrand’ s climate strategy for investments, and our commitments through Net Zero Asset Owner Alliance, our target is to ensure that our investment portfolio shall be climate neutral by 2050. Part of the commitment is for Storebrand to set intermediate targets for emission reductions and report on target achievement. 45) Since climate risk is integrated into our structured framework for risk assessment that only operates with these two time horizons, we have not included risk that could be felt in the even longer term, ie. in ten years or more 69 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.Appendix We have established a framework with the following targets for 2025: • Emission targets for equity, corporate bonds, and real estate investments: In line with the IPCC’s 1.5°C scenarios and commitments communicated through Storebrand’s climate strategy and the Net Zero Asset Owner Alliance (NZAOA), we aim to reduce the carbon footprint46) in the Storebrand Group’s total equities, corporate bond, and real estate investments by at least 32 per cent by 2025 with the base year in 2018. 47) • Climate reduction objectives for high emission sectors: Storebrand will set targets for emissions reductions for high- emission sectors during the first half of 2021 48). See our equity exposure to high emission sectors below. • Be an active owner and driving force: Storebrand Asset Management (SAM) leads Storebrand’s work with active ownership. In line with SAM’s strategy for active ownership, particular focus will be placed on our active ownership and engagements with the 20 companies where we own the largest emissions.49) This will mainly be done in cooperation with other investors in initiatives such as Climate Action 100+. • Reorient capital towards solution companies: Storebrand’s target is that 15% of our total investments will be invested in what we define as solutions by 2025. It includes equity investments in solution companies,50) green bonds, certified green property and investments in green infrastructure. • Engage customers and offer solutions: Storebrand aims to engage customers and offer products and solutions that ensure more capital in invested in solutions and less capital is invested in high-emission companies and sectors. Sector-specified exposure to high emission sectors Targets and metrics • Carbon footprint in equity investments: 12 tonnes CO2equivalents per NOK/SEK 1 million in sales income (compared to 18 index) 51) • Carbon footprint in bond investments: 9 tonnes CO2equivalents per NOK/SEK 1 million in sales income (compared to 16 index) 51) • Carbon intensity in real estate investments: 7.9 tonnes CO2equivalents per m2 • Exposure to high emission sectors NOK 32.2 billion / 8 per cent of total assets • Number of active company engagements related to climate and environmental-related risks and opportunities: 433 • Number of companies that have been excluded due to severe climate and environmental damage: 139 In 2020 we launched a new climate strategy. This entails, among other things, that Storebrand will no longer invest in companies that receive more than 5 per cent of their revenues from coal, oil sands-based activities, are involved in severe and/or systematically unsustainable production of palm oil, soy, cattle and timber. This can reduce deforestation risk in portfolios, in line with our deforestation policy, or in companies that deliberately and systematically work against the goals and targets enshrined in the Paris Agreement52), for example through lobbying. In addition, by 2025 our investment portfolio shall be completely free from companies that contribute to illegal deforestation. We currently survey all companies at high risk of contributing to deforestation and will report annually on this process from 2021. Additional measurement parameters and measurements can be found in the chapter a driving force for sustainable investments. Sector 53) Aluminum Aviation Cement Chemicals Energy Heavy duty automobiles Light duty automobiles Shipping Steel Utilities Total 2018 (Bn NOK ) 2019 (Bn NOK ) 2020 Change 2018-2020 (Bn NOK ) (Bn NOK ) 1,2 3,1 0,3 6,8 15,8 0,6 3,7 0,9 0,8 4,6 37,7 1,2 3,6 0,4 8,0 12,2 0,9 3,8 0,6 1,1 2,9 34,6 1,5 3,3 0,6 9,8 7,0 1,1 4,3 0,7 1,4 2,5 32,2 0,2 0,1 0,3 3,0 -8,8 0,5 0,6 -0,2 0,7 -2,1 -5,5 46) Calculated as Weighted Average Carbon Intensity.See calculation methodology in Definitions from page 225. 47) This means relative emission reductions. The methodology used is weighted average carbon intensity (tonnes CO2e per NOK 1 million in sales income) for shares and bonds and carbon intensity for real estate investments (CO2 per m2). 48) Based on Net Zero Asset Owner Alliance’s list of high-emission sectors, which includes the table with our specified exposure on page 70 49) Calculated on the share of owned share capital in the company multiplied by the company’s total Scope 1-2 emissions 50) See definition page 225 51) Available data until q3 2020. 52) See case on page 64 53) The GICS codes included in the various sectors are described in Definitions from page 225 70 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixReal estate investments Storebrand has direct real estate investments equivalent to NOK 49 billion, which constitutes 5 per cent of assets under management. Physical risk is largely related to the effects of extreme weather on physical assets. Transitional risks are linked to uncertainty about long-term changes. We expect the real estate sector to be subject to new requirements related to energy efficiency and climate impact. Our ability to adapt to these requirements is essential for us to manage risk and capitalise on market opportunities. In 2020, Storebrand’s property subsidiary, in collaboration with the The Science Based Targets Initiative (SBTi), tested their methodology for setting science-based targets in line with the1.5 degree target of the Paris Agreement. The aim of the pilot project was to establish a target, and an associated emission pathway to 2050. The pilot project was part of a report published in connection with SBTi launching its methodology to set science-based emission targets for financial institutions. The pilot project and the associated target includes intermediate targets on the road to carbon neutrality in 2050, and is a management tool that will be used in our further work on transition risk in the property portfolio. Risk-reducing measures that we have already implemented include property certification and rating through the Global Real Estate Sustainability Benchmark (GRESB). 54) Through 2020, we have been working on a project to develop a tool for climate accounting and forecasting for real estate, which is due to be completed in 2021. SPP Fastigheter, Storebrand’ s Swedish subsidiary in real estate investments, conducted an assessment in 2020 of its exposure to physical climate risk, mainly increased rainfall and flooding for all its properties. The analysis indicates that a couple of properties in the portfolio are at medium flooding risk, and work is underway to assess potential adaptation measures at these properties Targets and metrics • Long-term target of 100 per cent environmentally certified property. The share of direct real estate investments that had green certificates in 2020 was 43 per cent. The target is to increase this to 74 per cent by 2025. • Sustainability rating of all real estate: Our direct real estate investments are rated by GRESB in four different portfolios, and the portfolios are among the best in the Nordic region. The score increased almost 4 per cent in 2020 from 82 in 2019, to an average of 85 out of 100. With that, three out of four portfolios are ranked in the top 20 per cent globally, and awarded the maximum 5 stars. • Commitment to energy efficiency and greenhouse gas emissions: Continuous improvements in energy efficiency are achieved through several measures to optimise operations. The total carbon emissions in direct real estate investments continued to decrease, ending at 8 456 tons of CO2equivalents in 2020, or 7.9kg CO2e/m2. The goal for 2025 is to reduce this to 6.5kg CO2e/m2. Additional measurement parameters and targets relevant to climate-related risks related to real estate investments can be found on pages 59 and 65. Insurance The direct impact of climate change on Storebrand’s insurance obligations is limited because our business is largely based on reassurance where the terms of the agreement are adjusted annually. As a responsible insurance company, we still have a responsibility to assist our customers in securing themselves and their assets against potential climate risks. The biggest climate- related financial risk to our property and non-life insurance business is increased insurance settlements related to climate- related damage. In the long term, rising sea levels and changes in weather patterns can also have an impact. Risks associated with changing customer behaviour, technological developments and new regulations will also affect the property and non-life insurance market. Our main measures to reduce climate risk are the following: • • • • • 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 high exposure to physical risk 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: As one of 18 insurance companies, we have participated in a project for further development of standardised reporting for insurance providers in accordance with TCFD. We participated in the working group which analysed physical risk related to increased rainfall and flooding. The work resulted in a report launched in January 2021.55) Rewarding damage prevention: We actively communicate with our customers, encouraging damage prevention measures, such as securing property during periods prone to flooding Measurements and measurement parameters • Share of insurance premiums from electric car insurance: 18,8 per cent in 2020 • Our suppliers should have set targets for emissions cuts in the short and long term by 2025 • All suppliers must be climate neutral by 2025 54) GRESB assesses and rates real estate investments with respect to ESG performance and delivers standardised and validated data to capital markets. 55) https://www.unepfi.org/psi/wp-content/uploads/2021/01/PSI-TCFD-final-report.pdf 71 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.Appendix Working environment and HSE Storebrand’s absence due to illness has been at a stable low level for many years. Absence due to illness was 2.3 per cent in Norway and 1.8 per cent 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 follow-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. There were no (zero) injuries to a staff member in 2020. No damage to property was reported, and no accidents were otherwise reported in the Storebrand Group in 2020. resources Storebrand’s work on gender equality, human management, working environment and ethical regulations is described in more detail in the chapters People and Keeping our house in order. See our compilation of sustainability indicators on page 221. 72 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixProgress on our most material sustainability KPIs Key performance indicators Carbon footprint from equity investments: tonnes of Co2e per NOK 1 million in sales income (against index) Status 2019 Status 2020 Target 2025 18 (24) 12(18) N/A56) Carbon footprint from bond investments: tonnes of Co2e per NOK 1 million in sales income (against index) 7 (12) 9 (16) N/A56) s t n e m t s e v n I l e p o e P Exposure to high emission sectors: NOK billion/share of equity investments 34,6 /13 % 32,2 /8 % N/A56) Investments in solutions: NOK billion/ share of total AUM 53,7 / 6,5 % 92,6 / 9,6 % 15 % av AUM Comapny dialogues on ESG: number/share 408/9,7 % 572/12% N/A Carbon intensity property investments: co2/m2 9,12 tonn 7,9 tonn 6,5 tonn Property investments with green certificates: share of property investments Gender balance managment all levels: share women Engagement score all employees: 41% 39 % 43 % 39 % 74 % 50 % Storebrand score/ industry average in peakon, scale from 1-10 8,0 (7,8) 8,3 (7,8) > 8,0 Lysaker, 9 February 2021 Board of Directors of Storebrand ASA Didrik Munch (sign.) Chairman of the Board Karin Bing Orgland (sign.) Laila S. Dahlen (sign.) Marianne Bergmann Røren (sign.) Martin Skancke (sign.) Karl Sandlund (sign.) Fredrik Åtting (sign.) Magnus Gard (sign.) Hans-Petter Salvesen (sign.) Bodil Catherine (sign.) Valvik Odd Arild Grefstad (sign.) Group Chief Executive Officer 56) We aim to reduce the carbon footprint of the Storebrand Group’s total equity, corporate bond and real estate investments by at least 32 per cent by 2025 with a base year in 2018. In 2021, we will set targets for the individual asset class. See page 69 for more information. 73 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s reportStrategy 2021-23 43Strategic highlights 44Group Results 47Official Financial Statements of Storebrand ASA 52Outlook53A driving force for sustainable investments 57Risk66Climate risks and opportunities 68Working environment and HSE 72Progress on our most material sustainability KPIs 736.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.Appendix 6 Shareholder matters 10 Shareholder matters 74 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixShareholder matters Share Captial, 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 end 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 2020, the Company owned 416,255 treasury shares, which corresponds to 0.1 per cent 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 municipalities in Norway and from 48 countries. In terms of market capitalisation, Storebrand was the 16th largest company on the Oslo Stock Exchange at the end of 2020. Share purshase 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 2020, each employee was given the opportunity to buy shares in Storebrand and almost half of the Storebrand’s employees purchased a total of 384,670 shares. Foreign ownership As at 31 December 2020, foreign ownership totalled 56.6 per cent, compared to 56.2 per cent at the end of the 2019. Trading volume for shares in Storebrand In 2020, 585 million shares were traded, compared to 335 million shares in 2019. The trading volume in monetary terms was NOK 30,552 million in 2020, up from NOK 21,348 million in 2019. In relation to the average number of shares, the turnover rate for shares in Storebrand was 125 per cent. Share price performance Shares in Storebrand yielded a total return of -7.0 per cent in 2020. In the same period, the Oslo Stock Exchange’s OSEBX Index ended at 4.6 per cent, whereas the European Insurance Index Beinsur yielded a total return of -7.9 per cent for the corresponding period, measured in NOK. Dividend policy Storebrand’s dividend policy sates that the aim is to pay an ordinary dividend of more than 50 per cent 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 per cent. If the solvency margin is above 180 per cent, the Board intends to propose special dividends or share buy backs. Capital gains taxation Dividends are subject to tax for personal shareholders. The shareholder model entails that share dividends after the deduction for risk-free return shall be multiplied by an adjustment factor of 1.44. This amount is taxed at the capital income tax rate (22 per cent), which gives an effective tax rate of 31.68 per cent on dividends. Deduction for risk-free return in the individual year is the share’s input value (plus any previously unused deduction) multiplied by a risk-free interest rate. The risk-free interest rate will be set by the Directorate of Taxes in January the year after the income year. Only when a dividend that exceeds the total deduction for risk-free return will the dividend be subject to tax. Storebrand share Highest closing price (NOK) Highest closing price (NOK) Closing price on 31/12 (NOK) 2020 74.24 34.73 64.20 2019 2018 73.98 50.86 69.02 75.20 59.48 61.64 2017 70.45 46.97 66.9 2016 47.1 28.45 45.92 2015 35.98 23.21 34.95 Market cap 31/12 (NOK million) 30,034 32,289 28,836 31,296 20,660 15,724 Annual turnover (1000s of shares) 585,004 335,202 445,614 427,632 589,322 707,870 Average daily turnover (1000s of shares) Annual turnover (NOK million Rate of turnover (%) 2,321 30,552 125.1 1,346 3,094 21,348 30,477 71.7 95.3 2,450 25,359 94.9 2,780 21,249 131 2,820 20,907 157.3 Number of ordinary shares 31/12 (1000s of shares) 467,814 467,814 467,814 467,814 449,910 449,910 Earnings per ordinary share (NOK) Dividend per ordinary share (NOK) Total return (%) 5.02 3.25 -7.0 4.43 0 16.8 75 7.89 3.0 -4.7 5.28 2.1 49.1 4.73 1.55 31.4 2.63 0 19.7 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. AppendixInsider trading As one of the country’s leading financial institutions, Storebrand is dependent on maintaining an orderly relationship with financial 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. Investor relations Storebrand has a focus on comprehensive and effective communication 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 presentations of interim reports are published THE 20 LARGEST SHAREHOLDERS Based on a screening of the shareholder list per. 31.12.2020 Fund Manager Folketrygdfondet Allianz Global Investors T Rowe Price Global Investments EQT Fund Management KLP Vanguard Group Handelsbanken Asset Management M&G Investment Management DNB Asset Management Storebrand Asset Management BlackRock Varma Danske Bank Asset Management Highclere International Investors Solbakken AS Nordea Asset Management HSBC Trinkaus & Burkhardt Deka Investment Dimensional Fund Advisors BMO Global Asset Management (UK) on Storebrand’s website: www.storebrand.com/ir. In December 2020, Storebrand held a capital markets day outlining the strategy for 2021-2023. 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. Shareholder´s 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 33,865,368 28,371,592 18,500,000 14,237,832 13,510,084 12,901,293 10,922,166 10,261,001 10,245,078 9,741,980 9,403,234 9,398,795 7,348,235 6,766,008 6,737,269 6,373,970 5,950,437 5,257,200 4,717,507 11.04 7.24 6.06 3.95 3.04 2.89 2.76 2.33 2.19 2.19 2.08 2.01 2.01 1.57 1.45 1.44 1.36 1.27 1.12 1.01 76 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix9 Annual Accounts and Notes Income statement Storebrand Group 78 79 Statement of total comprehensive income 80 Statement of Financial Position 82 Statement of changes in equity 82 Statement of cash flow 85 Notes Storebrand ASA 163 Income statement 163 Statement of total comprehensive income 164 Statement of Financial Position 165 Statement of changes in equity 166 Statement of cash flow 167 Notes 180 Declaration by member of the Board and the CEO 181 Indepentent auditor’s report 77 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 - derivatives at fair value - loans at fair value - bonds at amortised cost - loans at amortised cost - profit from investments in associated companies/joint ventures 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 - derivatives at fair value - loans at fair value - bonds at amortised cost - loans at amortised cost - properties - profit from investments in associated companies/joint ventures 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 period attributable to: Share of profit for the period - shareholders Share of profit for the period - hybrid capital investors Share of profit for the period - non-controlling interests Total Earnings per ordinary share (NOK) Average number of shares as basis for calculation (million) There is no financial instruments that gives diluted effect on earnings per share 78 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 2020 44,188 22 785 -397 37 212 687 52 2019 32,366 40 600 -12 14 214 802 39 14,632 37,318 3,550 5,771 23 4,202 909 1,680 569 4,109 81,031 -29,531 -37,929 -4,327 -4,914 -826 -793 -78,320 2,711 -492 2,219 136 2,355 2,345 10 2,355 5.02 467.2 4,167 1,424 11 3,912 546 1,864 341 3,758 87,403 -26,756 -44,725 -5,892 -4,828 -1,238 -927 -84,366 3,037 -444 2,593 -511 2,082 2,067 12 3 2,082 4.43 466.8 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixSTOREBRAND GROUP Statement of total comprehensive income NOK million Profit/loss for the year Note 2020 2,355 Change in actuarial assumptions Fair value adjustment of properties for own use Other comprehensive income allocated to customers Tax on other comprehensive income elements not to be reclassified to profit/loss Total other comprehensive income elements not to be reclassified to profit/loss Translation differences foreign exchange Gains/losses from cash flow hedging Total other comprehensive income elements that may be reclassified to profit/loss 21 33 41 Total other comprehensive income elements Total comprehensive income Total comprehensive income attributable to: Share of total comprehensive income - shareholders Share of total comprehensive income - hybrid capital investors Share of total comprehensive income - non-controlling interests Total -110 83 -83 15 -95 305 -33 273 178 2,532 2,515 10 8 2,532 2019 2,082 3 -22 22 12 15 -168 -36 -204 -190 1,892 1,879 12 1 1,892 79 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 31.12.20 31.12.19 STOREBRAND GROUP Statement of Financial Position NOK million Assets company portfolio Deferred tax assets Intangible assets and fair value adjustments 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 26 27 21 28 29 1,780 6,303 1,397 283 10, 30, 31 10,639 10, 30 103 10, 30, 32 31,058 8,12,33 56 50 67 Accounts receivable and other short-term receivables 30.34 7,018 Financial assets at fair value: - Equities and fund units - Bonds and other fixed-income securities - Derivatives - Loans to customers Bank deposits Minority portion of 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 fund units - Bonds and other fixed-income securities - Derivatives - Loans to customers Bank deposits Total assets customer portfolio Total assets 8, 12, 30, 35 384 8, 10,12, 30, 36 28,833 10,12, 30, 37 32 10, 30 1,389 722 2,775 59,845 152,701 29 6,167 10, 30, 31 10, 30, 31 10, 30, 32 92,846 13,026 23,769 24 8, 12, 33 32,067 12, 33 30, 34 1,609 404 8, 12, 30, 35 8, 10, 12, 30, 36 10, 12, 30, 37 32 230,446 148,162 8,587 7,665 10, 30 10,290 575,061 727,763 80 1,430 6,220 2 1,075 227 8,256 41 29,798 26 49 67 4,824 323 28,512 1,183 389 3,119 44,933 130,474 4,045 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 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNOK million Equity and liabilities Paid-in capital Retained earnings Hybrid capital Non-controlling interests Total equity Subordinated loans Capital buffer Insurance liabilities Pension liabilities Deferred tax Financial liabilities: - Loans and deposits from credit institutions - Deposits from banking customers - Securities issued - Derivatives company portfolio - Derivatives customer portfolio - Other non-current liabilities Other current liabilities Minority portion of consolidated mutual funds Total liabilities Total equity and liabilities Note 31.12.20 31.12.19 12,858 22,839 226 35,923 9,110 29,319 9,30 38 38,39 536,028 21 26 352 849 9,12,30 9,12,30 9,12,30 10,12,30,37 10,12,30,37 9,30,40 1,653 15,506 20,649 114 851 1,355 16,209 59,845 691,840 727,763 12,856 20,264 226 52 33,398 8,925 23,825 477,171 266 768 446 14,404 18,729 86 908 1,037 8,274 44,933 599,772 633,170 Lysaker, 9 February 2021 Board of Directors of Storebrand ASA Didrik Munch (sign.) Chairman of the Board Karin Bing Orgland (sign.) Laila S. Dahlen (sign.) Marianne Bergmann Røren (sign.) Martin Skancke (sign.) Karl Sandlund (sign.) Fredrik Åtting (sign.) Magnus Gard (sign.) Hans-Petter Salvesen (sign.) Bodil Cahterine Valvik (sign.) Odd Arild Grefstad (sign.) Group Chief Executive Officer 81 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 controlling Total Total Currency Total Non- Majority’s share of equity Equity at 31 December 2018 2,339 -2 10,521 12,858 1,076 18,706 19,782 2,067 2,067 -166 -22 -188 176 12 57 3 -2 32,873 2,082 -190 -166 2,045 1,879 12 1 1,892 Equity at 31 December 2019 2,339 -5 10,521 12,856 910 19,355 20,264 -3 -3 -27 -27 3 3 -1,399 -1,399 27 27 50 -12 226 10 2,345 2,345 298 -128 170 298 2,217 2,515 10 Profit for the period Total other comprehensive income elements Total comprehensive income for the period Equity transactions with owners: Own shares Hybrid capital classified as equity Paid out interest hybrid capital Dividend paid Other Profit for the period Total other comprehensive income elements Total comprehensive income for the period Equity transactions with owners: Own shares Hybrid capital classified as equity Paid out interest hybrid capital Other 3 3 33 3 24 33 3 24 -10 -59 Equity at 31 December 2020 2,339 -2 10,521 12,858 1,208 21,631 22,839 226 35,923 1) 467,813,982 shares with a nominal value of NOK 5. 2) Includes undistributable funds in the risk equalisation fund amounting to NOK 438 million and security reserves amounting NOK 68 million. 3) Perpetual hybrid tier 1 capital classified as equity. 82 -7 52 8 8 -29 53 -12 -1,399 21 33,398 2,355 178 2,532 36 3 -10 -35 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix STOREBRAND GROUP Statement of cash flow NOK million Cash flow from operating 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 operating 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 operating activities Cash flow from investing activities Payments - purchase of subsidiaries Net receipts/payments - sale/purchase of fixed assets Net receipts/payments - sale of insurance portfolios Net cash flow from investing activities Cash flow from financing activities Receipts - new loans Payments - repayments of loans Payments - interest on loans Receipts - subordinated loans Payments - repayment of subordinated loans Payments - interest on subordinated loans Net receipts/payments - loans to financial institutions Receipts - issuing of share capital / sale of shares to 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 83 2020 2019 28,825 -21,606 7,285 184 953 -102 -24 -5,197 3,790 14,108 -1,801 1,102 -12,270 -511 -2,657 -16,137 -2,029 -220 -48 45 -224 9,012 -7,048 -371 499 -872 -388 1,205 26 -10 2,052 -201 26,343 -20,723 -118 -765 1,014 -115 -21 -4,837 5,742 6,522 -1,419 -15 -3,368 -368 -2,092 -7,262 -740 -308 -96 29 -375 3,001 -1,769 -429 1,052 -253 -365 443 33 -68 -1,399 125 -75 -12 284 -831 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixSTOREBRAND GROUP Statement of cash flow (continue) NOK million Cash and cash equivalents at the start of the period Currency translation cash/cash equivalents in foreign currency Cash and cash equivalents at the end of the period 1) 1) Consists of: Loans to financial institutions Bank deposits Total 2020 3,160 -81 2,878 103 2,775 2,878 2019 3,951 41 3,160 41 3,119 3,160 The cash flow analysis shows the Group’s cash flows for operating, investing and financing activities pursuant to the direct method. The cash flows show the overall change in means of payment over the year. Operating activities A substantial part of the activities in a financial group will be classified as operating. 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 operating 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 lines in operating activities to neutralise the cash flows associated with the customer portfolio in life insurance. Investing 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 are not available for use by the Group. 84 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixSTOREBRAND GROUP Notes Business and risk 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: Corporate information and accounting policies Important accounting estimates and judgement Acquisitions 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 Income statement Note 14: Premium income Note 15: Note 16: Note 17: Note 18: Note 19: Note 20: Note 21: Note 22: Note 23: Note 24: Note 25: Note 26: 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 Intangible assets and fair value adjustments on Note 27: Note 28: Note 29: Note 30: Note 31: Note 32: Note 33: Note 34: Note 35: Note 36: Note 37: Note 38: Note 39: Note 40: Other Note 41: Note 42: Note 43: Note 44: Note 45: purchased insurance contracts Tangible fixed assets and lease contracts Investments in other companies Classification of financial assets and liabilities 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 Hedge accounting Collateral Contingent liabilities Securities lending and buy-back agreements Information about related parties 85 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 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 2020 were approved by the Board of Directors of Storebrand ASA on 9 February 2021. 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 as 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 IAS 39, and was generally applicable from 1 January 2018. However, for insurance-dominated groups and companies, IFRS 4 allows for the implementation of IFRS 9 to be deferred 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 at 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 2023. The Storebrand Group has conducted a provisional analysis of the classification and measurement of financial instruments in accor- dance with the present IAS 39 for the transition to IFRS9, based on the current business model for the individual instruments. For debt instruments that are expected to be classified and measured at amortised cost or fair value through total comprehensive in- come upon transition to IFRS9, a SPPI (“Solely payment of principal and interest”) test is carried out. This is a provisional categorisation under IFRS9, based on the present asset allocation. No assessments have been made of any changes in classification and measure- ment of financial assets under IFRS9 in connection with the transition to IFRS17. 86 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixIFRS9 - 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 1.1.2020 1.1.2020 31.12.2020 31.12.2020 Booked value Fari value Booked value Fari value AC AC AC AC AC AC AC AC AC AC AC AC AC AC 10,594 10,594 13,065 13,034 111,424 116,161 116,511 125,604 41 41 103 103 FVOCI 53,245 53,246 54,534 54,533 AC AC AC AC AC AC AC 288 288 294 294 5,274 5,274 7,422 7,422 180,867 185,605 191,928 200,990 14,404 14,404 446 446 18,729 18,728 8,925 8,661 9,010 8,661 51,166 51,250 15,506 1,653 20,649 9,110 16,209 63,127 15,506 1,653 20,738 9,115 16,209 63,221 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 1.1.2020 1.1.2020 31.12.2020 31.12.2020 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 194,343 194,343 230,830 230,830 156,639 156,639 176,995 176,995 7,126 7,126 8,386 8,386 Derivatives Total financial assets Financial liabilities Derivatives Total financial liabilities FVP&L/ Hedge accounting FVP&L/ Hedge accounting 5,314 5,314 9,977 9,977 363,421 363,421 426,188 426,188 FVP&L/ Hedge FVP&L/ Hedge accounting accounting 994 994 994 994 964 964 964 964 87 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixA large majority of the financial assets 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 assets measured at amortised cost are largely related to Norwegian pension liabilities with annual interest rate guarantee. Investment properties are measured at fair value. Intangible assets comprise excess value relating to insurance contracts and customer relations acquired in connection with a business combination and acquired and self-developed IT solutions. This excess value is measured at acquisition 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 amor- tised 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 New accounting standards that have a significant impact on the consolidated financial statements have not been implemented in 2020. For changes in estimates, see Note 2 for further information. 5. New IFRS that have not entered into force New standards and changes in standards that have not come into effect: IFRS 17 IFRS 17 replaces IFRS 4 Insurance Contracts and introduces new requirements for the recognition, measurement, presentation and disclo- sure of issued insurance contracts. The standard has not been approved by the EU, but is expected to be applicable from 1 January 2023. 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 transition method or 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 2023, with a requirement that comparable figures are stated. 88 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Storebrand is working on preparing for implementation of IFRS17, including assessing the effects implementation of IFRS17 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 includ- ed in the Group’s equity, unless there are options or other conditions that entail that minority interests are classified 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 Hold- ing 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 owner- ship interests and, as a result of this, they are classified as liabilities in the consolidated financial statements of Storebrand. 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 cur- rencies 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 eliminat- ed 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 in subsidiaries, 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 deci- sion-maker. Four segments are reported for: • Savings • • Guaranteed Pension • Other Insurance 89 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixThere are some differences between the result lines used in the income statement and the segment results. The Group’s income state- ment 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 Nor- wegian 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 rec- ognised when the uncertainty associated with the income is no longer present. Fixed fees are recognised as income in line with delivery of the service. 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 and classified as an intangible asset. Goodwill is not amortised, instead it is tested for impairment. Goodwill is tested for impairment annually when assessing the recoverable amount or if there are indications that impairment has occurred. Goodwill is allocated to the relevant cash generating units that are ex- pected to benefit from the acquisition so that it can subsequently be tested for impairment. If the discounted cash flow for the cash-gen- erating unit(s) that goodwill is allocated to is lower than the recognised 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. 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 acquisition cost of the asset must also be reliably estimated. The value of an intangible asset is tested for impairment when there are indications that its value has been impaired, normally by the related cash-generating unit(s) being tested Intangible assets are otherwise 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. Investment proper- ties are properties leased to tenants outside the Group. 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 are measured at fair value and the changes in value are allocated to the customer portfolios. 90 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 the financial asset/liability is not measured 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 trans- fers 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. 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. Measurement of impairment and doubtful financial assets For financial assets carried at amortised cost, an assessment is made on each reporting date 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 car- rying amount and the present value of the estimated future cash flows (excluding future credit losses that have not occurred) 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 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 classified as 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, Changes in fair value are recognised in the income state- ment. 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). 91 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixInvestments held to maturity Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity and that a compa- ny 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 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. 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. Deriv- atives 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 is recognised through profit or loss. Storebrand has selected early implementation of “Interest Rate Benchmark Reform—Amendments to IAS 39 and IFRS 7” (IBOR Reform) that was issued in September 2019. In accordance with the transitional rules, the amendments have been subsequently applied to hedg- ing 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 ineffectiveness will still be recognised in the income statement. The stipulated amend- ments 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. 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 92 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 that are not derivatives 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-uni- form 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 ac- quired 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 compa- nies, 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. 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 con- tracts, 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 (admin- istration 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 admin- istration 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 portfolio assigned to the contract. The proportion of profit in the risk result is included. The company is not exposed to investment risk on customer assets, since the customers are not guaranteed a minimum return. The only exception is in the event of death, when the beneficiaries are repaid the amount originally paid in for annuity insurance and for guaranteed account (Garantikonto). 93 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 his- torical 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 profit and loss account 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 All selling costs in the Norwegian life insurance business are expensed, whilst in the Swedish subsidiaries, parts of the 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. The additional statutory reserves cannot exceed 12 per cent of the premium reserve. If the limit is exceeded, the excess amount is as- signed 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 insur- ance 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 asTotaling the portfolio has a net unrealised excess value. The portion of the cur- rent 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 invest- ments 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 profit and loss account. 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 94 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendixany 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 por- tion 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. 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 informa- tion 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 pen- sion 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 expect- ed 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. 95 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix15-2. 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 activ- ities. 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 revalua- tion reserve for the property in question, the excess is expensed over the profit and loss account. The write-down period and method are reviewed annually to ensure that the method and period being used both correspond to the use- ful 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. The impairment test is carried out for each asset if the asset primarily has independent, inward cash flows, or possibly a larger cash-generating unit. 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. 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 in- come 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 pro- posed 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 96 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix the asset as tangible fixed assets and the lease liability as other debt. The recognised asset is amortised over the lease period and the de- preciation 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 rental amounts 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 in accordance with IFRS 13. Changes in the value of biological assets are recognised in the profit and loss account. Ownership rights to biological assets are recognised on the date of transfer pursuant to the purchase agreement. Annual income and expenses for forestry and uncultivated land are recognised. 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. 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 Norwe- gian and the Swedish activities. An immaterial asset (value of business in-force – VIF) linked to the insurance contracts in the Swedish activi- ties 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 impair- ment 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 97 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendixin the assumptions for future cost, mortality and other biometric assumptions may also have a significant impact on the recognised insur- ance 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 a minimum of one external valua- tion during 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 invest- ments various valuation techniques are applied in order to fix fair value. These include private equity investments, investments 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. Covid-19 2020 has been influenced by developments relating to the spread of the Coronavirus. From the latter part of February and throughout March, the pandemic and the consequences of shutdowns in both Norway and globally, resulted to financial turmoil, with falling share prices, increased credit spreads, reduced interest rates and lower earnings for many financial assets. Together with lower oil prices, these conditions also resulted in a significant weakening of the Norwegian krone. Increased unemployment has had a negative impact on the disability insurance results and necessitated the strengthening of reserves. It is uncertain as to how the present situation will develop going forward. Assisted by political measures, the financial market, and particularly the stock market, strengthened in the second half of the year. The final months of the year were characterised by both another wave of infections in a number of countries, but there has also been positive news regarding the testing of potential vaccines. Storebrand has a risk management system which, through principles that have been adopted, manages and mitigates the impact of volatile financial markets. Storebrand increased its insurance liabilities in the first quarter of 2020 based on the expected impact of the Covid-19 virus. The situation was closely monitored in the following three quarters of 2020, and no significant impact on the reserves due to Covid-19 was observed. The development of insurance liabilities will depend on future scenarios and is currently more uncertain than usual. Storebrand will con- tinue to monitor the development of Covid-19 and its effects on the economy. A long-term situation with high unemployment may result in higher levels of disability and increased liabilities. However, the current insurance liabilities represent Storebrand’s best estimate of the insurance liabilities. 98 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixCovid-19 and the uncertain macroeconomic situation mean that there is greater uncertainty relating to several estimates at the end of 2020 than was the situation prior to the start of the pandemic. There is still major uncertainty about the spread of Covid-19 and the con- sequences for society. There is thus also increased uncertainty regarding cash flows associated with financial instruments and investment properties that are priced based on level 3 calculations, as well as estimated expected losses on lending. 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 esti- mates. The Group’s business activities may give rise to disputes, etc. related to tax positions with an uncertain outcome. The Group makes pro- visions 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: Acquisitions On 14 August 2020, Storebrand Forsikring AS entered into an agreement with Insr Insurance Group ASA (Insr) to acquire customer portfo- lios from Insr. Storebrand Forsikring AS acquired the right and obligation to renew insurance agreements from Insr’s portfolios. The transition process for customers from Insr to Storebrand will take place gradually over a 12-month period from the renewal date for the customers, starting on 1 December 2020. Storebrand will pay consideration to Insr of 20-30% of renewed premiums, and has pledged to pay a minimum of NOK 70 million no later than six months after the end of the renewal period. This transaction will be recognised under intangible assets in the balance sheet as the purchase of customer lists in line with the gradual transfer, and will not be recognised as a business combination. Note 4: Profit by segments 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 contribu- tion 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 Insurance has responsibility for the Group’s risk products in Norway and Sweden. The unit provides health insurance in the Norwegian and Swedish corporate and retail markets, P&C insurance and personal risk products in the Norwegian and Swedish retail markets and employee-related and pension-related insurance in the Norwegian and Swedish corporate markets. Guaranteed pension The guaranteed Pension segment includes long-term pension saving products which provide 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. 99 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Other The result for the holding company Storebrand ASA is reported under Other, as well as the result for the company portfolios and small subsidiaries of Storebrand Livsforsikring and SPP. In addition, this business is included in Euroben and the minority of the securities fund. The elimination of intra-group transactions that have been included in the other segments has also been included. Reconciliation between the profit and loss 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 corporate profit and loss account. 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 Livsforsikring 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. 100 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 statu- tory reserves. The modified profit-sharing model means that any negative risk result can be deducted from the customers’ interest profit before sharing, if it is not covered by the risk equalisation fund. Individual endowment insurance and pensions written by the Group prior to 1 January 2008 will continue to apply the profit rules effective 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 allo- cations to additional statutory reserves. 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 0.2 per cent of the capital. This 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 conTotaler price index (CPI) between the pre- vious 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: Loan losses consist of individual and group write-downs on lending activities that are on the 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 Livsforsikring 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. 101 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix GROUP PROFIT BY SEGMENT NOK million Savings Insurance Guaranteed pension Other Group profit before amortisation Amortisation of intangible assets 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 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 1) Amortisation of intangible assets are included in Storebrand Group 2) Includes eliminations of group transactions 2020 1,730 204 775 1 2,711 -492 2,219 2019 1,364 439 1,029 205 3,037 -444 2,593 Savings 2020 4,392 2019 3,996 Insurance Guaranteed pension 2020 2019 2020 1,455 2019 1,475 825 4,331 -3,506 -712 113 91 204 1,005 3,909 -2,904 -648 357 83 439 -842 614 162 775 -2,611 1,781 -51 1,730 -2,621 1,375 -11 1,364 Other 2) Storebrand Group 2020 -172 2019 -164 97 -75 76 1 73 -91 296 205 2020 5,676 825 4,331 -3,506 -4,068 2,433 278 2,711 -492 2,219 -819 657 372 1,029 2019 5,308 1,005 3,909 -2,904 -4,015 2,298 739 3,037 -444 2,593 102 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixTHE STOREBRAND GROUP ARE REPRESENTED IN THE FOLLOWING COUNTRIES: Segment/Land Norway Sweden UK Netherlands Denmark Germany Luxemburg Ireland Savings Insurance Guaranteed pension Other X X X X X X X X X X X X X X X X 2020 2019 5.02 35,923 20,185 268,331 962,472 49,474 5,562 81% 16% 97% 4.43 33,398 17,168 219,793 831,204 48,161 4,698 74% 17% 91% 276,755 263,185 50.8% -704 11.0% 11.4% 178% 72,766 18.7% 16.7% 54.5% 16 8.6% 10.7% 176% 62,442 19.6% 17.5% 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 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. 103 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 po- pulations. 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. At the Storebrand Group, responsibility for risk management and internal control is an integral part of management responsibility. 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 Acturay function Compliance Anti-money laudering (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 Commit- tee 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 mana- gement 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 (Actu- ary 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 Group Risk & Compliance (GRC), which is organised directly under the CEO and reports to the Board of Directors of Storebrand ASA. GRC’s task is to ensure that all significant risks are identified, measured and appropriately reported. The GRC 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 regulati- ons for risk management and the consolidated companies’ operations. 104 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixThe internal audit function is organised directly under the Board and shall provide the Boards of the relevant consolidated compa- nies with confirmation concerning the appropriateness and effectiveness of the company’s risk management, including how well the various lines of defence are working. 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 the risk of loss or public sanctions as a result of non-compliance with external or internal rules. The Group seeks to reduce operational risk through an effective system for internal control. Risks are followed up through the ma- nagement’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 and continuity plans have been prepared to deal with serious incidents in business-critical processes. 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, abnor- mal 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. Storebrand is facing a major technological shift with the transition to cloud-based infrastructure. Risks increase in connection with the actual transformation, and the consequence of errors can be greater when services are provided online. At the same time, cloud-based services and infrastructure reduce the risk associated with self-developed systems and, in the long term, outdated infra- structure. The asset management business has a modern and standardised core system, combined with self-developed applications. 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 within defined-contribution 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 within the same product category as a result of detailed regulation from the authorities. In Sweden, the framework conditions for insurance contracts entail major differences between the contracts within the same product category. 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, there is also an increased risk of the owner’s result having to be charged in order to cover necess- ary statutory provisions. 2. 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. 3. 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. 105 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixIn 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. 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. Occupational pension agreements (hybrid) are reported in the Guaranteed Pension segment when a customer has an agreement with a choice for investment of the pension assets. This is a small portfolio with limited insurance risk. 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 Nordic companies, and the insuran- ce 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 insu- rance companies on the basis of their shared experience. This applies to both endowment and pension insurance. Disability premi- ums 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 service occupational pension entered into force from 2020 and includes retirement pensions in the public sector. The new scheme is a premium pension and is a net pension that is known 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. 106 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNewer 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 Total of provisions and payments that must be made for insured events that occur in the period. The risk result takes into account insured events that have not yet been reported, but which the company, on the basis of experience, asTotales 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, the company’s business 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 disa- bility 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 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 result Death result Disability result Reinsurance Pooling Other Total risk result Storebrand Livsforsikring AS SPP Pension & Försäkring AB 2020 7 243 -26 5 -44 -33 153 2019 -58 416 443 2 22 -101 724 2020 54 23 134 -26 1 186 2019 -39 19 92 -1 -14 -4 53 107 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 2020, and these therefore had no impact on the results in the financial statements for 2020. Sensitivity The volatility of the risk results depends on the development in disability and mortality relative to expectations. The different contracts at Storebrand come with different risks, however when calculating volatility, the starting point is the same changes since the develop- ment in, for example, disability, is assumed to be the same across the contracts. To indicate the sensitivity of the annual result, an expected 5% increase in claims for disability and mortality respectively is used as a basis, where mortality consists of the risks of death and longevity. STOREBRAND LIVSFORSIKRING AS Guaranteed pension Insurance Defined Occupa- benefit tional Paid-up Individual Group Non-life NOK million pension pension policies insurance Total disability insurance Group life Total Total Death Disability 4 -4 1 49 -14 5 -4 59 -22 -1 -40 -2 -4 -19 -26 -22 -70 37 -92 The net effect of increased claims for disability will result in a reduction in the disability risk result of NOK 14 million for paid-up poli- cies and NOK 40 million for group disability pensions. Correspondingly, an increase in mortality claims will reduce the death risk result for group life by NOK 19 million, and for paid-up policies, the risk result for mortality will be improved by NOK 49 million. It varies as to how the gross effects above are recognised in the company’s income statement. The business rules define buffer capital and other factors which entail that a negative risk result for the pension products may be covered by the risk equalisation fund, provided that this is sufficient. Equivalently, up to 50% of the positive risk result will be added to the risk equalisation fund, while other positive risk results will pass to the customers. For group disability pensions, group life and personal risk, the risk results pass in their entirety to Storebrand, while the risk result for individual insurance policies are included in the profit sharing between the customers and Storebrand. SPP PENSION & FÖRSÄKRING AB SEK million Death Disability Defined contribution 8 2 Defined benefit 17 Total 25 2 Part of the change in disability and waiver of premiums is covered by pooling and reinsurance, and SPP’s effect on result is expected to be approximately 95 per cent. The change in increased longevity and mortality have their full impact in SPP’s result. 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 as a result of changes in interest rates. The most significant market risks for Storebrand are interest rate risk, share market risk, property price risk, credit risk, and exchange rate risk. 108 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixFor 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 sub-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, 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 in 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 du- ration 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. Both short and long-term money market rates fell significantly in Norway in 2020. Long-term rates have fallen in Sweden, while short-term money market rates have remained stable at close to zero. 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 Other Total Customer portfolios Customer portfolios with guarantee without guarantee Company portfolios 11% 36% 3% 24% 10% 16% 2% 4% 14% 79% 1% 100% 100% 26% 13% 59% 2% 1% 100% Storebrand aims to take low financial risk for the company portfolios, and most of the funds are invested in short and medium-term fixed income securities with low credit risk. 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. Risk management during the turmoil in the financial markets in the first quarter resulted in a decrease in equity exposure. This has since increased, which means that the investment allocation at the end of 2020 had not changed significantly from the start of the year. In Norway, most of the credit risk is linked to securities, which are carried at amortised cost. This significantly reduces the risk to the company’s result because the result is not normally influenced by market fluctuations. The exception is if there is a loss event. 109 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixThe 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 cur- rency 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 CHF HKD CAD EUR GBP JPY SEK USD NOK1) Other currency types Insurance liabilities in SEK Total net currency positions 2020 Total net currency positions 2019 200 93 210 174 1,082 106 296 234,093 4,135 39,005 -325 -134 -931 -279 -1,221 -203 -413 -9,559 -5,184 -1,487 -127 -41 -721 -105 -147 -98 -117 224,301 -1,070 37,518 -224,197 -224,197 -176 -398 -797 -703 -1,454 -1,139 -969 234,084 -9,161 37,518 -144 -233,735 22,927 7,080 1) Equity and bond funds denominated in NOK with foreign currency exposurein i.a. EUR and USD NOK 34 billion. The table above shows the currency positions as at 31 December 2020. The currency exposure is primarily related to investments in the Norwegian and Swedish insurance business. Storebrand Livsforsikring: 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. SPP: SPP uses currency hedging for its investments to a certain degree. Currency exposure may be between 0 and 30 per cent in accor- dance with the investment strategy 110 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 13 million at present. Guaranteed customer portfolios in more detail 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 % 1.50 % 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 2020 0.3 % 0.3 % 42.9 % 0.3 % 28.8 % 1.8 % 10.9 % 12.2 % 0.1 % 1.6 % 0.9 % 2020 2.6 % 3.8 % 2.4 % 3.3 % 0.2 % 3.1 % 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 % 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 inves- ting 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 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 impor- tant risk management tool. 111 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix SPP Pension & Insurance The guaranteed interest rate is determined by the insurance company and is used when calculating the premium and the guarante- ed 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-be- nefit 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 value shortfall. This is termed a deferred capital contribution (DCC), and changes in DCC are recognised in the profit and loss account 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 profit and loss account. 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 per cent on 85 per cent of the premium Average interest rate guarantee in per cent Individual pension insurance Group pension insurance Individual occupational pension insurance Total 2020 12.1 % 0.4 % 4.5 % 47.4 % 5.0 % 0.1 % 5.9 % 0.0 % 1.9 % 4.2 % 9.7 % 3.5 % 5.4 % 2020 3.0 % 2.6 % 3.1 % 3.0 % 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 % In the Swedish operations management of interest rate risk is based on the principle that the interest rate risk from assets shall ap- proximately correspond to the interest rate risk from the insurance liabilities. 112 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Sensitivity analyses The tables show the fall in value for Storebrand Livsforsikring 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 2020. The effect of each stress changes the return in each profile. 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 shiftt) Equity Property Credit spread (share of Solvency II) Stresstest 1 Stresstest 2 -100bp -20 % - 12 % 50 % +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 assu- med 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 2020, the customer buffers were of such a size that the effects on the result were 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 NOK million Share of portfolio 4,275 -2,447 -2,585 -1,007 -1,764 2.0 % -1.1 % -1.2 % -0.5 % -0.8 % -150 -2,162 -1,224 -857 -4,392 -0.2 % -2.3 % -1.3 % -0.9 % -4.7 % Storebrand Livsforsikring SPP Pension & Försäkring NOK million Share of portfolio NOK million Share of portfolio -2.0 % -0.7 % -0.7 % -0.3 % -3.7 % 150 -1,297 -714 -514 -2,376 0.2 % -1.4 % -0.8 % -0.5 % -2.5 % -4,274 -1,466 -1,506 -603 -7,849 113 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Storebrand Livsforsikring For Storebrand Livsforsikring it is stress test 2, which includes an increase in interest rates, that makes the greatest impact. The over- all market risk is NOK 7.8 billion, which is equivalent to 3.7 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 4.4 billion, which is equivalent to 4.7 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 redu- ced 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 invest- ments 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 mana- gement 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. 114 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixUNDISCOUNTED CASH FLOWS FOR FINANCIAL LIABILITIES 1) NOK million 0-6 months 7-12 months 2-3 years 4-5 years 5 years cashflows book value Subordinated loan capital 2) 298 865 2,361 7,654 11,177 9,110 over Total Total Loans and deposits from credit institutions Deposits from bank custo- mers Debt raised from issuance of securities Other current liabilities Uncalled residual liabilities Limited partnership Unused credit lines lending Lending commitments Total financial liabilities 1,653 15,504 1,471 16,150 8,251 3,063 2,962 3 379 6 11,142 10,687 -2,357 53 1,653 1,653 15,506 15,506 20,649 16,209 21,322 16,209 8,251 3,063 2,962 2020 49,351 1,253 13,556 18,340 -2,357 80,143 63,127 Derivatives related to funding 2020 Total financial liabilities 2019 Derivatives related to funding 2019 -149 40,150 -115 74 576 98 -209 13,930 9,395 968 -284 65,020 4 50,778 -50 -114 -181 5 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 CAPITAL 1) NOK million Issuer Perpetual subordinated loan capital 2) Nominal value Currency Interest Maturity Book value Storebrand Livsforsikring AS 1,100 NOK Variable 2024 1,100 Dated subordinated loan capital Storebrand Livsforsikring AS 3) Storebrand Livsforsikring AS3) Storebrand Livsforsikring AS 3) Storebrand Livsforsikring AS 3) Storebrand Livsforsikring AS Storebrand Livsforsikring AS 3) Storebrand Bank ASA Storebrand Bank ASA Total subordinated loans and hybrid tier 1 capital 2020 Total subordinated loans and hybrid tier 1 capital 2019 750 1,000 900 1,000 500 300 150 125 SEK SEK SEK SEK NOK EUR NOK NOK Variable Variable Variable Variable Variable Fixed Variable Variable 2021 2022 2025 2024 2025 2023 2022 2025 789 1,044 938 1,045 499 3,420 150 125 9,110 8,925 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. 3) The loans are subject to hedge accounting, see note 41 115 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixSPESIFICATION OF LOANS AND DEPOSITS FROM CREDIT INSTITUTIONS NOK million Call date 2020 2021 Total loans and deposits from credit institutions SPECIFICATION OF SECURITIES ISSUED NOK million Call date 2020 2021 2022 2023 2024 2025 Total securities issued Book value 2020 1,653 1,653 Book value 2020 1,637 6,011 4,766 4,997 3,239 20,649 2019 446 446 2019 3,769 4,916 6,023 4,021 18,729 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 1.1.20 Admission of new loans/liabilities Repayment of loans/liabilities Change in accrued interest Translation differences Change in value/amortisation Book value 31.12.20 Subordinated Liabilities to Securities loan capital financial institutions 8,925 499 -872 8 566 -16 9,110 446 1,653 -446 1,653 issued 18,729 8,838 -7,048 132 -2 20,649 116 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 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 AAA AA A BBB NIG Fair value Fair value Fair value Fair value Fair value Not rated Fair value Total Fair value Category by issuer or guarantor NOK million Government and government guaranteed bonds Corporate bonds Structured notes 26,568 22,782 12,787 6,127 236 31,945 13 39,723 29 12 18 5,650 6 Collateralised securities 7,639 233 Total interest bearing securities stated by rating Bond funds not managed by Storebrand Non-interest bearing securities managed by Storebrand 56,989 19,147 32,182 39,776 5,675 1 1 39,622 106,228 35 7,883 153,769 20,847 2,379 176,995 156,639 Total 2020 Total 2019 56,989 47,403 19,147 22,073 32,182 25,805 39,776 27,505 5,675 734 1 5,832 INTEREST BEARING SECURITIES AT AMORTISED COST Category of issuer or guarantor NOK million Government and govern- ment guaranteed bonds Corporate bonds Structured notes Collateralised securities Total 2020 Total 2019 AAA AA A BBB NIG Not rated Total Fair value Fair value Fair value Fair value Fair value Fair value Fair value 11,327 17,552 1,602 30,481 37,016 14,637 11,750 172 26,559 24,952 3,092 21,855 24,947 44,411 117 19,441 19,441 12,905 15,130 9,005 24,135 29,056 85,728 9,177 1,602 125,562 122,312 3,028 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixCOUNTERPARTIES NOK million Derivatives Of which derivatives in bond funds, managed by Storebrand Total derivatives excluding derivatives in bond funds 2020 Total derivatives excluding derivatives in bond funds 2019 Of which bank deposits in bond funds, managed by Storebrand Total bank deposits excluding bank deposits in bond funds 2020 Total bank deposits excluding bank deposits in bond funds 2019 Loans to financial institutions AAA AA A BBB NIG Fair value Fair value Fair value Fair value Fair value Not rated Fair value Total Fair value 4,788 5,963 114 134 24 11,024 477 570 1,047 4,311 5,393 114 134 24 9,977 Bank deposits 1) 50 3,057 3,671 1,625 10,717 46 1,452 53 6 6 578 124 50 3,626 9,265 124 303 3,716 6,466 108 10,594 71 32 5,313 14,569 1,504 13,064 103 280 1) of which tied-up bank deposit (tax deduction account) 280 Rating classes based on Standard & Poor’s. NIG = Non-investment grade. INVESTMENTS SUBJECT TO NETTING AGREEMENTS/CSA NOK million fin. assets fin. liabilites liabilities Booked value Booked value fin. assets/ Net booked Collateral "Cash (+/-)" Securities Net (+/-) exposure Investments subject to netting agreements Investments not subject to netting agreements Total 2020 Total 2019 9,909 68 9,977 5,313 964 9,076 5,741 -2 3,337 964 994 67 9,143 4,319 The Group has entered into framework agreements with all its counterparties to reduce the risk inherent in outstanding derivative transactions. These regulate how collateral is to be pledged against changes in market values that are calculated on a daily basis, among other things. 118 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS (FVO) NOK million Booke value maximum exposure for credit risk Book value of related credit derivatives that reduce credit risk Collateral Net credit risk This year's change in fair value due to change in credit risk Accumulated change in fair value due to change in credit risk Storebrand has none related credit derivatives or collateral CREDIT RISK FOR THE LOAN PORTFOLIO COMMITMENTS BY CUSTOMER GOUPS Lending to and receiva- bles from 2020 185,382 185,382 10 -914 2019 163,766 163,766 -283 Total Unimpaired Impaired Net defaulted NOK million customers Guarantees credit-lines ments ments ments write- downs Unused commit- commit- commit- Individual 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 2020 1) Total loans to and receivables from custo- 11,411 1 49,396 2,503 63,311 -38 -59 3,106 22 3,128 11,411 1 52,501 2,525 66,439 -38 -59 63,214 3,128 66,342 mers 2019 2) 60,659 1 3,155 63,815 1) 2020: - Of which Storebrand Bank - Of which Storebrand Livsforsikring 2) 2019: - Of which Storebrand 31,780 31,435 3,063 34,843 64 31,500 22 44 66 66 73 50 15 70 1 71 71 52 71 17 commit- ments 30 122 1 153 9 8 17 17 153 -28 97 104 15 105 -8 Bank 30,187 1 3,072 33,260 73 52 - Of which Storebrand Livsforsikring 30,472 83 30,555 -20 -8 The division into customer groups is based on Statistics Norway’s standard for sector and business grouping. The placement of the individual customer is determined by the customer’s primary business. 119 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixThe majority of the loans at Storebrand consist of home loans to retail market customers. The home loans are approved and admi- nistered 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 at 31 December 2020, Storebrand had loans to customers totalling NOK 63.2 billion net after provisions for losses of NOK 0.1 billion. Of this, NOK 13.9 billion was to the corporate market and NOK 49.4 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. 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. The weighted average loan-to-value ratio for home loans is approximately 57 per cent. Over 97 per cent of home loans have a loan to value ratio within 85 per cent and approximately 99.2 per cent are within a 100 per cent loan to value ratio. Approximately 56 per cent of the home loans are within a 60 per cent LVR. The portfolio is considered to have a low credit risk. TOTAL COMMITTMENTS BY REMAINING TERM 2020 2019 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 4 months - 1 year 2 -5 years More than 5 years Total gross commitments 9 553 2,060 10,267 50,423 63,312 2 32 172 609 2,311 12 586 2,232 10,876 52,734 20 259 806 10,639 48,995 5 23 121 758 2,248 25 282 928 11,397 51,243 3,128 66,440 60,719 1 3,155 63,875 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 commitments write-downs commit-ments during the period Gross non- performing Individual performing value changes Net non- Total recognised Sale and operation of real estate Wage-earners and others Others Total 2020 Total 2019 22 98 1 121 125 9 8 -21 -4 11 13 90 1 104 105 -3 -3 -1 In the case of default, Storebrand Bank ASA will sell the securities or repossess the properties if this is most suitable. 120 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixTOTAL 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 2020 2019 Loans to and Loans to and receivables receivables from from customers customers 282 73 40 86 481 285 58 46 91 480 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 Livsforsikring Group, which includes Storebrand Livsforsikring AS and SPP Livförsäkring AB. Other companies directly owned by Storebrand ASA that are exposed to significant risks are Storebrand Forsikring AS, Storebrand Helse- forsikring 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 risk 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 associ- ated 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 manage- ment could result in errors in the insurance businesses. Storebrand has climate risks associated with investments and insurance liabilities. Both physical climate change and risks from the transition to low emissions can have an impact, but the transition risk is greatest in the short and medium terms. Storebrand may be adversely affected if the Norwegian economy and the oil sector weaken, however the risk is somewhat offset by underweighted investments in the fossil fuel sector and overweighted investments in solution companies. For investments, the effect of climate risk is difficult to differentiate from other factors that influence financial market developments. 121 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 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. Bonds, certificates or equivalent instruments issued by national governments in local currencies 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 observa- ble 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, including hedge funds but excluding other alternative investment funds, are generally classified as level 2. 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. For alternative investments organised as limited liability companies, equity investments are valued based on the value-adjusted equity reported by external sources when available. In the case of 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. 122 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixUnits Of the fund units, it is private equity investments that represent the majority at level 3. Moreover, there are also some other types of funds, such as infrastructure funds and microfinance funds, 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. Loans to customers The value of fixed-rate loans is determined by discounting the agreed cash flows over the remaining maturity by the current disco- unt 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 bet- ween the agreed margin and the current market price over the remaining duration. Corporate bonds Bonds are normally not priced at level 3, but if the loan is in default and a payment is expected, these are priced based on the expec- ted payment. As at 31 December 2020, this was not a significant amount for Storebrand’s financial statements. 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: The required rate of return is of greatest importance when calculating the fair value for investment properties. 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 the 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. When calculating fair value, Storebrand uses internal cash flow models. 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. A future income and expense picture for the first 6 years has been estimated for the shopping centre properties and a final value has been calculated for the end of the 6th year based on market rent and normal operating costs for the property. In both models, the net income stream has been taken into consideration for 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 for offices (three to five years for trading). The cash flows from the 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 office model is based on the rental price overview from areastatistics, as well as data and observations from brokers. 123 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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. For trading, the forecast is based on the development of the shopping centre. 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 2020, external valuations were obtai- ned for properties worth NOK 18.3 billion (85 per cent of the portfolio’s value as at 31 December 2020). For quality control and updating of the internal model, external valuations shall be obtained each quarter from reputable appraisers to verify the value that appears when using the internal model. When obtaining such valuations, the individual appraiser’s routines for valuations, including collection of information, inspections etc., shall apply. External valuations shall be rotated in such a way that all segments are regularly appraised. The task of valuing investment properties shall be rotated between reputable appraisers within a reasonable time interval, and knowledge of the property must be taken into consideration. In the event of a discrepancy between the valuation and value obtained using the internal model, the model shall be used as long as the discrepancy is within what is discretio- narily considered to be best practice in the market. If there is a discrepancy of more than 5% between the internal and external valua- tion, the discrepancy shall be reported and the grounds for this provided in the valuation memorandum/valuation item memorandum that is presented to the Board of Storebrand Livsforsikring AS. External valuations are obtained for properties in the Swedish business. Shopping centres and commercial premises are valued annu- ally, while other wholly-owned property investments are valued on a quarterly basis. VALUATION OF FINANCIAL INSTRUMENTS TO 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 receivables Total financial assets 31.12.2020 Total financial assets 31.12.2019 Financial liabilities Debt raised by issuance of securities Loans and deposits from credit institutions Deposits from banking custo- mers Subordinated loan capital Total financial liabilities 31.12.2020 Total financial liabilities 31.12.2019 Total finansielle forpliktelser 31.12.19 Level 1 Level 2 Level 3 Non- Total Total Quoted Observable observable Fair value Book value Fair value Book value prices assumptions assumptions 31.12.20 31.12.20 31.12.19 31.12.19 103 12 31,044 14,244 6,065 17,719 103 6,076 48,763 14,244 103 6,064 48,763 13,026 41 6,180 47,327 14,433 41 6,206 47,327 13,377 109,723 1,636 111,359 103,484 101,728 98,046 155,128 144,461 25,420 25,248 180,546 171,441 169,709 164,997 20,750 20,649 18,728 18,729 1,653 15,506 1,653 15,506 446 14,404 446 14,404 9,184 9,110 9,010 8,925 47,094 46,918 42,589 42,504 20,750 1,653 15,506 9,184 47,094 42,589 124 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixVALUATION OF FINANCIAL INSTRUMENTS AND PROPERTIES AT FAIR VALUE NOK million Assets: Equities and units - Equities - Fund units Total equities and fund units 31.12.20 Total equities and fund units 31.12.19 Loans to customers - Loans to customers - corporate - Loans to customers - retail Total loans to customers 31.12.20 Total loans to customers 31.12.19 Bonds and other fixed-income securities - Government bonds - Corporate bonds - Collateralised securities - Bond funds Total bonds and other fixed-income securities 31.12.20 Total bonds and other fixed-income securities 31.12.19 Derivatives: - Equity derivatives - Interest derivatives - Currency derivatives Total derivatives 31.12.20 - of which derivatives with a positive market value - of which derivatives with a negative market value Total derivatives 31.12.19 Properties: Investment properties Properties for own use Total properties 31.12.20 Total properties 31.12.19 Level 1 Level 2 Level 3 Quoted prices Observable assumptions Non observable assumptions Total Fair value 31.12.20 Total Fair value 31.12.19 907 9,360 10,266 9,548 7,665 722 8,387 7,125 318 9,196 9,514 5,505 32,117 1,609 33,726 30,790 32,332 198,497 230,830 7,665 722 8,387 34,634 62,043 7,051 73,267 176,995 5,659 3,353 9,012 9,977 -964 32,117 1,609 33,726 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 5,314 -995 4,319 29,415 1,375 30,790 31,285 160 31,446 28,205 140 188,977 189,117 156,591 18,675 61,724 7,051 63,916 151,367 140,316 5,659 3,353 9,012 9,977 -964 4,319 15,959 155 16,114 10,818 125 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixMOVEMENTS BETWEEN QUOTED PRICES AND OBSERVABLE ASSUMPTIONS NOK million Equities and fund units From quoted prices to From observable assumptions observable assumptions to quoted prices 7 95 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. FINANCIAL INSTRUMENTS AND REAL ESTATE AT FAIR VALUE - LEVEL 3 NOK million Book value 01.01.20 Net gains/losses on financial instruments Supply Sales Translation differences Other Equities Fund units customers bonds Bond funds properties for own use Loans to Corporrate Investment Properties 532 9,016 7,126 -117 511 -20 184 1,253 -1,334 241 -170 2,294 -1,570 707 15 308 -6 1 5,490 29,416 1,375 -287 3,798 -327 523 84 1,099 1,086 432 72 45 -2 115 4 Book value 31.12.20 907 9,360 8,387 318 9,196 32,117 1,609 As of 31.12.20, Storebrand Livsforisikring had NOK 6.166 million invested in Storebrand Eiendomsfond Norge KS and Ruseløkkveien 26 AS, Oslo. The investments are classified as “Investment in associated companies and joint ventures” in the Consolidated Financial Statements. SENSITIVITY ASSESSMENTS Equities It is the forest investment in Hancock that accounts for most of the value of Level 3 equities. 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 valuat- ions. These utilise an estimated market-related required rate of return. NOK million Change in fair value per 31.12.20 Change in fair value per 31.12.19 Change in value at change in discount rate Increase + 25 bp Decrease - 25 bp -12 -19 11 21 Fund units Large portions of the portfolio are private equity funds invested in companies priced against comparable listed companies. The va- luation 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 0.54. 126 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix NOK million Change in fair value per 31.12.20 Change in fair value per 31.12.19 Change MSCI World Increase + 10 % Decrease - 10 % 430 413 -430 -413 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 31.12.20 Change in fair value per 31.12.19 Change MSCI World Increase + 10 % Decrease - 10 % 1 1 -1 -1 Loans to customers Loans are appraised at fair value. The value of these loans is determined by discounting future cash flows with the associated swap curve adjusted for an issuer-specific credit spread. 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 31.12.20 Change in fair value per 31.12.19 Change in marketspread + 10 bp -30 -29 - 10 bp 31 29 Corporate bonds Bonds are usually not priced at level 3, but in some cases, when they are non-performing loans, they are priced based on the expec- ted payment. As at 31 December 2020, this was not a significant amount for Storebrand’s accounts. NOK million Change in fair value per 31.12.20 Change in fair value per 31.12.19 Properties The sensitivity assessment for properties includes investments properties. Change MSCI World Increase + 10 % Decrease - 10 % 15 0 -15 0 The valuation of property is particularly sensitive to a change in the required rate of return and the expected future cash flow. A change of 0.25 per cent in the required rate of return where everything else remains unchanged will result in a change in the value of Storebrand’s property portfolio of approximately 5.0 per cent. In the order of 25 per cent of the property’s cash flow is linked to lease agreements entered into. This means that the changes in the uncertain parts of the cash flow by 1 per cent will result in a change in value of 0.75 per cent. NOK million Change in fair value per 31.12.20 Change in fair value per 31.12.19 Endring i avkastningskrav 0,25 % -1,827 -1,560 -0,25 % 2,041 1,699 127 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 13: Solidity and capital management The Storebrand Group is an insurance-dominated, cross-sectoral financial group with capital requirements in accordance with Solven- cy 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. Capital management Storebrand places particular emphasis on continually and systematically adapting the levels of equity in the Group. The level is adap- ted to the financial risk and capital requirements in the business, where growth and the composition of segments are important mot- ivating 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 requ- irements 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 ordi- nary 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. SOLVENCY CAPITAL NOK million Share capital Share premium Reconciliation reserve Including the effect of the transitional arrangement Subordinated loans Deferred tax assets Risk equalisation reserve Minority interests Unavailable minority interests Deductions for CRD IV subsidiaries Expected dividend 2020 Total basic solvency capital Subordinated capital for subsidiaries regulated in accordance with CRD IV Total solvency capital Group 1 unlimited 2,339 10,521 31,851 4,815 -3,006 -1,519 40,186 Total 2,339 10,521 31,851 4,815 8,734 247 438 -3,006 -1,519 49,605 3,006 52,611 31.12.20 Group 1 limited Group 2 Group 3 1,131 7,602 247 438 1,131 8,040 247 Total solvency capital available to cover the minimum capital requirement 43,533 40,186 1,131 2,215 31.12.19 Total 2,339 10,521 27,169 7,651 268 466 57 -41 -2,970 -1,517 43,943 2,970 46,913 38,614 128 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix SOLVENCY CAPITAL REQUIREMENT AND -MARGIN NOK million Market risk Counterparty risk Life insurance risk Health insurance risk P&C insurance risk Operational risk Diversification Loss-absorbing ability defferd tax Total solvency capital requirement - insurance company Capital requirements for subsidiaries regulated in accordance with CRD IV Total solvency capital requirement Solvency margin Minimum capital requirement Minimum margin 31.12.20 31.12.19 25,675 951 10,859 935 523 1,578 -7,948 -5,533 27,040 2,565 29,605 178% 11,074 393% 22,040 779 10,702 761 307 1,493 -7,207 -4,847 24,028 2,683 26,711 176% 9,788 394% The Storebrand Group has also a requirement to report capital adequacy in a multi-sectoral financial group (conglomerate directive). The calculation in accordance with the Solvency II regulations and capital adequacy calculation in accordance with the conglomerate directive give the same primary capital and essentially the same capital requirements. 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 Overfulfilment 31.12.20 31.12.19 2,739 27,040 29,779 3,006 49,605 52,611 22,833 2,937 24,028 26,966 2,970 43,943 46,913 19,947 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 2020, the difference amounted to NOK 173 million. 129 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 14: Premium income NOK million Savings: Unit Linked Storebrand Livsforsikring Unit Linked SPP Total savings Of which premium reserve transferred to company Insurance: P&C & Individual life 1) Group life 2) Pension related disability insurance Total insurance Of which premium reserve transferred to company Guaranteed pension: Defined Benefit (fee based) Storebrand Livsforsikring Paid-up policies Storebrand Livsforsikring Traditional individual life and pension Storebrand Livsforsikring SPP Guaranteed Products Total guaranteed pension Of which premium reserve transferred to company Other: Euroben Total other Total 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 2020 18,216 15,085 33,302 13,116 2,238 835 1,407 4,479 88 2,744 134 236 3,270 6,384 2,232 23 23 44,188 15,437 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 6,239 130 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 15: Net income analysed by class of financial instrument Net gains and Net Dividend/ losses on revaluation interest financial on invest- Of which Total 2020 Company Customer Total 2019 14,654 22 14,632 37,358 ments 7,833 1,214 1,080 4,335 5,374 60 10,127 24,423 -13 -3 3,547 2,676 4,413 1,595 6,009 NOK million income etc. Profit on equities and fund units Profit on bonds and other fixed-inco- me 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 Net income loans Total gains and losses on financial assets at amortised cost LOSSES FROM LOANS NOK million 693 2,835 1,024 60 4,612 3,546 2,679 3,961 1,595 5,556 assets 6,128 286 3,270 9,684 13 452 452 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 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 131 785 -397 37 447 163 -3 212 687 898 3,550 5,771 23 4,767 1,412 25 23,977 43,562 3,775 2,266 4,126 1,348 4,202 909 5,111 5,474 2020 2019 3 -27 -1 -2 -13 1 -37 2020 1,648 -393 -68 1,187 494 1,680 97 -42 1,680 1,680 1 16 -1 -21 1 -3 2019 1,556 -346 -59 1,151 713 1,864 82 -29 1,864 1,864 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 17: Other income NOK million Fee and commission income, banking Net fee and commission income, banking Management fees, asset management Return commissions/Kick-back Insurance related income Revenue from companies other than banking and insurance Other income Total other income Note 18: Insurance claims NOK million Savings: Unit Linked Storebrand Livsforsikring Unit Linked SPP Total savings Of which premium reserve transferred to company Insurance: P&C & Individual life 1) Group life 2) Pension related disability insurance Total insurance Of which premium reserve transferred to company Guaranteed pension: Defined Benefit (fee based) Storebrand Livsforsikring Paid-up policies Storebrand Livsforsikring Traditional individual life and pension Storebrand Livsforsikring SPP Guaranteed Products Total guaranteed pension Of which premium reserve transferred to company Other: Euroben Total other Total insurance claims 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 132 2020 114 114 2,342 1,217 264 180 -8 4,109 2020 -6,805 -5,162 -11,968 -7,662 -1,459 -705 -202 -2,366 -50 -1,625 -6,420 -1,243 -5,462 -14,751 -440 -447 -447 -29,531 -8,152 2019 107 107 2,111 1,117 250 115 59 3,758 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 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixDEVELOPMENT IN EXPECTED INSURANCE CLAIM PAYMENTS - LIFE INSURANCE NOK billion 0-1 year 1-3 years > 3 years Total Storebrand Livsforsikring 13 27 272 312 SPP 7 14 192 213 Euroben 1 8 9 DEVELOPMENT IN INSURANCE CLAIM PAYMENT - P&C INSURANCE, EXLUSIVE RUN-OFF NOK million 2015 2016 2017 2018 2019 2020 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 31.12.20 Total disbursed to present Claims reserve Claims reserve for previous years (before 2015) Total claims reserve 685 687 661 648 641 635 618 16 793 774 750 741 736 707 29 797 764 756 745 760 749 744 825 814 998 704 41 686 59 711 103 670 328 4,096 575 13 588 The overview shows the development in the estimate for occurred insurance claims over time and the remaining claims reserve. The overview also excludes the natural damage pool (Naturskadepool), Norwegian Motor Insurers’ Bureau (TFF), reinsurance and claims 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 2020 -1,670 -2,434 -223 -4,327 2019 -3,255 -779 -1,858 -5,892 133 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 20: Operating expenses and number of employees OPERATING EXPENSES NOK million Personnel expenses Amortisation/write-downs Other operating expenses Total operating expenses SPECIFICATION OF AMORTISATION/WRITE-DOWNS NOK million Amortisation/write-downs tangible fixed assets Amortisation/write-downs right-of-use assets Amortisation/write-downs IT systems Amortisation/write-downs properties for own use Total amortisation/write-down in income statement (see note 28) (see note 28) (see note 27) (see note 33) 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. 2020 -2,320 -267 -2,328 -4,914 2020 -7 -135 -123 -2 -267 2020 1 824 1 789 1 802 1 767 2019 -2,281 -231 -2,316 -4,828 2019 -6 -131 -92 -2 -231 2019 1 759 1 774 1 739 1 753 Note 21: Pensions 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 allo- cates 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 101,351 at 31 December 2020) - 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. 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 2020. 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. 134 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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. 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 mor- tality 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 66,800 in 2020 and will be SEK 68.200 in 2021), 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 sa- lary in excess of 30 times the ”basic income amount”. Full pension entitlement is reached after 30 years of membership 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 retirement age for SPP’s CEO is 65 years. The CEO is covered by BTP1. In addition, the CEO has a defined-contribution based addi- tional pension with SPP. The premium for this insurance is 20 per cent of salary that exceeds 30 times the “basic income amount”. 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 BOOKED IN STATEMENT OF FINANCIAL POSITION NOK million Pension assets Pension liabilities 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 31.12 135 2020 1,237 -1,082 155 196 351 2020 351 2020 1,259 15 21 79 -1 -51 111 1,433 2019 1,062 -994 68 196 264 2019 2 266 2019 1,231 13 25 84 2 -53 -4 -37 1,259 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixCHANGES 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 2021 Expected premium payments (contributions) in 2021 Expected AFP early retirement scheme payments in 2021 Expected payments from operations (uninsured scheme) in 2021 2019 914 18 87 32 -21 -4 -32 995 2020 995 16 -31 25 -30 107 1,082 21 165 15 49 PENSION ASSETS ARE BASED ON THE FINANCIAL ASSETS HELD BY STOREBRAND LIVSFORSIKRING/SPP COMPOSED AT 31.12: 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 Storebrand Livsforsikring SPP 2020 15 % 34 % 20 % 12 % 17 % 3 % 2019 13 % 36 % 13 % 15 % 20 % 1% 2020 12 % 18 % 13 % 57 % 2019 12 % 14 % 11% 63 % 100 % 100 % 100 % 100 % The table shows the percentage asset allocation of pension assets at year-end managed by Storebrand Life Insurance. Realised return on assets 4.4 % 3.6% 4.8 % 8.8 % 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 2020 15 5 20 220 17 258 2019 13 7 3 23 188 17 229 136 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixOTHER 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 management cost 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 2020 1.5 % 1.75 % 1.75 % 0.0 % KU 2019 2.2 % 2.00 % 2.00 % 0.0 % KU 2020 103 -11 -11 25 3 110 SPP 2020 1.2 % 3.5 % 2019 119 -25 -10 -99 12 -4 2019 1.5 % 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 cover- ed 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 Finan- ce 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 2020. 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 2020 and are calculated for each individual when all other assumptions are kept constant. 137 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix SWEDEN Percentage change in pension: - Pension liabilities - The period's net pension costs Discount rate earnings growth in pensions payment in pensions payment Expected Expected annual increase Expected annual increase 1.0 % -1.0 % 1.0 % -1.0 % 1.0 % + 1 year - 1 year -10 % -12 % 12 % 14 % -2 % 6 % -5 % -5 % 0 % 0 % 0 % 0 % 3 % 1 % -3 % -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 Karin Greve-Isdahl Trygve Håkedal Tove Selnes Terje Løken Total 2020 Total 201 9 Total Post remunera- Pension termination Ordinary Other tion for accrued for salary No. of shares salary 1) benefits 2) the year the year (months) Loan 3) owned 4) 7,373 5,690 4,835 4,865 6,346 6,293 2,955 3,255 2,945 3,255 209 225 225 188 23 158 64 65 183 159 7,582 5,914 5,060 5,054 6,369 6,450 3,019 3,321 3,128 3,414 47,812 49,621 1,498 1,639 49,311 51,260 1,451 1,107 933 934 1,654 1,227 544 604 538 604 9,598 9,180 24 18 12 12 12 12 12 12 12 12 6,166 194,520 10,800 120,564 6,531 3,135 85,072 94,788 83,561 1,200 100,554 18,598 8,282 7,435 6,981 69,128 78,150 20,962 16,135 21,955 16,502 754,613 568,954 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, currently 1,19 per cent p.a.. 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. NOK thousand Board of Directors Didrik Munch Laila Synnøve Dahlen Martin Skancke Karin Bing Orgland Liv Sandbæk Karl Sandlund Marianne Bergmann Røren Fredrik Åtting Bodil Catherine Valvik Hans-Petter Salvesen Fredrik Törnquist Magnus Gard Total 2020 Total 2019 Remuneration Loan shares owned 1) No. of 871 409 889 552 213 465 221 288 342 282 86 459 5,077 4,507 40,000 15,500 27,500 27,000 3,000 18,500,000 870 1,633 18,615,503 95,406 5,189 4,946 6,986 17,122 10,886 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. Loans to Group employees totalled NOK 2.712 million. 138 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixTHE BOARD OF DIRECTOR’S GUIDELINES FOR THE FIXING OF SALARIES AND OTHER REMUNERATION TO EXECUTIVE PERSONNEL AND STATEMENT ON THE EXECUTIVE EMPLOYEE REMUNERATION POLICY DURING THE PREVIOUS FINANCIAL YEAR ETC. For the 2021 Annual General Meeting, the Board of Directors of Storebrand ASA will present new Guidelines for the fixing of salaries and other remuneration of executive personnel in accordance with the new provision in Section 6-16a of the Norwegian Public Limited Liability Companies Act. Pursuant to the new provision in Section 6-16b of the Norwegian Public Limited Liability Companies Act, a report on salaries and other remuneration to executive personnel will first be presented at the annual general meeting in 2022. The guidelines and salaries report will replace the executive remuneration statement which was stipulated in the previous provision in Section 6-16a. Since no salaries report for 2020 will be presented at the 2021 general meeting, the Board of Directors has issued a limited statement on the implementation of the executive employee remuneration policy that was carried out during the previous financial year, as well as a statement on the effect of agreements for share-based remuneration. The statement is as follows: 1. STATEMENT ON THE EXECUTIVE EMPLOYEE REMUNERATION POLICY DURING THE PREVIOUS FINANCIAL YEAR The executive employee remuneration policy adopted for 2020 has been observed. The annual independent assessment of the guide- lines and the practice of these guidelines in connection with bonuses to be paid in 2021 will be carried out by the end of 2021. 2. STATEMENT ON THE EFFECTS OF SHARE-BASED REMUNERATION AGREEMENTS ON THE COMPANY AND THE SHAREHOLDERS A proportion of the executive management’s fixed salary is 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 individual’s portfolio of shares in Store- brand ASA. The Board of Directors presents the following guidelines for the approval of the general meeting: GUIDELINES FOR THE DETERMINATION OF REMUNERATION OF EXECUTIVE MANAGEMENT ETC. These guidelines were stipulated by the Board of Directors of Storebrand ASA on 9 February 2021 in accordance with Section 6-16 (a) of the Norwegian Public Limited Liability Companies Act. 1. Who the guidelines apply to The guidelines apply to the executive management (CEO and executive vice presidents) and employees who are members of the Board of Directors of Storebrand ASA. 2. The guidelines’ connection to the Group’s business strategy, long-term interests and financial sustainability Storebrand’s business strategy is to offer the most sustainable products and services within pension, savings, insurance and banking products to private individuals, businesses and public enterprises. Customers must be assured that their needs are assigned first priority when recommending our solutions. In a labour market characterised by strong competition for the most qualified employees, Storebrand shall have competitive, transpa- rent and motivating salary principles that help attract, develop and retain employees. Storebrand’s guidelines for financial remuneration are adapted to the company’s business strategy. In order to best safeguard the interests of customers and shareholders, Storebrand considers that the correct course of action is to focus primarily on a fixed salary as a means of overall financial compensation, and utilise variable remuneration to a limited extent. Executive management are only paid a fixed salary. To ensure that the Group’s executive management team has incentive schemes that coincide with the long-term interests of the owners, a significant proportion of the gross fixed salary is linked to the purchase of physical Storebrand shares, with a lock-in period of three years. The salaries of executive management are determined based on the position’s responsibilities and level of complexity. Regular compa- risons with equivalent roles in other companies are made in order to ensure that the salary level is competitive. Remuneration of executive management is governed by laws and regulations relating to remuneration schemes and does not include variable remuneration. This ensures a high level of predictability and also ensures that total remuneration is financially sustainable for the Group. 139 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 3. Remuneration to executive management Fixed salary with equity share Executive management’s equity share of the fixed salary involves the purchase of physical Storebrand shares at a fixed point in time once a year. The shares have a three year lock-in period and the Board of Directors encourages executive management to also retain the shares after the lock-period expires after three years. In the opinion of the Board of Directors, this scheme has a positive effect on the company and the shareholders, given the structure of the scheme and the size of each individual’s portfolio of shares in Store- brand ASA. The normative level of the desired equity exposure in relation to gross salary is a minimum of 200% for the CEO, 150% for the Chief Financial Officer and for executive vice presidents who are responsible for the profit & loss units, and 100% for other executive vice presidents. The share salary scheme was introduced in 2015. Until each member of executive management reaches the normative level, salary increases will primarily be given for the share part. When the normative level has been reached, following an individual assessment, a salary increase can also be given for the cash part. As is the case with other Storebrand employees, executive management have the option to purchase a limited number of shares in Storebrand ASA at a discount in accordance with the share programme for employees. Like other employees at the company, certain members of the Group’s executive management team receive benefits in kind in the form of car allowances and smaller fixed amounts as contributions to cover expenses for newspapers, electronic communication etc. These schemes are linked to employment contracts entered into in the past and are not part of the new contracts. Pension scheme and insurance The Group arranges and pays for an ordinary group pension scheme for all employees, which takes effect from the moment employ- ment commences, and in accordance with the pension agreement in force at any given time. All employees are also enrolled in group insurance schemes that provide cover in the event of illness, disability or death. Since 2015, the Company has had defined-contributi- on pension schemes for all employees. Executive management are included in the general pension and insurance schemes. The following defined-contribution pension scheme applied as of February 2021: • Saving starts from the first krone of salary. • Savings rate of 7 per cent of salary from 0 to 12 G (G = National Insurance basic amount). In addition, 13 per cent of salary between 7.1 and 12 G is saved. • • The total savings rate between 7.1 and 12 G is therefore 20 per cent. • Savings rate of 20% (taxed as salary) for salary above 12 G. 4. The duration of agreements and schemes for executive management Everyone in the Group’s executive management team has a six month period of notice. The Group has a retirement age of 70 years. In accordance with the general rules, employees can access a pension from the age of 62. There are no fixed schemes for early retirement pensions at the Group, nor for executive management. Executive management are entitled to severance pay if their contracts are terminated by the company. The right to severance pay also applies if the employee decides to leave the Company due to substantial changes in the organisation, or equivalent circumstan- ces, which result in the individual being unable to naturally continue in his/her position. The CEO is entitled to severance pay up to 24 months after the end of the notice period. Other members of the Group’s executive management team have equivalent severance pay agreements for up to 12 to 18 months from their agreed resignation. New agreements entered into for executive vice presidents will have a severance pay agreement for up to 12 months. The severance pay corresponds to the pensionable salary at the end of employment, excluding any bonus schemes. The amount of any severance pay will be subject to assessment in accordance with the individual agreement and the relevant remuneration regulations. 5. Comparison with remuneration of other employees Storebrand’s overarching guidelines for financial remuneration for all employees are considered and approved by the Group’s Board of Directors each year. Remuneration is principally based on a fixed salary and the salary level for the different roles is based on assessments of the requirements for the various roles in terms of formal qualifications, experience, responsibility and complexity. The salary levels for all roles in the Group, including the Group’s executive management, are calibrated in relation to the compensation for equivalent positions in the market. Storebrand’s pension and insurance schemes are also the same for all employees at the company, and the Group’s executive management team has no separate pension and insurance arrangements. The difference in remuneration between the Group’s executive management team and other employees is primarily due to the significant responsibility held by executive management and the complexity that comes with these roles. A significant proportion of 140 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendixexecutive management’s gross salary is used for share purchases with a lock-in period of three years to ensure that their interests coincide with the interests of the shareholders. Remuneration of other roles in the Group is also assessed in relation to responsibility, complexity and market conditions, based on a reputable and systematic system for evaluation. It is the responsibility of the individual managers to recommend financial remunera- tion for their employees within the framework of the principles and guidelines adopted by the Board of Directors and the company’s management. The People Departments assists the line with these decisions and approves recommendations. The People Department consults the executive vice president of the relevant area when required. Each year there is a local salary process for all Storebrand employees, where salary adjustments are proposed by an employee’s immediate superior and are sent to the superior’s manager for assessment. Each area of the Group is calibrated before the CEO approves the changes for the entire Group based on the recommendations from the Executive Vice President for People. The company’ strategy and objectives are of importance to the assessment of each individual’s total remuneration. Sustainability is an important part of Storebrand’s business strategy. The goals each area of the Group has set for sustainability will therefore also be an important part of the overall salary assessment. 6. Decision-making process for establishing, revising and implementing the guidelines The Board of Directors of Storebrand ASA has had a dedicated Compensation Committee since 2000. The Board of Directors determines remuneration to the CEO following a proposal from the Compensation Committee. The CEO deter- mines the compensation for other members of executive management based on a process with the Compensation Committee as the advisory body. The Compensation Committee is responsible for keeping itself informed about and proposing guidelines for the determination of remuneration of executive employees in the Group, including these guidelines, which are then adopted by the Board. The Compensa- tion 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 stipulated in regulations relating to remuneration schemes. Remuneration to executive management is subject to an independent process through the Compensation Committee, following the recommendation of the CEO. Remuneration for the CEO is subject to consideration by the Compensation Committee and is then approved by the Board. Market comparisons are used in the annual salary assessments. This prevents any conflict of interest. 7. Employees who are board members Employee-elected board members shall receive remuneration as board members that is determined by the general meeting in accor- dance with a proposal from Storebrand ASA’s nomination committee. 8. Consideration at the general meeting These guidelines shall be presented to the general meeting for consideration and approval in the event of any significant changes and at least every fourth year. Note 23: Remuneration paid to auditors NOK million Statutory audit Other reporting duties Tax advice Other non-audit services Total remuneration to auditors 2020 -11 -2 -1 -15 2019 -11 -2 -1 -1 -15 141 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Note 24: Other expenses NOK million Losses on claims, insurance Management fees Interest expenses Insurance Other expenses Total other expenses Note 25: Interest expenses NOK million Interest expenses subordinated loans Interest expenses financial institutions Interest expenses deposits from banking customers Interest expenses lease liabilities Other interest expenses Total interest expenses Note 26: Tax TAX EXPENSES ON ORDINARY PRE-TAX PROFIT NOK million Tax payable Change in deferred tax Total tax expenses on ordinary profit RECONCILIATION OF TAX EXPENSES AGAINST ORDINARY PRE-TAX PROFIT NOK million Ordinary pre-tax profit Expected income tax at nominal rate Tax effect of shares ("Fritaksmetoden") 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) Changes from previous years 2) Total tax charge Effective tax rate 3) 142 2020 -128 -448 -138 -112 -826 2020 -364 -295 -85 -20 -30 -793 2020 -84 220 136 2020 2,219 -555 228 4 21 -566 566 437 136 -6% 2019 -267 -762 -157 -51 -1,238 2019 -355 -413 -99 -25 -35 -927 2019 -16 -495 -511 2019 2,593 -648 -64 32 3 68 -451 451 99 -511 20% ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix1) 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 expen- se 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) Based on new information and an interpretation of transitional rules from 2018, taxable accounting income of NOK 356 million was recognised for 2020. 3) 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 is 22 per cent. For companies subject to financial tax is the tax rate 25 per cent. 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 is 21.4 per cent. TAX EXPENSES ON OTHER COMPREHENSIVE INCOME ELEMENTS NOK million Tax on other comprehensive income elements not to be reclassified to profit/loss Total tax expenses on other comprehensive income elements 2020 15 15 2019 12 12 CALCULATION OF DEFERRED TAX ASSETS AND DEFERRED TAX ON TEMPORARY DIFFERENCES AND LOSSES CARRIED FORWARD NOK million Tax-increasing temporary differences Securities Properties 1) 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 sheet1), 2), 3), 4) Recognised in balance sheet Deferred tax assets Deferred tax 4) Uncertain tax positions 2020 178 2,696 24 62 1,212 4,173 -27 -24 -36 -171 -259 -6,530 -2,616 -931 1,780 849 2019 283 2,126 8 78 1,377 3,872 -7 -22 -30 -166 753 527 -6,685 -2,287 -663 1,430 768 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 consi- ders 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 increa- se 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 143 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 Administra- tion’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 revised best estimate, the difference between Storebrand’s interpretation and the Norwegian Tax Administration’s interpretation is approximately NOK 6.4 billion in an uncertain tax position. If Storebrand’s interpretation is accepted, a deferred tax expense of approximately NOK 1.6 billion will be derecognised from the financial statements. 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 fair value adjustments on purchased insurance contracts Intangible asset IT systems 1,133 VIF 1) 9,574 Other intangible assets 1,727 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 wri- te-downs 01.01 Write-downs in the period Amortisation in the period 2) Disposals in the period Currency adjustment on converting foreign units Acc. depreciation and write-downs 31.12 Book value 31.12 105 200 -10 25 1,454 -590 -22 -100 7 -2 -708 746 14 71 1,811 -959 -120 1,028 10,602 -6,827 -372 -756 -70 Goodwill 2,467 2020 14,901 2019 14,604 105 200 14 -10 124 92 590 -69 85 2,552 1,209 16,419 -440 14,901 -305 -8,681 -8,498 -22 -592 7 -828 -35 -502 69 284 -8,681 6,220 -7,954 2,648 -1,149 662 -305 2,247 -10,116 6,303 1) Value of business-in-force, the difference between market value and book value of the insurance liabilities in SPP and Silver 144 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix SPECIFIACTION OF AMORTISATION OF INTANGILBE ASSETS NOK million Amortisation in the period - VIF Amortisation in the period - other intangible assets Total write-downs//amortisation of intangible assets in income statement Write-downs/amortisation of IT-systems are booked as operating expenses SPECIFICATION OF INTAGIBLE ASSETS 2020 -372 -120 -492 2019 -341 -104 -444 NOK million IT systems Value of business in force SPP Value of business in force Silver Customer lists Skagen Customer lists Cubera Customer lists SPP Customer lists Insr Customer contracts Cubera Brand name Skagen Database Cubera Total Useful economic life Depr. rate Depr. method Book value 2020 5 years 20 years 10 years 10 years 7 years 10 years 5 years 5 years 10 years 3 years 20 % 5 % 10 % 10 % 14 % 10 % 20 % 20 % 10 % 33 % Straight line Straight line Straight line Straight line Straight line Straight line Straight line Straight line Straight line Straight line 746 2,451 197 278 170 1 13 90 102 8 4,056 GOODWILL DISTRIBUTED BY BUSINESS ACQUISITION Acquisition cost write-downs Book value disposals/ Book value Accumulated Supply/ NOK million Business area 01.01 Delphi Fondsforvaltning Storebrand Bank ASA Savings Other SPP SPP Fonder Skagen Cubera Total Guarant. pension/ Savings Savings Savings Savings 35 422 750 48 1,007 206 2,469 Goodwill is not amortised, but is tested annually for impairment. Intangible assets linked to the acquisition of SPP 01.01 -4 -300 -304 01.01 currency effect 31.12 32 122 750 48 1,007 206 2,165 32 122 831 49 1,007 206 2,247 81 1 82 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. 145 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix In calculating the utility value, the management have made use of budgets and forecasts approved by the Board for the next three years (2021-2023). The management has made assessments for the period from 2024 to 2030, and the annual growth for each ele- ment in the income statement has been estimated. When calculating the terminal value, a growth rate equivalent to observed inflation of 0.5 per cent is used. This is lower than Riksbanken’s inflation target of 2.0 per cent, but is consistent with the risk-free interest rate used in the required rate of return. The primary drivers of improved long-term results will be the return on total assets, underlying inflation and wage growth in the market (which drive premium growth). In addition to cash flows from the forecasted result, the change in expected regulatory tying-up of capital is also used in the valuation. The utility value is calculated using a required rate of return of 7.0 per cent. The required rate of return is calculated based on the risk-free interest rate and added to 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 re- quired 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. Simulation using reasonable assumptions indicates a value that justifies the book value. Intangible assets linked to the banking business When calculating the utility value for the banking business, a cash flow based assessment of value has been made using the expected profit after taxes. Budgets and forecasts approved by the Board for the next three years (2021 to 2023) are used as the basis for the valuation. The cash flow is based on two elements, profit/loss to equity and change in expected regulatory tying-up of capital. It is also assumed that all capital in addition to regulatory tied-up capital, can be withdrawn at the end of each period. The management has made as- sessments for the period from 2024 to 2030, and the annual growth has been determined in the income statement. A growth rate of 1.0 per cent is used when calculating the terminal value. This is lower than Norges Bank’s inflation target, but consistent with the risk- free interest rate used in the required rate of return. The utility value is calculated using a required rate of return of 4.5 per cent. The required rate of return is calculated based on the risk-free interest rate and added to a premium that reflects the risk of the business. There will be uncertainty related to the assumptions that have been made in the valuation. The value will be affected by the assump- tions for the interest rate margin, expected losses on lending, growth parameters and capital requirements, as well as what required rate of return is assumed, etc. It is noted that the aim of the calculations is to achieve a satisfactory level of certainty that the utility value, cf. IAS 36, is not lower than the value recognised in the accounts. Simulations with reasonable and also conservative assumpti- ons indicate a value that justifies the book value. 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, branded pro- ducts, technology and goodwill. Budgets and forecasts approved by the Board for the next three years (2021 to 2023) are used as the basis for the valuation. For the period from 2024 to 2025, a growth rate in line with the equity market for the income and a constant ratio between income and expenses were used as a basis. A growth rate of 1.0 per cent is used when calculating the terminal value. This is lower than Norges Bank’s inflation target, but consistent with the risk-free interest rate used in the required rate of return. The utility value is calculated using a required rate of return of 10 per cent. There are 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. Simulations with reasonable and also conservative assumptions indicate a value that justifies the book value. 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 database over the private equity market. Budgets and forecasts approved by the Board for the next three years (2021 to 2023) are used as the basis for the valuation. For the period from 2024 to 2025, a projected forecast has been used that is based on the expected development in the private equity market. A growth rate of 1.0 per cent is used when calculating the terminal value. This is lower than Norges Bank’s inflation target, but consistent with the risk-free interest rate used in the required rate 146 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix of return. The utility value is calculated using a required rate of return after tax of 10 per cent. There are 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. Simulations with reasonable and also conservative assumptions indicate a value that justifies the book value. 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 Livs- forsikring 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 acqui- red 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 as- sets under management and income margins are forecasted based on observable developments since the acquisition and expected natural negative growth in the portfolio. There are uncertainty related to the assumptions that have been made in the valuation. The value will be influenced by the assumpti- ons 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. Simulations with reasonable and also conservative assumptions indicate a value that justifies the book value. Note 28: Tangible fixed assets and lease agreements NOK million Book value 01.01 Additions Disposals Depreciation Book value 31.12 Vehicles/ equipment Real estate 2020 2019 48 19 -2 -7 59 1 1 2 49 20 -2 -7 60 43 12 -1 -6 49 For specifiaction of write-downs and depreciation, see note 20. Depreciation plan and financial lifetime: Vehicles/equipment Fixtures & fittings Properties Straight line 3-10 years 3-8 years 15 years 147 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix SPECIFICATION OF TANGIBLE FIXED ASSETS AND LEASE AGREEMENTS IN BALANCE SHEET NOK million Tangible fixed assets Right-of-use assets Book value 31.12 Allocation by company and customers Tangible fixed assets - company Total tangilbe fixed assets and lease agremments LEASE AGGREMENTS 2020 60 1,337 1,397 1,397 1,397 2019 49 1,026 1,075 1,075 1,075 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 Disposals Currency adjustment from converting foreign units Book value 31. 12 Accumulated write-downs/depreciations 01.01 Depreciation Currency adjustment from converting foreign units Accumulated write-downs/depreciations 31.12 Booked value 31.12 Buildings IT-equipment Other equipment 1,090 402 -1 28 1,519 -116 -113 7 -222 1,297 75 3 4 83 -23 -22 -44 39 2 2 -1 1 2020 1,167 406 -1 33 1,604 -139 -135 7 -267 1,337 2019 1,088 79 1,167 -132 -10 -141 1,026 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 recog- nise 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. 148 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNON-DISCOUNTED LEASE LIABILITIES NOK million Year 1 Year 2 Year 3 Year 4 Year 5 After 5 years Total non-discounted lease liabilities 31. 12. CHANGES IN LEASE LIABILITIES NOK million Upon initial adoption 01.01 New/changed lease liabilities recognised during the period Payment of principal Accrued interest Exchange rate differences when converting foreign unit Total lease liabilities 31. 12 OTHER LEASE EXPENSES INCLUDED IN THE INCOME STATEMENT NOK million Lease expenses for assets with low value Total lease expenses included in operating expenses 2020 145 141 112 108 107 793 1,406 2020 1,037 404 -146 19 40 1,355 2020 -14 -14 2019 142 135 132 111 105 511 1,136 2019 1,080 87 -146 25 -10 1,037 2019 -10 -10 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 finan- cial statements. 149 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 20201) Benco 2019 Benco 10,712 10,200 512 51 10 10 882 32 32 1) Benco is no longer a substantial minority as Storebrand Livsforsikring AS during 2020 has bought out the minority share. SPECIFICATION OF ASSOCIATED COMPANIES AND JOINT VENTURES CLASSIFED AS SUBSTANTIAL (100% FIGURES) 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 Storebrand Helseforsikring AS Storebrand Helseforsikring AS 2020 2019 Equity-method Insurance Joint venture Equity-method Insurance Joint venture 694 121 74 446 34 862 67 67 584 66 50 373 28 735 47 47 130 PROFIT AND OWNERSHIP INTERESTS IN ASSOCIATED COMPANIES AND JOINT VENTURES NOK million Associated companies Inntre Holding AS Storebrand Eiendomsfond Norge KS Andre tilknyttede selskaper Joint ventures Försäkringsgirot AB Ruseløkkveien 26 AS Storebrand Helseforsikring AS Total 2020 Booked in the statement of financial position Investments in associated companies - company Investments in associated companies - customers Total 2020 Total 2019 Business location Ownership share Profit 31.12 Book value 31.12 Steinkjær Bærum Stockholm Oslo Lysaker 34.3 % 26.2 % 25.0 % 50.0 % 50.0 % 150 18 236 1 333.3 34 621 52 569 621 379 127 3,694 3 5 2,471.8 147 6,449 283 6,167 6,449 4,272 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Note 30: Classification of financial assets and liabilities Investments, Liabilities at Loans and held to Fair value, Fair value, Available for amortised receivables maturity held for sale FVO sale cost Total NOK million Financial assets Bank deposits Shares and fund units Bonds and other fixed-income 13,065 securities 103,484 13,026 103 54,828 7,422 178,902 167,488 13,026 13,378 Loans to financial institutions Loans to customers Accounts receivable and other short-term receivables Derivatives Total financial assets 2020 Total financial assets 2019 Financial liabilities Subordinated loan capital Loans and deposits from credit institutions Deposits from banking customers Securities issued Derivatives Other current liabilities Total financial liabilities 2020 Total financial liabilities 2019 230,830 176,995 8,386 73 416,284 358,166 13,065 230,830 293,506 103 63,214 7,422 9,977 618,116 544,287 9,110 9,110 1,653 15,506 20,649 15,389 62,308 50,831 1,653 15,506 20,649 964 16,209 64,091 51,772 78 78 10 808 808 9,903 9,903 5,256 887 11 898 932 151 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 31: Bonds at amortised cost LOANS AND RECEIVABLES NOK million Government bonds Corporate bonds Structured notes Collateralised securities Total bonds at amortised cost Distribution beween company and customers Loans and receivables company Loans and receivables customers with guarantee Total Storebrand Bank Modified duration Average effective yield Storebrand Livsforsikring Modified duration Average effective yield BONDS HELD TO MATURITY NOK million Corporate bonds Total bonds at amortised cost Distribution beween company and customers: Bonds held to maturity - customers with guarantees Total Modifed duration Average effective yield 2020 2019 Book value Fair value Book value Fair value 26,249 66,944 8,699 1,592 29,261 73,488 9,177 1,602 103,484 113,529 10,639 92,846 103,484 1.6% 0.1 0.6% 6.6 1.7% 26,249 69,772 1,525 501 98,046 8,256 89,790 98,046 2.5% 27,964 71,750 1,510 504 101,728 0.1 1.9% 6.1 2.6% 2020 2019 Book value Fair value Book value Fair value 13,026 13,026 13,026 13,026 1.0% 14,244 14,244 3.1 1.1% 13,377 13,377 13,377 13,377 2.1% 14,433 14,433 3.8 2.3% 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 avera- ge effective yield on the basis of each security’s share of the total interest rate sensitivity. 152 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 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. 2020 13,738 49,553 63,291 -77 63,214 21 31,780 31,434 31,780 31,434 63,214 2020 71 50 121 -17 104 2019 12,954 47,758 60,712 -53 60,658 23 30,187 30,472 30,187 30,471 60,658 2019 73 52 125 -20 105 153 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 33: Properties Type of properties NOK million 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 31.12.20 Average Required rate duration of 31.12.20 31.12.19 of return % 1) lease (years) 3) m2 3,50 - 4,00 4,00 - 5,35 4.40 5,00 - 7,66 5.60 4.20 6.50 3.80 4.20 4.60 4.84 5.9 3.9 4.0 4.4 4.0 2.0 11.0 12.0 10.0 4.6 3.70 4.0 94,332 85,225 16,987 165,809 103,210 27,393 19,293 69,448 35,872 73,591 38,820 729,980 729,980 8,435 4,811 790 5,497 2,693 7,682 4,360 719 5,955 2,137 858 898 270 2,589 2,692 2,750 683 50 32,117 1,609 33,726 50 29,261 4,415 33,726 239 2,143 2,563 2,016 653 49 29,415 1,375 30,790 49 26,901 3,839 30,790 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 is weighted based on the value of the individulal properties. As of 31.12.20, Storebrand Livsforsikring had NOK 6 166 million invested in Storebrand Eiendomsfond Norge KS and Ruseløkkveien 26 AS, 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 AS, Oslo invest exclusively in real estate at fair value. Vacancy Norway The vacancy rate for lettable areas was 7.4 per cent (6.3 per cent) at the end of 2020. The vacancy rate for areas that are not available for rent due to ongoing development projects is 78.6 per cent (57.2 per cent). At the end of 2020, a total of 13.8 per cent (12.1 per cent) of the floor space in the investment properties was vacant Sweden At the end of 2020, the vacancy for investment properties was 0,4 per cent Transactions:: Purchases: Further SEK 684 millions in property acquistions in SPP have been agreed on in 4th quarter 2020 in addtition to the figures that have been finalised and included in the financial statements as of 31 December 2020. 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 financial statements as of 31 December 2020 154 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixPROPERTIES 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 Depreciation method: Depreciation plan and financial lifetime 2020 1,375 8 72 -14 13 108 48 1,609 551 559 -677 -692 1,609 1,609 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 Client funds Collateral Accrued interest/pre-paid costs Tax receivable Activated sales costs (Swedish business) 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 155 2020 863 261 102 458 2,093 182 2,022 129 324 717 271 7,422 7,018 404 7,422 2019 1,420 6 -34 -13 11 -55 40 1,375 545 551 -664 -677 1,375 1,375 Straight line 50 years 2019 711 310 188 358 290 225 1,086 1,309 583 214 5,273 4,823 450 5,273 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixAGE 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 Sum Note 36: Bonds and other fixed-income securities NOK million Government bonds Corporate bonds 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 2020 858 6 1 865 -2 863 2020 Fair value 30,402 1,268 199,160 230,830 384 21,839 208,607 230,829 2020 Fair value 34,634 62,043 7,051 73,267 176,995 28,833 97,223 50,939 176,995 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 Modified duration Average effective yield Storebrand Fair value Life SPP Pension Storebrand Storebrand Storebrand Insurance & Insurance Euroben Bank Insurance 6.2 1.6 % 5.9 0.9 % 4.2 0.8 % 0.1 0.5 % 0.3 0.7 % ASA 0.3 0.7 % The effective yield for each security is calculated using the observed market price. Calculated effective yields are weighted to give an avera- ge 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. 156 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 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 positi- on 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 Gross booked value volume1) 246,363 189,359 NOK million Interest derivatives Currency derivatives Total derivater 31.12.20 Total derivater 31.12.19 Distribution between company and customers: Derivatives - company Derivatives - customers with guarantee Derivatives - customers without guarantee Total 1) Values 31.12. fin. assets fin. liabilities Net amount 6,364 3,613 9,977 5,313 705 260 964 994 5,659 3,353 9,012 4,319 1,275 5,753 1,984 9,012 Note 38: Technical insurance reserves - life insurance SPECIFICATION OF BUFFER CAPITAL ITEMS CONSERNING LIFE INSURANCE NOK million Additional statutory reserves Conditional bonus Market value adjustment reserve Total buffer capital Guaranteed pension 11,380 9,266 6,987 27,633 Total Store- Total Store- Euroben brand Group brand Group Savings Insurance *) (other) 183 183 1,503 1,503 2020 11,380 10,769 7,170 29,319 2019 9,023 9,302 5,500 23,825 157 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixSPECIFICATION OF BALANCE SHEET ITEMS CONSERNING LIFE INSURANCE NOK million Premium reserve - of which IBNS Premium fund/deposit fund Other technical reserves - of which IBNS Guaranteed pension 248,572 2,221 1,550 Savings Insurance *) 268,345 14 5,431 3,280 715 702 587 Total Store- Total Store- Euroben brand Group brand Group (other) 9,367 11 2020 2019 531,715 473,375 5,526 2,266 702 587 4,813 2,016 649 607 Total insurance liabilities - life insurance 250,123 268,345 6,849 9,367 534,683 476,040 *) 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 2020 3,102 4,069 7,170 2019 4,424 1,076 5,500 NOK million pension Savings Insurance *) (other) 2020 2019 Guaranteed Total Store- Total Store- Euroben brand Group brand Group Total insurance liabilities - life insurance 01.01 Premium income Capital return Insurance claims Change in conditional bonuses Fees Change in IBNR/RBNS Surplus to additional statutory reserve Other changes Total change in insurance liabilities in inco- me statement Yield tax To additional statutory reserve Change in premium fund Other Translation differences Total insurance liabiliteis - life insurance 31.12. 241,674 219,803 6,668 11,815 -14,949 -127 -1,488 54 -2,535 132 33,302 16,418 -11,922 -562 -501 6,216 2,812 224 -1,191 -882 402 148 -431 36,734 1,512 -70 135 105 553 8,156 -105 -10 11,923 -880 8,346 476,040 437,845 23 430 -447 164 -55 -2 114 -9 -10 925 42,804 28,887 -28,509 37 -2,988 456 -2,535 -224 31,216 45,705 -25,938 -1,778 -2,800 -7 -880 -794 37,929 44,725 -184 135 105 -347 229 -186 -166 21,004 -6,406 250,123 268,345 6,849 9,367 534,683 476,040 *) Including personal risk and employee insurance of the Insurance segment. See note 39 for insurance liabilities - P&C. 158 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 restructuring Appropriations earnout Other appropriations Governmental fees and tax withholding Collateral received derivates in cash Liabilities in connection with direct insurance Liabilities in connection with reinsurance 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 Change due to currency Book value 31.12 159 2020 56 56 695 650 620 30 1,345 2020 173 776 54 122 189 407 8,141 905 126 2,769 211 1,798 539 16,209 2020 57 27 -34 4 54 2019 26 26 537 594 566 28 1,131 2019 169 965 57 423 106 298 2,929 1,196 6 500 29 1,140 458 8,274 2019 38 50 -32 57 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 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 assets and liabilities measured at amorti- sed 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 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. Hedge effectiveness is 94 per cent per 31.12.20. HEDGING INSTRUMENT/HEDGED ITEM 2020 Book value 1) 2019 Book value 1) Recog- nised of compre- Conract/ hensive nominal Recog- nised of compre- hensive Assets Liabilities Booked income 1,101 3,420 284 141 -173 8 -2 -7 value 2,773 -2,238 -500 Assets Liabilities Booked income 1,070 3,243 493 -55 19 -9 -5 15 Contract/ nominal value 2,557 -2,238 NOK million Interest rate swaps Subordinated loans Debt raised through issuance of securities -284 1) Book values as at 31.12. Hedging of net investment in Storebrand Holding AB In 2020, Storebrand used cash flow hedging of the foreign exchange risk linked to Storebrand’s 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. The effe- ctive share of the hedging instruments is recognised in total comprehensive income. There is partial hedging of the net investment in Storebrand Holding AS and it is therefore expected that the hedge effectiveness in the future will be about 100 per cent. Expenses of NOK 868 million were recognised in total comprehensive income in connection with the hedging of Storebrand Holding AB, compared with income of NOK 322 million in 2019. HEDGING INSTRUMENT/HEDGED ITEM 2020 Book value 1) 2019 Book value 1) Contract/ Conract/ nominal value Assets Liabilities nominal value Assets Liabilities -4,700 -3,650 27 3,815 -4,700 -3,650 27 3,426 10,045 9,045 NOK million Currency derivatives Loan used as hedging instrument Underlying items 1) Book values at 31.12. 160 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Storebrand hedges an exposure in the reference interest rate EURIBOR 3M. Storebrand hedges an exposure of EUR 300 million nominal value in EURIBOR 3M. 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 “overnight” refe- rence 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 ambi- tion 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 2020 3,380 -8,828 -5,448 2019 904 -3,939 -3,035 The CSA agreements entered into with 13 counterparties regulate the security that can be used by the parties in OTC contracts that have been entered into. Most of the agreements have a minimum transfer amount of EUR 500,000. All agreements stipulate that cash in EUR and NOK can be used as security. In some of the agreements, government bonds are also defined as approved security. Interest is calculated based on the NOWA and EONIA rates respectively. Security provided for futures and options is adjusted daily on the basis of a daily margin settlement for each contract. Security is received and provided in the form of both cash and securities. Security in the form of cash is recognised in the balance she- et and classified as other receivables and other current liabilities in Notes 34 and 40 respectively. . 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 2020 1,703 151 1,854 2019 904 151 1,055 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 four 161 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix F-loan in Norges Bank as per 31.12.2020. Of total loans of NOK 31.5 billion, NOK 21,1 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 over-collateralisation (OC) of 16 per cent. The company must maintain the applicable OC that the rating agency requires if the company wishes to retain the current AAA rating. This requirement was 9.13 per cent at the end of 2020. The statu- tory OC is 2 per cent. Through commitments from previous prospectuses for covered bond issues, the company is obligated to maintain OC of up to 9.5% until these securities mature. Storebrand Boligkreditt AS has security that is NOK 1.3 billion more than what the present rating requires. Storebrand Bank ASA therefore considers the security to be adequate. Note 43: Contingent liabilities NOK million Guarantees Unused credit limit lending Uncalled residual liabilities re limited partnership Loan commitment retail market Total contingent liabilities 2020 3,063 8,251 2,962 14,276 2019 1 3,072 7,297 1,466 11,837 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 agreements COVERED BONDS - STOREBRAND BANK GROUP NOK million 2020 Transferred bonds still recognised on the statement of financial position Liabilities related to the assets 2019 403 403 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 employ- ees. These are transactions that are part of the products and services offered by the Group‘s companies to their customers. The transa- ctions 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 40.162 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes 85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes 167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818. Governance9. Sustainability assurance10. AppendixSTOREBRAND 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 Other operating expenses Total operating expenses Total expenses Pre-tax profit Tax Profit for year Note 2020 2 3 3 3 4, 5, 6 6 3,028 4 64 -3 1 3,095 -30 6 -40 -56 -96 -120 2,975 7 -171 2,804 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 2020 2,804 5 -15 4 -11 2019 3,230 2 50 -6 1 3,278 -51 -40 -62 -102 -153 3,125 -173 2,952 2019 2,952 -8 2 -6 Total comprehensive income 2,793 2,946 163 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 Other 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 31.12.20 31.12.19 7 13 8 44 27 20,893 20,964 41 27 20,042 20,110 16 3,139 3,166 9 10,12 11,12 12 5 12,14 16 15 57 4,894 61 8,166 29,130 2,339 -2 10,521 12,858 12,609 25,467 157 1,001 1,158 910 1,519 76 2,505 29,130 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 Lysaker, 9 February 2021 Board of Directors of Storebrand ASA Didrik Munch (sign.) Chairman of the Board Martin Skancke (sign.) Karin Bing Orgland Laila S. Dahlen (sign.) Marianne Bergmann Røren (sign.) Martin Skancke (sign.) Karl Sandlund (sign.) Fredrik Atting (sign.) Magnus Gard (sign.) Hans Petter Salvesen (sign.) Bodil ChaterineValvik (sign.) Odd Arild Grefstad (sign.) Group Chief Executive Officer 164 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix STOREBRAND ASA Statement of changes in equity NOK million Share capital 1) Own shares Share premium Other equity Total equity Equity at 31. December 2018 2,339 -2 10,521 10,521 8,395 2,952 -6 2,946 21,253 2,952 -6 2,946 -1,514 -1,514 -63 36 -6 9,794 2,804 -11 2,793 1,517 -1,519 33 -10 -68 38 -6 22,650 2,804 -11 2,793 1,517 -1,519 36 -10 10,521 12,609 25,467 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 Profit for the period Total other result elements Total comprehensive income Reversed dividend Provision for dividend Own share sold 2) Employee share 2) Equity at 31. December 2020 2,339 1) 467 813 982 shares with a nominal value of NOK 5. 2) In 2020, 526 935 shares were sold to our own employees. Holding of own shares 31. December 2020 was 416 255. -5 2 -5 3 -2 165 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixSTOREBRAND ASA Statement of cash flow NOK million Cash flow from operational activities 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 Payments - purchase/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 shares to employees Payments - buy own shares Payments - dividends Net cash flow from financing activities Net cash flow for the period Cash and cash equivalents at start of the period Cash and cash equivalents at the end of the period 2020 -1,577 -112 3,163 1,473 -1,144 -1,144 -800 500 -30 26 -304 26 34 61 2019 -1,408 -128 4,157 2,621 -629 -1 -630 -500 1 -58 33 -68 -1,399 -1,991 0 34 34 166 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixSTOREBRAND 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: Shareholders Note 16: Information about close associates Note 17: Number of employees/person-years 167 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 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. 168 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixCurrency 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 trans- action 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. Note 2: Income from investments in subsidiaries NOK million Storebrand Livsforsikring AS Storebrand Bank ASA Storebrand Asset Management AS Storebrand Forsikring AS Storebrand Facilities AS Storebrand Helseforsikring AS Total Group contribution from Storebrand ASA, see note 8 169 2020 2,222 80 620 105 1 3,028 2019 2,200 244 568 153 65 3,230 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 3: Net income for various classes of financial instruments NOK million income on realisation gain/loss 2020 2019 Dividend/ Net interest Net gain/loss unrealised Net income from equities and units Net income from bonds and other fixed income securities Net income from financial derivatives Net income and gains from financial assets at fair value – of which FVO (Fair Value Option) – of which trading 72 72 72 2 2 2 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 4 64 -3 66 69 -3 4 -9 -3 -7 -5 -3 2020 -21 -5 -8 -6 -40 2 50 -6 47 52 -6 2019 -20 -6 -8 -6 -40 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-contri- bution 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 101,351 as at 31 December 2020) – 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 The Norwegian companies participate in the Joint Scheme for Collective Agreement Pensions (AFP). The private AFP scheme provides a life- long 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 2020. 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. 170 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 2020 2 -7 -5 163 157 2020 161 3 15 -15 165 2020 7 7 2019 2 -7 -5 159 154 2019 168 4 8 -19 161 2019 7 -1 7 Expected premium payments are estimated to be NOK 1 million and the payments from operations are estimated to be NOK 12 million in 2021. Pension assets are based on the financial assets held by Storebrand Livsforsikring, 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 Livsforsikring were: 2020 15 % 34 % 20 % 12 % 17 % 3 % 100 % 4.4 % 2019 13 % 36 % 13 % 15 % 20 % 1% 100 % 3.6 % 171 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNET 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. 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 2020 2019 3 3 4 8 2020 9 6 15 2020 1.5 % 1.75 % 1.75 % 0.0 % KU 4 4 4 8 2019 8 1 8 2019 2.2 % 2.00 % 2.00 % 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 infla- tion, 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 insur- ance companies and pension funds. Storebrand has used the mortality table K2013BE (best estimate) in the actuarial calculations at 31 December 2020. 172 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Note 6: Remuneration of the CEO and elected officers of the company NOK thousand Chief Executive Officer 1) Salery 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 Tax advice Other non-audit services 2020 7,373 209 7,582 1,451 871 5,077 1,083 818 226 50 2019 6,899 191 7,090 1,353 855 4,730 1,055 688 74 25 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 Tax-free group contribution Permanent differences Change in temporary differences Tax base for the year TAX COST NOK million Payable tax group contribution Change in deferred tax Tax cost 173 2020 2,975 -30 -2,253 -30 13 675 2020 -169 -2 -171 2019 3,125 -219 -2,202 -21 -22 662 2019 -168 -5 -173 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 Accrued pension liabilities Gains/losses account 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 'permanent differences changes from previous year Tax cost Effective tax rate 2020 2019 1 1 -9 -1 -154 -2 -165 -165 41 2019 3,125 -781 55 551 3 -173 6 % -18 -157 -2 -177 -177 44 2020 2,975 -744 8 567 -2 -171 6 % 174 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 8: Parent company’s shares in subsidiaries and associated companies Forretnings- Eierandel/ kontor stemmeandel 2020 2019 Bokført verdi Oslo Oslo Oslo Oslo Oslo Oslo Værdal 100% 100% 100% 100% 100% 50% 25% 14,813 2,493 2,637 843 25 78 4 14,303 2,493 2,746 394 25 78 4 20,893 20,042 NOK million Subsidiaries Storebrand Livsforsikring AS 1) Storebrand Bank ASA Storebrand Asset Management AS 2) Storebrand Forsikring AS 3) Storebrand Facilities AS Jointly controlled/associated companies Storebrand Helseforsikring AS AS Værdalsbruket 4) Total 1) Group contribution in 2020 of NOK 511 million as capital contribution. 3) Dividend of NOK 120 million was posted as a repayment of capital. 2) Group contribution in 2020 of NOK 229 million as capital contribution. 4) 74.9 per cent owned by Storebrand Livsforsikring AS. Note 9: Equities NOK million Equities Total equities Note 10: Bonds and other fixed-income securities NOK million Bond funds Total bonds and other fixed-income securities Modified duration Average effective yield 175 Fair value 2020 57 57 Fair value 2020 4,894 4,894 0.3 0.67% 2019 44 44 2019 3,260 3,260 0.5 2.10% ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Note 11: Financial derivatives NOK million Total derivatives 2020 Total derivatives 2019 Gross nominal Gross booked value Gross booked volume 1) fin. assets fin. liabilities Net amount 600 11 7 3 Note 12: Financial risks CREDIT RISK BY COUNTERPARTY Bonds and other fixed-income securities at fair value Category of issuer or guarantor NOK million Fair value Fair value Fair value Fair value AAA AA A BBB Not rated Fair value Total Fair value State and state guaranteed Company bonds Supranational organisations Other Total 2020 Total 2019 COUNTERPARTIES NOK million Bank deposits 37 1,179 278 1,494 121 224 496 721 173 1,984 693 1,984 383 693 29 2,554 A Fair value 61 261 4,353 278 1 4,894 3,260 Total 61 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. 176 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixLiquidity 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 2020 Total financial liabilities 2019 Derivatives related to funding 2019 7 7 517 5 7 7 323 -10 516 516 526 510 510 1,042 1,042 1 366 -6 Carrying amount 1,001 1,001 1 309 -3 Storebrand ASA had as per 31 December 2020 liquid assets of NOK 4,9 billion. Currency risk Storebrand ASA has investments of SEK 51 million. 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 2020 2019 34 -7 27 -1 27 34 -7 26 1 27 2019 305 502 501 1,309 Property, plant and equipment mainly includes art that is not depreciated. Note 14: Securities issued NOK million Bond loan 2014/2020 1) Bond loan 2020/2025 Bond loan 2017/2020 Bond loan 2017/2022 Total bond and bank loans 2) Interest rate Currency value 2020 Net nominal Fixed Variable Variable Variable NOK NOK NOK NOK 300 500 500 500 500 501 1,001 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. 177 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Ownership interest in % 11.0 7.2 6.1 4.0 3.0 2.9 2.8 2.3 2.2 2.2 2.1 2.0 2.0 1.6 1.4 1.4 1.4 1.3 1.1 1.0 57% Note 15: Shareholders THE 20 LARGEST SHAREHOLDERS Folketrygdfondet Allianz Global Investors T Rowe Price Global Investments EQT Fund Management KLP Vanguard Group Handelsbanken Asset Management M&G Investment Management DNB Asset Management Storebrand Asset Management BlackRock Varma Danske Bank Asset Management Highclere International Investors Solbakken AS Nordea Asset Management HSBC Trinkaus & Burkhardt Deka Investment Dimensional Fund Advisors BMO Global Asset Management (UK) Foreign ownership of total shares 178 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.AppendixNote 16: 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 Board of Directors Didrik Munch Laila Synnøve Dahlen Martin Skancke Karin Bing Orgland Karl Sandlund Marianne Bergmann Røren Fredrik Åtting Bodil Catherine Valvik Hans-Petter Salvesen 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 17: Number of employees/person-years Number of employees Number of full time equivalent positions Average number of employees 179 2020 3,028 -47 3,139 910 2020 7 7 7 Number of shares 1) 194,520 120,564 85,072 94,788 83,561 100,554 20,962 16,135 21,955 16,502 40,000 15,500 27,500 27,000 3,000 0 18,500,000 870 0 1,633 2019 3,230 -47 3,166 900 2019 6 6 7 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Storebrand ASA and the Storebrand Group – 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 2020 financial year and as at 31 December 2020 (2020 Annual Report). The consolidated financial statements have been prepared in accordance with the EU-approved International Financial Repor- ting Standards (IFRS) and the associated interpretations, as well as the other disclosure obligations stipulated in the Norwe- gian Accounting Act that must be applied as at 31 December 2020. The annual financial statements for the parent company have been prepared in accordance with the Norwegian Accounting Act, Norwegian Regulations relating to annual 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 2020. In the best judgment of the Board and the CEO, the annual financial statements for 2020 have been prepared in accordance 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 December 2020. In the best judgment of the Board and the CEO, the annual report provides a fair and true overview of important 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, 9 February 2021 Board of Directors of Storebrand ASA Didrik Munch (sign.) Chairman of the Board Karin Bing Orgland (sign.) Laila S. Dahlen (sign.) Marianne Bergmann Røren (sign.) Martin Skancke (sign.) Karl Sandlund (sign.) Fredrik Åtting (sign.) Magnus Gard (sign.) Hans-Petter Salvesen (sign.) Bodil Catherine Valvik (sign.) Odd Arild Grefstad (sign.) Chief Executive Officer 180 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Independent auditors report 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 2020, 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 2020, the income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows 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 2020, 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 2020, 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 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 181 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 2020, 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 2020, the income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows 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 2020, 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 2020, 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 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 Independent Auditor's Report - Storebrand ASA 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. We have not identified regulatory changes, transactions or other material events that qualified as new key audit matters for our audit of the 2020 financial statements. 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 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 are 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. 182 (2) ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Independent Auditor's Report - Storebrand ASA Valuation of investment properties The Group has investment properties that mainly consists of office and retail 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. Through our audit we have assessed and tested design and effectiveness of established controls for review of 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 183 (3) ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Independent Auditor's Report - Storebrand ASA Independent Auditor's Report - Storebrand ASA Valuation of investment properties The Group has investment properties that Through our audit we have assessed and tested design mainly consists of office and retail properties. We have focused on and effectiveness of established controls for review of applied assumptions and calculation methods, investment property because it represents including the company’s internal valuation of an estimate and a substantial part of the investment properties. We particularly examined assets in the Group’s statement of whether management had established controls to 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. 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. Important assumptions for the value of We obtained, read through and understood the internal individual properties are primarily valuation model. We concluded that the model contains expected future cash flows and discount the elements required by the financial reporting rate. The basis for management’s estimate is an internal valuation model and external valuations. Management obtain 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. observations of market data from various In our assessment of the valuation, we challenged the market participants. Management assumptions for expected future cash flows and considers reasonableness of their own discount rate by comparing a sample of properties estimates through obtaining valuations against information from relevant external sources. from external valuers for a sample of Substantial changes in value from previous periods was 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 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. properties, the methods used and the assumptions the valuations are based on. 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 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 1, 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 and have therefore been a focus area. description of the method and the underlying assumptions that is used for the valuation. 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. (3) (4) 184 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix 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 a true and fair view 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 true and fair view 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: 185 (5) ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Independent Auditor's Report - Storebrand ASA • 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. • 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 a true and fair view. 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. 186 (6) ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818.Governance9.Sustainability assurance10.Appendix Independent Auditor's Report - Storebrand ASA 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. 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, 9 February 2021 PricewaterhouseCoopers AS Thomas Steffensen State Authorised Public Accountant Note: This translation from Norwegian has been prepared for information purposes only. 187 (7) ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 78Statement of total comprehensive income 79Statement of financial position 80Statement of changes in equity 82Statement of cash flow 83Notes 85Storebrand ASAIncome statement 163Statement of total comprehensive income 163Statement of financial position 164Statement of changes in equity 165Statement of cash flow 166Notes 167Declaration by member of the Board and the CEO 180Independent auditor´s report 1818. Governance9. Sustainability assurance10. Appendix 8 Corporate governance 189 Corporate governance 197 Companies in the Storebrand Group 188 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. GovernanceCorporate Governance 189Companies in the Storebrand Group 1979. Sustainability assurance10. AppendixCorporate 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 Storebrand 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. Storebrand’s corporate governance principles have been laid down in accordance with the Norwegian Corporate Governance 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 governance 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 annual report presenting financial, social, environmental and governance issues that are material for Storebrand and our stakeholders. The materiality analysis is can be found on page 16-17 above. Statement in line with the Norwegian Code of Practice for Corporate Governance (NUES) of 17 October 2018 1. Implementation and reporting on corporate governance (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. Storebrand 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. The market is kept updated on Storebrand’s goals, strategies and creation of value through quarterly performance presentations and other thematic presentations. Read more about the Company’s goals and main strategies in the Directors’ Report under the heading Strategy. Storebrand aims to be a world-class savings group that delivers 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 solutions. 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 this is Storebrand in the annual report. Since 1995 Storebrand has been focussed on sustainable investments, 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 the chapter a driving force for sustainable investments in the directors report above. This includes our principles for sustainable investments, which are approved by the group board and integrated throughout the group’s operations. Storebrand’s sustainability principles summarise how the work is an integral part of the Group’s overall objectives and governance and control processes. The principles were updated in 2018 and include all parts of the business, including investments, product development, procurement, employee follow-up and house operations. These principles are: • We base our business activities on the UN Sustainable Development Goals. • We help our customers to live more sustainably. We do this by managing our customers’ money in a sustainable manner, in addition to providing sustainable financing and insurance. • We are a responsible employer. • Our processes and decisions are based on sustainability 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. The Board of Directors adopts Storebrand’ s overall goals for the work on sustainability, which is in line with these principles. The group management is responsible for realizing the strategic goals. An overall strategic goal in 2020 has been to strengthen 189 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. GovernanceCorporate Governance 189Companies in the Storebrand Group 1979. Sustainability assurance10. Appendixsustainability as a competitive advantage. This goal has underlying targets related to our own operations, our products and our external communications. The targets are reviewed by the group management three times a year and twice a year by the board. Through our materiality analysis, we have defined the group’s focus areas. These are financial capital and investment universe, customer relations, our employees and keeping our house in order. In our integrated report, page 24, 31, 41, 65 and 73, detailed targets and results are presented for all these areas. Storebrand believes that diversity reinforces the company’s relative capacity for value creation. Increased diversity is an important aspect of Storebrand recruitment policy. Storebrand works to maintain and further develop an organization with equality and diversity. For more information see the chapter people in the annual report Storebrand has its own ethical rules. In addition, guidelines have been established for events, whistleblowing and combating corruption, among others. See our sustainability library for a full list of sustainability guidelines. https://www.storebrand.no/en/sustainability/sustainability-library 3. Equity and and dividends (deviations from the code of practice). The Board of Storebrand ASA continuously monitors Storebrand’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 dividend 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 Directors 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 dividend policy. The General Meeting was not requested to provide such authorisation in 2020. Read more about Storebrands dividend policy on page 51. 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 2020 Annual General Meeting, the Board was granted authorization to increase the share capital through issuing new shares for a total maximum value of NOK 233,906,991. This authorization 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 authorization. This authorization may be used for one or more new issues. This authorization 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 addition, each year Storebrand ASA sells shares to employees from its own holdings in connection with the share purchase scheme and long-term incentive schemes for employees of Storebrand. Accordingly, it is appropriate to authorise the Board of Directors to buy shares in the market to cover the aforementioned needs or any other needs. This authorisation is valid until the next Annual General Meeting. Otherwise, there are no provisions in Storebrand ASA’s Articles of Association that regulate the buyback or issuance of shares Apart from this, there are no provisions in Storebrand ASA’s Articles of Association that regulate the buyback or issuance of shares. Deviation from the Code of Practice: The Board’s authorizations 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 authorizations. 4. Equal treatment of shareholders and transactions with close associatess (No deviation from the code of practice) Storebrand ASA has only one class of shares. There are no special ownership and voting restrictions beyond the restrictions imposed by the Act on Financial Undertakings and Financial Groups Through their work, the board and management of Storebrand place great emphasis on equal treatment of the shareholders. 190 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. GovernanceCorporate Governance 189Companies in the Storebrand Group 1979. Sustainability assurance10. AppendixThe general competence rules for board members and executive 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 companies 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 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 associates involving Storebrand’s employees and other officers of the Group are regulated by Storebrand’s code of ethics. Employees 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 authorisation set out in Item 3 above, the Board may decide that the shareholders’ preferential rights shall be waived. 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. 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 access to electronic voting and the use of proxy allows shareholders to cast their votes without even attending the general meeting. All shareholders are thus given an opportunity to exert influence on Storebrand through the use of the right to vote. 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 Storebrand ASA are not obligated to attend but are encouraged to attend. The Group Chief Executive Officer, executive management team and the Group Legal Director participate from the management. The minutes of the General Meeting are available 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 For a complete account of shareholder matters, see section 6. statement, the balance sheet and the annual report, 5. Freely negotiable shares (No deviation 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 deviation from the code of practice) 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 2020. 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. Storebrand’ 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. • 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 statement 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- 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 Nomination Committee, • adopt the remuneration of the auditor, • and transact any other business listed on the agenda. 191 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. GovernanceCorporate Governance 189Companies in the Storebrand Group 1979. Sustainability assurance10. AppendixDecisions 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 authorizations 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 deviation from the code of practice) Storebrand ASA’s Articles of Association regulate the Nomination Committee, which consists of four or five members and an observer elected by the employees. For 2020-2021 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 Directors, as well as in other contexts where this would be natural, in accordance with an invitation from the Chairman of the Committee. The majority of the Nomination Committee is independent of the Board of Directors and the management. The Nomination 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 Committee 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 2020 Annual General Meeting. In accordance with the rules of procedure, the Nomination 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 information 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 candidates for the Board of Directors and Nomination Committee. A corresponding request to the shareholders is published on the company’s website. The nomination committee’s mandate in accordance with the company statutes is to propose candidates and remuneration for the Board of Directors and Nomination Committee, through recommendations to the General Meeting The remuneration of the members of the nomination committee has is in line with the nature of the work and the time spent in the committee work. The Nomination Committee held [14] meetings in 2020. 8. The composition and independence of the Board of directors (No deviation from the code of practice) 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 represented on the Board of Directors. At the end of 2020, the board consisted of 10 members (six men and four women). None of the members elected by the General Meeting have any employment, professional or consultancy relationship with Storebrand beyond their appointment to the Board of Directors. 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 independence requirements set forth in the Code of Practice. There are few instances of disqualification during the consideration of matters by the Board (none in 2020). 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 Committees”. An overview of the number of shares in Storebrand ASA owned by members of governing bodies as at 31 December 2020 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. 9. Work of the Board of Directors (No deviation from the code of practice) Duties of the board of directors In 2020, 15 board meetings were held, one of which was held at the subsidiary SPP in Stockholm. Storebrand’ s future strategy is discussed at the Board’s annual strategy meeting, which establishes guidelines for the management’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 Company’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 disqualification, but which may be necessary to take into account when matters are considered. Reference is made to Item 4 above. 192 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. GovernanceCorporate Governance 189Companies in the Storebrand Group 1979. Sustainability assurance10. AppendixThe 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 meetings 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 necessary. The Board has also drawn up instructions for the CEO. 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 committee 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 executive 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 Regulations in Norway and Sweden. The Compensation Committee held three meetings in 2020. The Audit Committee assists the Board by reviewing, evaluating and, where necessary, proposing appropriate measures with respect to the Group’s overall controls, financial and operational reporting, risk management/control, and internal and external auditing. The Audit Committee held nine meetings in 2020, 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. 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 forecasts and the treatment of risk reporting. The Risk Committee held seven meetings in 2020, including a joint meeting with the Audit Committee The main task of the strategy committee is to prepare the board management in the strategy area, with particular attention to the Group’s work on strategy, including mergers and acquisitions. The Committee shall provide forward-looking decision support related to the board’s discussion of the company’s strategic choices and targets. The strategy committee was established in August 2020 and held one meeting during the year. 10. Risk management and internal control (No deviation from the recommendation) Overall 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 authority, 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 instructions for the Chief Executive Officer, respectively. The Board of Directors has drawn up instructions for Storebrand’s subsidiaries 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 stakeholders 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 for areas such as risk management, internal control, financial reporting, handling inside information and share trading by primary insiders. Guidelines and information about information security, contingency plans, measures against money laundering and other financial criminality have also been drawn up. Storebrand is subject to statutory supervision in the countries 193 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. GovernanceCorporate Governance 189Companies in the Storebrand Group 1979. Sustainability assurance10. Appendixwhere it has operations that require a licence, including the Financial Supervisory Authority of Norway, as well as its own supervisory bodies and external auditor. 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 creating value for Storebrand’s shareholders. Storebrand’s financial and operational goals are defined annually 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 provides comprehensive reports for management and the Board concerning financial and operational targets. In addition, the Board of Directors receives risk reports from the risk management 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 profitability 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 Storebrand’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 on Storebrand’s financial performance and solvency. This provides 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. 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 remuneration 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. interim financial statements, Financial information and Storebrand’s accounting process Storebrand publishes four in addition to the ordinary annual financial statements. The financial statements must satisfy legal and regulatory requirements and be prepared in accordance with the adopted accounting policies and be published according to the schedule adopted by the Board of Storebrand ASA. 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 influenced 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 processes of the group companies. A series of risk assessment and control measures have been established in connection with the preparation of the financial statements. Assessments relating to significant accounting items and any changes in principles etc. are described in a separate document (assessment item memo). The Board’s Audit Committee conducts a preparatory review of interim financial statements and annual financial statements, focusing in particular 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 reconciled against other financial reporting. 194 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. GovernanceCorporate Governance 189Companies in the Storebrand Group 1979. Sustainability assurance10. Appendix11. Remuneration to the Board of Directors (No deviation from the code of practice) The General Meeting determines fixes the Board’s remuneration annually on the basis of the recommendations of the Nomination Committee. The fees paid to the members of the Board are not linked to earnings, option schemes or similar arrangements. Members of the Board and Board 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 shareholder-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 shareholdings 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 12. Remuneration to senior management (No deviation from the code of practice) The Board of Directors decides the structure of the remuneration for senior executives in Storebrand, and guidelines on the remuneration (previously the executive remuneration statement) are presented to the general meeting. The remuneration consists of fixed salary, variable remuneration, pension scheme and other personnel benefits that are common for a financial group. The remuneration shall motivate good efforts for long-term value creation and resource utilization in the company. The board’s stance is that the total remuneration should be competitive, but not leading within the industry. The salary of the group management is determined based on the level of responsibility and complexity of the position. An annual assessment is carried out based on external market data to ensure remuneration is adequate in relation to equivalent positions 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 cooperation, 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 purchase 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. Storebrand’s strategy and operational objectives are based on annual individual assessments of the remuneration of employees. This further strengthens the compliance between owners and the administration. Sustainable solutions are a key part of Storebrand’s business strategy and will also be part of the assessment of employees. More detailed information about the remuneration of executive 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 deviation from the code of practice) The Board has issued guidelines for the company’s reporting of financial and other information and for contact with shareholders 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 information and Storebrand’s accounting process. Documentation that is published is available on Storebrand’s website. All reporting 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 handling insider information, see also Item 10 – Management and control, above. the from takeover (No deviation 14. Corporate recommendation) 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 deviation from the recommendation) 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 195 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. GovernanceCorporate Governance 189Companies in the Storebrand Group 1979. Sustainability assurance10. Appendix 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, and Storebrand shall carry out a tender process for the selection of external audit companies at least every ten years. Each year, the work and independence of the external auditor is evaluated by the board’s audit committee. The auditor also holds an annual meeting with the board without the administration being present. The other companies in Storebrand have the same auditor as Storebrand ASA. 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 importance 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 Governance Committee since 2006. The Committee is responsible for ensuring good corporate governance across Storebrand. Storebrand Asset Management AS has had a Corporate Governance 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. Storebrand has issued guidelines with respect to employees holding positions of trust in external companies, which regulate, for example, the number of external 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 governing and controlling bodies, CVs for the members of Storebrand ASA’s Board of Directors, the Articles of Association, and ownership policies. in accordance with Section 3-3b, second Statement paragraph of the Norwegian Accounting Act A summary of the matters that Storebrand is to report on in accordance with Section 3-3b, second paragraph of the Norwegian Accounting Act follows below. The items follow the numbering used in the provision. 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 Governance 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 deviations 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 Companies 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 discussed in Item 8 above. 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. 196 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. GovernanceCorporate Governance 189Companies in the Storebrand Group 1979. Sustainability assurance10. Appendix 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 57) SPP Hyresförvaltning Storebrand & SPP Business Services AB 916 300 484 958 995 369 556734-9815 556045-7581 556892-4830 556401-8599 556745-7428 556883-1340 556594-9517 Euroben Life & Pension Designated Activity Company CIN 31 42 39 Storebrand Eiendomsfond Invest AS Storebrand Eiendom Trygg AS Storebrand Eiendom Vekst AS Storebrand Eiendom Utvikling AS Storebrand Pensjonstjenester AS Storebrand Infrastruktur AS AS Værdalsbruket 58) Norsk Pensjon AS Benco Insurance Holding BV Storebrand Bank ASA Storebrand Boligkreditt AS Storebrand Asset Management AS SPP Fonder AB Storebrand Fastigheter AB SKAGEN AS Cubera Private Equity AS Cubera Private Equity AB Storebrand Forsikring AS Storebrand Facilities AS Storebrand Helseforsikring AS 995 871 424 876 734 702 916 268 416 990 653 402 931 936 492 991 853 545 920 082 165 890 050 212 343 317 16 953 299 216 990 645 515 930 208 868 556397-8922 556801-1802 867 462 732 989 580 353 556812-8184 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 % 100,0 % 100,0 % 100,0 % 100,0 % 100,0 % 100,0 % 100,0 % 100,0 % 100,0% 100,0 % 100,0 % 50,0 % 57) Euroben Life & Pension DAC owns 7.3%. 58) Storebrand ASA owns 25.1 per cent and Storebrand’s total ownership interest is 100 per cent for AS Værdalsbruket. 197 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. GovernanceCorporate Governance 189Companies in the Storebrand Group 1979. Sustainability assurance10. Appendix9 Sustainability Assurance 199 TCFD table 201 GRI-indeks 198 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assuranceTCFD-index 199GRI-index 201Auditor’s statement on sustainability 20810. AppendixTCFD index Governance Strategy Disclose Storebrand’s governance around climate- related risks and opportunities. Disclose the actual and potential impacts of climate-related risks and opportunities on Storebrand’s businesses, strategy, and financial planning where such information is material. TCFD Recommended Disclosures Page TCFD Recommended Disclosures Page a Describe the Board’s oversight of climate-related risks and opportunities 53, 56 59) a Describe the climate-related risks and opportunities Storebrand has identified over the short, medium and long term 68-70 b Describe the management’s 53, 56 59) b Describe the impact of role in assessing and managing climate-related risks and opportunities climate-related risks and opportunities on Storebrand’s businesses, strategy, and financial planning 12-13, 57-65, 68-70, 73 c Describe the resilience of Storebrand’s strategy, taking into consideration different climate-related scenarios 12-13, 57-65, 68-70 59) In Director’s Report under Risk 199 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assuranceTCFD-index 199GRI-index 201Auditor’s statement on sustainability 20810. AppendixKAPITTEL11 - SUSTAINABILITY ASSURANCE Risk Management Metrics and Disclose how Storebrand identifies, assesses and manages climate-related risks. Targets 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 TCFD Recommended Disclosures Page a Disclose the metrics used by Storebrand to assess climate- related risks and opportunities in line with its strategy and risk management process. 37-39, 41, 57-65, 68-70 a Disclose the metrics used by Storebrand to assess climate- related risks and opportunities in line with its strategy and risk management process 37-39, 41, 57-65, 68-70 b Disclose Scope 1, Scope 2 and Scope 3 GHG emissions, and the related risks 41, 65, 73 b Disclose Scope 1, Scope 2 and Scope 3 GHG emissions, and the related risks. 41, 65, 73 c Disclose the targets used by Storebrand to manage climate-related risks and opportunities and performance against targets 37-39, 41, 65, 68-70, 73 60) c Disclose the targets used by Storebrand to manage climate-related risks and opportunities and performance against targets. 37-39, 41, 65, 68-70, 73 60) In Director’s Report under Risk 200 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assuranceTCFD-index 199GRI-index 201Auditor’s statement on sustainability 20810. AppendixGRI-index GRI-indeks An index of the GRI indicators we are reporting on and where the report contains information about the indicators follows below. GRI Ref. Her følger en indeks med GRI-indikatorene vi rapporterer på og hvor i rapporten informasjonen om indikatoren finnes. Organization profile Account Title 102-1 The name of the organisation Storebrand ASA GRI STANDARDER - OBLIGATORISKE INDICATOR 102-2 Activities, brands, products and services Described in chapter: This is Storebrand and the sub-chapter About Storebrand 102-3 The location of the head office Professor Kohts vei 9, Lysaker, Oslo, Norway 102-4 The places where your organisation operates Described in chapter: This is Storebrand and the sub-chapters About Storebrand and Material issues 102-5 Ownership and legal form Described in chapter: Directors’ Report and sub-chapter Overview of companies in the Storebrand Group 102-6 The markets covered Described in chapter: This is Storebrand and the sub-chapter About Storebrand 102-7 The size of the organisation Described in the chapters: This is Storebrand, sub-chapter About Storebrand People under Key figures Directors’ Report, sub-chapter Group’s Results 2020 Reporting Full Full Full Full Full Full 102-8 Information about employees and other workers Described in the chapters: Partial People in the sub-chapter Engaged, competent and courageous employees People under Key figures 102-9 Supply chain Described in the chapters: Keeping our house in order in sub-chapter Sustainable practices throughout our value chain 102-10 Significant changes in the organisation and supply chain DDescribed in the chapters: Ceo’s foreword Chairman’s foreword 102-11 Precautionary principle or approach Described in the chapters: This is Storebrand Keeping our house in order In the sub-chapter: Sustainable practices throughout our value chain Director’s Reort in the sub-chapter A driving force for sustainable investments, Climate risks and opportunities 102-12 External initiatives Described in the chapters: This is Storebrand Keeping our house in order In the sub-chapter: Full Full Full Full Sustainable practices throughout our value chain Director’s report in the sub-chapters A driving force for sustainable investments and Climate risks and opportunities Corporate governance Initiatives: UN PRI, UN Global Compact, Global Reporting Initiative, UN Sustainability Goals. Task Force on Climate-related Financial Disclosures (TCFD), Paris Agreement 2015, Carbon Disclosure Project, Global 100, UN Principles for Responsible Business Conduct, UN Declaration of Human Rights, UN Environ- mental Conventions, UN Principles for Sustainable Insurance, UNEP Finance Initiative, Portfolio DecarbonisationCoalition, Accounting for Sustainability, UN Convention Against Corruption, THE CORE CONVENTION, Montreal Pledge, Tobacco-Free Portfolios, UN Principles for Empowering Women,SHIFT, CEOs for a Sustainable Future, Know Chain the 201 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assuranceTCFD-index 199GRI-index 201Auditor’s statement on sustainability 20810. Appendix KAPITTEL11 - SUSTAINABILITY ASSURANCE GRI Ref. Title Account 102-13 Membership in organisations Described in the chapters: Reporting Full This is Storebrand Keeping our house in order In the sub-chapter: Sustainable practices throughout our value chain Director’s report in the sub-chapters A driving force for sustainable investments and Climate risks and opportunities Organizations: UNEP FI group working with Climate Risk, Climate Action 100+, Net-Zero Asset Owner Alliance, Global Real Estate Sustainability Benchmark (GRESB),NORSIF, SWESIF, PRI Investor Commitment to Support a Just Transition on Climate Change Strategy 102-14 Opinion from the chief decision-maker Described in: The CEO’s foreword, Chairman’s preface Ethics and integrity 102-16 Values, standards, principles and norms Described in chapters: This is Storebrand In the sub-chapter: About Storebrand, Keeping our house in order, Directors’ Report and Corporate governance Management 102-18 Governance structure Described in the chapters: This is Storebrand, Directors’ report, Corporate Governance In the sub-chapters: Organisation, Corporate Management, Board of Directors and Committees, Risk, Stakeholder engagement 102-40 List of stakeholder groups Described in chapter: This is Storebrand under the sub-chapter Material issues 102-41 Collective bargaining agreements Described in chapter: This is Storebrand under the sub-chapter Material issues 102-42 102-43 102-44 Identification and selection of stakeholders Described in chapter: This is Storebrand under the sub-chapter Material issues Approach to stakeholder engagement Described in chapter: This is Storebrand under the sub-chapter Material issues Important topics and questions that have been addressed Described in chapter: This is Storebrand under the sub-chapter Material issues Full Full Full Full Full Full Full Full 202 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assuranceTCFD-index 199GRI-index 201Auditor’s statement on sustainability 20810. Appendix GRI Ref. Title Reporting practices Account Reporting 102-45 Entities covered by the organisation’s consolidated financial statements Described in chapter: This is Storebrand under the sub-chapter Material issues Described in the ”Why” section at the beginning of each sub-chapter 102-46 Defining report content and topic boundaries Described in: Director’s report under the sub-chapter The Group’s profit 2020 102-47 List of material topics Described in chapter: This is Storebrand under the sub-chapter Material issues 102-48 Restatements of information Changes occur and are described in the chapters: People, Keeping our house in order and Directors’ report Under the sub-chapters: A driving force for sustainable investments and Climate risk and opportunities For all chapters mentioned above, the changes in the table with key figures apply 102-49 Changes in reporting No significant changes 102-50 Reporting period January 1,20 20–December 31, 2015 102-51 Date of previous report January 1,2019–December 31, 2019 102-52 Reporting frequency Annual 102-53 Contact https://www.storebrand.no/en/investor-relations 102-54 Reporting in accordance with GRI standards Described in chapter: This is Storebrand under the sub-chapter Material issues 102-55 GRI Index This table is the GRI index 102-56 External verification Appears in the auditor’s report Competitive long-term return to shareholders and customers (A) 103-1 103-2 Explanation of the material topic and its boundary The management approach and its components Described in chapter: This is Storebrand under the sub-chapter Material issues Described in the chapters: Ceo’s foreword and Chairman’s preface This is Storebrand Directors’ Report in the sub-chapters: Risk, Climate risk and opportunities, A driving force for sustainable investments, Strategic Highlights 2020, Group Results 2020, Future Outlook 103-3 Evaluation of management’s approach Described in chapters: Chairman’s preface This is Storebrand Directors’ Report in the sub-chapters: A driving force for sustainable investments and Climate risks and opportunities 201-1 Direct financial value generated and distributed Described in chapters: Corporate Governance and Directors’ report In the sub-chapters: Strategic highlights 2020, Group’s result 2020 201-2 Financial implications and other risks and opportunities resulting from climate change Described in: Directors’ report in the sub-chapters A driving force for sustainable invest- ments and Climate risks and opportunities Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full 203 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assuranceTCFD-index 199GRI-index 201Auditor’s statement on sustainability 20810. Appendix Full Full Full Full Full Full Full Full Full Account Reporting GRI Ref. Title A driving force for sustainable investments (B) 103-1 Explanation of the material topic and its boundary 103-2 The management approach and its components 103-3 Evaluation of management’s approach Described in the chapters: Ceo’s foreword, Chairman’s preface This is Storebrand in the sub-chapter About Storebrand Directors’ Report in the sub-chapters: Strategic highlights and A driving force for sustainable investments Described in the chapters: Ceo’s foreword, Chairman’s preface This is Storebrand in the sub-chapter About Storebrand Directors’ Report in the sub-chapters: Strategic highlights and A driving force for sustainable investments Described in the chapters: Ceo’s foreword, Chairman’s preface This is Storebrand in the sub-chapter About Storebrand Directors’ Report in the sub-chapters: Strategic highlights and A driving force for sustainable investments FS10 Share and number of companies in the portfolio that the reporting organisation has interacted with on environmental or societal conditions Described in: Directors’ report in the sub-chapter A driving force for sustainable investments under Key figures Active ownership and reduce ESG (environmental, social and governance) risk (C) 103-1 Explanation of the material topic and its boundary 103-2 The management approach and its components Described in the chapters: Ceo’s foreword, Chairman’s preface This is Storebrand in the sub-chapter About Storebrand Directors’ Report in the sub-chapters: Strategic Highlights, A driving force for sustainable investments, Active owners- hip, Exclusions and Climate risks and opportunities Described in the chapters: Ceo’s foreword, Chairman’s preface This is Storebrand in the sub-chapter About Storebrand Directors’ Report in the sub-chapters: Strategic highlights, A driving force for sustainable investments, Active owners- hip, Exclusions and Climate risks and opportunities 103-3 Evaluation of the management approach Described in the chapters: Ceo’s foreword, Chairman’s preface, This is Storebrand About Storebrand Directors’ Report in the sub-chapters FS11 412-3 Percentage of assets exposed to positive and negative environmental or social screening Significant investment agreements and contracts that include human rights provisions or have undergone human rights screening Described in Directors’ report in the sub-chapter: A driving force for sustainable investments under Key figures Described in Directors’ report in the sub-chapter: A driving force for sustainable investments in the sub-chapters Active owners- hip and Exclusions 204 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assuranceTCFD-index 199GRI-index 201Auditor’s statement on sustainability 20810. Appendix GRI Ref. Title Economic freedom in all phases of life (D) Account Reporting 103-1 103-2 103-3 Explanation of the material topic and its boundary Described in chapter: Customer relations under the sub-chapter Greater financial security and freedom The management approach and its components Described in chapter: Customer relations under the sub-chapter Greater financial security and freedom Evaluation of management’s approach Described in chapter: Customer relations under the sub-chapter Greater financial security and freedom STB-1 Customer satisfaction Described in chapter: Customer relationships under Key figures Engaging, relevant and responsible advisory services (E) 103-1 103-2 103-3 418-1 Explanation of the material topic and its boundary Described in chapter: Customer relations under the sub-chapter Engaging relevant and responsible advice The management approach and its components Described in chapter: Customer relations under the sub-chapter Engaging relevant and responsible advice Evaluation of management’s approach Described in chapter: Customer relations under the sub-chapter Engaging relevant and responsible advice Documented complaints about privacy violations and loss of customer data Described in chapter: Customer relationships under Key figures Digital innovator In financial services (F) 103-1 103-2 103-3 STB-2 Explanation of the material topic and its boundary Described in chapter: Customer relations under sub-chapter Digital innovator in financial services The management approach and its components Described in chapter: Customer relations under sub-chapter Digital innovator in financial services Evaluation of management’s approach Described in chapter: Customer relations under sub-chapter Digital innovator in financial services Number of downloads of the ”My Money” app Described in chapter: Customer relationships under Key figures STB-3 Automation of settlement processes Described in chapter: Customer relations under sub-chapter Digital innovator in financial services Simple and seamless customer experiences (G) 103-1 103-2 103-3 417-2 417-3 Explanation of the material topic and its Boundary Described in chapter: Customer relationships under the sub-chapter Simple and seamless customer experiences The management approach and its components Described in chapter: Customer relationships under the sub-chapter Simple and seamless customer experiences Evaluation of management’s approach Described in chapter: Customer relationships under the sub-chapter Simple and seamless customer experiences Cases of non-compliance with information and labelling of products and services Cases of non-compliance with mar- ket communication requirements Described in chapter: Customer relationships under the sub-chapters Simple and seamless customer experiences and Key figures Described in chapter: Customer relationships under the sub-chapters Simple and seamless customer experiencesand Key figures Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full 205 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assuranceTCFD-index 199GRI-index 201Auditor’s statement on sustainability 20810. Appendix GRI Ref. Title A culture of learning (H) Account Reporting 103-1 103-2 103-3 404-1 Explanation of the material topic and its boundary Described in the chapter: People under the sub-chapter A culture of learning The management approach and its components Described in the chapter: People under the sub-chapter A culture of learning Evaluation of management’s approach Described in the chapter: People under the sub-chapter A culture of learning Average number of hours of training per employee Described in the chapter: People under the subchapter A culture of learning Committed, competent and courageous wizards (I) 103-1 103-2 103-3 STB-4 Explanation of the material topic and its boundary The management approach and its components Evaluation of management’s approach Described in the chapter: People under the sub-chapter Engaged, competent and courageous employees Described in the chapter: People under the sub-chapter Engaged, competent and courageous employees Described in the chapter: People under the sub-chapter Engaged, competent and courageous employees Engagement scores all employees: Storebrand’s score vs. the industry average in Peakon Described in: Directors’ Report under the sub-chapter Progress on our most material sustainability KPIs Diversity and equal opportunities (J) 103-1 103-2 103-3 405-1 405-2 Explanation of the material topic and its boundary Described in chapter: People under the diversity and equality sub-chapter The management approach and its components Described in chapter: People under the diversity and equality sub-chapter Evaluation of management’s approach Described in chapter: People under the diversity and equality sub-chapter Wage differences between women and men Described in chapter: People under Key figures Diversity in governing bodies and among employees Described in chapter: People under Key figures Corporate governance and compliance: Privacy and combating financial crime (K) 103-1 Explanation of the material topic and its boundary Described in the chapter: Keeping our house in order under sub-chaptert Corporate governance and compliance: Privacy and combating financial crime, including Privacy and digital trust, Counter-corruption,Counter-terrorism and terrorist financing 103-2 The management approach and its components 103-3 Evaluation of management’s approach 205-2 418-1 Communication and training on policies and procedures for combating corruption Documented complaints about privacy violations and loss of customer data Described in chapter: Keeping our house in order under the sub-chapter Corporate Governance and Compliance: Privacy and Combating Financial Crime, including Privacy and Digital Trust, Counter-Terrorism, Counter-Terrorism and Terrorist Financing Described in chapter: Keeping our house in order under the sub-chapter Corporate Governance and Compliance: Privacy and Combating Financial Crime, including Privacy and Digital Trust, Counter-Terrorism, Counter-Terrorism and Terrorist Financing Described in chapter: Keeping our house in order under the sub-chapters Countering corruption and Key figures Described in chapter: Keeping our house in order under the sub-chapter Corporate governance and compliance: Privacy and combating financial crime and Key figures 206 Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Partial Full ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assuranceTCFD-index 199GRI-index 201Auditor’s statement on sustainability 20810. Appendix GRI Ref. Title Account Reporting Sustainable practices throughout the value chain (L) 103-1 103-2 103-3 308-1 Explanation of the material topic and its boundary Described in chapter: Keeping our house in order under the sub-chapter Sustainable supply chain The management approach and its components Described in chapter: Keeping our house in order under the sub-chapter Sustainable practices throughout our value chain Evaluation of management’s approach Described in chapter: Keeping our house in order under sub-chapter Sustainable practices throughout our value chain Suppliers assessed based on environmental criteria Described in chapter: Keeping our house in order under the sub-chapters Sustainable practices throughout our value chain and key figures Corporate Social Responsibility (M) 103-1 Explanation of the material topic and its boundary 103-2 The management approach and its components 103-3 Evaluation of management’s approach Described in chapter: Keeping our house in order under the sub-chapter Corporate Social Responsibility and Corporate Governance and Compliance: Privacy and Combating Financial Crime Described in chapter: Keeping our house in order under the sub-chapter Corporate Social Responsibility and Corporate Governance and Compliance: Privacy and Combating Financial Crime Described in chapter: Keeping our house in order under the sub-chapter Corporate Social Responsibility and Corporate Governance and Compliance: Privacy and Combating Financial Crime 415-1 Political contributions We don’t make contributions to political parties. Responsible resource use (N) 103-1 103-2 103-3 305-4 305-5 Explanation of the material topic and its boundary The management approach and its components Evaluation of management’s approach Described in chapter: Keeping our house in order under the sub-chapter Responsible resource use Described in chapter: Keeping our house in order under the sub-chapter Responsible resource use Described in chapter: Keeping our house in order under the sub-chapter Responsible resource use The intensity of greenhouse gas emissions Described in chapter: Keeping our house in order under Key figures Reduction in greenhouse gas emissions Described in chapter: Keeping our house in order under Key figures Full Full Full Full Full Full Full Full Full Full Full Full Full 207 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assuranceTCFD-index 199GRI-index 201Auditor’s statement on sustainability 20810. Appendix Auditor's statement on sustainability To: Board of Directors in Storebrand ASA To: Board of Directors in Storebrand ASA Til Styret i Storebrand ASA Independent statement regarding Storebrand ASA’s sustainability reporting Ledelsens ansvar Uavhengig uttalelse vedrørende Storebrands rapportering om bærekraft Independent statement regarding Storebrand ASA’s sustainability reporting Vi har kontrollert om Storebrand ASA har utarbeidet GRI-indeks for 2020 og målinger og beregninger av nøkkeltall for bærekraft («rapportering om bærekraft) per 09.02.2021. We have examined whether Storebrand ASA has developed GRI Index for 2020 and measurements and reporting of key performance indicators for sustainability (sustainability reporting) per 09.02.2021. We have examined whether Storebrand ASA has developed GRI Index for 2020 and measurements and reporting of key performance indicators for sustainability (sustainability reporting) per Storebrands GRI-indeks for 2020 er en oversikt over hvilke av indikatorene i retningslinjene fra The Global Reporting Initiative som Storebrand ASA har benyttet for å måle og rapportere om 09.02.2021. bærekraft; sammen med en henvisning til hvor informasjonen om bærekraft er rapportert. Storebrands GRI-indeks for 2020 er tilgjengelig og inngår i Storebrands ASAs årsrapport for 2020. Vi har kontrollert om Storebrand har utarbeidet en indeks for 2020 og om obligatorisk informasjon er gitt slik det kreves i standarder utgitt av The Global Reporting Initiative (www.globalreporting.org/standards) (kriterier). Storebrand’s GRI Index for 2020 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 Storebrand’s GRI Index for 2020 is an overview of which principles, aspects and indicators from sustainability; together with a reference to where material sustainability information is reported. the The Global Reporting Initiative guidelines that Storebrand ASA use to measure and report on Storebrand’s GRI Index 2020 is available on Storebrand’s website sustainability; together with a reference to where material sustainability information is reported. (www.Storebrand.no/sustainability/reports). We have examined whether Storebrand has Storebrand’s GRI Index 2020 is available on Storebrand’s website developed a GRI Index for 2020 and whether mandatory disclosures are presented according the Nøkkeltall for bærekraft er tabeller som viser indikatorer på bærekraft som Storebrand ASA måler (www.Storebrand.no/sustainability/reports). We have examined whether Storebrand has Standards published by The Global Reporting Initiative (www.globalreporting.org/standards) og følger opp. Tabellene er tilgjengelige og inngår i Storebrand ASAs årsrapport for 2020, developed a GRI Index for 2020 and whether mandatory disclosures are presented according the (criteria). nærmere bestemt til slutt i hvert av kapitlene «En pådriver for bærekraftige investeringer», Standards published by The Global Reporting Initiative (www.globalreporting.org/standards) «Kunderelasjoner», «Mennesker» og «Orden i eget hus». De ulike tabellene er også tilgjengelig i (criteria). Key performance indicators for sustainability are the tables containing sustainability indicators samleoversikten «Komplett liste med bærekraftsindikatorer» som er et vedlegg til årsrapporten. that Storebrand ASA measure and control. The tables are available and included in Storebrand Storebrand har definert nøkkeltallene og forklart hvordan de måles i noteverk til tabellene som er Key performance indicators for sustainability are the tables containing sustainability indicators tilgjengelig og inngår i årsrapporten (kriterier). Vi har kontrollert grunnlaget for målingene og har ASA’s annual report 2020, specifically at the end of the four chapters titled «Financial capital and etterberegnet målingene. that Storebrand ASA measure and control. The tables are available and included in Storebrand investment universe», «Customer relations», «People» and «Keeping our house in order». ASA’s annual report 2020, specifically at the end of the four chapters titled «Financial capital and Storebrand has defined the key performance indicators and explained how they are measured in investment universe», «Customer relations», «People» and «Keeping our house in order». the tables (criteria). We have examined the basis for the measurements and checked the Storebrand has defined the key performance indicators and explained how they are measured in calculations of the measurements. Ledelsen er ansvarlig for Storebrand ASAs rapportering om bærekraft og for at det er utarbeidet i the tables (criteria). We have examined the basis for the measurements and checked the overensstemmelse med kriterier som beskrevet over. Ansvaret omfatter å utforme, implementere og calculations of the measurements. vedlikeholde en intern kontroll som ivaretar Storebrand ASAs rapportering om bærekraft. Tasks and responsibilities of management Management is responsible for GRI Index 2020 and that the Index is developed in accordance with the Tasks and responsibilities of management Standards published by The Global Reporting Initiative. Management is also responsible for key Management is responsible for GRI Index 2020 and that the Index is developed in accordance with the performance indicators for sustainability and that these are developed in accordance with the Vi er uavhengige av selskapet i overenstemmelse med lov og forskrift og Code of Ethics for Standards published by The Global Reporting Initiative. Management is also responsible for key definitions given in the tables at the end of the chapters «Financial capital and investment universe», Professional Accountants (IESBA Code) og med de etiske kravene som er relevante for vårt oppdrag, performance indicators for sustainability and that these are developed in accordance with the «Customer relations», «People» and «Keeping our house in order». Their responsibility includes og vi har oppfylt våre etiske forpliktelser i samsvar med disse kravene og IESBA Code. Vi anvender definitions given in the tables at the end of the chapters «Financial capital and investment universe», developing, implementing and maintaining internal controls that ensure the development and ISQC 1 [NORSK] – Kvalitetskontroll for revisjonsfirmaer som utfører revisjon og forenklet «Customer relations», «People» and «Keeping our house in order». Their responsibility includes reporting of the GRI Index and key performance indicators for sustainability. revisorkontroll av regnskaper samt andre attestasjonsoppdrag og beslektede tjenester og opprettholder et omfattende system for kvalitetskontroll inkludert dokumenterte retningslinjer og developing, implementing and maintaining internal controls that ensure the development and prosedyrer vedrørende etterlevelse av etiske krav, faglige standarder og gjeldende lovmessige og reporting of the GRI Index and key performance indicators for sustainability. regulatoriske krav. Our independence and quality control We are independent of the company in accordance with applicable laws and regulations and the Code Our independence and quality control of Ethics for Professional Accountants (IESBA Code) and with the ethical requirements that are We are independent of the company in accordance with applicable laws and regulations and the Code relevant to our independent statement, and we have fulfilled our ethical obligations in accordance with of Ethics for Professional Accountants (IESBA Code) and with the ethical requirements that are these requirements and IESBA Code. We use ISQC 1 - Quality Control for Firms that Perform Audits relevant to our independent statement, and we have fulfilled our ethical obligations in accordance with and Reviews of Financial Statements, and Other Assurance and Related Services Engagements and these requirements and IESBA Code. We use ISQC 1 - Quality Control for Firms that Perform Audits maintains a comprehensive quality control system including documented policies and procedures of and Reviews of Financial Statements, and Other Assurance and Related Services Engagements and the ethical standards, professional standards and applicable legal and regulatory claim. 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 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 PricewaterhouseCoopers AS, Dronning Eufemias gate 71, 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 Vår oppgave er å gi uttrykk for en mening om saksforholdet basert på vår kontroll. Vår uavhengighet og kvalitetskontroll Revisors oppgaver og plikter 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 208 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 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assuranceTCFD-index 199GRI-index 201Auditor’s statement on sustainability 20810. Appendix 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 2020 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 2020 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, 9 February 2021 PricewaterhouseCoopers AS Thomas Steffensen State authorized public accountant (This translation from Norwegian has been made for information purposes only) (2) 209 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assuranceTCFD-index 199GRI-index 201Auditor’s statement on sustainability 20810. Appendix 10 Appendix 209 Executive management CVs 213 Group Board of Directors CVs 219 Complete list of Sustainability Indicators 223 Definitions 210 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223Executive management CVs ODD ARILD GREFSTAD (1965) LARS AA. LØDDESØL (1964) Group Chief Executive Officer Group Chief Financial Officer Storebrand ASA HEIDI SKAARET (1961) Executive Vice President, Retail Market Storebrand ASA Education State-Authorised Public Accountant Authorised Financial Analyst (AFA) Previous positions 2011–2012: Managing Director, Storebrand Life Insurance 2008–2011: Executive Vice President Finance and Legal, Storebrand ASA Group Chief Financial Officer Education Storebrand ASA Education MSc in Economics and Business Administration, University of Washington, USA MSc in Economics and Business Administration, Previous positions BI Norwegian Business School 2008–2012: Lindorff Group AB, Executive Vice MBA, Thunderbird School of Global President, Scandinavia Region, Managing Director Management, USA (AGSIM) of Lindorff AS in Norway. 2002–2008: Executive Vice President Finance, Previous positions Storebrand ASA 1998–2002: Manager of the Group Controller Unit, Storebrand ASA 1997–1998: Group Controller, Life Insurance, Storebrand ASA 2008–2011: Executive Vice President, Life and Pensions Norway and Managing Director, Storebrand Livsforsikring AS 2004–2008: Executive Vice President, Corporate Market Life Insurance, Storebrand Livsforsikring AS 1994–1997: Vice President, Internal Auditing, 2001–2004: CFO, Storebrand ASA 2001–2008: IKANO Finans ASA, Managing Director 1987–2000: Managerial positions at Den norske Bank ASA 1986–1987: Financial Services Officer, Bank of America, San Francisco, USA 1981–1983: Nord-Video (Aftenposten, Gyldendal, Mortensen), Sales Secretary Storebrand ASA 1989–1994: External Auditing, Arthur Andersen & Co 1994–2001: Vice President/Relationship Ownership in Storebrand Manager, Citibank International plc Number of shares as at 1990–1994: Asst. Treasurer, Scandinavian 31 December 2020: 94,788 Ownership in Storebrand Number of shares as of 31 December 2020: 194,520 Airlines Systems Ownership in Storebrand Number of shares as of 31 December 2020: 120,564 211 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223 KAPITTEL12 - 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 Bond trading, Svenska Handelsbanken 1996–2003: Head of Fixed Income, Alfred Berg Finland 1994–1996: Trainee, Pohjola Bank (OKOBANK) Ownership in Storebrand Number of shares as at 31 December 2020: 83,561 JAN ERIK SAUGESTAD (1965) Executive Vice President, Asset Management Education TERJE LØKEN (1975) Executive Vice President Digital & Innovation Education MSc in Engineering, Norwegian University of Master Computer Science, NTNU Norway Science and Technology (NTNU) MBA (INSEAD in France) Previous positions 2006–2015: Investment Director, Storebrand 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) 1990–1991: Junior Consultant, McKinsey & Company Ownership in Storebrand Number of shares as of 31 December 2020: 100,554 Previous positions 2017-2019: Chief Digital Officer (CDO), Storebrand Livsforsikring AS 2013-2016: Head of Digital and Mobile IT, Storebrand Livsforsikring AS 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 og Data Ownership in Storebrand Number of shares as of 31 December 2020: 16,502 212 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223TRYGVE HÅKEDAL (1979) Executive Vice President Technology Education KARIN GREVE-ISDAHL (1979) Executive Vice President Sustainability, Communications and Industry Policy Master of Science, Advanced Computing, Education Imperial College London Bachelor of Science, Computing Science, Newcastle University Previous positions 2016-2019 SVP IT Strategy & Architecture, Storebrand Group 2013-2015 Chief Architect & Head of IT Strategy, Storebrand Group 2009-2013 Enterprise Architect, Storebrand Group 2008-2009 Analyst, Goldman Sachs 2006-2008 Consultant, Accenture Master of International Relations, Bond University, Australia Bachelor of Communications, Bond University, Australia 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 2003-2004 Project Test Manager, Opera Software Ownership in Storebrand Ownership in Storebrand Number of shares as of 31 December 2020: 16,135 Number of shares as of 31 December 2020: 20,962 GEIR HOLMGREN (1972) Executive Vice President, Corporate Market Education Cand. Scient degree with actuarial qualifications, University of Oslo, Norway MBA, Griffith University Brisbane, Australia Previous positions 2013–2015: Executive Vice President, Guaranteed Pension, Storebrand ASA 2011–2012: Manager Customer Service and Product, Storebrand Livsforsikring AS 2003–2011: Product Manager, Storebrand Livsforsikring AS 2002–2003: Product Manager Unit linked Insurance, Storebrand Livsforsikring AS 2000–2002: Product Manager Defined Contribu- 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 2020: 85,072 213 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223KAPITTEL12 - 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 2020: 21,955 214 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223STOREBRAND ÅRSRAPPORT 2020 Group Board of Directors CVs DIDRIK MUNCH (1956) LAILA S. DAHLEN (1968) Chairman of the Board at Storebrand ASA since 2017 Director of the Board at Storebrand ASA since 2013 Position Position 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 2020: 40,000 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 Director, FINN.no AS Board Director, Schibsted Products & Technology AS Board Director, Lendo AS Board Director, E24 AS Ownership in Storebrand Number of shares as at 31 December 2020: 15,500 215 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223KAPITTEL12 - APPENDIX KARIN BING ORGLAND (1959) Director of the Board at Storebrand ASA since 2015 MARIANNE BERGMANN RØREN (1968) Director of the Board at Storebrand ASA since 2020 Position Self-employed Education MSc in Economics and Business Administration Norwegian School of Economics (NHH) Top Manager Programme (IMD, BI and Management in Lund) Previous positions Executive Vice President of DNB, and various managerial positions in the same group (1985–2013) Consultant, the Ministry of Trade and Shipping (1983–1985) 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 2020: 27,000 Position CEO, Mesta AS Education Master in Law, Oslo University Previous positions Danske Bank Corporate & Institutions (2007-2019) Global Head of COO Office Global Head of Risk Global Head of AML Program COO and Deputy Country Manager Chief Legal Adviser Managing Associate (lawyer) Thommessen (2005-2007) Managing Associate and Associate (lawyer) Wiersholm (2001-2005) Advisor and international coordinator Finanstilsynet (1999-2001) Lawyer Advokatfirmaet Arthur Andersen (1998-1999) Positions of trust Member of nomination comittee, Telenor ASA Board member, EBA Ownership in Storebrand Number of shares as at 31 December 2020: 0 216 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223KARL SANDLUND (1977) MARTIN SKANCKE (1966) Director of the Board at Storebrand ASA since 2019 Director of the Board at Storebrand ASA since 2014 Position Executive Vice President & CCO, SAS Education MSc Industrial Engineering and Management, University of Linkõping Previous positions EVP Commercial, SAS (2017-2020) 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) Position Independent consultant Education Authorised Financial Analyst Norwegian School of Economics (NHH) 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 Director, Business Strategies, SAS (2004-2006) Special Adviser, Storebrand (2011–2013) Consultant, McKinsey & Company (2001-2004) Deputy Director General and Director General, the Ministry of Finance Ownership in Storebrand Number of shares as at 31 December 2020: 3,000 (1994–2001, 2006–2011) Director General, the Office of the Prime Minister (2002–2006) Management consultant, McKinsey & Company (2001–2002) Positions of trust Director of Norfund Board Chairman of the Principles for Responsible Investment (PRI) Director of Storebrand Livsforsikring AS Ownership in Storebrand Number of shares as at 31 December: 27,500 217 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223 FREDRIK ÅTTING (1968) MAGNUS GARD (1978) Director of the Board at Storebrand ASA since 2020 Position Partner and CO-Head of EQT Public Value Utdannelse MSc (Stockholm School of Economics) Previous positions Various positions in EQT, Sweden, Hong Kong, Germany and England (1996-) Associate, Enskilda Securities, Sverige (1993-1996) Employee Representative of the Board at Storebrand ASA since 2019 Position Team Lead, corporate market, new sales Education MSc Economics and Business Administration (NHH) Previous positions Head of marketing, partners, retail market (2020) Sales Manager Pensions and Investment, Financial Advisory AS, Storebrand (2013-2019) Positions of trust Authorised Finanical Advisor, Storebrand (2007 – 2014) Chairman of the nomitation committee, BHG Group AB Account Manager, Mamut ASA (2004 – 2007) Chairman of nomitation committee, Adapteo Plc Ownership in Storebrand Number of shares as at 31 December 2020: 0 Number of shares owned by the close associate, EQT Public Value Investments S.à r.l, as of 7th December 2020: 18,500,000 Sales Executive, Rosa Index AS (2004) Internship, Centennial AS (2003-2004) Ownership in Storebrand Number of shares as at 31 December 2020: 1 633 218 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223HANS-PETTER SALVESEN (1968) BODIL CATHERINE VALVIK (1973) Employee Representative of the Board at Storebrand ASA since 2020 Employee Representative of the Board at Storebrand ASA since 2020 Position Head of Union Representatives, The Finance Sector Union of Norway Position Head of Fund Administration in Storebrand Asset Management ASA in Storebrand ASA Education Marketing Communications, BI Norges Markedshøyskole/NMH People Management, Høyskolen i Akershus Previous positions Sales Manager Storebrand Bank ASA (2016-2020) Sales Manager Storebrand Finansiell Rådgivning AS (2014-2016) Head of Dialogue Marketing/CRM Storebrand ASA, (2012-2014) Operational Manager Storebrand Baltic UAB (2010-2012) Key Account Manager, Storebrand Bank ASA (2005-2010) Web Manager/Project Management Storebrand Bank ASA (2003 – 2005) Web Manager/Project Management Finansbanken ASA (2000-2003) Employee Gjensidige Forsikring (1988-2000) Ownership in Storebrand Number of shares as at 31 December 2020: 0 Education BA(Hons) Travel & Tourism Management, University of Northumbria at Newcastle Previous positions Manager, Customer Services, Public pensions, Storebrand Pensjonstjenester AS (2018-2020) Manager, Customer Service, Pension & Savings, Storebrand PM (2013-2018) Manager Customer Service Link and Mutal Funds, Storebrand Kapitalforvaltning (2007-2012) Manager Customer Service Link, Storebrand Livsforsikring (2002-2006) Manager for Helpline Link, Storebrand Livsforsikring (2001-2002) Financial advisor, Storebrand Livsforsikring (1999-2001) Ownership in Storebrand Number of shares as at 31 December 2020: 870 219 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223BODIL CATHERINE VALVIK (1973) Employee Representative of the Board at Storebrand ASA since 2020 Head of Fund Administration in Storebrand Asset Management ASA Position Education Previous positions BA(Hons) Travel & Tourism Management, University of Northumbria at Newcastle Manager, Customer Services, Public pensions, Storebrand Pensjonstjenester AS (2018-2020) Manager, Customer Service, Pension & Savings, Storebrand PM (2013-2018) Manager Customer Service Link and Mutal Funds, Storebrand Kapitalforvaltning (2007-2012) Manager Customer Service Link, Storebrand Livsforsikring (2002-2006) Manager for Helpline Link, Storebrand Livsforsikring (2001-2002) Financial advisor, Storebrand Livsforsikring (1999-2001) Ownership in Storebrand Number of shares as at 31 December 2020: 870 Page 1, Photographer: Shutterstock Page 5, Photographer: Ole Berg-Rusten, NTB Page 8, Photographer: Johnér Bildbyrå AB / Sara Winsnes Page 9, Photographer: Shutterstock Page 18, Photographer: Johnér Bildbyrå AB Page 20, Photographer: Johnér Bildbyrå AB / Mikael Svensson Page 25, Photographer: Johnér Bildbyrå AB Page 27, Photographer: Maskot / Offset.com Page 32, Photographer: Johnér Bildbyrå AB Page 33, Photographer: Johnér Bildbyrå AB / Hans Berggren Page 39, Photographer: Johnér Bildbyrå AB / Henrik Trygg Page 40, Photographer: Johnér Bildbyrå AB / Susanne Kronholm Page 42, Photographer: Johnér Bildbyrå AB / Michael Jönsson Page 48, Photographer: Shutterstock Page 49, Photographer: Shutterstock Page 54, Photographer: Shutterstock Page 56, Photographer: Shutterstock Page 57, Photographer: Shutterstock Page 67, Photographer: Shutterstock Page 72, Photographer: Fredrik Schlyter / Johnér Bildbyrå AB Page 74, Photographer: Maskot / Offset.com Page 188, Photographer: Johnér Bildbyrå AB Page 198, Photographer: shutterstock Page 210, Photographer: Caiaimage / Johner Page 211-219, Photographer: Storebrand Archive 220 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223Goal 2021 >10 % Goal 2025 >10 % >150 % >150 % >50 % 100 % N/A >50 % 100 % N/A N/A N/A N/A N/A Complete list of Sustainability KPIs Investments Key performance indicators Return on equity Solvency margin Dividend ratio Share of total assets screened for sustainability NOK billion invested in fossil-free products 61) Carbon footprint from equity investments: ton- nes of CO2e per NOK 1 million in sales income Result 2017 11.3 % 172 % 40 % 100 % 60 Result 2018 13.7 % 173 % 68 % 100 % 68 Result 2019 8.0 % 176 % 0% 100 % 277 Result 2020 8.6% 178% 65% 100% 379 (against index) 62) 28 (18) 22 (32) 18 (24) 12 (18) N/A Carbon footprint from bond investments: ton- nes of CO2e per NOK 1 million in sales income (against index) 63) Total carbon emissions from equity invest- ments: tonnes of co2 Exposure to high emission sectors64): NOK New New New 7 (12) 9 (16) New New 3 661 218 3 261 366 billion / share of equity investments New 37.7 / 19% 34.6 /13% 32.2 / 8% N/A N/A N/A Investments in solutions (solutions companies, green bonds and property with environmental certification): NOK billion / share of total assets 65) New 38.8 / 5.5 % 53.7 / 6.5 % 92,6 / 9,6% 10 % 15 % Investments in green bonds: NOK billion/ share of total bond investments New 8.4 / 2.9 % 12.4 / 3.1 % 22.2 / 5% Investments in solution companies: NOK billion/ share of total equity investments New New 24.3 / 9.3 % 50.3 / 13% - - - - Investments in certified green property: NOK billion/ share of total real estate investments 9.9 / 26 % 13 / 30 % 17 / 41 % 20.1 / 43 % 52 % 74 % Companies excluded from the investment universe of the Storebrand Group: number/share of investment universe New 171 / 5.9 % 182 / 4.3 % 215 / 4.6% N/A Companies excluded from MSCI ACWI Index: number/share of MSCI ACWI investment universe Companies that have been contacted to discuss ESG through active ownership: number/share of investment New New 178 / 7.6% 198 / 8.1% N/A universe New 314 / 10.8 % 408 / 9.7% 572 / 12% N/A Votes at general meetings to promote Storebrand’s ESG criteria: number/ share of investment universe New 530 / 41.6 % 151 / 4.3 % 503 / 13% N/A N/A N/A N/A N/A Energy intensity direct real estate investments: kWh/m2 192 kWh/m2 201 kWh/m2 194 kWh/m2 181 kWh/m2 190 kWh/m2 181 kWh/m2 Water intensity direct real estate investments: m3/m2 0.34 m3/m2 0.38 m3/m2 0.46 m3/m2 0.44 0.45 m3/m2 0.43 m3/m2 Waste quantity direct real estate investments: kg/m2 /Share of waste sorted for recycling 8.2 / 71 % 9.4 / 74 % 9.2 / 69 % 8.1 / 72 % 73 % 80 % Carbon footprint direct real estate investments: tonnes co2e / kg CO2e per m2 9,368 / 10,35 GRESB score direct real estate investments (value-weighted average)66) 9,675 / 9,9 9,692 / 9,1 8,456 / 7,9 8.2 6.5 76% 221 82% 85% Increase Increase ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223Complete list of Sustainability KPIs Customer relations Result Result Result Key performance indicators 67) Customer satisfaction 68) Market share: Savings, retail market Norway Market position: Pension, corporate market Norway Proportion of women, pension savings Recognised for sustainable value creation 2017 Nr. 4 22 % Nr. 1 43 % 2018 Nr. 4 21 % Nr. 1 43 % (Retail Norway) New 2019 New 2019 Recognised for sustainable value creation (Corporate market Norway) New 2019 New 2019 Customer satisfaction (Net Promoter System, Enterprise Market Sweden) Nr. 8 Nr. 7 2019 Nr. 4 20 % Nr. 1 44 % Nr. 3 Nr. 1 Nr. 5 Result 2020 Nr. 6 22 % Nr. 1 44.2% Goal 2021 Top 3 Goal 2025 Top 3 Increase Increase Nr. 1 Nr. 1 Increase Increase Nr. 5 Top 3 Nr. 1 Nr. 4 Nr. 1 Nr. 1 Nr. 7 Top 3 Top 3 Footnotes “Investments”: 61) Fossil-free products are one of several ways to achieve our overall goal of net zero emissions, and therefore we have not set a specific target for how much should be invested in fossil-free products. 62) The method of carbon footprint calculations has been further developed for the annual report 2020. Similar indicators for 2017 – 2019 are rendered with the same methodology to ensure a consistent comparison basis.The ratio of funds to index is similar with the current and previous method, but the absolute values on the indicators will thus differ from previous years’ reported figures. 63) The method of carbon footprint calculations has been further developed for the annual report 2020. Similar indicators for 2017 – 2019 are rendered with the same methodology to ensure a consistent comparison basis. The ratio of funds to index is similar with the current and previous method, but the absolute values on the indicators will thus differ from previous years’ reported figures. 64) The figure applies to equity investments. For more information, see the chapter on climate risks and opportunities, especially page 70. See also description in the list of definitions from page 225. 65) We have decided to set an overall target for 2020 and 2025, and not a target for each asset class. 66) The objective is for all our portfolios to achieve a 5 star GRESB rating. This means that the portfolio must be among the top 20% globally, and therefore cannot be directly translated into a score (which is based on a value-weighted average). Footnotes “Customer relations” 67) We have stopped reporting on two indicators from 2019 on 2019: a) GDPR courses (this is an important indicator to make sure that new routines are implemented, but we are confident that these routines are working well and that all relevant employees receive GDPR training as part of the onboarding) and b) Sustainable Brand Index scores for the UK and Sweden (these indicators are replaced by others). In addition, complaints are now discussed under chapter 5 below. 68) Net Promoter System, Retail Norway 222 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223People Key performance indicators Sick leave Norway Sick leave Sweden Turnover rate for women group Turnover rate for men group Number of employees New recruits to the group Number of women hired during the year Number of 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 Result Result Result 2018 2.7% 3.3% N/A N/A 2019 3.1% 2.5% 9.7% 9.2% 1,667 1,742 220 78 116 115 102 526 408 235 284 204 78 126 109 117 531 379 264 302 2020 2.3% 1.8% 6.1% 6.8% 1,824 285 124 161 119 112 572 425 268 302 Female directors on the Group Board 5 out of 9 4 out of 9 4 out of 10 Women in Group Executive Management Team 3 out of 9 3 out of 10 3 out of 10 Women at management level 3: share of women / number of women Gender balance all managers: share of women / number of women Average salary female employees, Norway (NOK) Average salary male employees, Norway (NOK) Average salary female employees, Sweden (SEK) Average salary male employees,, Sweden (SEK) Expanded top management, women's share of men's salary per position category (Hay Grade 21-25) Employees up to middle managers, women’s share of men’s salary per position category (Hay Grade 13-20) CEO - average worker pay ratio: CEO pay/ average worker pay Goal 2021 Goal 2025 < 3.5% < 3.5% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 40% N/A 50% 50% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 40% N/A 50% 50% N/A N/A N/A N/A 46% 39% 699,228 871,146 608,551 762,151 41% 38% / 24 39% 39% / 103 743,684 914,107 644,484 811,717 760,948 923,686 671,159 842,226 110% 100% 104% 100% 100% 99% 97% 100% 100% 8.2 : 1 8.9 : 1 N/A N/A 99% N/A 223 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223Keeping our house in order Key performance indicators Result 2017 Result 2018 Result 2019 Result 2020 Goal 2020 Goal 2025 Environmentally certified purchases (share of the total expenditure that went to suppliers with certified environmental management system) 69) 38 % 46 % 57 % 62% 60% 60 % Share of purchasing volume that has answered survey on sustainability of suppliers 70) New New New 17% Increse 100% Greenhouse gas emissions from own operation (total) scope 1-3: tonnes of CO2 / tonnes CO2 per FTE 1,484 / 0.9 1,444 / 0.9 1,519 / 0.92 477 / 0.28 0.71 71) 0.671) Scope 1-emission: tonnes CO2 / tonnes CO2 per FTE 1.9 / 0 1.4 / 0 1.1 / 0 1.2 / 0 Scope 2-emission: tonnes CO2 / tonnes CO2 per FTE 320 / 0.19 201 / 0.13 179 / 0.11 164 / 0.09 Scope 3-emission: tonnes CO2 / tonnes CO2 per FTE 1,162 / 0.71 1,241 / 0.77 1,339 / 0.81 313 / 0.18 CO2e-emissions per FTE due to air travel: Scope 3,tonnes 73) CDP rating DJSI score/ percentile global E-learning conducted, ethics: total / share of man-years74) E-learning carried out, anti-corruption work: total / share of man-years 74) E-learning completed, combating money laundering and financial crime: total / share of man-years74) E-learning completed, privacy: total/ share of man-years 74) Number of complaints processed by the Financial Appeals Board 75) Number of breaches of code of conduct/ Code of Conduct Number of information security incidents Number of privacy events 0.64 B 69/74 New New New New New New 3 N/A 0.69 A - 63/74 New New New New 135 New 0 60 0.74 A - 75/81 89 % 87 % 89 % New 192 9 30 48 - - - - A - - - - A 0.15 A - 81/93 Top 10% 72) Top 10% 72) 91% 90% 92% 85% 218 2 20 41 100 % 100 % 100 % 100 % 100 % 100 % 100% 100% N/A N/A N/A N/A N/A N/A N/A N/A 69) Even though we achieved a higher purchasing volume from environmentally certified suppliers in 2020, the dynamics of our supply chain and market conditions still make the 60 per cent target challenging. Therefore, our aim is to work on maintaining a share of purchases from environmentally certified suppliers of over 60%. 70) Applies to volume of our purchases in NOK to suppliers with over NOK 1 million in sales to Storebrand 71) We have set a target to reduce our emissions by 7,6% per year by 2025 with a 2019 baseline year. Due to the Covid-19 pandemic, our emissions in 2020 were abnormally low. We will consider adjusting our long-term targets when the pandemic stabilises and working-life becomes more normalised. 72) A top 10% rank entails that Storebrand will be included in the Dow Jones Sustainability Wolrd Index. Score and percentile as expressed in the indicator can therefore not be directly compared with the target expressed here. 73) We have stopped reporting the average number of flights per FTE, as this is not a relevant indicator. The impact of air travel on the environment depends on how far you travel. This indicator is therefore replaced by kg CO2equivalents per FTE related to flights will be replaced from 2019. Emissions from flights have been recalculated for 2017-2019 as a result of updates to the emission factors in our travel agencies’ systems. 74) From 2019, we started reporting for each course separately. Historical data for 2017 and 2018 is therefore not available. Data for 2019 shows the share of all permanent employees throughout the year. The deviation from the 100% target is mainly due to turnover and new hires. 75) The figures apply to our Norwegian enterprises, as these are complaints dealt with in the Financial Complaints Commission. SPP not included here. 224 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223 Definitions of Key performance indicators Definitions apply to the KPIs in Chapters 2 - 6 of this report, and all the KPIs in the complete list of sustainability KPIs above A driving force for sustainable investments 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. Dividend/Pay-out ratio: Dividend as a share of profit after tax. (see Dividend Policy on p.51) Per cent of AuM screened for sustainability: All companies in our investment universe are screened for sustainability according to our standards: https:// www.storebrand.no/en/sustainability/investments Fossil-free products: The companies in the portfolio may have no more than 5% of their revenues related to the production or distribution of fossil energy, and the fossil reserves shall not exceed 100 million tonnes of CO2. Carbon footprint in equity investments: Results per Q3 2020. Based on TCFD’s definition. The fund’s total carbon footprint is the sum of the companies’ carbon emissions over the companies’ revenues, weighted for our ownership of the respective companies. The unit of measure shows carbon emissions per million fund currency in NOK. The method is the same for stocks and bonds. Exposure to high-emitting sectors: Indicates our exposure to high-emitting sectors in NOK and as a share of total equity investments. The definition of high-emitting sectors follows the methodology recommendation of the Net Zero Asset Owner Alliance, and includes the following GICS codes for each sector: Aviation 20301010, 20302010 Chemicals 15101010, 15101020, 15101030, 15101040, 15101050 Energy, 10101010, 10101020, 10102010, 10102020, 10102030, 10102040, 10102050 Steel, 15104050 Shipping, 20303010 Cement 15102010 Utilities, 55101010, 55102010, 55103010, 55105010 Light duty automobiles, 25102010 Heavy duty automobiles, 20304020, 20104020 Aluminium, 15104010 Investment in solutions (solution companies, Green Bonds, and real estate investments with Green Building Certificate): Total share of managed capital invested in solution companies, through our portfolio of clean technology, renewable energy and green bonds in equity and interest rates in Storebrand and SPP. Direct real estate investments under operational control in Norway and Sweden with environmental certification. Investments in green bonds: Green bonds enable capital raising for new and existing projects with environmental gains. Investments in solution companies: The investment in solution companies, through our portfolio of clean technology and renewable energy, among others, in Storebrand and SPP. Certified green property: Share direct real estate investments under operational control in Norway and Sweden with environmental certification. Energy consumption direct real estate investments: Temperature-adjusted energy consumption per square meter of heated 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. Water consumption in direct real estate investments: Water consumption in cubic metres per square meter of heated area in direct real estate investments under operational control in Norway and Sweden. Consumption measured and registered in the environmental follow-up system. Carbon footprint direct real estate investments: CO2 emissions from direct real estate investments under operational control, per square meter of heated area. Includes direct and indirect emissions (scope 1-3), including the tenant’s energy and water consumption as well as waste production. The carbon footprint is calculated by CemaSys AS according to the Greenhouse Gas Protocol (GHG) protocol. The Nordic mix emission factor is the basis for calculating location- based emissions from electric power. Waste sorting in direct real estate investments: Share of source sorted waste from real estate including tenants. Residual waste is sorted mechanically at the recycling plant, and mainly goes to energy recovery. Customer relations Net Promoter System: Net Promoter System: Net Promoter System (NPS) is a measuring tool for customer satisfaction where the customer gives a score from 0 to 10 with 10 as the best result. Market share Savings Norway PM: Based on Q3 figures from Finans Norway and VFF (Mutual Funds Association). Market position BM occupational pension: Based on Q3figures from the Finance Norway. Share of female pension savers: Proportion of pension savers (customers) who are women. Association to profitable sustainability: Averages of the share that connects Storebrand with sustainability, environmental responsibility and corporate social responsibility. 225 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223 KAPITTEL12 - APPENDIX Expected pension as a share of salary: Customers’ expected pension from all sources (including private savings for pension, national insurance, AFP, and occupational pension schemes in Norway), expressed as a percentage of current salary. People Sickness absence: Number of sick leave days divided by number of working days at end-December 2020 Number of employees: Number of employees at Storebrand and SPP as of 31.12.20, including Værdalsbruket. Leader level 1-3: Level 1=CEO Level 2=Group management Level 3=Reports to group management, with the exception of personal assistants Gender balance all managers, proportion of women: Includes all female managers with personnel responsibilities. For level 3, all female managers are counted, except personal assistants Turnover: Permanent employees who quit in 2020 with the exception of voluntary severance agreements between employer and employee, reduction in workforce or retirement, divided by average number of permanent employees in 2020. Number recruited: Number of recruits including permanent employees, substitutes and internships in Norway and Sweden. The figures also include recruited employees who left the group later in 2020. Number of employees in different age groups/sex: Includes Norway and Sweden. Discrepancies compared to the total number of employees are due to the fact that gender is not registered for all employees and that Værdaksbruket is not included in these figures. Hay Grade: Hay Grade is a recognised job evaluation system used by many larger companies in Norway and internationally. The system makes it possible to compare pay for positions that have the same requirements for competence, experience and complexity. The system is used to compare wages for positions across the group and also against positions with the same Hay Grade in the labour market. The figures only apply to Storebrand in Norway. Hay Grade 21-25 includes roles except CEO. CEO - Average Worker Pay Ratio: Basic salary for CEO relative to average salary for all employees in Norway Keeping our house in order Environmental requirements for suppliers: Share of contracts with suppliers where Storebrand has over 1MNOK in procurement where the supplier is certified or meets requirements according to one or more of the following environmental certification systems: Miljøbas, Miljøfyrtårn, Svanen, ISO 14001, CO2 neutral. 226 Co2 emissions: CO2 emissions per man-year in Norwegian and Swedish operations. Includes direct and indirect discharge; transport, other transport, energy consumption and waste (scope1-3). The carbon footprint is calculated by CemaSys AS according to the Greenhouse Gas Protocol (GHG) protocol. The Nordic mix emission factor is the basis for calculating location-based emissions from electric power. CO2 emissions from air travel: Emissions from service trips the employees of the Group’s Norwegian and Swedish operations have done by air. Scope 1: Tonnes of CO2 equivalents, measured in accordance with Greehouse gas protocol. Scope 2: Tonnes of CO2 equivalents, measured in accordance with Greehouse gas protocol. Scope 3: Tonnes of CO2 equivalents, measured according to Greehouse gas protocol. Energy consumption: Temperature-adjusted energy consumption per square metre of heated area at the head offices in Norway and Sweden. Consumption measured by the energy supplier (electricity and district heating / cooling) and registered in the environmental monitoring system. Water consumption: Water consumption in cubic metres per square meter of heated area in the head offices of Norway and Sweden. Consumption measured and registered in the environmental follow-up system. Waste sorting/sorting grade: Share of waste sorted for recycling and further handling at head offices in Norway and Sweden. The residual waste is mechanically sorted at the recycling plant, and mainly goes to combustion with heat recovery. Paper consumption: Consumption of office paper (copy and bond paper), envelopes, advertisements, including externally printed and regulatory letter attachments in kilograms per full-time employee in both Norwegian and Swedish operations. CDP rating: Rating performed by carbon disclosure project. E-learning course completed: Employee who is registered as completed in our e-learning system. Cases dealt with in the Financial Complaints Committee: Customers complain storebrand to the Financial Complaints Commission for the processing of cases. These are processed by the Financial Complaints Committee on an ongoing basis. Information security events: An information security incident is a suspected, attempted, successful or imminent threat of unauthorised access, use, disclosure, violation, alteration or destruction of information; disruption of IT operations; or significant violation of the responsible use policy. ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director´s report6.Shareholder matters7.Annual Accounts and Notes8.Governance9.Sustainability assurance10.AppendixExecutive management CVs 209Group Board of Directors CVs 213Complete list of Sustainability Indicators 219Definitions 223Storebrand ASA Professor Kohts vei 9, Postboks 500, 1327 Lysaker, telefon 915 08880, storebrand.no 227 ContentsFacts and figures 2020 3Letter from the Group Chief Executive Officer 5Chairman’s foreword 71. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director´s report6. Shareholder matters7. Annual Accounts and Notes8. Governance9. Sustainability assurance10. Appendix

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