Storebrand ASA Annual Report 2021

Plain-text annual report

Storebrand ASA Annual report 2021 How to navigate in the Annual report Previous page Next page Full screen 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 Table of contents Introduction 3 Facts and figures 2021 5 Foreword by our CEO 7 Foreword by the Chair 9 Highlights in 2021 1. This is Storebrand 12 About Storebrand 13 Organisation 16 Executive management 17 Board of Directors 2. Customer relations 21 Greater security and financial wellness 6. Shareholder matters 7. Annual Accounts and Notes Storebrand Group 92 Income statement 93 Statement of total comprehensive income 94 Statement of Financial Position 96 Statement of changes in equity 97 Statement of cash flow 99 Notes Storebrand ASA 180 Income statement 23 Engaging, relevant and responsible advice 180 Statement of total comprehensive income 24 Digital innovator in financial services 25 Simple and seamless customer experiences 26 Key performance indicators 3. People 28 A culture for learning 30 Engaged, competent and courageous employees 31 Diversity and equal opportunities 33 Key performance indicators 4. Keeping Our House in Order 35 Corporate governance and compliance 40 Responsible use of resources 41 Sustainable practices through our value chain 181 Statement of Financial Position 182 Statement of changes in equity 183 Statement of cash flow 184 Notes 197 Declaration by member of the Board and the CEO 198 Indepentent auditor’s report 8. Corporate governance 206 Corporate governance 214 Companies in the Storebrand Group 9. Sustainability Assurance 216 TCFD-index 220 GRI-index 226 Auditor’s Statement 10. Appendix 229 Executive management CVs 234 Group Board of Directors CVs 240 Sustainability indicators and definitions 247 Carbon Accounting Summary 248 Taxonomy reporting always go back to this page for a 43 Corporate social responsibility complete overview. 44 Key performance indicators 5. Director’s report 46 Strategy 2021-23 47 Strategic highlights 2021 51 The Group’s results 2021 56 Official Financial Statements of Storebrand ASA 57 Outlook 62 A driving force for sustainable investments 72 Risk 74 Climate risk and opportunities 84 Working environment and HSE 85 Progress on our most material sustainability KPIs 2 Facts and figures 2021 Number of employees 1 914 Return on equity2) 10.7 % Assets under management, NOK billion 1 097 Investments in fossil free funds, NOK billion 483 Real estate investments with green certificates4) 68% Group profit1), NOK million 4 503 Solency ratio 175 % Assets under management screened for sustainability criteria 100 % Investments in solutions3), NOK billion 123.1 Rank in Global 100 among insurance comapanies No. 1 (third consecutive year) 1 Profit before amortisation and tax. 2 After tax, adjusted for amortisation of intangible assets. 3 Equity investments in solution companies, investments in green bonds, green infrastructure and investments in real estate with Green Building Certificate. 4 Capital Investment that we acquired in 2021 has not reported to GRESB, and the real estate assets managed by the company is not included in the figures for Green Building Certificate 3 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixDefined Contribution pensions Norway – Annualised return last 5 years *) Pension investment profiles Sweden – Annualised return last 5 years **) 9.2 % 8.4 % 8.3 % 8.1 % 8.0 % 10.9 % 9.3 % 9.2 % 8.3 % 6.8 % Storebrand Competitors SPP Competitors Unit Linked reserves Total assets under Written portfolio (NOK billion) management (NOK billion) premiums (NOK billion) +15% 308 +14% 1,097 +22% 6.45 5.29 268 962 2020 2021 2020 2021 2020 2021 Fee and administration income Group profit ***) (NOK million) Earnings per share, adj. (NOK million) +16% 6,607 5,676 +66% 4,503 2,711 for amortisation (NOK) +29% 7.81 6.07 2020 2021 2020 2021 2020 2021 *) 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. ***) Result before amortisation and tax 4 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixForeword by our CEO In 2021, we shifted into an even higher gear ensuring increased speed and growth, while defining clear ambitions for the coming years. With a strong solvency ratio and balance sheet, where Defined Contribution pensions now make up most of the pension assets, we could spend less time on older products in run-off and devote more attention to Storebrand’s future business. Odd Arild Grefstad Group Chief Executive Officer Throughout the year, more and more customers signed up for our market-leading digital products within pensions, savings, insurance, banking, and asset management. The group delivered both strong returns and long-term value to both customers and shareholders. The group result before amortisation and tax reached NOK 4.5 billion, supported by the sale of Værdalsbruket as well as good returns for customers in funds with performance fees. Excluding positive one-off effects, earnings grew substantially in 2021, and we are well on track to achieve our ambition of delivering a Group profit before amortisation and tax of more than NOK 4 billion in 2023. Since the winter of 2019/2020, the pandemic has changed the professional and personal lives for most people. Throughout this period, Storebrand’s employees have shown an impressive ability to make the best of the situation. We quickly found new ways of working that contributed to both customer and employee satisfaction, and solid results. Storebrand has been present for our customers during the pandemic. Throughout 2021, many customers confirmed that Storebrand plays an important role as a contributor to their financial security and freedom. We handled volatile markets throughout the pandemic and provided secure and good returns to our customers while strengthening our solvency. The Norwegian and Swedish economies developed positively throughout the year. The share of companies with payment difficulties or at risk of going bankrupt fell sharply, and a record number of employees were employed. In fact, at the beginning of 2022, labour shortage was one of the biggest challenges in the Nordic countries. Interest rates rose through 2021. This was a sign of a healthier economy after a period of record-low interest rates, and an advantage for Storebrand as a life insurance company and manager of people’s pension money. Unfortunately, the spread of Covid-19 increased towards the fall of 2021, resulting in new restrictions that created challenges for both companies and individuals. Although the uncertainty increased in the short term, we saw clear signs that everyday life was returning to normal. Within Defined Contribution pensions, we delivered record-high returns within the most used pension profiles in Norway, both in 2021 and on a three- and five-year basis. This means that Storebrand’s customers have received the best return in the market. We are proud to deliver market-leading returns through a distinctly sustainable asset management, providing better pension for our customers and contributing to a better world to retire in. In total, Unit Linked products achieved 15 per cent growth. At the turn of the year these products accounted for 51 per cent of the managed pension assets. Among corporate customers in Norway, we had both the highest customer satisfaction and loyalty. 5 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixEarly last year, Individual Pension Accounts were introduced in Norway. The scheme makes pensions simpler and clearer, and it allows employees in the private sector to choose which company will manage their pension funds. Storebrand met the change with competitive solutions. Customers shall be confident that Storebrand provides the best offer, whether they follow their employer’s collective scheme, or choose a pension provider themselves. At the end of the year, we entered into an agreement to buy Danica in Norway. We look forward to combining our expertise and good technical solutions with Danica’s strong and professional distribution partners. We will take pride in serving Danica’s customers and helping even more people gain access to market-leading products and services. In the public sector, which is one of our new focus areas, it was a very exciting year. First, we could welcome Vestland County Municipality. Then we won the trust of both Øygarden and Bjørnafjorden municipalities, as well as several public organisations. We demonstrated that there is money to be saved for municipalities that put their pension schemes out to public tender, while at the same time giving employees access to pension schemes that are at least as good the ones they had before. The results will inspire further efforts within the public sector in the time to come. In Sweden, SPP continued to change the pension market by delivering strong digital solutions and sustainable products and services. This led to many new customers moving to SPP towards the end of the year. SPP was recognised as the most digital pension company in the Swedish market and delivered record-high results in 2021. Our investment in the Norwegian retail market resulted in significant earnings growth and an increase in the number of customers and employees. We gained market shares within savings, banking and insurance. Storebrand was the fastest growing insurance company in the Norwegian retail market, with an increase in market share from 4.5 per cent to 6.0 per cent. The bank’s lending, primarily for mortgages, grew by as much as 15 per cent. Continuously improving digital services - including the app “Mine Penger” (“My money”) - contributed to good experiences for our savings customers. Profit in the retail market increased by 48 per cent in 2021, and we have high growth ambitions going forward. Storebrand is both one of the largest, and the fastest growing, asset managers in the Nordic region. We are the gateway to investments in the Nordic region for international customers. At the same time, we offer a wide range of products to customers in the Nordic countries, and we have cutting-edge sustainable investment solutions for everyone. In 2021, we increased our total assets by more than NOK 130 billion and exceeded NOK 1,000 billion in total assets under management. Our funds delivered solid returns in 2021. In a market characterised by low interest rates, customers want to invest more and more into private equity, real estate, and infrastructure. These are asset classes we have a lot of experience with, and which will be important for Storebrand’s growth and profitability in the future. I am therefore pleased that in the autumn of 2021, the Danish property manager Capital Investment became a part of Storebrand. important increasingly Sustainability has become for both businesses and organisations, and for private individuals. With larger investments improves our ability to make an impact. Storebrand is an increasingly active driving force for sustainable business and societal development. Through active ownership, we contribute to important decisions in the companies we invest in. We also actively engage in global networks, with suppliers we buy from, and through products and services that we offer to our customers. Our goal is to achieve net zero emissions in all our investments by 2050. By 2025, our intermediate goal is to reduce greenhouse gas emissions from our investments by 32 per cent and increase the share of investments in solution companies to 15 per cent. Sustainability is about more than climate. Going forward, we will emphasise our focus on nature, biodiversity and social challenges. As inequality in the world deepens, it is important to strengthen our commitment to issues such as equal pay, equal rights, and the protection of social groups particularly vulnerable to climate change. Storebrand was widely recognised for our sustainability work in 2021. For the second year in a row, Storebrand was ranked by the Dow Jones Sustainability Index as one of the world’s 10 per cent most sustainable listed companies. In addition, we were again named one of the world’s most sustainable insurance companies by Corporate Knights Global 100. Institutional customers in Norway and Sweden rated us as the best on sustainable investments. In 2021, we further developed our workplaces to adapt everyday work to hybrid models, with flexible schemes and a combination of work and home offices. Our goal is for Storebrand to be a leading and future-oriented workplace. Employee satisfaction surveys showed that employees thrived even better in 2021 than before. We continued to attract skilled employees and recruited as many as 250 new colleagues throughout the year. The use of data and insights is becoming increasingly important in the development of strategy, work processes, customer solutions, products and services. We are at the forefront of moving our IT infrastructure to cloud-based solutions. Digital sales also continued to increase in 2021. I look forward to an exciting new year, where our employees, products and services will create a future to look forward to for customers and shareholders, and with positive ripple effects for the societies in which we operate. I would like to thank customers, shareholders and employees who all contributed to Storebrand’s progress in 2021. Odd Arild Grefstad 6 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixForeword by the Chair Storebrand’s business has a major impact on society. The world is facing a green shift, and Storebrand intends to lead the way in sustainable value creation for customers, shareholders, and society. We will deliver products and services tailored to meet the needs of our customers and contribute to their financial security and financial freedom. Didrik Munch Chair, Storebrand ASA 7 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixIn recent years, Storebrand has carried out a successful strategic turnaround operation. While Storebrand previously was a manager of capital-intensive guaranteed pensions primarily, the company is now transformed into a leading manager of savings for both companies and individuals. In addition, we are a steadily growing insurance player. We will build on this position going forward. Storebrand achieved historically strong growth and very satisfactory results in 2021. Thus, we are able to confirm the ambitious growth targets for the years 2021-2023 that were announced at Storebrand’s Capital Markets Day in 2020. asset managers, with sustainable investments as a foundation. We have set ambitious goals and are committed to adapting our investment portfolio to the 1.5-degree target in line with the Paris Agreement. This means that the investment portfolio must be carbon neutral by 2050 at the latest. By 2025, Storebrand must reduce greenhouse gas emissions from our investments by 32 per cent, and at least 15 per cent of the portfolio must be invested in solution companies that are particularly well positioned to help achieve the UN Sustainable Development Goals. This requires a close dialogue with the companies we invest in to help them reduce emissions. Our ambition is to deliver a group profit (before amortisation and tax) of more than NOK 4 billion in 2023. Self-financed growth within what we call “Future Storebrand”, will be a main contributor to increased profitability. At the same time, Storebrand will manage the balance sheet with guaranteed pensions in run-off in an efficient and safe manner that both secures customers’ pension payments and frees up capital for shareholders over time. With skilled employees, a high degree of digitalisation, market-leading products and a solid financial position, the group is well positioned to meet market developments. Storebrand’s investments will provide good returns and long-term value for both customers and shareholders. We are well on our way to realising our ambition of becoming a Nordic powerhouse for asset management. Storebrand offers a wide range of management solutions. We have strengthened our focus on alternative investments and further developed our offering within sustainable investments. The goal is both to be a preferred partner for Nordic investors, and a gateway to the Nordic region for international investors. The board is very pleased with Storebrand’s results in 2021 and believes the company is well positioned for the years to come. Storebrand’s shareholders achieved a total return of 43 per cent in 2021, which was higher than the returns reported both by the Oslo Stock Exchange and by European peers. Storebrand faces exciting challenges. Competition is tough in both the corporate and retail markets. Customers have increasingly high expectations, and we must deliver on ambitious goals for profitable growth and sustainable development. Time and time again, Storebrand has demonstrated an ability to adapt to market and societal developments. The group’s balance sheet is solid, and our financial flexibility is good. Storebrand has paid increasing dividends, made acquisitions to strengthen our customer offerings, and secured long-term financing through debt issuances in international markets. All this strengthens the basis for creating future growth and shareholder value, while also contributing positively to a sustainable development in the years to come. Storebrand ensures good solutions and accessibility for customers through cost-effective operations, innovation and digital solutions. Value-adding self-service solutions provide flexibility for customers and contribute to healthy margins in a pension market characterised by strong competition. Our ambition is to maintain Storebrand’s position as a leading provider of occupational pensions in both Norway and Sweden. is becoming for pension savings The market increasingly individualised. Retail customers expect us to meet their individual needs at various stages of their lives. Therefore, it was satisfying to note an increase in the number of customers who chose us as their savings and insurance provider in 2021. We aim to help our customers make good choices that provide both good returns for them as well as a positive societal development. While our offering to the retail market used to be a supplement to other activities, retail savings and insurance products have become part of Storebrand’s core business. We will continue to challenge the established players in these markets. Storebrand has grown to become one of the Nordic region’s largest 8 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixHighlights in 2021 Q1 January - March Q2 April - June estate • Storebrand launched a Nordic sustainable customers countries were opportunities. remains promising. real throughout for looking The market outlook fund. More the Nordic investment • Storebrand led a global investor group that met with the Brazilian government to call for stronger efforts to reduce deforestation. • Storebrand the and Confederation of Norwegian Enterprise renewed an occupational pension agreement comprising the organisation’s 29,000 member companies representing more than 592,000 man-years. issued • Storebrand Livsforsikring AS its first green bond. The issuance was a time- limited subordinated bond of EUR 300 million. Storebrand continued to contribute to a growing market for sustainable bonds and stimulate the market for sustainable investments and financing. • Storebrand sold AS Værdalsbruket to Fabritius Gruppen AS. Værdalsbruket was the country’s second-largest private forest ownership company and had been owned by Storebrand since 1935. 9 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixQ3 Q4 July - September October - December • Total assets under management exceeded NOK 1000 billion. • Storebrand maintained its rank as best in class among sustainable investments. For the third consecutive year, the annual Prospera survey in Norway and Sweden showed that institutional clients ranked Storebrand Asset Management best in class among sustainable investments. • Storebrand launched a new fund focused on investments in solutions for the cities of the future. By 2050, 70 per cent of the world’s population will live in cities, which will require smart urban planning and development. Companies that help cities become better live represent a great growth places to potential. • Norway reopened after one and a half years of pandemic restrictions. Storebrand launched Future Storebrand, a flexible and trust-based work model where employees and teams may decide the physical locations for their work. • Storebrand acquired Capital in Denmark, strengthening the group’s position within alternative investments in Norway, Sweden and Denmark. Investment • Øygarden municipality chose Storebrand as its pension provider. The pension scheme covered around 9,000 current and former employees in the municipality. • Storebrand maintained its position as one of the world’s most sustainable companies. For the second year in a row, Storebrand was named by the Dow Jones Sustainability Index as one of the world’s 10 per cent most sustainable listed companies. • Bjørnafjorden municipality chose Storebrand as its pension provider. The pension scheme covers around 6,000 employees, members, and pensioners in the municipality. • Storebrand Studio went live. State-of-the art video production and digital live broadcasts will enhance Storebrand’s visual communication with customers, stakeholders and employees. • Storebrand Livsforsikring AS entered into an agreement to purchase 100 per cent of the shares in Danica Pensjonsforsikring AS Norway. Pending approval by Norway’s Financial Supervisory Authority and the Norwegian Competition Authority, the acquisition was expected to take place during the first half of 2022. 10 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix1 This is Storebrand 12 About Storebrand 13 Organisation 16 Executive management 17 Board of Directors Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is StorebrandAbout Storebrand 12Organisation 13Executive management 16Board of Directors 172. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixAbout Storebrand Storebrand is a Nordic 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 and to consistently meet their expectations. Our customers should be confident that we put their needs first. We have been an important 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 1,097 billion invested in more than 5,000 companies around the world. More than 2 million people in Norway and Sweden have placed their savings with us. 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 positive 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 brighter future. Our driving force Storebrand’s driving force is key to delivering on our purpose. We will be closest to the customer, in a simple and sustainable way, delivering increased security and financial wellness. We do this by being a brave pioneer and by leading the way in sustainable investments. Engelsk W HY A brighter future H OW O H W Close to our customer – simple and sustainable W H A T Brave pioneer Security and financial wellness A brighter future Brave Pioneer We work to ensure that more and more people can think about the future with optimism. Both because they have a personal economy that allows them to live the life they want, and because they see that what we do together really contributes to the world moving in the right direction. We believe that there is always room for improvement. This requires courage to challenge the status quo and willingness to learn by trial and error. We do not simply choose the path of least resistance, rather we act in ways that are best for our clients based on our wealth of experience and knowledge. Both as a corporation and as individuals. Security and financial wellness Close to our customer – simple and sustainable Our products and services can significantly improve our customer’s well- being - now and for the future. We ensure that what they value the most is taken care of and enable them the freedom to realise their dreams. We are committed to knowing the customer so well that we can provide them with what they want and need. We will always have their best interest at heart. This makes it easy for them to make good choices, both for themselves and for the planet. Storebrand 1867 The non-life insurance company Norden is established as a competitor to Storebrand. 1767 Almindelige Brand- Forsikrings-Anstalt is established as a compulsory ﬁ re insurance for buildings in Norwegian cities. 1847 Private interests establish Christiania almindelige Brandforsikrings-Selskab for Varer og Eﬀ ecter. The company is referred to as Storebrand. 1936 Storebrand buys Europeiske, Norway’s leading travel insurer. 1990 Storebrand and UNI Forsikring decide to merge and receive a formal licence in January 1991. 1923 Storebrand buys almost all the shares in Idun. With a few exceptions, the rest is acquired during the 1970s. 1978 Storebrand changes the logo and introduces the “link” as an easily recognisable trademark. The formal name of the holding company changes to the Storebrand Group Ltd. 1999 Storebrand, Skandia and Pohjola gather their 2009 non-life insurance activities in the new Nordic Storebrand conﬁ rms that talks have Swedish-registered company “If Skadeförsäkring been held about a possible merger ab”. Storebrand sells out ﬁ ve years later. with Gjensidige. The talks ended without result. 2017 Storebrand acquires SKAGEN and celebrates its 250th anniversary. 2021 Storebrand’s Capital management exceeds NOK 1000 billion. 1996 The company changes its name to Storebrand ASA and establishes Storebrand bank ASA. 2006 Storebrand re-enters P&C insurance market. 2014 Storebrand Asset Management exceeds NOK 500 billion. 2019 Storebrand acquires the investment company Cubera Private Equity AS, which manages several private equity funds in the Nordic countries and internationally. 1814 After Norway’s secession from Denmark, the scheme is continued, and the administration transferred to Christiania. 1917 The life insurance company Norske Folk is founded. 1925 Christiania Almindelige Forsikrings- 1963 Storebrand takes over Norske Fortuna. Brage and Fram merge and become Aksjeselskap, referred to as Storebrand, changes its name to Christiania almindelige the country’s largest life company. Forsikrings-Aksjeselskap Storebrand. 1984 Norges Brannkasse and Norske Folk become UNI Forsikring. 1995 Storebrand establishes sustainable investment in Storebrand Asset Management. 1861 Storebrand’s owners establish Norway’s ﬁ rst privately owned life insurance company, Idun. 1998 Storebrand Helseforsikring is established. 2007 Storebrand acquires the Swedish pension company SPP and forms the Nordic region’s leading life insurance group. 2016 Storebrand launches “Our Driving Force”, a mission statement with a vision to create a future to look forward to. 2005 The Storting decides that all companies must introduce occupational pensions (OTPs) by 2007. 2012 Storebrand launches its new vision: “Our customers recommend us”. Odd Arild Grefstad is appointed new CEO. 2020 Storebrand is included in the Dow Jones Sustainability Index, ranked as one of the world’s 10 per cent most sustainable listed companies. 12 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is StorebrandAbout Storebrand 12Organisation 13Executive management 16Board of Directors 172. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate 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 %) Storebrand Holding AB Storebrand Boligkreditt AS SPP Fonder AB SPP Spar AB SPP Konsult AB SPP Pensjon & Forsäkring AB Storebrand Fastigheter AB SKAGEN AS Cubera Private Equity AS Storebrand Eiendomsfond Invest AS Storebrand Eiendom Trygg AS Storebrand Eiendom Vekst AS Storebrand Eiendom Utvikling AS Storebrand Pensjonstjenester AS Norsk Pensjon AS (25%) Storebrand & SPP Business Services AB SPP Fastigheter AB SPP Fastigheter Komplementär AB SPP Hyresförvaltning AB Business Segments Savings Insurance Guaranteed pensions Other Consists of products that encompass pension savings without interest rate guaran- tees. This includes defined contribution pensions in Norway and Sweden, asset management and savings and banking products for private individuals. 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 pen- sion-related insurance in the corporate market as well as non-life insurance products, and personal risk insurance products in the Norwegian retail market. 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. This includes other companies within the Storebrand Group, including subsidiaries of Store- brand Life Insurance and SPP. Storebrand 1767 Almindelige Brand- Forsikrings-Anstalt is established as a compulsory ﬁ re insurance for buildings in Norwegian cities. 1847 Private interests establish Christiania almindelige Brandforsikrings-Selskab for Varer og Eﬀ ecter. The company is referred to as Storebrand. 1867 The non-life insurance company Norden is established as a competitor to Storebrand. 1936 Storebrand buys Europeiske, Norway’s leading travel insurer. 1990 Storebrand and UNI Forsikring decide to merge and receive a formal licence in January 1991. 1923 Storebrand buys almost all the shares in Idun. With a few exceptions, the rest is acquired during the 1970s. 1978 Storebrand changes the logo and introduces the “link” as an easily recognisable trademark. The formal name of the holding company changes to the Storebrand Group Ltd. 1999 Storebrand, Skandia and Pohjola gather their non-life insurance activities in the new Nordic 2009 Storebrand conﬁ rms that talks have Swedish-registered company “If Skadeförsäkring been held about a possible merger ab”. Storebrand sells out ﬁ ve years later. with Gjensidige. The talks ended without result. 2017 Storebrand acquires SKAGEN and celebrates its 250th anniversary. 2021 Storebrand’s Capital management exceeds NOK 1000 billion. 1996 The company changes its name to Storebrand ASA and establishes Storebrand bank ASA. 2006 Storebrand re-enters P&C insurance market. 2014 Storebrand Asset Management exceeds NOK 500 billion. 2019 Storebrand acquires the investment company Cubera Private Equity AS, which manages several private equity funds in the Nordic countries and internationally. 1814 After Norway’s secession from Denmark, the scheme is continued, and the administration transferred to Christiania. 1917 The life insurance company Norske Folk is founded. 1925 Christiania Almindelige Forsikrings- 1963 Storebrand takes over Norske Fortuna. Brage and Fram merge and become Aksjeselskap, referred to as Storebrand, changes its name to Christiania almindelige the country’s largest life company. Forsikrings-Aksjeselskap Storebrand. 1984 Norges Brannkasse and Norske Folk become UNI Forsikring. 1995 Storebrand establishes sustainable investment in Storebrand Asset Management. 1861 Storebrand’s owners establish Norway’s ﬁ rst privately owned life insurance company, Idun. 1998 Storebrand Helseforsikring is established. 2007 Storebrand acquires the Swedish pension company SPP and forms the Nordic region’s leading life insurance group. 2016 Storebrand launches “Our Driving Force”, a mission statement with a vision to create a future to look forward to. 2005 The Storting decides that all companies must introduce occupational pensions (OTPs) by 2007. 2012 Storebrand launches its new vision: “Our customers recommend us”. Odd Arild Grefstad is appointed new CEO. 13 2020 Storebrand is included in the Dow Jones Sustainability Index, ranked as one of the world’s 10 per cent most sustainable listed companies. Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is StorebrandAbout Storebrand 12Organisation 13Executive management 16Board of Directors 172. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate 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 IPBES-report on biodiversity and ecosystem services.5 The report is clear in its conclusion: Loss of biodiversity and ecosystems occurs to an 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.6 The transition represents both financial risks and opportunities for Storebrand as an investor and asset manager. In 2021, the Intergovernmental Panel on Climate Change announced the Code Red for Humanity in its latest report on climate change.7 The report states that climate change is intensifying continuously, and that some changes are already irreversible. The financial sector plays a key role in helping to achieve the UN Sustainable Development Goals (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, we believe this will also result in higher returns for our customers. Companies with sustainability as a key part of their business strategy have a stronger position for managing climate and sustainability risks and capitalising 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. Sustainability in Storebrand Sustainability is integrated in our business strategy and 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 every six months 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 (SDGs). • We help our customers to live more sustainably through the products and services we offer. • 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 work with our customers, suppliers, authorities and partners to achieve the UN Sustainable Development Goals. • We are transparent about our work on sustainability and the results we achieve. We have identified three SDGs that may be significantly impacted by how we manage the Group’s business and human resource processes. At the end of relevant chapters of this report, figures are provided that show how far we have come in this work. 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). 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 work actively towards equal opportunities and gender balance in work and economic life (target 5.5). 5) The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services. Media Release: Nature’s Dangerous Decline ‘Unprecedented’; Species Extinction Rates ‘Accelerating’. https://www.ipbes.net/news/Media-Release-Global-Assessment 6) IPCC. Special Report, Global Warming of 1.5 °C. https://www.ipcc.ch/sr15/ 7) IPCC. Sixth Assessment Report. https://www.ipcc.ch/assessment-report/ar6/ 14 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is StorebrandAbout Storebrand 12Organisation 13Executive management 16Board of Directors 172. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixProducts and Services Storebrand is a leading financial player in the Nordic market and will continue to 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.8 In 2021, Prospera ranked Storebrand first in the sustainable investment category in both Norway and Sweden. We also scored best among the major financial institutions in the Ethical Banking Guide in Norway, and we were included on the Dow Jones Sustainability Index’s list of the world’s 10 per cent most sustainable companies for the second year in a row. These were important recognitions of Storebrand’s efforts to operationalise sustainability and integrate sustainability in our investment products. Communication and stakeholder dialogue Strategic ambitions, target setting, reporting, and communication about sustainability are important success criteria in our work. We are transparent about our sustainability efforts and report in accordance with several leading reporting standards, including the Global Reporting Initiative (GRI), Task Force on Climate-related Financial Disclosures (TCFD) and Carbon Disclosure Project (CDP), in line with the expectations of several key stakeholders. In addition, we engage in international sustainability initiatives such as The Net Zero Asset Owner Alliance and Climate Action 100+ to support the development of international metrics and targets, and to positively influence investee companies. As one of the founding members of Net Zero Asset Owner Alliance, we have supported the development of a Target Setting Protocol that has received recognition from António Guterres, the UN Secretary General.9 All our funds are managed according to the Storebrand standard. By the end of 2021, 11.2 per cent of our capital was invested in what we call solutions – companies that contribute to the SDGs, investments in green bonds, green infrastructure, and certified green real estate investments. In addition, almost 44 per cent (NOK 483 billion) of assets under management were invested in fossil-free funds. All assets under management in our Swedish branch SPP Funds were invested in funds consisting of companies that had no connections to the fossil fuel sector. We have identified eight SDGs (below) where Storebrand can have the greatest impact through our investment activities. The goals are used actively, for example when applying Storbrand’s sustainability rating. The protection of peace, justice and strong institutions (SDG 16) are key considerations when making investment decisions (see page 68). For Specific measures and objectives related to these sustainability goals in our asset management are described in the chapter Driving force for sustainable investments. This illustrates our strong commitment to SDG 17: collaboration and partnerships 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 to integrate sustainability information into their reporting cycle (target 12.6). We strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in our operations and in our investments (target 13.1). We integrate climate change measures into our policies, strategies and planning (target 13.2). 8) The Storebrand Standard applies to all self-managed funds and pension funds, and shall contribute to ensuring our customer’s long-term returns. Read more about the criterias here: https://www.storebrand.no/asset-management/barekraftige-investeringer/storebrandstandarden 9) Net Zero Asset Owner Alliance has developed a second edition of the Target Setting Protocol: https://www.unepfi.org/net-zero-alliance/resources/target-setting-protocol-second-edition/ 15 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is StorebrandAbout Storebrand 12Organisation 13Executive management 16Board of Directors 172. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix Executive management Lars Aa. Løddesøl Heidi Skaaret Staffan Hansén Group CFO and Executive Vice President CEO, SPP EVP Strategy and Legal Retail Market Jan Erik Saugestad Terje Løken Executive Vice President Executive Vice President Asset Mgmt. Digital and Innovation Geir Holmgren Executive Vice President Corporate Market Odd Arild Grefstad Trygve Håkedal Karin Greve-Isdahl Tove Selnes CEO Storebrand ASA Executive Vice President Executive Vice President Executive Vice President Technology Communications, Sustainability People and Business Policy See Appendix on page 229 for Executive management CVs 16 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is StorebrandAbout Storebrand 12Organisation 13Executive management 16Board of Directors 172. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixBoard of Directors Martin Skancke Karin Bing Orgland Christel Elise Borge Board Director Board Director Board Director Fredrik Åtting Board Director Karl Sandlund Marianne Bergmann Røren Board Director Board Director Didrik Munch Board Chair Bodil Catherine Valvik Hans-Petter Salvesen Hanne Seim Grave Employee Representative Employee Representative Employee Representative See Appendix on page 234 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 shareholder-elected directors are independent and do not have significant business relations with Storebrand. All directors are non-managerial staff. 17 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is StorebrandAbout Storebrand 12Organisation 13Executive management 16Board of Directors 172. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate 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 210. The Strategy Committee The Audit Committee Leader Didrik Munch Members Fredrik Åtting Christel Elise Borge Hans-Petter Salvesen Leader Karin Bing Orgland Members Martin Skancke Hanne Seim Grave The Risk Committee The Compensation Committee Leader Didrik Munch Members Marianne Bergmann Røren Hans-Petter Salvesen Leader Martin Skancke Members Fredrik Åtting Bodil Catherine Valvik The Nomination Committee Leader Per Otto Dyb Members (shareholder-elected) Leiv Askvig Nils Halvard Bastiansen Anders Gaarud Liv Monica Stubholt 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. Our operating environment will be adjusted and shaped in line with societal developments. The materiality analysis will therefore be continuously updated through ongoing dialogue with our most important stakeholders: Shareholders, customers, employees, authorities, and NGOs. In 2022, we will develop an updated materiality analysis to incorporate the double materiality concept proposed by the European Financial Reporting Advisory Group (EFRAG) in its work for the elaboration of EU non-financial reporting standards under the Corporate Sustainability Reporting Directive (CSRD). 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. The analysis is publicly available.10 The dialogue with stakeholders is conducted through interviews, surveys, and direct dialogue. We also extract information 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 related material topics in 2020, and how we will work on these going forward. 10) See Storebrands Sustainability Library: https://www.storebrand.no/en/sustainability/sustainability-library/_/attachment/download/a66150fc-0f46-4c2d-8aa1-cbb3d5ebc00d:d12bc8eb4126c99c0ae94c0e72b9d8b0e6ad0c1a/Materiality%20analysis%20report%202019.pdf 18 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is StorebrandAbout Storebrand 12Organisation 13Executive management 16Board of Directors 172. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixVERY HIGH E A G B K C Financial capital and investment universe A B C Competitive long-term returns to shareholders and customers A diving force for sustainable investments Active ownership and reducing ESG (environmental, social and governance) risk Customer relations D E F G Greater security and financial wellness Engaging, relevant and responsible advice Digital innovator in financial services Simple and seamless customer experiences L 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 Sustainable practices through our value chains Corporate social responsibility N Responsible use of resources HIGH D I J MODERATE M F H 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 1. 2. Customer relations 3. Our people 4. Keeping our house in order The material topics are ranked according to the degree of influence they have on our stakeholders’ assessments and their decisions related to Storebrand, and to the extent to which they affect our business. The materiality analysis forms the structure of this annual report and includes input from our stakeholders. The financial capital and investment universe, and the three underlying material topics, are consistently ranked by our stakeholders as very significant. They are also very relevant to the Group’s strategy and risk management and therefore are included in the Director’s Report. Topic A: Competitive long-term returns to shareholders and customers are covered through other chapters in the report such as Customer relations, the Director’s report, and the accounts. Topic B and C have been merged into one chapter; Driving force for sustainable investment. Other material themes are also ranked with high importance, including topic E: Engaging, relevant and responsible advice, G: Simple and seamless customer experiences, and K: Governance and compliance: privacy, information security, anti-corruption, 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 results. The key figures for each focus area are reported to Executive 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 220. The guidelines of the International Integrated Reporting Council (IIRC) are also used as a basis 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 93 per cent of the group’s employees. The figures do not include smaller, local offices or Cubera, as these are not considered material due to their size. See page 214 for more information about companies in the Storebrand Group. 19 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is StorebrandAbout Storebrand 12Organisation 13Executive management 16Board of Directors 172. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix 2 Customer relations 21 Greater security and financial wellness 23 Engaging, relevant and responsible advice 24 Digital innovator in financial services 25 Simple and seamless customer experiences 26 Key performance indicators Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relationsGreater security and financial wellness 21Engaging, relevant and responsible advice 23Digital innovator in financial services 24Simple and seamless customer experiences 25Key performance indicators 263. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixGreater security and financial wellness We shall help our customers achieve security and financial wellness by offering long-term savings, banking, and insurance solutions. 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 robust structures for risk management, we 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, in a simple and sustainable way. Why Recent reforms to the Norwegian and Swedish pension systems entail greater individual flexibility and responsibility for their own long-term financial situation, including pensions. With increased life expectancy in general, Norwegians in the future 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 Individual Pension Account (“Egen pensjonskonto”) in February 2021. It is intended to provide better oversight and control over your own pension and increase payouts. In December 2021, the Swedish government proposed to extend the transfer right for Unit-linked insurance and custodian insurance covered before 1 July 2007. It will be easier and cheaper for employees in Sweden to move pension funds saved from 1 July 2007 to today. The rules on fees (maximum SEK 600) shall also include insurance policies covered prior to 1 July 2007. The regulatory amendments are proposed to enter into force on 1 July 2022. Goals and ambitions Storebrand aims 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 savings, 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 possible returns. We provide information and advice to our corporate customer so that they, in turn, may 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-ups. Through digital solutions, customer seminars, and advisory services, 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 coherent communication. Overall, Storebrand is a preferred provider of pension services. The Storebrand brand in Norway is communicated to the market through the communication concept (“Gode Penger”). Storebrand shall be known for its ability to create value for customers through sustainable investments. In 2021, we developed several new products and services that support this strategy. “Good Money” 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 these types of pension and savings products in the Swedish market. Approach We provide information in a coherent manner and make good advice readily available to help our customers gain an overview of their personal finances. Development of digital tools and the improvement of digital communication are important instruments, both in the Norwegian and Swedish markets. The “My Money” (“Mine Penger”) 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 “Smart Pension” (“Smart Pensjon”) 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 advisory services. In 2021, 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. SPP also developed a fully digital service for employees to choose when and how they want their pension payouts. 21 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relationsGreater security and financial wellness 21Engaging, relevant and responsible advice 23Digital innovator in financial services 24Simple and seamless customer experiences 25Key performance indicators 263. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix“Storebrand shall be known for our ability to create value through sustainable investments.” SPP also continued to develop the digital tool called “Your climate footprint” (“Ditt klimatavtrykk”). 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. In 2021 our financial advisors received training in the usage and communication of this tool. In Norway, a pilot project was We are continuously working to stimulate, and expand access, to banking and insurance services, and financial services for all (target 8.10). (“Bærekraftsdashboard”). Corporate customers launched to further develop a similar tool entitled the “Sustainability Dashboard” in Sweden gave feedback that the tool is useful for communication with their own employees. Several companies also want to use the tool in recruitment campaigns and in their corporate sustainability reporting. Results Storebrand works to increase customers’ awareness related to their pensions and savings. We contribute to this through communication about products and services, both on our own website, in direct customer dialogue, in the app “My Money”, and in social media. More than 700,000 people checked their pension on Storebrand’ s website in Norway in 2021. Throughout the year, more than 200,000 customers downloaded the “My Money” app, which was launched in a new version in 2021. In Sweden, more than 428,000 customers logged into SPP’s website to attain information about their pension, while over 4,000 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. More than 72.9 per cent of all private customers who retired in 2021 chose a fully digital pension payment solution.11 11) Private customers who retired earlier than the agreed retirement age is not included in this calculation. 22 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relationsGreater security and financial wellness 21Engaging, relevant and responsible advice 23Digital innovator in financial services 24Simple and seamless customer experiences 25Key performance indicators 263. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixEngaging, relevant and responsible advice Why Customers often find it complicated to get a complete overview of their own finances, pension and insurance policies, rights, and payments through the different stages of life. We work continuously to improve and simplify information for the benefit of our customers. Relevant and responsible advisory services are prerequisites for good customer satisfaction. We help customers select products and services that are relevant and appropriate for their current life situation. Goals and ambitions We aim to provide products and services that contribute to security and financial wellness for our customers. We deliver pension and savings capital growth through professional management tailored to fit individual risk profiles and time horizon preferences. In Norway, our ambition is for 70 per cent of our advisors across savings, banking, and insurance to be authorised.12 In Sweden, all our advisors are certified in line with requirements from the authorities. Approach The starting point for all customer contact is the principle of putting the customer first. This is reflected in our service standards: The interaction between digital and physical customer service will become increasingly important. Storebrand’s, teams work closely together to deliver first-class customer services and develop new initiatives. Results In 2021, Storebrand was ranked 1st in the Norwegian Customer Barometer’s annual measurement of customer satisfaction in the corporate market, with a satisfaction score of 74 points (out of 100). Storebrand received the highest loyalty score among corporate customers. Sustainability was an important driver of loyalty and trust. This confirmed that our commitment to profitable sustainability will become an important differentiator in both the corporate and retail markets. In the market for mutual funds, we had a market share of 4.4 per cent at the end of 2021.13 In the market for Unit-linked savings, we had a market share of 16.9 per cent at the end of 2021.14 In the non-life insurance market, we had a market share of 5.9 per cent. In the market for banking, we had a market share of 1.8 per cent per Q3 in 2021.15 • • • • Trustworthy – I keep what I promise, and I am a professional. Caring – I treat everyone individually, help them, and give advice. SPP has grown significantly in the Swedish market. SPP has positioned itself well, offering sustainable management of employees’ pension funds and efficient digital services. Enthusiastic – I am positive and exceed expectations. Efficient – I make the customer journey easy and improve your organisation. 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. Information about our authorisation and competency requirements is available to customers across our digital platforms. Market position, pension: #1 Corporate Market Norge 12) The figures will be affected by turnover in the organisation 13) Securities funds consist of an equity savings account and an investor account. 14) Figures for retail customers. Source: https://vff.no/siste-m%C3%A5ned. 15) Market share for banking is measured in loans. 23 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relationsGreater security and financial wellness 21Engaging, relevant and responsible advice 23Digital innovator in financial services 24Simple and seamless customer experiences 25Key performance indicators 263. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix Digital innovator in financial services Why A well-maintained and advanced technology platform is required to adopt emerging technologies, create innovative digital services, and meet our customers’ digital expectations. Storebrand’s platform is continuously improved to offer strong financial products and services to our customers. Storebrand Forsikring launched an automated electronic health declaration that both streamlined and improved the experience for our customers when buying products. Storebrand Forsikring also launched a digital sales advisory solution for property damage, in addition to new innovative solutions for digital sales tailored to product packages for the SME market segment. Goals and ambitions We work to increase the number of satisfied and loyal customers through good, digital customer experiences. The interaction between digital services and automated processes is key for both distribution and operations, as well as for our ability to ensure profitable growth and a future-oriented Storebrand in the years to come. Storebrand Bank launched several new digital solutions. The Bank’s partnership with Huseierne, a homeowner’s membership organisation, and Nordvik, a real estate broker, was further strengthened. Huseiernes’ service for security deposit accounts was improved, in addition to a new integration to Nordvik’s real estate agent system that generates potential leads to Storebrand. Approach We work systematically to develop excellent digital customer experiences through automated processes based on a solid technological platform and infrastructure. Increasingly advanced use of data and artificial intelligence, in combination with leading expertise, are critical success factors to creating good digital In 2021, digital service development, customer experiences. technology and data resources were merged into one, common business unit called “Storebrand Digital”. Integrated machine learning models were incorporated into key business processes across the Group. In addition, several core systems were modernised. Migrating Storebrand’s IT solutions to a cloud-based infrastructure continued at full speed in 2021. Results During 2021, we had more than 4.4 million visits on www.storebrand. no. The number of page views increased by approximately 11 per cent from the previous year. The “Mine Penger” (“My Money”) app was used by 30,000 customers every month and served as a digital hub for Storebrand’s savings services. Additionally, the number of digital sales of insurance and savings increased by 32 per cent and 38 per cent, respectively, compared to 2020. The share of digital sales in our sales channels for both insurance and savings accounted for 40 per cent of the total volume. In 2021, customers’ defined contribution pension schemes were transferred to their Individual Pension Account. This arrangement entailed that customers’ pension funds gained from previous and current employers were collected in one pension account. More than 700,000 pension agreements were managed and 99 per cent of these processes were automated. SPP has nearly completed the implementation of a new core system that enables further digitalisation and innovation of products and services. By the end of 2021, 97 per cent of all pension agreements were converted to the new solution. The share of people who received pension funds digitally increased from 15 per cent to 80 per cent in 2021. The number of manual cases processed by SPP was reduced by 30 per cent in 2021 following the introduction of digital services such as self-service solutions for corporate customers. Through artificial intelligence and machine learning, we were able to improve the accuracy of risk-based pricing for group disability pensions by 15 per cent in the period 2019 - 2021. The basis for value creation through smart use of data was further strengthened in 2021. Among other things, Storebrand exposed 10 per cent more insurance fraud than previous years. Storebrand’s use of machine learning to detect insurance fraud took second place in the “Dataforeningens’ Innsiktspris” (Data Association’s Insight Award) for 2021. During 2021, the system portfolio of Storebrand Asset Management AS was moved from two local data centers to Microsoft Azure cloud. 24 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relationsGreater security and financial wellness 21Engaging, relevant and responsible advice 23Digital innovator in financial services 24Simple and seamless customer experiences 25Key performance indicators 263. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixSimple and seamless customer experiences Why In line with technological development, demands for improved customer experiences have increased significantly. Customers expect a seamless interaction between advisory service and customer service across digital and serviced channels. Surveys showed that customers wanted a trusted partner at important life events, and that good advice and customer experiences were considered more important than (actual) product properties. Increased use of digital meetings and webinars were important tools to improve customer dialogue in 2021. Goals and ambitions Our aim and ambition are to offer personalised experiences to each of our customers, across digital and serviced channels. Through dialogue with existing and potential customers, we continued to develop product offerings aimed at affluent persons and people approaching retirement age (“Smart Pensjon”). Customer needs in connection with home purchases will have priority in 2022. Approach Storebrand invests in technology, services and concepts that ensure relevance for our customers in the channels they prefer. In 2020, we introduced Salesforce as an IT platform for customer dialogue and follow-up across channels. The system allows for customer dialogue logged in one channel to be identified, retrieved and followed up in another. Increasingly, customers will experience that we recognise them, regardless of which channel they use to communicate with us. Going forward, we will continue to develop Salesforce to strengthen our customer offering in line with customer and market expectations. Our core deliveries were also strengthened in 2021. New loan customers were assigned an individual contact person at the bank. Insurance claims settlement processes were improved, and we established a separate advisory system to service customers across banking and savings. Results Our digital platform for customer dialogue, Salesforce, gained traction throughout 2021. The platform was integrated with several digital sales and advisory services within savings and insurance. External partners also gained access to the platform. The product concept for affluent persons performed well due to distinct value propositions, efficient presentations and sales activities, as well as close dialogue with customers. The digital service “Smart Pensjon” (“Smart Pension”) was further developed with, among other things, a new solution for simulating withdrawal of pensions and start-up of private savings schemes. Customer satisfaction increased by 15 per cent, to 7.0 (scale from 1 - 10) from 2020 to 2021. The share of digital sales through this service increased by 400 per cent from 2020 to 2021. 25 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relationsGreater security and financial wellness 21Engaging, relevant and responsible advice 23Digital innovator in financial services 24Simple and seamless customer experiences 25Key performance indicators 263. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixKey performance indicators For more key performance indicators (KPIs) and detailed KPI definitions, see page 242. Results Results Results Results 2020 No. 6 2021 No. 5 Goals 2022 Top 3 Goals 2025 Top 3 21.7 % 19.6 % Increase Increase No. 1 No. 5 No. 4 No. 2 No. 3 No. 3 No. 1 Top 3 No. 1 No. 1 No. 1 No. 1 Key performance indicators Customer Satisfaction 16 Market share: Savings, retail market Norway Market share: Pension, corporate market Norway Recognised for sustainable value creation (Retail market Norway) Recognised for sustainable value creation (Corporate market Norway) 2018 No. 4 21 % No. 1 New New 2019 No. 4 20 % No. 1 No. 3 No. 1 16) Net Promoter System, retail market Norway 26 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relationsGreater security and financial wellness 21Engaging, relevant and responsible advice 23Digital innovator in financial services 24Simple and seamless customer experiences 25Key performance indicators 263. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix3 People 28 A culture for learning 30 Engaged, competent and courageous employees 31 Diversity and equal opportunities 33 Key performance indicators Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. PeopleA culture for learning 28 Engaged, competent and courageous employees 30 Diversity and equal opportunities 31 Key performance indicators 334. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixA culture for learning «People first, digital always» is the title of Storebrand’s People strategy. The strategy enables our organisation to adapt to continuous changes in an increasingly digitalised society and deliver on ambitious business targets. For the second consecutive year, the pandemic affected our ways of working. We continued to facilitate flexible working arrangements and hybrid working models. Storebrand will build on this experience to develop the workplace of the future to benefit employees, the company, and society. Through our Future Storebrand initiative, we invited managers and employees to define and share their thoughts. Although digital solutions and flexible work patterns provide both efficiency and freedom, we see that physical meetings and gatherings strengthen the diversity of opinion, interpersonal relations, and a sense of belonging. New ways of working contributed to an increase in the Group’s employee engagement score, to a record 8.4 out of 10, in our bi-monthly employee survey. This progress, combined with the company’s solid financial results, gives motivation and energy to further develop Storebrand as a future-oriented employer and workplace. Why Storebrand believes that all employees should have the opportunity to develop their skills continuously. Building competencies to ensure personal development and skills refinement is essential, and it contributes to Storebrand delivering value to our customers. Our goal is that employees should learn throughout their time with us and thereby strengthen their opportunities in the job market should they decide to seek employment elsewhere. Storebrand offers courses and training programs and stimulates through daily assignments. We strive learning experiences to facilitate exciting tasks, new challenges, and collaboration across business units. Managers and employees have a shared responsibility to provide continuous feedback to ensure continuous improvement. Employees are encouraged to acquire new insights and experiences. Goals and ambitions Our ambition is to build a learning culture characterised by psychological safety. We strive towards having a culture where you can experiment, make mistakes, be open about what you master, and create a safe space to provide input, express different perspectives and receive feedback. Phychological safety is a prerequisite for innovation in a hybrid work model. We urge employees to contribute to the learning of their colleagues, and we aspire to achieve a genuine team spirit that exceeds the desire for individual success. Approach In 2021, we selected a group of employees from different parts of the Group to share their views on psychological safety on our internal social media channels. Group members published weekly posts about what psychological safety meant to them and how each employee could contribute to cultural improvements. The program was well received and evolved into a workshop titled “Psychological safety - what, why and how?”, and more than 30 management teams and business units have later completed this workshop. The content was further converted into an e-learning course for new employees as part of their digital onboarding program. In 2021, we also had a fully digital event, titled “Our new working day” for all our employees. The purpose was to strengthen internal unity and customer-centricity. The main topics include how to balance the needs of individuals, and society, and to raise awareness of challenges and opportunities in our new hybrid working day. Storebrand engaged with the entire organisation through live broadcasts from our new digital TV studios in our offices in Lysaker and Stockholm. In addition, participants completed digital teamwork activities, and employees were divided into small teams and played a new interactive game about challenges and interactions in a hybrid work model. As we put lifelong learning and development on the agenda, we also conducted in-depth interviews with employees to understand their experiences about learning. We focused primarily on learning and development experiences during change and digital transformation. We interviewed more than 100 employees and 20 managers across more than 20 teams and conducted follow-up conversations with managers to discuss how to meet employees’ expectations and needs. We continued our work to further develop digital competence among our employees, and we see that successful hybrid working models depend on efficient use of digital tools for knowledge sharing and collaboration. Storebrand expects managers to take responsibility for self-development and continuous development of leadership skills. Managers can choose between a range of courses and programs tailored to support different roles and needs. In 2021, we offered a digital leadership development program called Storebrand Leadership Weekly, which focused on trust and change management. We also implemented the Storebrand Future Impact programme for young talents with one to three years’ work experience. The program aims to train future leaders and change agents and primarily develops three skills: self-management, relationships and collaboration, and complex problem-solving. The participants 28 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. PeopleA culture for learning 28 Engaged, competent and courageous employees 30 Diversity and equal opportunities 31 Key performance indicators 334. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendixcompleted a project where the goal was to solve global challenges in a responsible, ethical, and sustainable way. They were encouraged to apply what they had learned through the development programme. In 2021, we recruited 30 digital enthusiasts, strengthening our already numerous pool of digital change agents in Norway and Sweden. These employees play an important role in improving our use of digital solutions for collaboration. In 2021, we launched Storebrand Inclusive Leadership, a programme designed to raise awareness of how leaders can foster and develop teams with employees of diverse backgrounds and competencies. Storebrand also facilitated informal arenas where leaders could come together to reflect and share experiences. Examples included a practical leadership lunch, an onboarding program for new managers, and a buddy program. In addition, Storebrand hosted management meetings within the various business units and all In 2021, we carried out our annual summer internship program, Storebrand Sandbox. Sandbox is a leading fintech program in Norway and Sweden, where students with different study backgrounds solve real challenges facing Storebrand and our customers. Sandbox invites young talents to get to know Storebrand and broadens our network among potential employees. The program also contributes to Storebrand’s learning culture, demonstrating the importance of learning, failing, collaborating, and innovating. Our digital learning platform, Campus Storebrand, provides access to various inspiration and professional development, including digital internal courses and links to various external course providers. Results The social media posts about psychological safety were read by between 1,000 and 1,200 employees every week during the campaign period from January to May 2021. The series increased the demand for more information and knowledge about the topic. Following the series, People facilitated more than 20 workshops on psychological safety in various management groups, business units, and teams across the company. The focus on psychological safety will continue in 2022. More than 1,200 employees participated in our annual employee day. The day included an interactive digital group game about hybrid working models. More than 1,000 employees responded to an evaluation survey about the game, which scored 4.6 out of 5. More than 120 employees celebrated of The International Day for Failure, which became the most visited StorebrandTalks in 2021.17 In-depth interviews with managers and employees conducted in 2021 gave us valuable knowledge and reassurance that we have the right approach to developing a learning culture. Development courses and training were considered significant, but everyday learning was valued higher – especially when presented with challenging tasks and working together with skilled colleagues. Feedback and recognition when developing new skills and competencies also were appreciated. In 2021, more than 24 middle managers participated in the digital leadership program, Storebrand Leadership Weekly. Approximately 90 managers participated in the program Storebrand Inclusive Leadership. We arranged four leadership guilds and five practical leadership lunches where all managers in Norway could attend or watch the recording. The war for talent continued in 2021, and we took steps to position Storebrand as an attractive employer among students and young employees. Universum’s ranking of Norway’s most attractive employers named Storebrand as one of the increasingly attractive companies among IT graduates in 2021. Our graduate program Storebrand Future Impact had 26 participants in 2021. Our goal was to develop effective ambassadors for change, both in Storebrand and society at large. The program began with two digital introductory sessions during the autumn of 2021, and we have planned three physical gatherings and a project assignment in 2022. For the summer program, Storebrand Sandbox, we received close to 1000 applications for the program. A total of 20 students were accepted, of whom 15 work in Norway and five in Sweden. The students were majoring in economics, technology, psychology, IT, entrepreneurship, and design. Once again, the program was an essential catalyst for innovation. Through interdisciplinary teams, students solved current challenges that Storebrand was facing. In 2021, we offered more than 200 courses through Campus Storebrand, our digital learning platform. More than 2,000 employees participated in one or more of them. Employees completed 7,185 hours of e-learning, averaging 3.63 hours of learning per person. In addition, employees completed digital courses via external web- based platforms. These courses do not show up in the statistics above. Employees also learn from sharing insights and experiences on our internal sharing platforms such as Yammer, Teams, and Sharepoint, for which we do not keep statistics. We use the employee survey provider Peakon to distribute regular employee surveys to ensure frequent and continuous feedback on employee satisfaction. In 2021, the score for development increased from 7.8 to 8.0 out of 10. The score for guidance increased from 8.0 to 8.1 out of 10, while the score for career development increased from 7.5 to 7.7, and the score for learning increased from 8.1 to 8.3. 17) StorebrandTalks is our internal arena for sharing knowledge and inspiration across the organisation. Employees share experience, work, or expertise in a 30-minute broadcast or lecture once a month where we invite the whole organisation to participate. We share recordings right after the talks so that everyone can see them when it suits them best. 29 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. PeopleA culture for learning 28 Engaged, competent and courageous employees 30 Diversity and equal opportunities 31 Key performance indicators 334. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixEngaged, competent and courageous employees Why Storebrand’s employees are our primary source of innovation, development, and growth. Employees who are brave pioneers who dare to innovate and challenge prevailing norms are essential for Storebrand to secure a bright future for our customers and society. is to strengthen employee satisfaction, Goals and ambitions Our ambition job satisfaction, and employee engagement through meaningful work, strong leadership, a motivating work environment, development opportunities, and confidence in management. Our managers must define clear objectives and encourage employees to collaborate with peers to achieve collective and individual goals. Female managers in group 39% Transparency is a prerequisite for employee motivation, trust, and safety. All employees shall feel confident to raise issues with the management and others in the Group. Storebrand also has its own ethical guidelines. Approach Storebrand relies on trust from customers, partners, authorities, shareholders, and society. The organisation should be known for high ethical standards to gain trust. All employees shall act with diligence, accountability and legality. Storebrand uses e-learning for training in ethics, anti-corruption, anti-money laundering, and terrorist financing, as well privacy issues and digital trust. Annual completion of the courses is mandatory to ensure responsible business practices in line with our Code of Conduct. Storebrand has established an external third-party notification channel through an auditor company, and the whistle-blower channel is communicated in our onboarding program for new starters and via the Storebrand intranet.18 We also have well- established procedures for dealing with complaints, harassment, and other inappropriate behavior. In 2021, we received no alerts or complaints about harassment or other inappropriate behavior through the third- party notification channel. Our driving force is to be close to our customers and to help them achieve financial safety and freedom, ensuring a brighter future. Our driving force requires us to act as brave pathfinders. Every year, an employee receives the Storebrand Brave Pioneer Award. The nomination process in 2021 was transparent, and all candidates were nominated via our internal social media platform, leading to a record turnout and number of nominations. Employees answer employee surveys regularly (every two weeks or monthly via Peakon) to measure workplace engagement and satisfaction with work, management, collaboration, sustainability, perceived self-determination, and freedom of opinion. Executive management follows up these strategically anchored objectives. 18) Our third-party notification channel is through the audition company BDO: https://u.bdo.no/storebrand 30 Our goal of being a smart and agile organisation is supported by Peakon, which allows us to follow the data in real time for continuous improvement. At Storebrand, we encourage a good work-life balance for all employees. After the pandemic outbreak in 2020, we facilitated increased flexibility in work hours and choice of workplace. What employees delivered was more important than where they performed their work, but we continued to value physical meetings and collaboration. Throughout 2021, we worked continuously to develop a hybrid working model. To support the teams’ autonomy, flexibility, ability to adapt and learn, we developed conversation tools to facilitate discussions about succeeding in our new workday. The office premises were upgraded with different zones for interaction and concentration to make it more attractive to return to the office when pandemic restrictions were removed. From now on, we will design our future workplace to ensure and maintain a good balance between efficiency, interaction, creativity, competence development, and engagement. Results In 2021, an average of 85 per cent of employees completed e-learning courses in ethics, anti-corruption, anti-money laundering, anti-terror financing, privacy, and digital trust. All members of the Board and senior management completed annual courses in ethics, anti-corruption, anti-money laundering, terror financing, privacy, and digital trust, as part of the Group’s risk management. Find more information about this in the chapter Corporate governance. In 2021, our employees signed off on our privacy and information security guidelines through “Workday”, our People system. All employees must review and confirm the guidelines annually to show that they have read and understood the content. An average of 80 per cent of employees responded to the employee engagement survey at least once in the last three months throughout 2021. The score for engagement rose from 8.3 to 8.4 out of 10 throughout 2021. In 2021, our employee engagement surveys showed an improved (including core values, score on organisational adaptation sustainability, and equality), self-determination, freedom of opinion, relationship with colleagues, support from the leader, and meaningful work tasks. The results showed room for improvement within the physical working environment to meet post-pandemic demands. We conducted several experiments to strengthen agile collaboration and work processes in the organisation. In the latter half of 2021, the scores for workplace environment increased from 7.7 to 8.0 out of 10. Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. PeopleA culture for learning 28 Engaged, competent and courageous employees 30 Diversity and equal opportunities 31 Key performance indicators 334. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendixinclusion was also a theme in more than 20 management groups, business units, and teams across the organisation. In 2021, the Board received regular reports on the share of female managers at management levels 1-4. At the end of 2021, 39 per cent of managers at these levels were women. Throughout 2021, we improved our recruitment and interview process to make it as digitally inclusive and gender-neutral as possible at every stage. The interview team shall consist of women and men, and there must be at least one female and one male candidate in the final round for leadership positions. In addition, in 2021 we entered into a collaboration with the Norwegian Labour and Welfare Administration (NAV) to employ people with reduced working capacity or persons who, for various reasons, had been outside the labour market for a prolonged period. The objective was to offer the best and most inclusive journey for potential candidates and help Storebrand become an attractive and inclusive workplace. We offer permanent employees paid parental leave beyond the statutory requirements of Norway and Sweden and pay 100 per cent salary during parental leave for all employees, regardless of gender. for women, Results Ten women from different parts of the Group were selected to participate in FiftyFifty, a talent and leadership development programme initiated the programme in cooperation with external partners as part of our 250th anniversary in 2017. AFF, a leadership and organisational development consultancy in Norway, is now in charge of the programme. The 75 participants from nine different companies in the programme collaborate to develop initiatives that promote equality for themselves, their companies, and society. in 2021. Storebrand For the mentoring programme for women, we received over 50 applications. We established 35 mentor pairs across the Group with participants from Norway and Sweden. As many as 90 leaders completed the course Storebrand Inclusive Management in 2021, where leaders in groups of 15 participants leaders can attended six digital gatherings addressing how contribute to building an inclusive organisation. The course was developed based on a successful pilot in the spring of 2021. The programme continues in 2022. The goal is to ensure at least 40 per cent female participation in our leadership and talent development programmes. Among the participants in the Storebrand Academy, 40 per cent were women and 60 per cent men. In the Storebrand Leadership Weekly Programme, 60 per cent were women and 40 per cent men. An equal number of women and men attended our summer internship programme, Sandbox. In the graduate programme Storebrand Future Impact, the female share of participants were 75 per cent and the remaining 25 per cent were men. At the end of 2021, we had four employees recruited through our cooperation with the Norwegian Labour and Welfare Administration (NAV). The arrangement contributes to an increased understanding of diversity and creates a more inclusive work environment. At the end of the year, the share of women among all Storebrand managers (management levels 1-6) was 37 per cent. Three out of nine members (33 per cent) of the Group Executive Management were women. Among the managers who reported directly to the Group Executive management, 37 per cent were women. 50 per cent of the Board directors of Storebrand ASA were women. When recruiting for management positions in 2021, we invited at least one female and one male candidate in the final round of interviews. We reviewed the Group’s salary levels in connection with the wage adjustment process in 2021. The review showed slightly lower average earnings among female employees than male employees. The finding led to several measures, including an annual salary revision involving business unit leaders and executive managers. In addition, we introduced changes to our recruitment, development, and succession planning processes to make them more inclusive. We will continue with these measures in 2022. In our employee surveys in Peakon, questions related to gender equality and inclusion achieved a steady score of 8.7 out of 10 throughout 2021. The average age of Storebrand Group employees was 43 years at the end of the year. The average tenure was ten years in Norway and nine years in Sweden. Per 31 December 2021, the Storebrand Group had a total of 1,914 employees. There was a good gender balance among permanent employees in both Norway and Sweden, as shown in the table below. Sick leave has been low and stable for several years. In 2021, the absence rate was 2.5 per cent in our Norwegian operations and 1.6 per cent in our Swedish operations. No physical injuries were reported in the Storebrand Group in 2021. Gender distribution* Norway men 811 woman 654 Sweden men 199 woman 219 Total men 1017 woman 875 Not specified 3 * All figures are permanent employees only as of 31.12.21. Capital Investment is not included. 32 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. PeopleA culture for learning 28 Engaged, competent and courageous employees 30 Diversity and equal opportunities 31 Key performance indicators 334. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixKey performance indicators For more key performance indicators (KPIs) and detailed KPI definitions, see page 243. Key performance indicators Women in Board of Directors Results 2018 Results 2019 Results 2020 Results 2021 5 out of 9 4 out of 9 4 out of 10 5 out of 10 Women in Group Executive Management 3 out of 9 3 out of 10 3 out of 10 3 out of 9 Women at management level 3: share of women Women at management level 1-4: share of women Gender balance all managers: share of women 46 % New 39 % 41 % New 39 % 38 % 38 % 39 % 37 % 39 % 37 % Expanded top management, women's share of men's salary Goals Goals 2022 50 % 40 % 50 % 50 % 50 % 2025 50 % 50 % 50 % 50 % 50 % per position category (Hay Grade 21-25) 110 % 100 % 104 % 97 % 100 % 100 % Employees up to middle managers, women’s share of men’s salary per position category (Hay Grade 13-20) 99 % 99 % 97 % 97 % 100 % 100 % 33 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. PeopleA culture for learning 28 Engaged, competent and courageous employees 30 Diversity and equal opportunities 31 Key performance indicators 334. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix4 Keeping our house in order 35 Corporate governance and compliance 40 Responsible use of resources 41 Sustainable practices through our value chain 43 Corporate social responsibility 44 Key performance indicators Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance 35Responsible use of resources 40Sustainable practices through our value chain 41Corporate social responsibility 43Key performance indicators 445. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixCorporate governance and compliance: Privacy and digital trust Ethical guidelines and ethical practices at all levels of the organisation are prerequisites for gaining trust from customers, authorities, shareholders, and society in general. Our guidelines and routines apply to all levels of our organisation and aim to guide the behaviour and decisions of our employees. 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. 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 are in safe hands and handled in a responsible manner. Therefore, we rely on proper security measures, established procedures and processes for privacy security. Moreover, our employees receive training in how to handle of personal and sensitive 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. So long as our customers continue to trust us with their data, 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.19 Approach In our privacy guidelines, you will find purpose limitation, a description of roles and responsibilities and requirements for data processing. We work systematically with information security. Through an internal control system, we set requirements for, monitor, and continuously improve privacy 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 high, those affected 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 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.20 In addition, on our website we provide advice and recommendations on how our customers can reduce their risk of online fraud. Fraudulent activities online often aim to steal personal information from the victims that may be misused by the fraudsters. Our approach to securing personal information and other types of information against illegal and unwanted activity, is described further in the chapter Information security. Results E-learning courses on privacy issues is mandatory for all employees to complete each year. In addition, departmental training is carried out as needed. 89 per cent of the Group’s employees completed a mandatory privacy course in privacy in 2021. In 2021, 125 incidents related to the processing of personal data were reported. We reported 31 of these as discrepancies to the Data Protection Authority, in accordance with the EU General Data Protection Regulation (GDPR). This is an increase in incidents from 2020. The increase is due to both the transition of incidents to a joint technical platform which includes SPP as well as an increased internal awareness of the fact that incidents should be reported. All incidents from 2021 have been handled properly and closed. The Norwegian Data Protection Authority did not issue any fines, warnings, or other actions for Storebrand to take, in order to meet GDPR discrepancies in 2021. 19) The Personal Data Act includes national legislation as well as the EU General Data Protection Regulation (GDPR). 20) For more information on digital security and privacy: https://www.storebrand.no/om-storebrand/sikkerhet-og-personvern 35 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance 35Responsible use of resources 40Sustainable practices through our value chain 41Corporate social responsibility 43Key performance indicators 445. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixCorporate governance and compliance: Countering corruption Why Corruption is one of the major causes of poverty in many parts of the world. It is prohibited in all countries where Storebrand operates. Corruption can result in reduced trust in Storebrand as a company, and in the financial and insurance industry in general. Corruption is detrimental to healthy competition in all industries. Therefore, we must work systematically to prevent this form of crime. We expect that both employees and hired consultants behave in ways suited to build and maintain trust, both in them as individuals, and in the Group as a whole. As a general rule, no one is allowed to receive favours, gifts or invitations from Storebrand’s suppliers or business partners. In cases where it may still be accepted, our guidelines specify acceptable threshold values in the relevant currency for each country. 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 to ensure that there is no corruption in our relationship with them, and that they are aware and conscious about how to fight against corruption within their own business. Gifts given on behalf of Storebrand are subject to the same threshold value. No one must give or receive gifts with an expectation of reciprocity, nor achieve any form of advantage, personally or for the benefit of Storebrand’s subsidiaries. All events held on behalf of Storebrand shall be consistent with our role in society. All content shall be business appropriate and relevant and otherwise adhere to our guidelines for events. All employees and board members shall complete the Group’s anticorruption programme. Exceptions are made for employees on leave or long-term sick leave. Approach Our ethical guidelines establish our expectations to how our employees, temporary staff and consultants should contribute to uncover, reject and report any attempts of corruption or corrupt behaviour. Our ethical guidelines are approved by the Board of Storebrand ASA and the Boards of all subsidiaries. In addition to these guidelines, we have other internal regulations aimed at countering corruption. The Group’s compliance function is responsible for informing all employees on the Groups work to counter corruption. The Group’s compliance functions are responsible for information and training related to anti-corruption work. Each employee is responsible for understanding and acting in accordance with our anti-corruption guidelines. Employees must also complete mandatory training each year, and compliance with this procedures is followed up by management. New employees complete the mandatory training as part of their onboarding programme. 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. Storebrand has established both an internal and external notification channel. Employees who suspect corruption or other financial misconduct shall report this using one of our reporting channels. If the report is delivered through our external channel, the one who reports (whistleblower) can choose to remain anonymous. Results 89 per cent of the Group’s employees completed a mandatory course on countering corruption in 2021.21 No cases related to corruption were uncovered or reported to the Group in 2021. One case of internal misconduct involving and external partner was uncovered. There were two cases of breaches to Storebrand’s Code of Conduct and one breach of internal misconduct. These three matters were handled as personnel matters with written or oral warnings as a result. Breaches to Storebrands Code of Conduct:22 Category Bribery/Corruption Internal misconduct Internal misconduct with agents 23 Other violations of ethical rules Discrimination Number in 2021 0 1 1 2 0 21) Figures do not include Cubera Private Equity, as this company has its own Anti-corruption Programme. 22) Internal misconduct among agents are not included in the key performance indicator on breaches to the ethical guidelines (Code of Conduct). For a complete list of definitions see appendix Sustainability indicators and definitions on page 240. 23) It was registered one internal misconduct at an insurance broker in 2021. 36 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance 35Responsible use of resources 40Sustainable practices through our value chain 41Corporate social responsibility 43Key performance indicators 445. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixCorporate governance and compliance: Information security Why As a financial institution, the Group’s digital infrastructure is critical. We are an attractive target for a variety of threat actors, in large due to the nature of our work and the value of our customers, partners, employees, and our position in the market. Digital attacks are becoming increasingly sophisticated, and in combination with hybrid work patterns, this increases the risk of not detecting unwanted activity. This challenge applies to Storebrand, our partners and suppliers. If we become a victim of a cyber-attack, the potential consequences may include a temporary loss of services, decline in our customers’ trust in us, and high financial costs for restoring our systems and data. Information security is about ensuring that information is correct, and available only for the people who need to access to the information, when they need it. The Group’s approach to ensuring good information security is through people, processes, and technology. Our business operations largely evolve around the use, communication, and storage of different types of information – both electronically and physically. Therefore, it is highly important for Storebrand to work systematically and continuously with information security. Good information security is a prerequisite for maintaining our customer’s trust, the reputation of the Group, and our ability to be competitive and deliver services. Goals and ambitions In order to engage our customers, whilst developing and building long-term relationships with them, the Group work continuously to deliver first-class customer experiences. This requires us to have stable and secure IT-solutions. It is therefore a prerequisite for Storebrand to be able to conduct financial activities, and to increase our ability to innovate, to have and maintain good information security. Our continuous work with information security help us to manage cyber risk, maintain an acceptable threat level, and thus our ability to take care of the information we possess. Approach One of Storebrand’s most important tasks is to maintain and ensure good solutions for an increasingly hybrid workday. This means that all employees, no matter where they work from, have access to secure and stable IT solutions, that adhere to Storebrand’s information security policies and requirements. Additionally, the IT solutions must be able to deal with the dynamic threat landscape that Storebrand, and the financial services industry, is facing. When the pandemic hit in 2020, Storebrand put considerable effort in to adapting to new ways of working, new technical solutions and a distributed workforce working in several physical locations. It was therefore, and still is, a priority for Storebrand to ensure good information security at home, as well as in the office. In 2021, we were therefore very well equipped to handle a lasting hybrid working life – and 2022 is no different. The Group’s Security department sets the premise for all security activities in the Group. In the autumn of 2021, we split the security department into two lines of defense. The first line of defense is an operational unit (Security Operations) in the Storebrand Digital business unit. This unit is responsible for security monitoring, and for detecting and handling incidents. The second line of defense, also called the CISO-function (the Chief Information Security Officer- function) is an independent control function integrated in the Group’s Governance, Risk & Compliance-function. This means that the CISO-function is at the same level as other independent control functions in the Group. The responsibility of the CISO-function includes security governance, offensive security, and resilience and continuity management. The CISO reports directly to the Board and the CEO’s of the Group’s subsidiaries, on topics such as changes to the threat landscape and cyber risk. The Group’s board and executive management has defined cyber risk as the highest operational risk in the Group. Information security and the management of cyber risk is by this given high priority in the Group. The Group has an Information Security Management System (ISMS), which is based upon specifications and requirements set out in ISO/IEC27001/2, an internationally recognised standard for information security.24 The ISMS is an internal control system that ensures that Storebrand has a systematic and verifiable approach to information security. The ISMS makes it possible for the Group to adjust the requirements we set for information security when needed. The management system is a fundamental part of the Group’s risk-based approach to business operations. All business 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. 24) ISO 27001 is an international starndard for information security management 37 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance 35Responsible use of resources 40Sustainable practices through our value chain 41Corporate social responsibility 43Key performance indicators 445. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendixareas in Storebrand are required to follow best practices for information security as described in the management system. The system sets requirements, verifies, and continuously improves information security in our daily routines, customer solutions and in collaboration with our partners. Additionally, information security is well integrated into our risk management processes. is a member of the Nordic Financial CERT, a joint Nordic operations center that shares information regarding threats, attacks, and other activities among Nordic financial institutions. Storebrand contributes with information sharing in the network. In this way, we help to map and understand developments within the threat landscape, both internally and externally. The Group faces a complex and dynamic threat landscape where we experience daily attempts of cyber-attacks. The techniques used for cyber-attacks vary from attempts of social engineering to threat actors attempting to break into our IT systems. A common denominator is that the attacks are becoming increasingly advanced and hard to detect. Cooperation with external parties, partners and authorities has been, and continue to be, a crucial factor of success in managing cyber risk and potential threats. During 2021, the Group has implemented several measures to identify, protect, detect, respond to- and recover from potential cyber-attacks. One such effort, has been the strengthening of the Group’s efforts in the area of resilience and business continuity. A new Head of Resilience & Business continuity has been employed, and dedicated resources for resilience and business continuity has been appointed in each of the business units within the Group. In the fourth quarter of 2021, the Group also conducted a crisis management exercise, based on a complex cyber-attack-scenario, targeting critical parts of the Group’s infrastructure. Storebrand has established a separate first line of defense function for handling security incidents, CSIRT (Computer Security Incident Response Team). The team is actively searching for potential threats to, and vulnerabilities within, our systems, and responds to all tips regarding incidents, breaches and/or attacks. In addition, Storebrand Knowledgeable, motivated, and aware employees are an important part of Storebrand’s preventive security work, thus we updated our security culture program strategy in 2021. For eight years in a row, the Group spent October focusing our efforts on our annual Security Awareness Month. The theme for 2021 was “Security outside the office,” addressing risks and security challenges with a distributed workforce and hybrid working model. Results The ever-changing threat landscape the Group is facing, requires a well-established risk management system for information security. Storebrand therefore works continuously with areas such as awareness and training, management and control, resilience and continuity, threat intelligence, and incident management, amongst others. We will continue this work in 2022. In particular, the Group will focus on improving our Business Continuity Management System (BCMS), which is based on requirements set out in the standard ISO 2230125. This is a mutually compatible management system with our ISMS. Whilst the ISMS works to manage risk ensuring confidentiality, integrity, and availability of our information, the BCMS manages risks of major deviations and disasters that may lead to significant loss, disruption or re-organisation of key business processes. 25) ISO 22301 is an international standard for business continuity management 38 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance 35Responsible use of resources 40Sustainable practices through our value chain 41Corporate social responsibility 43Key performance indicators 445. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixCorporate governance and compliance: Anti-money laundering and terror financing Why We are a key player in the Nordic financial market. Therefore, we have a clear 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 this in a serious manner in accordance with our responsibilities. Good routines and management focus on anti-money laundering (AML) are important for maintaining our reputation. Goals and ambitions Storebrand shall act consistently and in compliance with all 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 mandatory training each year. Approach We have established policies to avoid money laundering and terror financing. The guidelines have been reviewed and approved by the Board of Storebrand ASA and are based on our Code of Conduct and relevant legislation. These guidelines and additional measures have been implemented throughout the Group. 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 reports to identify and report suspicious transactions or behaviour. Any activity that we suspect is in breach of the Norwegian Anti- Money Laundering Act of 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 2021, 15 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 28 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 2021, 90 per cent of our employees completed the mandatory training course in anti-money laundering, financial crime, and terror financing. 39 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance 35Responsible use of resources 40Sustainable practices through our value chain 41Corporate social responsibility 43Key performance indicators 445. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixResponsible use of resources 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 is why we work to ensure that our own operations are as sustainable as possible. 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 2022.26 For our own operations, we aim to reduce greenhouse gas emissions by 7.6 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 2019.27 We continuously work to become more energy efficient, reduce waste production, increase the proportion of waste sorted, and reduce our carbon footprint in connection with business travel and commuting. 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.28 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 business travel. 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 business 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- 12.5 We aim to significantly reduce the amount of waste reduction, through prevention, recycling and reuse. 12.6 We encourage companies to implement 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. related projects. Due to Covid-19, the number of flights carried out by employees at Storebrand were reduced to a minimum in 2020, but increased somewhat towards the end of 2021. 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 2021, employees were given the opportunity to buy private electric bikes at a discounted price with an interest-free loan from Storebrand. During the year, all meeting rooms in our headquarter in Lysaker were equipped with video equipment. The refurbishment of the headquarter in Stockholm will be completed in 2022, including updated video equipment in the meeting rooms. In order to reduce unnecessary waste, we have decided to remove all disposable cups from our offices. Employees who bring their own cup receive a discount in the coffee shop at our main 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 unable to reduce through our own operations are compensated by purchasing emission quotas and investing in carbon-positive projects. Results Due to Covid-19, emissions from operations and the number of business trips were significantly reduced in 2021. Internal carbon pricing and new travel guidelines were introduced. 27 employees used the offer to buy electric bikes for personal use at a discounted rate, financed with an interest-free loan from Storebrand. In 2021, Storebrand ordered the planting of 42,500 mangrove trees. Since 2020, we have planted 73,750 trees through the Worldview Foundation. We have also purchased climate quotas from a forest conservation project in Kenya through Wildlife Works and ordered negative emission quotas from Climeworks through direct carbon capture and storage. 26) So that the goal of limiting average global warming to 1.5 ° C by 2050 is achieved, in accordance with the Paris Agreement. 27) For more information about the findings in the UN’s Emissions Gap Report 2019: https://wedocs.unep.org/bitstream/handle/20.500.11822/30797/EGR2019.pdf?sequence=1&isAllowed=y 28) Storebrand has a climate strategy that will help to limit global warming to 1.5 degrees. A key measure is that our investments must be carbon neutral by 2050, with specific intermediate targets along the way. At the same time, Storebrand as a Group must be carbon neutral. Through this, Storebrand helps to limit physical climate change. 40 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance 35Responsible use of resources 40Sustainable practices through our value chain 41Corporate social responsibility 43Key performance indicators 445. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixSustainable practices through our value chain Why Procurement is an area where we can have a major impact by influencing our suppliers towards more sustainable practices. We have increased the use of outsourcing in order to focus internal resources on core business activities and to ensure efficient operations. This requires proper procedures for the monitoring of working conditions, safeguarding human rights, and managing environmental issues throughout the value chain. Our ambition for 2021 was to maintain the share of environmentally certified purchasing volume of at least 60 per cent, following our achievement of this target in 2020.29 Even though we achieved the target of purchasing volume from environmentally certified suppliers in 2021, 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 per cent. Goals and ambitions A key objective is to avoid the use of suppliers whose production processes or products violate international agreements, national legislation, or Storebrand’s internal guidelines. Through our own activities and procurement activities, we aim to contribute to sustainable development, and to ensure that human rights and workers’ rights are not infringed. 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 environment 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 introduce sustainable working methods and integrate information about sustainability into their reporting routines. 12.7 We promote sustainable procurement practices. 13.2 We incorporate action on climate change into our policies, strategies and plans. 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.30 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 in 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 Asset Management’s exclusion list.31 Our purchasing policy is based on the Group’s governing documents and related procedures, which are revised annually. 32 We have developed a 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. We select - Sustainability is weighted at least at least 20 per cent 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. 29) Eco-Lighthouse, EMAS, ISO14001 and Swan Mark 30) This target allows suppliers to compensate for emissions they are unable to cut in the short term through the purchase of climate quotas. 31) For more information about Storebrand’s list of exclusions: https://www.storebrand.no/en/asset-management/sustainable-investments/exclusions 32) 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, terrorist 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”. 41 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance 35Responsible use of resources 40Sustainable practices through our value chain 41Corporate social responsibility 43Key performance indicators 445. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixWe 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. We map all suppliers with annual sales volume to Storebrand of more than 1 million NOK, through a questionnaire divided into the following main areas related to sustainability: • • • • 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 monitored each year. 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 considered to entail the greatest risk and impact on sustainability are outsourcing (including offshoring), damage settlement (car and property), and property management in general. Results In 2021, contracts worth more than NOK 1 million totaled around NOK 3.34 billion. This accounts for more than 91 per cent of our total purchasing volume and includes the management and development of direct real estate investments. Of this volume, 60.3 per cent comprise suppliers that are environmentally certified in accordance with our purchasing policy. This volume is divided into 339 suppliers, of which 68 (20 per cent) are certified according to a recognised environmental management standard. In 2021, we worked actively with larger and strategic suppliers to promote our goal of achieving a carbon-neutral purchasing portfolio. Through these dialogues, we experienced a large commitment among suppliers to be carbon neutral by 2025. We also conducted a survey among suppliers with more than NOK 1 million in turnover. Many suppliers found that it was demanding to answer the survey. We therefore see a need to standardise reporting. In collaboration with suppliers, we will in 2022 continue to look for more appropriate ways to collect information and standardise reporting. 42 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance 35Responsible use of resources 40Sustainable practices through our value chain 41Corporate social responsibility 43Key performance indicators 445. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixCorporate social responsibility biogas used to operate the solution. Cycle UB’s product solution can help to solve a global problem in the aquaculture industry, that has major environmental consequences. As a result of the two-day program for “youth companies”, we selected 10 winners that received a total of NOK 50 000 stipend for their ideas. In addition to the stipend, the youth companies were offered a few hours of mentorship with a Storebrand employee to further develop their ideas, service design, upscaling, and strategy. In 2021, NOK 500 000 was awarded to 23 “We cheer on” projects around Norway, and 400 000 SEK were awarded to similar projects in Sweden. All the projects contributed to a future to look forward to. In cooperation with Goodify we launched an internal competition over four weeks around Christmas that we called “GoodieChallenge”. Employees who perfomed good deeds in this period earned points and could win small gifts. 44 unique deeds were performed and a total of 86 employees downloaded the Goodify app. Why As a leading financial institution in Norway and Sweden, we have an important social responsibility. The sustainability work means that we are actively engaged in the society we operate in through our primary business as a provider of financial services to over 2 million customers in Norway and Sweden, as a responsible employer, and by engaging in socially beneficial activities beyond this. Goals and ambitions We will take social responsibility by providing financial support and knowledge about sustainability. We also want to enable more employees to spend time on activities related to corporate social responsibility. Approach Ungt Entreprenørskap (“Young Entrepreneurship”) is a non-profit organisation that encourages young students to establish and run their own businesses. We have helped create a sustainability award to stimulate young students’ engagement to continue to want to learn how to run a sustainable business. In 2021, we introduced a two-day program for youth companies where the students had the opportunity to discuss their ideas with a jury consisting of employees in Storebrand. The jury gave advice and feedback on how sustainable and feasible the young students’ ideas were. Financial support and mentorship were given to the youth companies that had the best ideas. Every six months, Storebrand organises the “We cheer on”- competition. This is a social responsibility initiative where we provide financial support for various social projects that contributes to making a future to look forward to. Financial support can be given to projects both in Norway and abroad. Volunteering is an important part of Norwegian culture, and a great deal of volunteer work is done annually, including in sports and leisure activities. This is something we want to support. In 2021, Storebrand collaborated with Goodify to motivate employees to participate more actively in volunteering and carry out good deeds in society. Results As many as 318 youth companies competed in the sustainability category through Ungt Entreprenørskap (“Young Entrepreneurship”), in 2021. Cycle UB won the award for the development of a solution for collecting and utilising sludge from fish farms. The prototype managed to collect as much as 42 per cent of the sludge that comes from fish farms. Additionally, they had thought about how to make the process circular, by reusing the sluge for fish feed as well as for 43 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance 35Responsible use of resources 40Sustainable practices through our value chain 41Corporate social responsibility 43Key performance indicators 445. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixKey performance indicators 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 93 per cent of the group’s employees. For more key performance indicators (KPIs) and detailed KPI definitions, see page 245. Key performance indicators Results 2018 Results 2019 Results 2020 Results 2021 Goals 2022 Goals 2025 Environmentally certified purchases (share of the total expenditure that went to suppliers with certified environmental management system) 33 46 % 57 % 62 % 60 % 55 % 60 % Greenhouse gas emissions from own operation (total) scope 1-3: tonnes of CO2 / tonnes CO2 per FTE 1,444 / 0.9 1,519 / 0.92 477.4 / 0.28 320 / 0.18 0.71 Scope 1-emission: tonnes CO2 / tonnes CO2 per FTE 1.4 / 0 1.1 / 0 1.2 / 0 0.5 / 0 Scope 2-emission: tonnes CO2 / tonnes CO2 per FTE 201 / 0.13 179 / 0.11 164 / 0.09 130.6 / 0.07 Scope 3-emission: tonnes CO2 / tonnes CO2 per FTE 1,241 / 0.69 1,339 / 0.74 313 / 0.18 188.9 / 0.11 CO2e-emissions per FTE due to air travel: Scope 3, tonnes per FTE 34 CDP-rating 0.69 B 0.67 A - 0.1 A - 0.07 A - N/A N/A N/A N/A A 0.6 N/A N/A N/A N/A A DJSI score/global percentile 63 / 74 75 / 81 81 / 93 82 / 92 Top 10 % Top 10 % E-learning conducted, ethics: total / share of man-years New 1,518 / 89 % 1,660 / 91 % 1,694 / 91 % 100 % 100 % E-learning carried out, anti-corruption work: total / share of man-years New 1,479 / 87 % 1,642 / 90 % 1,659 / 89 % 100 % 100 % E-learning completed, combating money laundering and financial crime: total / share of man-years New 1,523 / 89 % 1,678 / 92 % 1,673 / 90 % 100 % 100 % E-learning completed, privacy: total / share of man-years Number of complaints processed by the Financial Appeals Board 35 Number of breaches of Code of Conduct Number of information security incidents Number of privacy incidents 36 New 135 New 0 60 New 1,368 / 75 % 1,662 / 89 % 100 % 100 % 192 9 30 48 218 2 20 41 198 3 28 125 N/A N/A N/A N/A N/A N/A N/A N/A 33) Since we achieved the target for 2021, new targets have been set for 2022 and 2025. 34) CO2 emissions from air travel have been recalculated for 2018–2020 as a result of updates to the emission metrics in our travel agencies’ systems. 35) The figures apply to our Norwegian companies, as these are complaints processed by the Financial Appeals Board Norway. SPP is not included here. 36) The Privacy Ombudsman’s assessment is that the increase in incidents is primarily related to increased awareness of reporting incidents, and not a real increase in the number of non-conformities compared with previous years. In addition, a new reporting tool has made it possible to include SPP (Sweden) in the figures. 44 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in OrderCorporate governance and compliance 35Responsible use of resources 40Sustainable practices through our value chain 41Corporate social responsibility 43Key performance indicators 445. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix5 Directors’ report 46 Strategy 2021-23 47 Strategic highlights 51 Group Results 56 Official Financial Statements of Storebrand ASA 57 Outlook 62 A driving force for sustainable investments 72 Risk 74 Climate risks and opportunities 84 Working environment and HSE 85 Progress on our most material sustainability KPIs Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate 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 greater security and financial wellness by offering long-term savings and insurance solutions. Our goal is to deliver sustainable solutions tailored to the customer’s individual needs. 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 Future Storebrand, and capital release from the guaranteed pensions business which is in run-off. customer insight. We are well on the way to achieve our ambition to deliver a group profit (before amortisation and tax) of more than 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. Read more about our work with social responsibility in the chapters Customer relations, People, and Keeping our house in order. 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 46 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 products with interest rate guarantees. Our goal is to release an estimated NOK 10 billion of capital by 2030, while maintaining a strong solvency position and a balance sheet adapted to our risk and business. Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixStrategic highlights 2021 In 2021, we shifted into an even higher gear ensuring increased speed and growth. With a strong solvency ratio, a stable financial market that developed positively, and a balance sheet where the share of Defined Contribution pensions in growth exceeded the share of guaranteed pensions in run-off, we were able to strengthen our focus and deliveries in our growth strategy. Strong growth in the core business contributed to a larger customer base, an increased operating profit for the Group, as well as higher dividends to our shareholders. The summer of 2021 marked a positive reopening of the economy after a prolonged period of restrictive measures due to the Covid- 19 pandemic. However, by the end of the year, the outbreak of the Omicron variant contributed to renewed insecurity in the society and a need for new infection control measures. Storebrand has maintained operations fully and we have continued to follow our strategy throughout the period. The main impact of Covid-19 on Storebrand’s business is the increased risk of lower employment and more disability in society, which can lead to higher claims. In response to this, Storebrand has made the necessary adjustments in provisions and prices. Throughout the pandemic, we have managed volatile markets and adapted our portfolios to ensure a good return on both our customers’ funds and our own financial investments. Growth 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 2021, we reached a milestone by managing more than NOK 1,000 million of assets, managing a total of NOK 1,097 million of assets. This is our main revenue driver. In addition, we will build on existing savings and pension relationships with individuals by offering related products and solutions within retail insurance and banking in Norway. Leading provider of occupational pensions in Norway and Sweden In 2021, we once again delivered the market’s best return to our Defined Contribution pension customers, compared to comparable investment profiles. This applies to both our largest and most common investment profiles with high and moderate equity content, which achieved a return of 20.6 per cent and 13.4 per cent, respectively. The return on the profiles is also the market’s best over the last three and five years. Norwegian customers also received their Individual Pension Accounts in 2021. Employees’ funds from previous pension capital certificates were combined into the same account as their active Defined Contribution account they have with current employers. The vast majority of employees at Storebrand’s corporate customers chose to continue pension savings through employers’ agreements with us. Only 2.5 per cent chose to move pension management to an alternative provider. For Storebrand, the total one-off effect from the automatic transfer of pension capital certificates was NOK -6 billion in net transferred capital. After consolidation in the market and intense competition ahead of the introduction of the Individual Pension Account, Storebrand was the second largest provider of Defined Contribution pensions at the end of 2021, with a market share of 27 per cent (by the end of Q3). In December, Storebrand entered into an agreement to buy Danica, Norway’s sixth largest provider of Defined Contribution pensions with a 5 per cent market share. Approval of the transaction from the authorities is expected in the first half of 2022. Through Danica, we will strengthen our presence in the market for small and medium- sized companies and increase distribution power. In total, Storebrand managed NOK 158 billion within Unit Linked products in Norway at the end of the year. At the same time, we strengthened our position in the market for public sector occupational pensions, where we won tenders that will give us a total of NOK 5.5 billion in transferred reserves at the beginning of 2022. We also took over the management of closed pension funds that contribute to earnings growth in the area Guaranteed pension. SPP continued to grow in the Swedish pension market, supported by being the most sustainable and digitally innovative provider. The “Hållbarhetskartan” (“Sustainability Map”) was launched in early 2021. The service provides companies and their employees with information about the sustainability profile in their pension savings. We also continued to attract customers in the transfer market, but intense competition resulted in a net transfer of funds of NOK -4 billion. Despite this, SPP delivered its strongest result ever and total funds in Unit Linked insurance grew to NOK 150 billion. The ongoing capital release from guaranteed products in run-off resulted in a dividend corresponding to 137 per cent of the result for 2021. Storebrand also provided insurance coverage to corporate customers equivalent to NOK 2 billion in insurance premiums in 2021. At the same time, we launched our P&C insurance offering for small and medium- sized companies. Together with contracts taken over from Insr through the year, these amounted to NOK 217 million in written premiums at the end of 2021. 47 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixCompetitive return (annualised) on Defined Contribution pension funds in Norway 37 High equity content 20.6 % 2021 17.0 % 17.1 % 16.2 % 19.4 % 14.6 % Last 3 years Last 5 years 17.0 % 14.6 % 15.9 % 16.3 % 16.5 % 15.3 % 12.3 % 10.9 % 10.9 % 10.6 % 10.6 % 11.4 % Storebrand Competitor 1 Competitor 2 Competitor 3 Competitor 4 Competitor 5 Storebrand Competitor 1 Competitor 2 Competitor 3 Competitor 4 Competitor 5 Storebrand Competitor 1 Competitor 2 Competitor 3 Competitor 4 Competitor 5 Moderate equity content 2021 Last 3 years Last 5 years 13.4 % 10.9 % 10.8 % 11.2 % 12.2 % 12.4 % 11.9 % 12.2 % 9.7 % 11.3 % 10.7 % 11.4 % 9.2 % 7.9 % 8.0 % 8.3 % 8.4 % 8.1 % Storebrand Competitor 1 Competitor 2 Competitor 3 Competitor 4 Competitor 5 Storebrand Competitor 1 Competitor 2 Competitor 3 Competitor 4 Competitor 5 Storebrand Competitor 1 Competitor 2 Competitor 3 Competitor 4 Competitor 5 Nordic Powerhouse in Asset Management The progress for Storebrand Asset Management continued in 2021, with the strengthening of our position within alternative investment classes, solid excess returns for our customers through active management, and new steps to ensure sustainable management of the invested funds. To strengthen the distribution of funds in the international market, we launched several of our most sustainable funds on The Asset Management Exchange (AMX) in Ireland. This opened for several British pension funds to consider Storebrand as an asset manager. At the end of 2021, new platforms in Ireland and Luxembourg accounted for NOK 11 billion of total assets. Within alternative investments, we acquired the Danish property manager Capital Investment, which managed properties worth NOK 21 billion. We also entered into Nordic partnerships in infrastructure investments and continued our focus on Private Equity through Cubera. In total, we raised NOK 9 billion in customer funds within alternative investments. Among our active funds, several funds achieved significant excess returns for our customers, and contributed to earnings growth from performance-based fees. The main contributor was SKAGEN Global which had an excess return of about 12 per cent compared with the benchmark index. We also took further steps to consolidate our position as a world leader in sustainable investment. At the end of the year, we managed NOK 483 billion in fossil-free investments, and NOK 123 billion in solutions. Solutions are defined as either investments in companies that Storebrand’s investment team believes contribute to sustainable development and help us achieve the UN’s sustainability goals, or through investments in green bonds, environmentally certified real estate and green infrastructure. By 2025, we aim to reduce direct greenhouse gas emissions from investments in equities, bonds and real estate by 32 per cent. In the same period, we will increase the proportion of investments in solutions to 15 per cent. 37) Return based on comparable investment profiles with moderate equity content (ca. 50%) and high equity content (ca. 80%) within an active defined contribution pension scheme . Source: Norsk Pensjon. 48 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixMore information about our sustainability work is discussed in the chapters Driving Force for Sustainable Investments, Climate risks and opportunities, 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 of insurance and savings have increased by 32 and 38 per cent, respectively, over the past year. The digital sales share in our own channels accounted for 40 per cent of the total volume for both insurance and savings. The degree of automation when establishing an Individual Pension Account and merging customers’ pension funds was over 99 per cent. In SPP, the proportion of individuals who retire digitally has increased from 15 per cent to 80 per cent in 2021. Through the use of machine learning, we have improved the price model for pension related disability insurance by 15 per cent and artificial intelligence means that we now detect 10 per cent more insurance fraud compared to through traditional techniques. The work with machine learning and insurance fraud achieved 2nd place in the Dataforeningens Innsiktspris (Data Association’s Insight Award) for 2021. More information about our digital initiatives is described in the chapter on Customer relations under the section Digital innovator in financial services. Corporate governance Good corporate governance is important for us to achieve our goals. Storebrand works continuously to improve both the overall decision- making processes and the day-to-day management of the company. Read more about our work in the chapter Corporate Governance. Management of capital and balance sheet For the past ten years, Storebrand has succeeded in transforming its business from capital-intensive products with guaranteed returns, to fast-growing and self-financing capital-light products. Total assets have more than doubled since 2012. At the end of the year, 73 per cent of the total assets under management were related to the capital-light business, and less than 49 per cent of the pension assets on the balance sheet were guaranteed reserves. 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 greater security and financial wellness. The combination of an increased distribution power, acquisition of customer portfolios and strong demand in the retail market contributed to an exceptionally strong growth in 2021. The profit from the retail market increased by as much as 42 per cent compared with the previous year, mainly driven by: • • • 72 per cent growth in net sales of fund-based savings to NOK 4.2 billion, and 24 per cent growth in assets under management, which amounted to NOK 52 billion at the end of the year. Growth in the bank’s mortgage loan balance for by 15 per cent, to NOK 57 billion. Premium growth of more than NOK 1 billion within P&C insurance and private risk coverage. This corresponds to a growth of 54 per cent, of which approximately 28 per cent of the growth came from the Insr portfolio and organic growth amounted to 26 per cent. 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 2021. 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. We are also constantly developing our work to assess climate as a financial risk. We have incorporated climate risk assessments into our ongoing risk monitoring, management and reporting to supervisory authorities. Storebrand is determined to lead and develop the sustainability agenda within the financial industry in the years to come. Our sustainability position has been highly recognised in 2021. Storebrand was once again 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 third 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. 49 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixStorebrand 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 5 per cent in 2021. The growth business, on the other hand, yielded a return on equity of 33 per cent.38 The Group’s overall return on equity was 10.7 per cent for 2021. The solvency ratio was 175 per cent at the end of 2021 – a decrease of 3 percentage points from last year’s solvency ratio including transitional rules at the end of 2020. Without transitional rules, we strengthened the solvency ratio by 9 percentage points from 166 per cent in 2020. Regulatory input factors in the solvency calculation, modelling changes and growth in the business weakened solvency, while a higher interest rate level combined with a good excess return from positive financial markets contributed to increases in the solvency. In total, new subordinated loans also contributed 6 percentage points, and we sold AS Værdalsbruket, which had a positive effect on profit of NOK 546 million and strengthened solvency by 2 percentage points. The result in 2021 helped to strengthen the solvency margin by about 12 percentage points. Storebrand wants to contribute to a growing market for sustainable bonds and stimulate the market for sustainable investments and financing. As the first Nordic insurance company, Storebrand Livsforsikring AS issued a green subordinated bond in the first quarter of 2021. The bond issue is a non-perpetual subordinated bond of EUR 300 million. The green bond qualifies as Tier 2 capital under the solvency regulations for insurance companies. 39 Financial targets Storebrand has the following financial targets: Return on equity 40 Future Storebrand (Savings and Insurance) Run-off business (Guaranteed and Other) Goal Status 2021 > 10 % 10.7 % 33 % 5 % 52 % Dividend pay-out ratio 41 > 50 % Solvency ratio (Storebrand Group) > 150 % 175 % 38) Based on a pro forma distribution of IFRS equity per business area. The capital is distributed based on the capital consumption under Solvency II and CRD IV. The Savings and Insurance segments are calibrated to a solvency margin of 150%, while the rest of the capital is allocated to the Guaranteed pension segment including Other. 39) Green Bond Allocation Report 2021: https://www.storebrand.no/en/investor-relations/rating-and-funding/_/attachment/inline/d0a9246a-8cf8-452f-a187-fff440653b9e:31d168bdf3de4eb26fbb ee7ed6acd32718a0ac53/Green%20Bond%20Allocation%20Report%202021.pdf 40) After tax, adjusted for amortisation of intangible assets. This document contains Alternative Performance Measures (APMs) as defined by the European Securities and Markets Authority (ESMA). This is a summary of APMs used in financial reporting at storebrand.com/ir. The income statement is based on reported IFRS results for the individual companies. 41) After tax. 50 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixThe Group’s results 2021 The Storebrand Group’s financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS). In accordance with Norwegian accounting legislation, the board of Storebrand ASA confirms that the annual accounts have been prepared on the assumption of continued operations. No significant incidents have occurred after the balance sheet date. Financial items and risk result life was NOK 1,372 million (NOK 278 million). This year’s result includes a positive effect on profit of NOK 546 million from the sale of AS Værdalsbruket. In addition, increased net profit sharing for guaranteed products and an improved risk result, after a period of weak results during the Covid-19 pandemic, contributed positively. Our financial result is reported by the following business segment: Savings, Insurance, Guaranteed Pension and Other, as well as on a consolidated Group level. Amortisation of intangible assets amounted to NOK -527 million (NOK -492 million). The increase is mainly due to the acquisition of new businesses as well as customer portfolios from Insr. NOK million Fee and administration income Insurance result Operational cost Operating profit 2021 2020 6,607 5,676 1,201 825 -4,678 -4,068 3,130 2,433 Financial items and risk result life 1,372 278 Profit before amortisation Amortisation Profit before tax Tax Profit after tax 4,503 2,711 -527 -492 3,976 2,219 -846 136 3,130 2,355 Profit before tax was NOK 3,976 million (NOK 2,219 million). The Group ended the year with a tax income of NOK -846 million (NOK 136 million). The tax income in 2020 was the result of new information and interpretation of the transitional rules for 2018. The estimated normal tax rate for the Group is 19-22 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 3,130 million (NOK 2,355 million). Savings NOK million 2021 2020 Fee and administration income 5,215 4,392 Operational cost Operating profit -2,927 -2,611 2,288 1,781 Financial items and risk result life 67 -51 Profit before amortisation 2,355 1,730 Financial results Fee and administration income increased by 19 per cent to NOK 5,215 million (NOK 4,392 million). Income growth in Defined Contribution pensions in Norway was 5 per cent, despite the introduction of Individual Pension Accounts in 2021 contributing to reduced income margins. Within asset management, income growth was 29 per cent, driven by excess returns in funds with performance fees contributing NOK 550 million (NOK 234 million). Higher net interest margin and good volume growth led to a significant increase in the bank’s contribution. Storebrand achieved a Group profit (before amortisation) of NOK 4,503 million (NOK 2,711 million). The figures in parentheses show the corresponding figures for last year. Fee and administration income increased by 16 per cent to NOK 6,607 million (NOK 5,676 million), driven mainly by strong underlying growth in assets under management. Excess returns in funds with performance fees contributed NOK 550 million (NOK 234 million). Adjusted for this, the growth was 11 per cent compared to last year. The insurance result was NOK 1,201 million (NOK 825 million) and resulted in a combined ratio of 94 per cent (97 per cent). This is somewhat weaker than the targeted combined ratio of 90-92 per cent. This year’s improvement is due to weak results in 2020 in products with disability coverage as a result of the covid-19 pandemic. (NOK Operating expenses amounted to NOK -4,678 million -4,068 million). Adjusted for costs related to acquired business, performance-related results and currency movements, operating expenses were NOK -4,410 million – in line with the target of keeping costs nominally flat at NOK 4.4 billion for 2021. Total operating profit was NOK 3,130 million (NOK 2,433 million). 51 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixOperating expenses amounted to NOK -2,927 million (NOK -2,611 million). The cost increase is largely due to excess returns in funds with performance fees where costs increased to NOK -255 million (NOK -79 million). Adjusted for costs related to excess returns in funds with performance fees, the cost increase was 5.5 per cent in 2021. Growth and digital investments, as well as the acquisition of the Danish property manager Capital Investment, contributed to increased costs. Total growth in assets under management for Storebrand Asset Management was NOK 134 billion (14 per cent) to NOK 1,097 billion. Good returns during the year, in addition to NOK 43 billion in net capital inflows and NOK 21 billion from the acquisition of Capital Investment, contributed to the growth. The bank’s retail lending balance grew by NOK 7.5 billion (15 per cent) to NOK 57.0 billion. Financial and risk result life was NOK 67 million (NOK -51 million). The loss in 2020 is mainly due to model-based provisions for loan losses in the bank. Profit before amortisation increased to NOK 2,355 million (NOK 1,730 million) - an increase of 36 per cent in 2021. Balance sheet and market development Assets under management grew significantly in 2021. Unit Linked reserves grew by 15 per cent to NOK 308 billion. Positive market development and growth in paid-in premiums contributed positively, while net transfers of total assets contributed negatively with NOK -13.6 billion (NOK 5.4 billion). The reason for negative net transfers of capital is mainly a one-off effect in 2021 related to the automatic transfer of pension capital with the introduction of Individual Pension Accounts in the Norwegian market. Intense competition in the Swedish market also led to negative transfers in the Swedish business. Key figures Savings NOK million Unit Linked Reserves Unit Linked Premiums 2021 2020 308,351 268,331 21,212 20,185 AuM Asset Management 1,096,556 962,472 Retail Lending 57,015 49,474 Insurance NOK million Insurance pemiums f.o.a. Claims f.o.a. Operational cost Operating profit Financial result Profit before amortisation 2021 2020 5,175 4,331 -3,974 -3,506 -875 -712 326 113 97 91 423 204 52 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixFinancial results Insurance premiums for own account (f.o.a.) grew by 19 per cent to NOK 5,175 million in 2021 (NOK 4,331 million), driven mainly by strong volume growth. Written premium NOK million P&C & Individual life Health & Group life* 2021 3,301 1,775 1,369 2020 2,144 1,870 1,274 Pension related disability insurance Nordic Total written premium 6,445 5,288 * Includes the entire written premium for Storebrand Helseforsikring AS (50/50 joint venture with Munich Health) Guaranteed pension NOK million Fee and administration income Operational cost Operating profit Risk result life & pensions Net profit sharing Profit before amortisation 2021 2020 1,631 1,511 -890 -861 741 650 187 19 504 136 1,432 805 Financial results The fee and administration income amounted to NOK 1,631 million (NOK 1,511 million). Growth in public sector occupational pensions and the takeover of closed pension funds contributed to increased income. Over time, fee income is expected to gradually decline because the products are mainly in long-term run-off. Operating expenses amounted to NOK -890 million (NOK -861 million). Risk result life & pension was NOK 187 million (NOK 19 million). The improvement in earnings is due to an improvement in the risk result related to Defined Benefit pensions, partly explained by price adjustments that were introduced after weak results in 2020. Net profit sharing, after further strengthening of the buffer capital, was NOK 504 million (NOK 136 million), driven by good returns in both Norwegian and Swedish products. The booked return was on average 4.5 per cent in Norway against an average customer guarantee of 3.1 per cent. In Sweden, the average return was 3.7 per cent against an average guarantee of 2.8 per cent. Profit before amortisation was NOK 1,432 million (NOK 805 million). Balance sheet and market development At the end of the year, guaranteed reserves amounted to NOK 291 billion. This is an increase of NOK 3 billion in 2021, but NOK 10 billion adjusted for currency effects. The increase is due to growth in public sector occupational pensions, takeover of closed pension funds and good returns. Net outflows, excluding transfers, amounted to NOK -10.2 billion (NOK -10.1 billion) as a result of larger pension payments being paid out than premium payments being paid in. As a share of the total balance sheet, the reserves correspond to 48.5 per cent (51.7 per cent) at the end of the year, a reduction of 3.2 percentage points since last year. Insurance claims increased to NOK -3,974 million (-3,506 million), but the claims ratio ended at 77 per cent, which is slightly better than 81 per cent the year before. The high claims ratio in 2020 was mainly a result of the Covid-19 pandemic which led to reserve strengthening for all products with disability coverage. The claims ratio in 2021 was more normalised, but still characterised by high levels of claims related to disability coverage within the group life product. Total operating costs for the year were NOK -875 million (NOK -712 million) and resulted in a marginal increase in the cost ratio from 16 per cent to 17 per cent in 2021. The cost increase is related to increased staffing and sales commissions in external distribution channels, as well as the acquisition of Insr’s customer portfolios. The total combined ratio was 94 per cent (97 per cent) and the total operating profit was NOK 326 million (NOK 113 million) for the year. It is somewhat weaker than the target combined ratio of 90-92 per cent. The growth products P&C and Individual Life achieved a strong combined ratio of 88 per cent (89 per cent), while Group Life and Pension related disability insurance achieved weaker combined ratios of 110 per cent (123 per cent) and 96 per cent (91 per cent), respectively. The financial result was NOK 97 million (NOK 91 million). The investment portfolio for insurance amounted to NOK 9.6 billion at the end of 2021 (NOK 8.8 billion) and achieved a return of 3.3 per cent. The investments are primarily in fixed income securities booked at amortised cost or with a short maturity. Profit before amortisation was NOK 423 million (NOK 204 million). Balance sheet and market development The total growth in written portfolio premiums amounted to 22 per cent in 2021. Most of the growth was in P&C and Individual Life, which grew by NOK 1.2 billion, equivalent to 54 per cent. Of this, transfers from Insr amounted to NOK 610 million in 2021 (NOK 740 million in total). Pension related disability grew by 7 per cent while Health and Group Life decreased by 5 per cent. Written premiums at the end of the year was NOK 6.4 billion, of which NOK 3.3 billion is in the retail market and NOK 3.1 billion in the corporate market. Key figures Insurance Claims ratio Cost ratio Combined ratio 2021 77 % 17 % 94 % 2020 81 % 16 % 97 % 53 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixStorebrand’s strategy is to grow the buffer capital to secure customer returns and shield shareholder’s equity under turbulent market conditions. Buffer capital for guaranteed pensions increased to 11.2 per cent (11.0 per cent) of customer reserves in Norway and to 17.8 per cent (11.4 per cent) in Sweden. This corresponds to an overall increase of NOK 4.4 billion since last year. contribute to increased costs and a lower operating profit. The Financial items and risk result life was NOK 518 million, an increase from last year’s NOK 83 million. The strong financial result is mainly explained by a positive effect of NOK 546 million from the sale of AS Værdalsbruket. Key figures Guaranteed Pension NOK million Guaranteed reserves 2021 2020 290,862 287,614 Guranteed reserves in % of total reserves 48.5 % 51.7 % Net inflows and outflows, excluding transfers -10,268 -10,058 Average booked return in Norway Average guarantee in Norway Average value-adjusted return in Sweden Average guarantee in Sweden 4.5% 3.1% 3.7% 2.8% 4.8% 3.1% 4.4% 3.2% Buffer capital in % of customer reserves in Norway 11.2 % 11.0 % Buffer capital in % of customer reserves in Sweden 17.8 % 11.4 % Other Dividend for 2021 Storebrand has established a framework for capital management that links dividends to the solvency ratio. 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 ratio 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. The Board has carefully reviewed the solvency position, liquidity position and the 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 3.50 per share for 2021, equal to NOK 1,645 million, to the Annual General Meeting. NOK million 2021 2020 Fee and administration income 21 9 For more information about historical dividends, Storebrand’s share and other shareholder matters, see the chapter Shareholder matters. Operational cost Operating profit -246 -120 -225 -111 Financial items and risk result life 518 83 Profit before amortisation 293 -28 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. Eliminations NOK million 2021 2020 Fee and administration income -260 -236 Operational cost Financial results Profit before amortisation 260 236 - - - - Financial results The operating profit was NOK -225 million, a decrease from the previous year (NOK -111 million). Transaction costs related to the acquisition of Capital Investment and the process with Danica Storebrand’s dividend policy: 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. The balance sheet must form a sound foundation and support the Group’s growth strategy at the same time as released capital is repaid to the owners. 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 2021, the solvency ratio for the Group was 175 per cent. Storebrand uses the standard model for the calculation of Solvency II. Prudent in risk management and regulatory adjustment mechanisms the solvency regulation compensate for occasionally challenging financial market conditions. Storebrand aims to pay an ordinary dividend of more than 50 per cent of Group profit after tax. The Board of Directors’ ambition is to pay ordinary dividends per share of at least the same nominal amount as the previous year. Ordinary dividends are subject to a sustainable solvency ratio above 150 per cent. If the solvency ratio is above 180 per cent, the Board of Directors intends to propose special dividends or share buy backs. 54 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixStorebrand Livsforsikring Group’s solidity capital consists of equity, subordinated loan capital, market value adjustment reserves, additional statutory reserves, conditional bonuses and risk equalisation reserves. The solidity capital was strengthened by NOK 1.3 billion in 2021. Issuances of new loans and redemptions as well as exchange rate changes resulted in a net increase of NOK 2.0 billion in subordinated loans in 2021. The market value adjustment reserve has been reduced by NOK 0.9 billion as a result of rising interest rates, and amounts to NOK 6.3 billion at year-end. Conditional bonuses have been strengthened by NOK 3.0 billion and amount to NOK 13.8 billion. Booked returns have contributed to increasing the additional statutory reserves. Additional statutory reserves amounted to NOK 13.6 billion at the end of the year, an increase of NOK 2.2 billion for the year. The excess values of bonds and loans valued at amortised cost has been reduced by NOK 5.5 billion this year due to rising interest rates, and amounts to NOK 3.4 billion at the end of the year. Excess values of bonds and loans at amortised cost is not recognised in the accounts. Storebrand Bank Group had a pure core capital adequacy ratio of 15.4 per cent and capital adequacy ratio of 20.3 per cent at the end of 2021. The company has satisfactory capital adequacy and liquidity based on its business activities. The lending portfolio consists primarily of low-risk home mortgages with an average LTV (loan-to-value) of 57 per cent. Storebrand ASA (holding) held liquid assets of NOK 4.8 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 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 2025. Storebrand ASA recognised dividend and group contributions from subsidiaries of NOK 4,542 million in 2021. The dividend allocated to shareholders amounted to NOK 1,645 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 2021, 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. 55 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixOfficial Financial Statements of Storebrand ASA 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 4,505 million in 2021, compared to NOK 2,975 million in 2020. Group contributions from investments in subsidiaries amounted to NOK 4,542 million, compared to NOK 3,028 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 classified to profit/loss Change in estimate deviation pension Tax on other result elements Total other result elements 2021 4,542 144 -180 4,505 -258 4,248 2020 3,028 43 -96 2,975 -171 2,804 2021 4,248 2020 2,804 6 -1 4 -15 4 -11 Total comprehensive income 4,252 2,793 Allocation of the profit Storebrand ASA reported a profit of NOK 4,248 million in 2021, compared to NOK 2,804 million in 2020. The Board proposes a dividend of NOK 1,645 million to the Annual General Meeting, corresponding to an ordinary dividend of NOK 3.50 per share for the financial year 2021. Allocation of the profit for the year for Storebrand ASA NOK million Profit for the year Allocations Transferred to other reserves Provision for shared dividends Total allocations 2021 4,248 2020 2,804 2,602 1,645 4,248 1,285 1,519 2,804 56 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook57A driving force for sustainable investments 62Risk72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856.Shareholder matters7.Annual Accounts and Notes8.Corporate 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. 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. These amounted to 48.5 per cent at the end of 2021, 3 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 13 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. There is still uncertainty about the consequences of Covid-19 and how it will affect financial markets going forward. With a solid solvency ratio of 175 per cent and more than 13 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. Financial Results In Norway, the market for Defined Contribution pensions has experienced strong structural growth in recent years. Going forward, high single-digit growth in premiums and double-digit growth in total assets are still expected. With the introduction of Individual Pension Accounts, the fees were reduced throughout the market. This will have a negative effect on earnings in 2022, but the expected growth and own profitability measures will bring results back to previous levels in 2023. Our ambition is that Storebrand remains the market leader in pensions in the private sector by offering attractive and competitive customer solutions, while at the same time running a cost- effective business. The acquisition of Danica, pending regulatory approval, strengthens our ambition in the pension market. From July 2022, there will be increased requirements for which income is pensionable, which will increase the premium volume in the Norwegian market by approx. NOK 3 billion annually. We also have the ambition to take a 1 per cent market share annually, corresponding to NOK 5 billion in annual net inflow of assets, in the market for public sector occupational pensions. Storebrand aims to achieve further synergies across customers, products and capital by expanding our non-life insurance offering to corporate customers. 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 our competitive advantages in digital, sustainable solutions, and a strong market position. The market is expected to grow by about 8 per cent annually, supported by increasing relocation volumes. SPP’s ambition is to grow between 14 and 16 per cent annually, twice as much as the overall market growth, by being the leading player in the transfer market. 57 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 of 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 by the end of 2023, compared to 2020, while maintaining a stable fee margin. The retail market has evolved into and increasingly larger part of Storebrand and accounted for 25 per cent of the Group’s profits in 2021. The individualisation of the pension and savings market is expected to increase further. Non-life insurance, particularly P&C insurance, is an important growth area. The ambition is to grow more than 10 per cent annually within savings, mortgage lending and insurance. Storebrand’s ambition from the Capital Market Day in 2021 was to achieve a Group profit (before amortisation and tax) of NOK 4 billion in 2023. We managed this already in 2021 with help from the sale of AS Værdalsbruket and significant performance fees from excess returns in active funds. The full effect of the regulatory change related to Individual Pension Accounts in 2021 will have a negative contribution in 2022 of approx. NOK 100 million. The full positive effect of the Danica acquisition (given government approval) will come in 2023. Strong growth in all focus areas will contribute to further earnings growth in the coming years. In the period 2012-2020, Storebrand reported flat nominal costs, adjusted for acquisitions, currency, and performance related costs. In 2021, we delivered on our cost target of NOK 4.4 billion. We expect the cost base to increase to NOK 4.9 billion in 2022, due to growth initiatives and increased wage pressure. The growth initiatives include investments in the public sector, non-life insurance in the market for small and medium-sized enterprises, and the recently acquired Capital Investment. Should revenue growth not materialise, Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendixmanagement has identified measures to reduce costs. Acquisitions, including Danica (given regulatory approval) and costs associated with future performance fees will come in addition. Capital management Storebrand aims to maintain a solvency ratio of at least 150 per cent. At the end of 2021 it was 175 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 percentage points 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. We expect that approximately NOK 10 billion in capital will be released by 2030. Realisation of the Group’s ambitions is expected to lead to a rising return on equity over time. We expect to deliver more than a 10 per cent return on equity by the end of 2023 and beyond. 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. International regulations Solvency II revision The European Commission presented proposals for changes in the Solvency II standard model in September 2021. The Commission’s proposals differ significantly compared to earlier proposals from The European Insurance and Occupational Pension Authority (EIOPA). The main purpose of the revision is to ensure that insurance companies continue to invest in accordance with the political priorities of the EU, especially with regards to financing the post Covid- 19 recovery, by facilitating long-term investments and increasing the capacity to invest in European business. The Commission particularly emphasises the importance of the insurance sector’s role in financing the green transition and helping society to adapt to climate change. The proposed new model also intends to correct regulatory deficiencies and make the insurance sector more robust. Storebrand currently applies what is commonly known as the standard model. Changes to the standard model could increase the solvency capital for Norwegian and Swedish insurers. The Commission’s proposals appear to reflect Norwegian interest rates better than earlier proposals from EIOPA. The Commission also proposes changes that could have offsetting effects to increased capital requirements, such as a reduced risk margin. Several changes are also proposed in the calculation of the volatility adjustment as well as an increased interval for the symmetric adjustment for equity risk. As they are currently outlined, the Commission’s proposals are not expected to have a significant overall impact on Storebrand’s solvency ratio. The Commission has not outlined a timeline for the further process on adapting changes in the standard model. 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 until 2024-2025. The Commission will also consider a phasing-in period of five years for new rules related to the calculation of interest rate risk and the new extrapolation method for interest rates will be phased in gradually until the end of 2031. Sustainable finance The EU’s goal of a carbon neutral Europe by 2050 requires significant investments. The EU’s Action Plan on Sustainable Finance is expected to increase the share of sustainable investments, promote long-termism, and define which financial products may be defined as sustainable. EU taxonomy for sustainable finance activities The EU Taxonomy is a main part of the EU’s Action Plan on Sustainable Finance. While the taxonomy regulations entered into force on 12 July 2020 in the EU, the new requirements will only apply from 2022 for the first two environmental goals (climate change mitigation and climate change adaptation), and from 2023 for the other four environmental goals (sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biological diversity and ecosystems). Legislative measures including the EU Taxonomy and sustainability disclosures were passed by the Norwegian Parliament (Stortinget) in December 2021. The new regulations entail a mapping of the legislative requirements for their products and services. Large, listed companies will be required to report on the proportion of their turnover, investments and operational costs that are covered by the EU Taxonomy. In 2023, companies must report on the share of turnover, investments and operational costs that are defined as environmentally sustainable activities in accordance with the technical criteria that the EU has prepared for each economic activity. 58 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixThe new rules for sustainable finance will establish standards for sustainable asset management, as well as clarify disclosure and customer information requirements. We believe that the development will result in a higher quality of financial and non- financial reporting, better information to key stakeholders, and make it easier to compare data across the financial sector. A challenge of implementing the new rules for sustainable finance is to get correct and necessary data. See appendix on page 248 for an overview of how much of our business is covered by the EU Taxonomy. The Taxonomy’s reporting requirements are increasing step by step, and we will report on the share of our business that will be classified as sustainable in the years to come. Markets in Financial Instruments Directive (MiFID II) and Insurance Distribution Directive (IDD) In April 2021, the European Commission adopted a revision in existing MiFID II and IDD regulations that require businesses to map sustainability in the same way as financial risk. Companies that provide investment advice must obtain information about customers’ preferences related to sustainability, in addition to mapping their experience and knowledge of investments. The mapping of sustainability risks and preferences will become an integral part of the suitability assessment made by companies that offer financial products. Supplementary provisions on sustainability in MIFID II and IDD are being considered for incorporation into Norwegian law through the EEA Agreement. These regulatory changes will take effect in the EU in the second half of 2022. Corporate Sustainability Reporting Directive (CSRD) In April 2021, the European Commission adopted a proposal to prepare a new Corporate Sustainability Reporting Directive (CSRD) to replace the previous Non-Financial Reporting Directive (NFRD). CSRD aims to raise sustainability information to the same level as financial information. The proposal aims to improve the flow of information on sustainability within corporate governance. This will make sustainability reporting from companies more consistent, so that finance players, investors and the general public can use comparable and reliable sustainability information. Storebrand’s annual report will be in line with this regulation. Sustainable Finance Disclosure Regulation (SFRD) Another important part of the EU’s Action Plan on Sustainable Finance is the EU’s Sustainable Finance Disclosure Regulation (SFDR). The Sustainable Finance Disclosure Regulation (Hereafter the Disclosure Regulation) is intended to help clients make informed investment decisions. It requires Storebrand, as a financial player, to be transparent about how we manage sustainability risk, potential negative consequences of our investments, and the sustainability of our products. The Disclosure Regulation divides financial products into three categories that affect the degree of sustainability information to be disclosed by companies. The three categories are: • • • Financial products that have sustainability as the main objective (defined as an Article 9 financial product): Investments in companies or projects that contribute to an environmental or a social sustainability goal. This may be investments in companies that produce renewable energy or have services that contribute to increased equality. In addition, the companies invested in must not harm any other sustainability goals. Financial products that promote environmental or social aspects, but that do not have sustainability as the main objective of its investment (defined as an Article 8 financial product): It may be funds that have sustainability requirements, such as avoiding fossil fuels or having the lowest possible emissions, but where the entire investment does not focus solely on sustainability. All other financial products (defined as Article 6 financial products): This is a broad “other” category that includes everything from funds that completely ignore sustainability to funds that analyse sustainability and take sustainability risk into account without meeting the EU’s requirements under the Disclosure Regulation. We welcome the Disclosure Regulation as it should provide increased transparency on financial savings products and make it easier to compare data across the financial sector. Changes in IFRS A new accounting standard for insurance contracts, IFRS 17, is set to be implemented in 2023. The purpose is to introduce common accounting rules for insurance contracts and improve the comparability of insurance accounts. IFRS 17 entails, among other things, market valuation of liabilities, separation of insurance cohorts in the accounts, income recognition over the contract period rather upfront, and an amended profit and loss statement. Storebrand will implement IFRS 9 for financial instruments at the same time. For Storebrand’s consolidated financial statements, the new standards will lead to changes in the valuation of insurance contracts, classification of fixed income investments and how profits are recognised. Estimated effects for Storebrand will be presented closer to implementation. Whether IFRS 17 is implemented in the statutory reporting requirements is decided by national regulations in each country. Storebrand expects that its property and casualty business will be required to implement IFRS 17 in the statutory reporting. For the life insurance business, IFRS 17 is not expected to be applied in the statutory reporting requirements. The effects from the implementation of IFRS 17 is thus not expected to affect the Solvency calculations nor dividend capacity significantly. 59 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixDuring COP26, IFRS announced that it will establish an International Sustainability Standards Board (ISSB) with the aim of developing standards in sustainability reporting. Storebrand views this positively and believes it is an important measure to meet increasing demands for sustainability information. Norwegian regulations Savings in Norwegian Defined Contribution pensions In December 2021, new legislation was adopted making pension contributions mandatory for all of employees’ income, not just income above 1G (G = NOK 17 Interim Report Storebrand Group 106,399) for employees working more than 20 per cent and are above the age of 13. Companies need to adapt to the new legislation before 1 July 2022. It is estimated that the changes will increase total savings in the Defined Contribution pension market by about NOK 3 billion per year. Individual pension savings The savings limit in the IPS scheme for individual, tax-favoured pension savings has been reduced from NOK 40,000 to NOK 15,000 per year, with effect from the tax year 2022. The tax rules will continue unchanged. In this sense, this is still a favorable scheme, which is nevertheless weakened by a sharp reduction in how much it is allowed to save. Changes announced in the government platform The government parties have announced in the Hurdal platform that a sales tax on health insurance will be introduced, in order to reduce the use of such insurances. The governing parties have also announced a revenue-neutral reorganisation of the financial tax, in which the increased employer’s contribution for financial companies will be removed. Public Occupational Pensions The Norwegian parliament also passed new legislation in December 2021 regulating the buffer capital within public occupational pension schemes. The new legislation merges the market value adjustment reserves with the additional statutory reserves into a more flexible customer buffer fund which can cover negative returns. There is no cap on the size of the new buffer fund. The new regulation will facilitate competition in the market for public occupational pensions and is expected to be positive for Storebrand’s growth ambitions in this market. Paid-up policies New legislation was passed for Paid-up policies in December 2021. The final changes are: • • The ability for providers to build additional statutory reserves separately for individual contracts. This will allow for profit sharing and increased benefits on contracts with sufficient additional statutory reserves. Faster pay-outs for small paid up-policies. Providers can reduce 60 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix• the pay-out period for paid up-policies so that annual payments equal 0.3G (G = NOK 106,399). Policyholders can demand a reduced payout period so that annual payments equal 0.5G. The policyholder and provider also have the option to enter into an agreement to reduce the pay-out period so that the annual payments equal 1G. This can reduce longevity risk and duration risk for the affected contracts. Providers will be allowed to compensate customers who convert guaranteed paid-up policies to investment choice. It will still be possible to offer conversion without compensation. If compensation is offered, it should reflect the value of the guaranteed returns the customer surrenders. The legislation change passed regarding more flexible buffer capital management within public occupational pensions mentioned above was not passed for paid-up policies. The Ministry of Finance has however announced that it may consider further regulatory changes. The Financial Supervisory Authority of Norway’s proposal for a flexible buffer fund, where exchange rate adjustment funds and additional provisions are merged into a new customer-distributed buffer fund that can cover negative returns, has so far only been introduced for municipal pension schemes. This happened through the Norwegian Parliament’s (Stortinget) consideration of Prop. 223 L. The Ministry of Finance announced there that it would assess the need for further regulatory changes later. Transparency Act The Transparency Act has been passed by the Parliament and will enter into force on 1 July 2022. The Norwegian Consumer Authority has been given the task of providing guidance and supervision of the Transparency Act. The law imposes a number of obligations on larger businesses related to human rights and working conditions, and gives both consumers and others the right to information about the companies’ handling of these. All eligible companies are obliged to carry out due diligence assessments in line with the OECD’s guidelines for multinational companies. The requirement for the scope of the due diligence assessments must be proportionate to the size of the business, and the assessments must be carried out regularly. Disclosures of the due diligence assessments shall be published each year. The statement must meet the minimum requirements under the Transparency Act, but can also be more comprehensive. The report can be published in several places, but must as a minimum be easily accessible on the company’s website. The Transparency Act gives the opportunity for anyone to demand to receive information from companies about how they handle actual and potential negative consequences that have been assessed in the due diligence assessments. The right to information includes both general information about how the company handles negative consequences, and specific information related to goods and services. Adaptations to the new regulatory requirements has been implemented both in departments that are responsible for processes that are directly affected by new obligations and at Group level to identify the need for adaptations in group-wide processes, including those related to reporting and transparency. Swedish regulations New transfer market regulation To promote the transfer of pension rights, additional fee restrictions were introduced on 1 April 2021 for the repurchase and transfer of unit-linked and custodial insurance. Insurance companies can only charge an administration fee that corresponds to direct costs for the transaction, and the amount can not exceed 0.0127 basic amounts (equivalent to approximately SEK 600 in 2021). On the question of the right of transfer for agreements entered into before 1 July 2007, the Swedish Government has proposed in a proposition that the right shall apply regardless of when a unit- linked and custodian insurance agreement has been entered into. The Swedish government has proposed that the fee restrictions for relocation and repurchase should also apply to these contracts. The new legislative amendments are proposed to take effect on 1 July 2022. The Swedish Parliament is expected to consider the proposals in the spring of 2022. SPP supports a more open relocation market. In the past, this has been voluntary for insurance companies, and something SPP allows. Premium pensions (PPM) of the national retirement pension system A negotiated fund market is implemented as a second step in the reform of PPM, and a new set of rules was presented by the Swedish government on 22 December 2021. The fund market will continue to give pension savers the freedom to choose how the funds are to be invested. A new authority - Fondstorgsnemnda - which will negotiate funds and manage the fund market is also proposed. Increased demands will be placed on funds in the fund market; they must be suitable for pension savings, cost-effective, sustainable, controllable and of high quality. The Swedish government plans to present a proposition to the Swedish Parliament on 22 March 2022 and the legislative amendments are proposed to take effect on 1 June 2022. PPM fund platform is a large distribution channel for SPP’s funds. We envisage that the new fund platform will offer fewer funds at a lower price, but it is too early to say anything about the consequences of this. 61 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixA driving force for sustainable investments Storebrand manages our customers’ savings over several decades and we therefore have a long-term perspective. We take an integrated approach to sustainable investments, in which we combine our sustainability strategy with our investment strategy. We believe that companies that have a good understanding of how to manage sustainability risks and opportunities have a competitive advantage that will enable them to deliver better returns, while contributing positively to sustainable development. In recent years, the debate about sustainability has largely focused on cutting greenhouse gas emissions to reduce global warming. Going forward, the global sustainability agenda will increasingly also revolve around topics such as biodiversity and ecosystems to solve climate challenges. In addition, the resilience of safeguarding good working conditions and social and economic justice in the transition to a low-emission society has received increased attention. To achieve long-term positive effects, it is important to view environmental and social conditions, and corporate governance in context. We believe that investments in companies that are well-positioned to deliver on the UN Sustainable Development Goals will deliver better risk-adjusted returns for our customers over time. A main goal is to positively support the achievement of the UN’s Sustainable Development Goals (SDGs), without causing harm or having a negative impact on society and the environment. With this in mind, we strive to: 1. Contribute to positive influence by allocating more capital to investments in solution companies (see below for definition), green bonds, certified real estate and green infrastructure. 2. Exercising active ownership and excluding companies to reduce the negative impact our investments can have. This approach enables us to be a driving force for sustainable investments that contribute to positive change and development, while reducing financial risk. Directing capital towards sustainable solutions Storebrand aims to be a driving force for lasting change in the way companies are managed, while ensuring the best possible return for customers and owners. We fundamentally believe that investing in companies well-positioned to deliver on the SDGs, will deliver better risk-adjusted long-term returns for our clients. We therefore put capital into action to fund socially beneficial, sustainable solutions aligned with the achievement of the SDGs; and we reduce exposure to activities that impact society and the environment negatively. Storebrand works to increase our positive contribution to sustainability by directing more capital to investments that are well- positioned to deliver solutions to global sustainability challenges, as described through the SDGs. We do this by increasing investments in solution companies, green bonds, investments in real estate and infrastructure that support the SDGs. One of our goals is to invest 15 per cent of our assets under management in solution companies, green bonds, green infrastructure, and certified real estate by 2025. Since 2012, Storebrand has developed and integrated a proprietary Sustainability Score to identify companies that have the potential to deliver good returns, while helping to solve sustainability challenges. All our portfolio managers can use the Sustainability Score in a way that is aligned with the investment strategy and risk profile of individual funds and portfolios. Through proprietary analysis, we identify what we call “solution companies”. These are companies that help achieve the SDGs through products, services and operations, without causing significant harm. The companies that are categorised as solution companies are included in a database that is updated regularly. The database is a valuable tool for fund managers in their work on sustainable investments and serves as the basis for our thematic solution portfolios (for example, on renewable energy, smart cities and equal opportunities), or as part of broader investment portfolios. At the end of 2021, 13 per cent of our equity investments were invested in solution companies. During the year, Storebrand launched two new solution funds; one with a focus on sustainable cities and one with a focus on equal opportunities. 62 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix We invest in green bonds, which allow fixed income funds to increase their exposure to projects that are focused on sustainability. The green bonds are for companies that both meet the Storebrand standard and are in line with international standards such as the Green Bond Principles, the forthcoming EU Green Bond standard, and with the framework of the International Capital Market Association (ICMA). By the end of 2021, we had invested NOK 25.7 billion in green bonds. This accounts for 6 per cent of our total bond investments, up from 5 per cent in 2020. We integrate sustainability throughout our real estate business and aim to be the Nordic region’s leading player in sustainable real estate management. The share of our buildings that were environmentally certified (BREEAM or equivalent) increased from 43 per cent in 2020 to 68 per cent in 2021. We reduced emissions from our real estate investments, from 7.9 kg CO2 per m2 in 2020, to 5.9 CO2 per m2 in 2021. In 2021, three out of four reporting companies with direct real estate investments achieved a 5-star rating from the Global ESG Benchmark for Real Assets (GRESB). The Danish-based company Capital Investment, which we acquired in 2021, has not yet reported to GRESB, and the properties that the company manages are not included in the figures for certification and greenhouse gas emissions above. Storebrand also manages capital for infrastructure investments that enable the transition to a green economy. The transition away from fossil fuels will require significant investment in renewable energy infrastructure, both from the public and private sector. Sustainable infrastructure is a key focus area in the EU Commission’s Investment Plan for Europe, that aims to mobilise EUR 650 billion of public and private investment by 2027 to transition to a climate-friendly economy in the coming years. During 2021, Storebrand Asset Management established and raised capital for a fund that invests in sustainable infrastructure. Throughout the year, the fund made three direct investments in a US onshore wind farm, an offshore wind farm in the UK and 65 electric train sets in the UK. Each investment has a positive sustainability impact. HOW WE CONTRIBUTE TO THE UN SUSTAINABLE DEVELOPMENT GOALS THROUGH INVESTMENTS IN SOLUTIONS We invest in companies that deliver climate solutions and contribute to achieving the Paris Agreement. We invest in companies that promote energy efficiency and enable increased production, distribution and use of renewable energy in the global energy mix. We increase investments in infrastructure, grid, storage and clean energy technology. We invest in companies that deliver solutions in sustainable management and efficient use of natural resources. We promote circular economy and waste reduction in the product life cycle. We promote safe drinking water solutions at an affordable price, improved sanitation, water quality, efficient water consumption, management of water resources and recovery of water-related ecosystems. We ensure exposure to companies that contribute to sustainable urban development, transport systems, and reduce the impact of cities 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. 63 We promote companies that contribute to good health and quality of life. We are increasing exposure to companies that are helping more people access necessary health services, medicines and vaccines, health insurance, and companies that prevent deaths as a result of unsatisfactory water and sanitation conditions. Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixBiodiversity and ecosystems: Our goal is that our investment portfolio will not contribute to deforestation by 2025. During identified companies with high 2021, we surveyed and exposure and insufficient risk management. Next, we selected 50 companies for further targeted engagement to achieve better forest protection in operations and supply chains. Based on this dialogue, we have chosen to cooperate with companies that show a willingness to improve. Divestments are considered in companies that do not have a satisfactory response. To help promote international regulation in this area, we also signed the Finance for Biodiversity Pledge, which is described below in the section on multilateral engagement. Resilient supply chains: Respect for labour rights in supply chains has been an important issue for Storebrand for many years. Dialogue on these topics helps to ensure healthy operations in the enterprises through robust supply chains, while helping to reduce maternity, child labour, forced labour and low living standards. Throughout the year, we established a partnership through the Platform for Living Wages Financials (PLWF), focusing on achieving a decent living wage, in the clothing, food and retail sectors. Corporate sustainability disclosure: Storebrand believes that all companies should report according to standardised and company-specific sustainability indicators. We therefore highlight the importance of consistent, reliable and verifiable reporting on sustainability indicators in our dialogue with our portfolio companies. Increased transparency also depends on reporting tools, such as the work of the Taskforce on Nature- related Financial Disclosures (TNFD), which Storebrand helped launch this year, and continues to provide advisory support. Together with more than 50 members of The Institutional Investors Group on Climate Change (IIGCC), Storebrand has stated clear expectations about companies’ management of physical climate risk. We want companies to demonstrate how they deal with the physical effects of climate change in their businesses. In 2021, we contacted 50 of the companies we have invested in that are highly exposed to climate risk, to require them to comply with our expectations. Expectations include strategic planning using climate scenarios, integration of climate adaptation in business decisions, and reporting in line with the TCFD recommendations. • Active ownership We set requirements for the companies we invest in and use our position as owners to influence the companies for improvement. To reduce negative impact, we have a clear and transparent process to ensure that companies meet our sustainability risk standards. This, combined with a structured corporate governance process, reduces our exposure to sustainability-related risks, such as climate risk. During 2021, we defined even more demanding criteria to the boards and management of the companies we invest in, and further developed our general principles of engagement. We also initiated several international initiatives. Five principles of engagement guide Storebrand’s active ownership: • 1. Creating shareholder value: Our activities shall contribute to long-term value creation in a responsible manner. 2. Aiming for a positive impact: Our activities should be driven by the goal of creating a real difference, not symbolic value. 3. Nordic approach: We focus on topics and issues where Nordic actors have real influence and/or have a major impact on Nordic stakeholders. 4. Multi-stakeholder engagement: We work with a wide range of stakeholders, including governments, organisations, businesses and investors. Targeted engagement: We strive to gain the greatest possible influence by concentrating our commitment to companies where we have a significant stake. 5. • We have chosen to prioritise four themes for active ownership for 2021-2023: • The race to net zero: Storebrand is committed to achieving net zero greenhouse gas emissions in all our assets under management by no later than 2050, in line with the Paris Agreement. This entails a decarbonised portfolio across all asset classes. In line with this commitment, we have set an intermediate target of reducing the carbon footprint of Storebrand’s total equity, corporate bond and real estate investments by at least 32 per cent by 2025 with a base year in 2018. Storebrand was one of the founders of the UN-backed Net-Zero Asset Owner Alliance initiative in 2019. We also became a member of the Net Zero Asset Managers Initiative in 2021. 64 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixDetails of how we engaged in 2021 During 2021, we initiated contact 382 times with 332 different companies. This was in addition to already ongoing dialogues. During the year, we had a total of 601 dialogues with people or departments in a total of 490 companies.42 The contact includes both obtaining information and direct dialogue about the companies’ sustainability work. In addition to dialogue with companies, we also had four dialogues with external fund managers and 38 meetings with authorities and public organisations in 2021. Dialogue with companies Storebrand accounted for 154 of the dialogues with companies we have invested in. In other cases, we took the initiative together with other companies: 67 initiatives were with Storebrand in a leading role, and 358 with Storebrand as a contributor. A total of 87 per cent of the initiatives took place proactively, while 3.2 per cent took place on a reactive basis and 9.7 per cent were not categorised.43 The dialogues took place mainly in the form of e-mail, letters and digital meetings. In the vast majority of cases, the dialogue took place with investor contacts or sustainability teams. In 16 per cent of cases, we were in contact with the CEO of the companies in question. What types of companies we engaged with (sectors) Most of the initiatives included companies in the materials sector, consumer goods, financial services and manufacturing. Geography The majority of the companies we had dialogue with in 2021 were based in the US, Japan, Sweden and Norway. What aspects of ESG we engaged on (ESG categories) In 2021, our engagements with companies dealt with several topics within ESG and we addressed as many as 12 of the UN Sustainable Development Goals. Just over half of the dialogues dealt with climate issues, including climate change, emissions, deforestation and the use of chemicals, while 29 per cent focused on social issues such as human rights, working conditions and wage conditions. 18 per cent of the dialogues were about corporate governance. Outcomes of engagements concluded During 2021, we conducted and concluded 33 dialogues. We achieved the outcomes we sought in eight of the dialogues, while we did not achieve the desired outcomes in six of them. In the remaining 18 dialogues, we consider the outcomes to have been neutral. In cases where the engagements concluded successfully, the result was first and foremost an increased awareness and understanding. In some cases, the companies changed their practices or committed to implementing concrete changes. Voting In 2021, we voted at the Annual General Meeting of 947 companies based in a total of 47 countries. Nearly 30 per cent of the meetings we attended took place in the United States. The financial sector accounted for the largest amount – 247 meetings – while the utilities sector accounted for the lowest number with 57 meetings. ENGAGEMENTS BY ESG CATEGORY 53 % - Environment 29 % - Social 18 % - Governance ESG ENGAGEMENTS - ESG ISSUES Tema Number of engangements Percentage distribution GHG emissions Climate change Deforestation Chemicals Human rights in conﬂict zones Climate change ﬁnancing Forced labour Access to medicines Living wages Human Rights 161 104 80 51 37 28 26 21 18 12 Sustainability reporting and disclosure 11 Healthy food and nutrition Coal ﬁnancing Biodiversity Indigenous Peoples rights 9 8 6 4 26.8 % 17.3 % 13.3 % 8.5 % 6.2 % 4.7 % 4.3 % 3.5 % 3.0 % 2.0 % 1.8 % 1.5 % 1.3 % 1.0 % 0.7 % 42) The number of dialogues is higher than the number of companies because in some cases we have contact with several people on different topics in the same company. 43) Proactive dialogues / initiatives mean internal pre-planned engagements in a case (e.g. dialogue with 20 companies with the highest emissions), while reactive means that we respond to a response that has been notified of a case (e.g. from a third party). 65 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix ESG ENGAGEMENTS BY SECTOR 20.5 % Materials 12.3 % Consumer Staples 10.8 % Financial 8.8 % Consumer Discretionary 11.6 % Industrials 9.7 % Energy 7.7 % Utilities 5.8 % Healthcare 5.5 % Information Technology 3.3 % Communication Services 2.8 % Real Estate 1.2 % None/Other ESG ENGAGEMENTS - GEOGRAPHY FINISHED ENGAGEMENTS - RESULTS FINISHED ENGAGEMENTS - OUTCOMES Country Number of engagmenets Percentage distribution United States 133 22.1 % Japan Sweden Norway Germany United Kingdom France China Switzerland Canada 57 47 43 28 25 25 21 19 16 9.5 % 7.8 % 7.2 % 4.7 % 4.2 % 4.2 % 3.5 % 3.2 % 2.7 % ESG ENGAGEMENT BY CATEGORY 25 % - Successful 19 % - Unsuccessful 56 % - Neutral MEETINGS VOTED BY MARKET 52 % - Increased understanding/information 21 % - Failed/no outcome 15 % - Company committed to changes 9 % - Company changed practice 3 % - None VOTE ALIGNMENT WITH MANAGEMENT 24.7 % - USA 4.7 % - United Kingdom 11.4 % - China 3.5 % - Cayman Islands 6.1 % - Norway 3.2 % - Sweden 5.9 % - India 2.7 % - Canada 5.5 % - Japan 27.2 % - Other Markets 90 % - Votes With Mgmt 10 % - Votes Against Mgmt Type Number of engagements Percentage distribution 5.2 % - Australia Proactive Reactive Other 524 87.20 % 19 58 3.20 % 9.70 % 66 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix with a total of USD 46 trillion in assets under management and USD 10 trillion in assets under management, respectively. Protection and sustainable management of oceans, forests, wetlands and other sensitive ecosystems are essential for long-term social and economic stability. Environmental destruction reduces nature’s ability to continue to generate the ecosystem services that businesses and societies depend on. Industry players depend on input factors such as water, materials and minerals. In addition, for example, they need erosion control and flood protection to ensure stable production processes. A lack of understanding of the relationship between natural capital and industry activity is described as called “hidden” risks. The value of natural capital is estimated at more than NOK 100,000 billion globally. Loss of nature can thus have major economic consequences for business and social development. Activities to avoid loss of biodiversity are therefore high on Storebrand’s agenda. In 2022, we will continue our work to establish nature-related risk as a concept, in the same way as climate risk. At the forefront of the COP26 and COP15 conferences, we joined forces with 77 other financial institutions in the Finance for Biodiversity Pledge that urged the world’s governments to act immediately to stop and reverse biodiversity loss. The statement calls for the creation of a more ambitious Global Biodiversity Framework (GBF) that drives the expectations of financial institutions and businesses to align financial flows to global biodiversity goals. This year, we also signed the Business Call for a UN Treaty on Plastic Pollution. Plastic pollution is a problem that is not dealt with effectively by current legal and political frameworks. A global treaty on plastic pollution can help drive the transition to a circular economy for plastics, which Storebrand supports by committing to exercising responsible investment practices on this topic. Out of 18,016 proposals for consideration, we voted in 18,003 cases. In 90 per cent of cases, we supported proposals from the management of the companies, while we voted against the management’s recommendation in 10 per cent of cases. Storebrande against proposals from the management dealt with, among other things, extraordinary compensation schemes, reporting and plans related to climate risk, reporting on matters related to human rights, as well as the independence of the board and a lack of diversity. For example, we voted against a proposal from the management of the energy company Equinor for targets for climate change in the short, medium and long term. Our rationale was that companies we invest in should adopt targets for greenhouse gas emissions in line with the Paris Agreement. The Equinor management’s proposal received a majority with the support of the Norwegian state, but Storebrand’s vote sent a strong signal that investors want ambitious and concrete climate targets both in the short and long term. Multilateral cooperation to support active ownership Many sustainability challenges are so extensive that they can only be solved through multi-party involvement and cooperation, for example authorities, trade associations, environmental and human rights organisations and trade unions. Several of the initiatives and alliances we have engaged in in recent years focus on the priority areas for active ownership in 2021-2023 as discussed above. In 2021, we joined the Platform for Living Wages Financials (PLWF) to contribute to a positive development in the living wages in within the clothing, food and agricultural and retail sectors. Another example of this type of collaboration is the Task force on Nature-related Financial Disclosures (TNFD), a framework for businesses that will help organisations manage biodiversity risks. Storebrand is an advisory participant in the TNFD Forum, a cross- sectoral competence body that supports the work of TNFD. Business engagement at the political level is also important to stimulate change and promote sustainability initiatives. During 2021, we led and supported several broad initiatives to influence the COP26 United Nations Climate Conference and COP15 United Nations Biodiversity Conference sustainability negotiations. Both conferences brought together governments around the world to agree on national commitments and set new long-term goals for climate and natural issues. An important element of the negotiations was to create broad support among financial players for revised frameworks and commitments based on climate-based research that will contribute to achieving sustainability. Storebrand has been active in leading and supporting several important and broad sustainability collaboration initiatives. The Global Investor Statement to Governments on the Climate Crisis and the Finance for Biodiversity Pledge were among the initiatives we actively engaged in. These initiatives involved financial institutions 67 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixACTIVE OWNERSHIP TO REALISE THE SDGS We take measures to avoid corruption and bribery, as a result of inadequate corporate governance and systematic failure to uncover fraud and corruption. In Myanmar, we have also led a major investor initiative to reduce the risk of contributing to human rights violations. Some of the cases involved led to exclusions. Company reporting is another of our main topics: We have highlighted the importance of consistent, reliable and verifiable reporting on sustainability indicators in our dialogue with our portfolio companies during the period. Biodiversity and ecosystems are one of our priority engagement topics – they play a crucial role in supporting sustainable value creation and meeting climate commitments. We are committed to achieving a deforestation-free portfolio by 2025. We work with portfolio companies to communicate our expectations for improved forest protection in operations and supply chains. Prior to the COP15 negotiations, Storebrand finance for Biodiversity Pledge signed, and called for urgent government action on climate issues. In the Nordic countries, we have also worked on a set of expectations and dialogues with forestry companies. We continue our engagement with companies in the aquaculture sector, with a focus on climate issues and impacts on biodiversity. This year we have also collaborated with Grieg Seafood, WWF and the Norwegian Institute for Marine Research (NINA), on a pilot project to improve the aquaculture sector’s reporting on influences and dependences on nature. The transition to a low-emission society and net zero emissions in 2050 is one of our priority topics. Storebrand has been a member of the Taskforce on Nature-related Financial Disclosures working group, which was launched this year, with the aim of creating a reporting framework that helps organisations manage biodiversity risk and identify opportunities. We also announced clear expectations of companies in tackling climate risk and have focused on dialogues with the 20 largest emitters in our portfolios. Prior to COP26, we were a signatory of Call to Action for the decarbonisation of shipping, which clarifies an expectation for governments to increase their ambitions and commit to decarbonising shipping by 2050. During this period, Storebrand also signed the Global Investor Statement to governments on the climate crisis and called for urgent government measures to achieve climate targets. We work with companies to reduce water consumption and greenhouse gas emissions in intensive livestock production. In addition, we have engaged them to raise environmental standards in important sectors, such as palm oil, soy, cattle and timber. In 2021, we signed the UN Treaty on Plastic Pollution to help drive the transition to a circular economy for plastics. We are engaged with companies in our portfolio where we address issues of working conditions, including the living wage. We have joined the Platform for Living Wages Financials (PLWF) initiative and are working with other investors to address issues of the living wage and create structures that support workers’ working conditions. The platform contributes to a positive development in the living wage in the clothing, food and agricultural and retail sectors. One of our most important engagement issues is supply chain resilience, including the issue of forced labour, where we have continued to focus on China and the Xinjiang region, through direct dialogues and with the Investor Alliance on Human rights. Storebrand wants to raise awareness of international labour rights, particularly in high-risk sectors such as the textile industry. We seek to improve our policies and contribute to both better relationships between management and employees and working conditions in our supply chains. 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 required companies to establish the right practices and measures to protect their employees from Covid-19. Storebrand has worked actively to mitigate the impact of the pandemic on companies, society, the economy and financial markets. As a result, Storebrand is committed to acting in support of investor statement on Coronavirus Response. 68 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix Exclusions All our investments must satisfy the Storebrand Standard, our benchmark requirement for sustainable investments, which excludes companies that violate international norms and conventions or are involved in unacceptable operations. The Storebrand Standard includes criteria for human rights and international law, corruption, corporate crime, serious climate and environmental damage, controversial weapons (land mines, cluster munitions and nuclear weapons) and tobacco. Companies in high-risk industries that have low sustainability scores are excluded. Furthermore, we do not invest in companies that are excluded from the Norwegian Pension Fund Global (GPFG) by Norges Bank (the Norwegian national central bank). For selected funds and savings profiles, we apply expanded criteria related to businesses involved in the production and distribution of fossil fuels, alcohol, pornography, weapons and gambling, as well as green bond standards. We address serious breaches of standards by our portfolio companies through a structured, policy-driven, and predicable process, in which exclusion is generally a final resort. In case of serious behavioural violations of our standards, we usually begin by engaging in dialogue with the company. If we conclude that the company poses an unacceptable risk of breaching our standards, we sell our existing investments in the company and exclude it from our investment portfolio.44 In case of product-based breaches, our exclusion process is based on more data analysis than dialogue. We have agreements with third- party databases that document and report to us the percentage of revenue that companies receive from specific classifications of products. If a company’s revenue from the excluded product classes rises above our threshold levels, we automatically exclude the company. The detailed product-based threshold levels vary, rising to a maximum of 5 per cent of total revenue. In 2021, the exclusion process resulted in the exclusion of 67 companies from our investment portfolios consisting of over 5,000 companies. A total of 7 companies were re-included, after observed and sustained returns to the required standards. As of December 31st, 2021, there are 257 companies of the MSCI ACWI Index on our exclusion list, while an additional 517 companies are excluded from certain funds based on our extended criteria. Companies excluded based on the Storebrand standard, by category, as of 31 December 2021 Conduct-based exclusion - Environment Conduct-based exclusion - Corruption Conduct-based exclusion - Human Rights and International Law Tobacco Controversial weapons Climate - Coal Climate - Lobbying Climate - Oilsand Unsustainable Palmoil Cannabis Total number of companies *) For further description of our exclusion methods, see Storebrand’s exlusion list. 18 10 39 25 27 133 5 9 11 1 257* Human rights in Myanmar After a military coup against Myanmar’s democratically elected government in early 2021, Storebrand has been taking a leading role regarding investor engagement to help secure human rights in the country. Following the coup, the military government that took control over the country carried out actions against pro- democracy protesters. These actions have resulted in hundreds of deaths and several thousand people being arrested, tortured and injured. Furthermore, an estimated 700,000 people hailing from Myanmar’s Rohingya ethnic minority group have been forced to seek refuge outside the country. The Myanmarese military government’s actions were met with international protests, condemnations and sanctions from the United States, the European Union and many other countries, multilateral institutions and organisations around the world. Storebrand led the work to formulate a joint statement from the international business community, in cooperation with the Investor Alliance for Human Rights and the Heartland Initiative. One outcome is this work was the formal publication of the Investor Statement on Human Rights and Business Activities in Myanmar which was signed in June 2021 by 77 investors globally. The statement called on companies operating in Myanmar to identify the risk of human rights violations in their own value chain, take measures to reduce risk, report publicly on development, and participate in collective measures to support human rights in the country. Storebrand carried out due diligence related to companies operating in Myanmar to identify links to the military junta government and potential human rights violations. 44) For a detailed description of our exclusions and methodology see: https://www.storebrand.no/asset-management/barekraftige-investeringer/utelukkelser 69 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixEXCLUSION CRITERIA BASED ON THE UN’S 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 the economic crime. revenue comes from the production or distribution of weapons (handguns and military weapons). Companies that cause or contribute to serious and systematic violations of international law and human rights in war zones. Government bonds issued by countries that are systematically corrupt, that systematically suppress fundamental social and political rights, or against which the UN Security Council has adopted sanctions. Companies where more than 5 per cent of their revenue comes from the production or distribution of controversial weapons, including nuclear weapons, land mines, cluster munitions, biological weapons and chemical weapons. Companies involved in serious environmental damage. Companies where more than 5 per cent of their Companies that receive more than 5 per cent of their of fossil fuels, or which have more than 100 million revenues from coal or oil sands-based activities. tonnes of CO2 in fossil reserves. revenues come from the production or distribution Companies that contribute to severe and/or systematic deforestation through non-satisfactory production of palm oil, soy, cattle or timber. Companies that deliberately and systematically work and lobby to counteract the objectives enshrined in the Paris Agreement. Companies with serious 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 where more than 5 per cent of their Companies where more than 5 per cent of their revenue comes from the production or distribution of revenue comes from the production or distribution tobacco or drugs. of alcohol. 70 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix Key performance indicators 45 Key performance indicators Results 2018 Results 2019 Results 2020 Results 2021 Goals 2022 Goals 2025 Return on equity Solvency Margin Dividend ratio Share of total assets screened for sustainability NOK billion invested in fossil-free products 46 Carbon footprint from equities investments: tonnes of CO2e per NOK 1 million in sales 13.7 % 173 % 68 % 100 % 68 8.0 % 179 % 0 % 100 % 277 8.6 % 178 % 65 % 100 % 379.2 10.7 % 175 % 52 % 100 % 483 income (against index) 47 22 (32) 18 (24) 12 (18) 12 (18) Carbon footprint from bond investments: tonnes of CO2e per NOK 1 million in sales income (against index) 48 New 7 (15) 9 (16) 9 (17) Exposure to high emitting sectors: NOK billion / share of equity investments 37.7 / 19 % 34.6 / 13 % 32.2 / 8% 42.5 / 9% Investments in solutions (solutions compa- nies, green bonds, green infrastructure and property with environmental certification): NOK billion / share of total assets 49 38.8 / 5.5 % 53.7 / 6.5 % 92.6 / 9.6% 123.1 / 11.2 % Investments in green bonds: NOK billion/ share of total bond investments 8.4 / 2.9 % 12.4 / 3.1 % 22.2 / 5% 25.7 / 6 % Investments in green infrastructure: NOK billion / share of total infrastructure investments New New New 1.5 / 100 % Investments in solution company equities: NOK billion/ share of total equity investments New 24.3 / 9.3 % 50.3 / 13 % 62.6 / 13 % Investments in certified green property: NOK billion/ share of total real estate >10 % >150 % >50 % 100 % N/A N/A N/A N/A 13 % N/A N/A N/A >10 % >150 % >50 % 100 % N/A N/A N/A N/A 15 % N/A N/A N/A investments 50 13 / 30 % 17 / 41 % 20.1 / 43 % 33.3 / 68 % 75 % 90 % Companies that have been contacted to dis- cuss ESG through active ownership: number/ share of investment universe 51 314 / 10.8 % 408 / 9.7 % 572 / 12 % 601 / 12 % Carbon footprint direct real estate investments: tonnes CO2e / kg CO2e per m2 10,818 / 9.96 10,228 / 9.12 8,456 / 7.9 6,703 / 5.9 N/A 8.6 N/A 6.5 45) For a complete list of sustainability indicators and definitions, see Appendix on page 240. 46) Fossil-free products are one of several ways to achieve our overall goal of net zero emissions, and we have therefore not set a specific goal for how much to invest in fossil-free products. 47) The method for calculating carbon footprints has been further developed for the annual report 2021. Data are obtained through Trucost (S&P Global)’s systems and weighted by market value per position. For index figures, corresponding calculations are weighted per index and it is weighted together with the portfolios’ indices based on portfolio values. This represents a coverage ratio of 96.7% in our carbon footprint from equity investments, and a coverage ratio of 93.8% for indices. 48) The method for calculating carbon footprints has been further developed for the annual report 2021. Data is obtained through Trucost (S&P Global)’s systems and calculated data from the management, weighted by market value per position. For index figures, corresponding calculations are weighted per index and it is weighted together with the portfolios’ indices based on portfolio values. This represents a coverage ratio of 48.8% in our carbon footprint from bond investments, and a coverage ratio of 92.1% for indices. 49) We have decided to set an overall goal for resp. 2022 and 2025, instead of one target for each asset class. 50) Capital Investment, which we acquired in 2021, has not yet reported to GRESB, and the properties the company manages are not included in the figures for certification. 51) The number of companies we have engaged in has increased at the same time as the investment universe has increased. Number of engagements as a share of the investment universe will thus be the same as in 2020. 71 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixRisk Our risk management framework is designed to ensure that we take the appropriate risk for delivering returns to customers and shareholders, 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. One of the biggest financial risks associated with Covid-19 has been the risk associated with rising unemployment as a result of a weak economy. This has historically led to an increase in disability and related claims. Storebrand has strengthened its reserves to meet the increased uncertainty. The autumn of 2021 marked a reopening of Norwegian society, but the renewed infection pressure towards the end of the year means that the risk is still higher than usual. 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. The Board assesses the risk in the Own Risk Solvency Assessment (ORSA) process. The greatest risk for Storebrand is the financial market risk. In the short term, troubled financial markets, especially falling stock, credit and real estate markets, may result in investment losses, or falling interest rates may increase the insurance liability. In the longer term, persistently low interest rates are a risk because it becomes more difficult to achieve the guaranteed return on investment. Other risk areas include business risk, insurance risk, counterparty risk, operational risk, climate risk and liquidity risk. Covid-19 has had a limited impact on Storebrand’s operations. The reorganisation of work routines during the pandemic took place without significant adverse events, and the customer service and deliveries were affected only to a small degree. Increased use of digital services in the normal working day has, however, reinforced the need to take care of and further develop IT security solutions. Overall, we saw a stable development in the number of reported incidents in 2021. The number of customer and process-related incidents was at the same level as in 2020. However, the number of “high-risk incidents” was somewhat higher, where we reported several cases to the Norwegian Data Protection Authority in 2021. The risk landscape varies between business areas. The main risks are described per business area below. Risks associated with regulatory changes are discussed in the section Outlook above. Insurance Insurance consists of personal 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 payout in the event of death, but Storebrand’s risk from this is limited. In P&C 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 United 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. Operational risks, including regulatory compliance, are the greatest risks. The greatest risks for the banking business are credit risk and liquidity risk. Virtually the entire loan portfolio is secured by mortgages, limiting our credit risk. The financial markets developments have been positive for Storebrand throughout the year, with rising stock markets and interest rates at the same time as credit spreads remained stable. Guaranteed pensions Guaranteed Pension encompasses savings and pension products with guaranteed interest rates. The greatest risks are financial market risk and longevity risk. 72 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixA 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 return. 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 a zero per cent guarantee. Storebrand wants to grow in the guaranteed public occupational pension market and received new customers in 2021. 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. 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 over many 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 26. 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. 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. 73 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixClimate risk and opportunities Climate risk often is divided into two categories: physical risk (consequences of changes to the climate and the environment) and transition risk (consequences of the transition to a low-carbon society). Physical climate risk is impacted by the extent and speed of climate change. A common reference for total physical climate risk is the average global temperature increase since the pre-industrial age. The United Nations states that the global temperature rise already is 1.1 degrees.52 The development the next decade is expected to be a consequence of previous years’ emissions. Decisions made during the next few years will affect the risk significantly in the long term. policies in order to reach the Paris agreement targets, dropping interest rates or oil price, or reduced petroleum activities. As part of our work to reduce risk, we mapped Storebrand’s exposure in the fossile fuel sector last year, particularly in terms of income from pension products, as well as disability coverage related to the industry and related sectors. We use the recommendations from the Task Force on Climate- Related Financial Disclosures (TCFD) as a framework for reporting of climate-related financial risks.54 Storebrand’s impact on the climate is described elsewhere in this report, mainly in the chapter Keeping our house in order and in the chapter A driving force for sustainable investments. The transition risk will be influenced by how extensive and fast the transmission to a low-carbon society will take place. The transmission will be affected by politics, regulatory demands, technological development, business priorities and consumer preferences. We have established an index to describe where the TCFD- recommended disclosures are addressed in this report. The index is included in the appendix on page 216. Why Both climate change and the transmission to a low-carbon society represent both challenges and opportunities for Storebrand. Every year, we assess how climate risk may impact the Group’s operations, financial situation, framework conditions, and reputation. The assessment provides a basis on which to analyse measures to reduce risks or exploit opportunities. Climate change and the transition to a low-carbon society could impact our business significantly. The consequences may be further enhanced by changes to the oil price and activities in the oil and gas industry. In 2020, Storebrand developed a climate strategy to contribute to global warming being limited to about 1.5 degrees.53 A key element is to ensure carbon-neutral investments by 2050, at the latest, with specific sub-goals along the way. Measures to reduce risks and maximise opportunities are described in the chapter A driving force for sustainable investments. Our approach Storebrand assesses climate risk based on the same framework as other business risks. Overall risks, including climate risk, are described in a risk analysis report addressed by the Group Executive Management and Board twice a year. The risk analysis includes assessments of business and reputation risks related Storebrand’s strategy to uphold a leading sustainability position. Climate risk also is addressed in the annual ORSA-report55, which is sent to Norway’s Financial Supervisory Authority following approval by the Storebrand Board. Climate risk also is a part of the risk review conducted by all Group subsidiaries. Climate risk, particularly physical risk, is very long term and therefore is assessed in based on a longer time perspective than other risks. Scenarios for climate risk assessments As historical events have a limited relevance for climate risk, it is necessary to assess risks related to various scenarios. Storebrand bases our annual assessment on three scenarios: The effects on investments and obligations may be sudden, in the form of market volatility, or gradual, through lower returns and lasting low interest rates. Policy or regulations may also entail risk if it is difficult to meet targets due to limited technological or investment opportunities. Examples could be an abrupt change to Norway’s • • • Rapid transition to a low carbon society, meeting the target of limiting global warming to 1.5 degrees Somewhat slower transition, but global warming is nevertheless limited to about 2 degrees Emissions continue to be high and global warming reaches or exceeds 3 degrees 52 IPCC. Sixth Assessment Report. https://www.ipcc.ch/assessment-report/ar6/ 53) Storebrand Climate Policy for Investments: https://www.storebrand.no/asset-management/barekraftige-investeringer/var-klimastrategi/_/attachment/inline/4378826b-d7e2-4dc7-a16d-62e1300f2b12:9f73b6f864f81af51ca 8045668e4bc5f026a2674/86128%20STB_Clima_policy_investment_rapport.pdf 54) Since the launch of the TCFD recommendations in 2017, we have been working on these recommendations: https://assets.bbhub.io/company/sites/60/2021/10/FINAL-2017-TCFD-Report.pdf. In this annual report, the climate risk descriptions are also adapted to the greatest possible extent to the updated recommendations for reporting that were launched in the autumn of 2021: https://assets.bbhub.io/company/sites/60/2021/07/2021- Metrics_Targets_Guidance-1.pdf 55) Own Risk and Solvency Assessment, ORSA 74 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixFigure 1: Network for Greening the Financial System (NGFS) climate risk scenarios High Disorderly Divergent Net Zero (1,5C) s k s i r n o i t i s n a r T Too little, too late Delayed transition Net Zero 2050 (1,5C) Below 2C NDCs Current policies Orderly Low Hot house world High Physical risks Positioning of scenarios is approximate, based on an assessment of physical and transition risks out to 2100. Storebrand uses scenarios developed by the Network for Greening the Financial System (NGFS).56 The network has been established by central banks and supervisory authorities to establish a framework for assessing and handling of climate risk, as well as to encourage the financial sector to support the transition to a low-carbon economy. The scenarios will be further developed, including quantitative stress tests, as a basis for supervisory processes and analyses of financial stability. NGSF has defined six scenarios with risk varying along two dimensions. 1. How serious will the physical consequence of global warming be? 2. Will the transition be a controlled or disruptive process? (transition risk) NGFS outlines two scenarios that lead to zero emissions in 2050. The scenario “Net Zero 2050” expects a rapid transition, with a high degree of coordination among nations and sectors. The transition risk in this scenario therefore is seen as low, despite the speed of the transition. The “Divergent Net Zero” scenario considers the transition risk significantly higher, as the use of oil as transportation fuel is phased out very quickly while the use of fossil energy for industrial activities declines more slowly. The physical risk is about the same in both scenarios because global warming is limited to 1,5 degrees. Storebrand has chosen «Divergent Net Zero» as a basis for the “Speedy transition” scenario. Norway could be particularly exposed to transition risk because of a rapid phasing out of oil and gas as energy sources. In addition, ambitions and preferred means are likely to vary significantly among various stakeholders. Storebrand’s “Delayed transition” scenario is based on the NGFS- scenario carrying the same name. In this scenario, emissions continue to rise up until 2030, after which policy becomes significantly restrictive. This is expected to result in a rapid decline in emissions after 2030, towards zero in 2050, keeping global warming below 2 degrees. In this scenario, transition risk is about the same as for «Speedy transition» but it is postponed until after 2030. The physical climate risk in this scenario is expected to be somewhat higher than for “Speedy transition.” 56) Scenarios updated June 2021: https://www.ngfs.net/sites/default/files/media/2021/08/27/ngfs_climate_scenarios_phase2_june2021.pdf 75 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix Figure 2: Storebrand’s climate risk scenarios A: Speedy transition B: Delayed transition C: Current policies The scenario is based on the NGFS ”Divergent Net Zero”. Climate policies are subject to a major shift, and the technological development happens fast. The zero emission target by 2050 is reached. Global warming is contained at less than 1.5 degrees. Costs related to the transition will be considerable, accelerated by a lack of coordination among nations and sectors. The use of oil for transporation is phased out rapidly, while the reduction in the fossil share for energy supply and industry are variable. The scenario is based on moderate use of CO2 capture and storage. The scenario is based on the NGSF ”Delayed Transition”-scenario. The absence of regulations lead to economical growth in the wake of Covid-19 are based on fossil energy. The CO2 emissions grow up until 2030. Policies then become stricter and include a significant increase in the price of CO2. This leads to a rapid decline in emissions post 2030, towards zero in 2050. The overall emission decline is sufficient to ensure a global warming below 2 degrees. The scenario is based on the NGSF ”Current Policies” scenario. Limited awareness of the climate crisis combined with shortsighted political priorities prevent the implementation of future restrictions. Measures implemented to reduce emissions are continued. Emissions increases until 2080. Global warming is expected to reach about 3 degrees, with a significant risk of an even further increase. This will lead to large and irreversible climate change. It is useful to understand what the various scenarios mean for conditions that affect Storebrand’s risks. A global temperature increase is a key indicator of physical risk, while carbon costs are a key indicator of the global temperature development. Carbon price development is a main indicator of transition risk. In Norway, the demand and price development for oil and gas are key indicators for transition risk. Both the transition and physical climate changes could affect economic growth and the financial markets. The development of the Norwegian economy will influence out customers, whose behaviour, in turn will impact Storebrand’s future earnings. At the same time, the global effects on global financial markets will affect Storebrand as an asset manager. Areas where climate-related risks can affect Storebrand Climate risk affects several parts of our business. At the same time, it is important to understand that both the source of risk and the way the risk affects the business can be different. Therefore, it is important that separate assessments are made for each of the areas listed below. • • • • • • • • Storebrand’s investments, both securities and real estate Storebrand’s life insurance liabilities Storebrand’s non-life insurance liabilities Storebrand’s asset management Storebrand’s banking business Risk that Storebrand’s customers may be affected by climate risk Reputation risk, especially linked to Storebrand’s strategy choice to be a leader in sustainability Regulatory risk from non-compliance with new requirements for climate adaptation or reporting Further in this chapter, we will focus on the areas that are most important in different parts of our business. For each area, implemented and planned measures that affect the risk are described, in addition to assessments of any new measures that can contribute to reducing risks or realising opportunities from climate change. Climate risk for investments Storebrand’s largest climate-related financial risks and opportunities are considered to be in the transition to a low-emission society. Our investments may be affected by climate policy and regulations, stricter emission requirements, a changed cost structure and market preferences. Our most important measures to reduce these risks and exploit potential opportunities are described in the chapter A driving force for sustainable investments. Climate risk can affect Storebrand’s return through two mechanisms: • • Climate-related factors affecting returns from the financial market as a whole, for example because economic growth is affected by physical climate change or due to a less effective policy to achieve zero emissions (absolute climate risk). Effects of Storebrand investing differently from the broad market, for example by failing to invest in some industries or companies and investing more in solution companies (relative climate risk). 76 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix Absolute climate risk The transition risk can have both positive and negative consequences for various players, which can make it challenging to decide whether to invest in given sectors and companies. It can be difficult to argue whether the transition as a whole will have positive or negative consequences for the capital market. For long-term pension savings, it is therefore beneficial to invest broadly in global financial markets in order to diversify risk and meet any future risks. The main difference between the scenarios above is the long-term negative effect of physical climate risk. The risk is greatest in the scenario “Current policies “, while it is least in the “Speedy transition” scenario. One challenge is that the negative effects of climate change are not evident to the individual company and consumer, especially in the short term. It is therefore important that authorities and other actors adjust framework conditions and preferences so that companies and private individuals can adapt both behaviours and attitudes in the interest of society. In 2020, we launched a new climate strategy for our investments, with the goal of entering into investments that greatly contribute to climate change. We no longer invest in companies that receive more than 5 per cent of the revenues from coal, oil sands-based activities, are involved in serious and / or systematic unsustainable production of palm oil, soy, cattle and timber. Storebrand will not invest in companies that consciously and systematically work against the goals agreed in the Paris Agreement. We expect companies to support effective policy measures aimed at reducing climate risk and limiting temperature rise to 1.5 degrees. This support should apply to all commitments made by the company in all geographical regions, and to political commitments made indirectly, through third-party organisations acting on behalf of the company or with the company’s financial support. Based on the targets for carbon-neutral investments by 2050 and intermediate targets for emission reductions, we established a framework in 2021 with the following targets for 2025: Emission targets for equity, corporate bonds and real estate investments: We have a goal of reducing the carbon footprint58 in equities, corporate bonds and real estate by at least 32 per cent by 2025 (base year in 2018). in Storebrand’s total investments Direct capital towards solution companies: Storebrand has a goal that 15 per cent of our total investments will be invested in what we define as solutions by 2025. This includes equity investments in solution companies59, green bonds, certified green real estate and investments in green infrastructure. Be an active owner and driver force: In 2021, we had our focus on the 20 companies with the highest emissions.60 The impact work took place mainly in collaboration with other investors, including Climate Action 100+. In addition, we held meetings with the management of the 20 companies in which we had ownership interests and which represented the largest emissions: Storebrand’s most important contribution is to ensure that the Group’s investments are carbon neutral by 2050. Through active ownership, we work systematically to ensure that the companies that we invest in do their part to reduce emissions. Our work is carried out in direct dialogue with individual companies, and through several strategic collaborations, such as in the Net Zero Asset Owner Alliance, the Net Zero Asset Manager Alliance, and the Climate Action 100+. Relative climate risk Storebrand’s investment strategy means that our investments have deliberate deviations from the global market index. This is partly a consequence of Storebrand Asset Management’s sustainability strategy that applies to all investments, and partly a consequence of Storebrand Livsforsikring and SPP Pension & Försäkring having their own requirements as part of the investment strategy. We make a number of adjustments to reduce the relative climate risk to which our investments are exposed, including: • • • • • • • • Excluding companies that contribute to serious environmental damage.57 Excluding companies that actively work against the objectives of the Paris Agreement. Excluding companies in the fossil sector in parts of the portfolio. Setting requirements for a minimum average sustainability condition, which also includes climate-related conditions. A minimum of 15 per cent of the portfolio must be invested in solutions by 2025. 57) We exclude companies that contribute to serious environmental damage, including companies that receive more than 5 per cent of the revenues from coal, oil sands-based activities, and companies that are involved in serious and / or systematic unsustainable production of palm oil, soy, cattle and timber. Read more about our exclusions here: https://www.storebrand.no/asset-management/barekraftige-investeringer/utelukkelser 58) Calculated as Weighted Average Carbon Intensity, see definitions on page 240-241 in the appendix Sustainability indicators and definitions. 59) See definitions for investments in solutions on page 241 in the appendix Sustainability indicators and definitions. 60) Calculated based on the share of owned share capital in the company multiplied by the company’s total Scope 1-2 emissions. 77 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook57A driving force for sustainable investments 62Risk72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856.Shareholder matters7.Annual Accounts and Notes8.Corporate governance9.Sustainability Assurance10.AppendixFigure 3: Overview of companies in high-emitting sectors Industry & Materials • • • • • • Angang Steel Co Ltd. Elkem ASA Haci Omer Sabanci Holding AS JFE Holdings Inc Jiangxi Copper LafargeHolcim Ltd • Nippon Steel Corp • Norsk Hydro ASA • O-I Glass Inc • SSAB Svenskt Stål • Waste Management Inc • Yara International ASA Shipping • • DFDS A/S Odfjell SE • Wallenius Wilhelmsen ASA • Wilh Wilhelmsen Holding ASA Oil & Gas • • • • Equinor ASA Gazprom PJSC LUKOIL PJSC SFL Corp Ltd information, Equities and bonds are valued on an ongoing basis based on all available including climate-related risks and opportunities. The valuation reflects, to some extent, that the authorities’ target of zero emissions in 2050 may have consequences for oil and gas demand, and earnings for oil and gas shares and that the price of carbon emissions may be higher in the future. Similarly, the financial market has priced in that companies that invest in renewable energy, or that can in other ways take advantage of opportunities in the green shift, can achieve increased earnings in the future (high valuation in relation to current results is a measure of this). Lower future returns for fossil fuel companies than solution companies are due to the climate effects being larger or coming faster than expected. It is therefore likely that Storebrand will have a somewhat lower climate risk than the market in the scenario “Speedy transition”. In the scenarios “Delayed transition” or “Current policies”, it is likely that Storebrand will have a somewhat higher climate risk than the market because we were early in developing a strategy to realise the goal of zero emissions. The risk must be seen in connection with Storebrand’s total investments being broadly diversified, which means that the deviation risk in the portfolios is limited, including the effects of climate risk. Exposure for different technologies The overview of companies in high-emitting sectors (Figure 3) is based on each individual company being assessed as a whole, based on its own main business. An oil and gas company is defined in the overview as 100 per cent fossil sector, even though it has activities within green energy or technology. Storebrand has performed a more granular analysis for selected investment portfolios based on methodologies from PACTA. As an example, the PACTA analysis is used for “Storebrand Balansert Pensjon”, which is the largest investment profile for Defined Contribution pensions in Storebrand Livsforsikring. 78 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixFigure 4: Storebrand Balansert Pensjon, share of investments / emissions for equities / bonds covered Financial exposure to climate relevant sectors Financial exposure to climate relevant sector Emissions exposure from climate relevant sectors Emissions exposure from climate relevant sectors PACTA analyses the industries with the largest greenhouse gas emissions. Overall, the analysed industries account for approximately 75 per cent of greenhouse gas emissions globally. Measured as a proportion of investments, the analysed industries amounted to approximately 6 per cent of the equity and bond investments for Storebrand Balansert Pensjon, while they accounted for 43 per cent of emissions from the equity investments and 20 per cent of emissions from the bond investments. The proportion of emissions covered by the analysis was significantly lower than 75 per cent. This was due to Storebrand having lower exposure than the rest of the market to the analysed sectors. Non-analysed sectors are considered to be relatively larger contributors to emissions. Figure 5: Storebrand Balansert Pensjon, exposure to different technologies for selected industries compared to index 79 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook57A driving force for sustainable investments 62Risk72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856.Shareholder matters7.Annual Accounts and Notes8.Corporate governance9.Sustainability Assurance10.AppendixStorebrand had lower exposure than the index in the most exposed industries. As a consequence, Storebrand was therefore underexposed to some of the green technologies. This was especially relevant in power production, where Storebrand had lower exposure than the market to renewable energy. Many of the companies use fossil energy sources, including coal, while being involved in renewable energy. Other companies with exposure to renewable energy are excluded from other sustainability criteria, such as violations of basic human rights (this illustrates that a good strategy for climate and other sustainability adaptation requires many considerations). Forward-looking analysis Both the carbon footprint and exposure to industries or technologies provide a snapshot of risks. We believe it is more important to look at how companies work towards reducing the footprint in line with the zero-emission target. Storebrand assesses, among other things, whether companies we plan to invest in have committed to emission targets based on scientific facts. We also closely monitor the proportion of companies in our portfolios that have set science- based targets. The PACTA tool provides an opportunity to assess how the companies’ plans will affect the composition of technologies over time. Figure 12 shows what exposure to one of the expected future that our portfolio, as well as the world market index looks like. This is compared with what is required to be in line with the two degree- target or below (Aligned portfolio / benchmark). The analysis above assumes that Storebrand owns the same companies in five years. The portfolio’s exposure over time can be influenced through dynamic goals for the investment strategy. Examples may be not investing in bonds issued by fossil fuel companies maturing after 2030 or setting gradually increasing targets for the share of solution companies. By investing fossil-free, we can also reduce our risk, but this will not help the world reach its emission targets today. Therefore, investments in companies moving in the right direction may be effective, even if they have large emissions in the short term. Figure 6: Storebrand Balansert Pensjon, exposure in five years based on the companies’ plans Listed Equity: Future technology mix as % of sector based on ETP2017: B2DS scenario compared to iShares MSCI ACWI ETF as a subset of Global Market. 80 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix Figure 7: Sector-specific exposure to high-emitting sectors Sector Aluminium Aviation Cement Chemicals Energy Heavy duty automobiles Light duty automobiles Shipping Steel Utilities Grand Total 2018 (BNOK) 2019 (BNOK) 2020 (BNOK) 2021 Change 2018-2021 (BNOK) (BNOK) 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 2.3 3.6 0.9 12.4 9.1 2.3 5.8 1.2 1.8 3.3 42.5 1.1 0.5 0.6 5.6 -6.7 1.7 2.1 0.3 1.0 -1.3 4.8 Other key performance indicators can be seen in the chapter A driving force for sustainable investment on page 71. Key indicators • • • • • • • Carbon footprint in equity investments: 12 tonnes of CO2 equivalents per NOK 1 million in sales revenue (against 18 index) 61 Carbon footprint in bond investments: 9 tonnes of CO2 equivalents per NOK 1 million in sales revenue (against 17 index) 62 Carbon intensity in real estate investments: 5.9 tonnes of CO2 equivalents per m2. Exposure to high-emitting sectors: NOK 42.5 billion / 9 per cent of total total assets. Number of active dialogues related to climate and environmental risks and opportunities: 318 Number of companies that have been excluded due to serious climate and environmental damage: 176 Equity investments in fossil energy, NOK billion / share of equity investments: NOK 9.1 billion / 1.8 per cent. Real estate investments Storebrand manages direct real estate investments equivalent to NOK 74.6 billion, which amounts to 6.8 per cent of assets under management.63 Physical risk is largely related to the effects of extreme weather on physical assets. Acute physical climate risk is already affecting real estate, also in Scandinavia, even though the risk is far lower than in the most vulnerable parts of the world. The risk increases over time, especially during the “Current policies” scenario. Extreme rainfall and flooding stand out as the most important single factors. Micro-location and the robustness of properties affect exposure to damage, increased insurance costs and other costs. Chronic physical risk such as heat waves and sea level rise are more long-term, but can have both direct and indirect financial effects. In the worst case, property can become unusable and unchangeable. Transition risk in the form of increased public requirements and fees, increased climate-related market requirements, as well as reputational risk of having too low climate ambitions or not achieving own targets, is most relevant in the “Speedy transition” scenario and then the “Delayed transition” scenario. Under the scenarios “Current policies” and “Delayed transition”, there is a risk of lower returns in the short or medium term as a result of over-investment or premature investment in relation correct market values. Timing is critical to reduce risk. It will be important both on the cost and revenue side, and may be able to have a double effect. The general long-term nature of real estate investments can dampen the effect by getting return on investments at a later stage in the event of a delayed transition. Climate risk can affect growth, liquidity and absolute returns in real estate because real estate investments generally have higher costs and reduced growth opportunities. Gaining relative returns through appropriate managing and prevention of risks, and utilising opportunities in the transition to the low-emission society, varies from the market in general. The main strategy for reducing risk is through active ownership. Proactive analysis and implementation of measures will optimise adaptation to future climate change and a 1.5-degree emission pathway, both on the portfolio and individual properties. This is better for society, rather than leaving property with lower climate efficiency to investors who do not have an active strategy. Selection 61) The source for the calculations of carbon footprint is based on data from our data supplier in Q3 2021. 62) The source for the calculations of carbon footprint is based on data from our data supplier in Q3 2021. 63) 74.6 billion including Capital Investment. 81 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook57A driving force for sustainable investments 62Risk72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856.Shareholder matters7.Annual Accounts and Notes8.Corporate governance9.Sustainability Assurance10.Appendixis therefore a secondary strategy, while climate risk is carefully assessed for new investments. Sustainability certification (the BREEAM system or equivalent) gives the properties both a quality rating and an important basis for improvement plans. Benchmarking through GRESB (Global Real Asset Sustainability Benchmark) provides a similar sustainability rating at portfolio and management level, and supports development towards a global standard that reduces risk and greenhouse gas emissions. Key indicators for climate risk in real estate: • • • Requirements regarding energy efficiency and greenhouse improve energy efficiency gas emissions: measures to and waste management are assessed and implemented continuously on the properties, and result in reduced greenhouse gas emissions from operations. Long-term goal of 100 per cent environmentally certified property. Sustainability ranking of real estate: The management of our direct real estate investments is ranked by GRESB in four different portfolios, and the portfolios are among the best in Northern Europe with a similar composition. In 2021, three out of four portfolios are ranked among the top 20 per cent globally, and awarded the maximum of 5 stars. 64 2018 2019 2020 202165 Goal 2025 Carbon emissions kgCO2e/m2 per year 66 9.96 9.12 7.9 5.9 Reduce Certified green real estate, percentage share AuM 67 30 % 41 % 43 % 68% 90% GRESB-score 76.4 % 81.7 % 84.8 % 88.6% Increase 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. The biggest climate-related risk is more damage and higher compensation for property insurance due to precipitation that leads to water intrusion. The risk is mainly associated with buildings where the lowest floor is below ground level. The risk has increased because there are more frequent storms with heavy rain in a concentrated area, with the greatest consequences in densely populated areas. Although it can cause flooding in a large area, it is not described as a natural catastrophe and must therefore be covered by Storebrand. Major incidents that are directly caused by landslides, storms, floods (rivers and streams that cross their banks), storm surges, earthquakes or volcanic eruptions, on the other hand, are covered by the natural perils pool and internal reinsurance. Even if physical risk is central to non-life insurance, transitional risk may occur. One possible risk is that fewer people want or need to own their own car. Measures to mitigate climate change may accelerate such a trend. Cars will then to a greater extent be owned by public transport actors, and this will change the market from a private market to a large customer market. For a small player like Storebrand Forsikring, it can be a threat. Increased use of car sharing of privately owned cars will also lead to changes in the need for insurance. Our most important 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. We improve the risk assessment, among other things, by analyzing the risk of extreme precipitation and floods in various areas. At the same time, we give a higher price for insurance of buildings with basements in risk areas. 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. Rewarding damage prevention: We actively communicate with our customers, encouraging damage prevention measures, such as securing property during periods prone to flooding. 64) Capital Investment, which we acquired in 2021, has not yet reported to GRESB and is thus not included in the data base. 65) Capital Investment, which we acquired in 2021, is not included in the data base. 66) Certifiable properties in operation. 67) Sustainability certification is BREEAM or equivalent, can also be LEED, Svanen or Miljöbyggnad. The total assets of Capital Investment, which was acquired in 2021, are not included. 82 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix Key indicators in insurance • Share of insurance premiums from electric car insurance: 22 per cent in 2021. • 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. • Climate risk as an asset manager Storebrand Asset Management manages more than NOK 1,000 billion, both for Storebrand’s own companies and other institutional customers and private individuals. New EU standards for classifying funds (Sustainable Finance Disclosure Regulation, SFDR) highlights the importance of adapting to sustainability measures and makes it easier to compare different suppliers. In order for funds to be marketed as “green” or “sustainable”, they must promote sustainability as part of the investment strategy (an Article 8 financial product) or have sustainability as an investment objective (an Article 9 financial product).68 In 2021, Storebrand and SPP classified all their fixed income and equity funds as Article 8 or Article 9 under the SFDR standard. There is a risk in linking sustainability and climate to Storebrand’s brand and customer message if customers are more concerned with other things when they make the decision to purchase funds. Increased awareness of the importance of sustainability, especially climate, means that the risk is considered low. Storebrand has a wide range of funds, including specialised funds with sustainability as an investment goal through investing in solution companies. This degree of sustainability alignment in investments carries the risk of lower returns than the market and competitors. Storebrand’s solution fund received a strong return in 2020, but had a weak period from February to May in 2021. Such results are expected, and the long-term return is good, both in absolute terms and relative to the broad market. Risk of customers being affected by climate risk If climate risk has a negative effect on Storebrand’s customers, it may lead to a reduced business volume and thus lower revenues. The consequences of this are particularly significant for Defined Contribution pensions. The annual savings premium (2021) was NOK 20 billion, of which NOK 13 billion was in Norway. Given that Storebrand Livsforsikring maintains a market share of approximately 30 per cent for Defined Contribution pensions in Norway, growth in premiums be reliant on employee numbers in Norwegian companies as well as the increased or decreased wage growth effect on possible changes in savings rates. A scenario with negative economic effects in the transition to a low-emission society can affect all these conditions negatively. With no changes in the transition pathway, 1 per cent lower growth in the number of employees or 1 per cent lower wage growth will result in a NOK 130 million lower premium in the first year. The effect will grow and accumulate over time if the change is prolonged. The risk of negative effects from transition risk can be particularly high for customers in the fossil fuel sector. A review of the customer base shows that Storebrand has a significant exposure to the fossil fuel sector. As an appendix to this report, we have prepared a TCFD index. This provides an overview of how we respond to the various recommendations for reporting, as well as which pages of the annual report more detailed information can be found. The index ensures transparency, and makes it easier to find relevant information. The table is on page 216. 68) For more information on the Sustainable Finance Disclosure Regulation (SFDR), see Regulatory changes in Director’s Report, page 59. 83 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook57A driving force for sustainable investments 62Risk72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856.Shareholder matters7.Annual Accounts and Notes8.Corporate governance9.Sustainability Assurance10.AppendixWorking environment and HSE Managers are encouraged to discuss ethics, ethical dilemmas, information security, financial crime and HSE in departmental meetings. We monitor whether this is implemented and implement further measures when necessary. Storebrand’s sick leave rate among employees has been at a stable low level for many years. Sick leave among employees was 2.5 per cent in Norway and 1.6 per cent in the Swedish business in 2021. 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. Sick leave and overtime are regularly followed up in the Cooperation Committee (SU) in each business unit, which consists of the executive manager, union representatives, safety representatives and the People Business Partner. For members of the Working Environment Committee and safety representatives, there is a requirement for a mandatory HSE course. There were no (zero) injuries to a staff member in 2021. No damage to property was reported, and no accidents were otherwise reported in the Storebrand Group in 2021. 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 also our compilation of sustainability indicators and definitions on page 240. A separate remuneration report has been prepared by the Board of Storebrand ASA and is available on on our website, www.storebrand.no. Insurance for the Board members and the company’s management The Board and senior executives are covered by the company’s ongoing board liability insurance. This is placed with insurers with a solid rating. The insurer will, within the framework of the insurance coverage, compensate for loss of assets as a result of claims made against the insured for personal management responsibility during the insurance period. 84 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixProgress on our most material sustainability KPIs Key performance indicators Carbon footprint from equity investments: Status 2020 Status 2021 Target 2025 tonnes of CO2e per NOK 1 million in sales income (against index) 12 (18) 12 (18) N/A 69 Carbon footprint from bond investments: tonnes of CO2e per NOK 1 million in sales income (against index) 9 (16) 9 (17) N/A 69 Carbon intensity property investments: CO2/m2 7.9 tonn 5.9 tonn 6.5 tonn Exposure to high emission sectors: NOK billion/share of equity investments 32.2 / 8 % 42.5 / 9 % N/A Investments in solutions: NOK billion/ share of total AUM 92.6 / 9.6 % 123.1 / 11.2 % 15 % of AUM Property investments with green certificates: share of property investments 43 % 68 % 90 % Company dialogues on ESG: number/share 572 / 12 % 601 / 12 % Gender balance managment all levels: share of women Women in Group Executive Management Team Engagement score all employees: 39 % 3 / 10 37 % 3 / 9 N/A 50 % 50 % Storebrand score/ industry average in Peakon, scale from 1-10 8.3 (7.8) 8.4 (7.8) > 8.0 s t n e m t s e v n I l e p o e P 69) Target to reduce the carbon footprint of the Storebrand Group’s total equity, corporate bond and real estate investments by at least 32 perc ent by 2025 with a base year in 2018. 85 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91.This is Storebrand2.Customer relations3.People4.Keeping Our House in Order5.Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook57A driving force for sustainable investments 62Risk72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856.Shareholder matters7.Annual Accounts and Notes8.Corporate governance9.Sustainability Assurance10.AppendixStorebrand ASA - Statement from the Board of Directors and the CEO The Board of Directors and the CEO have today considered and approved the annual report and annual accounts for Storebrand ASA and Storebrand Group for the financial year 2021 and as of 31 December 2021 (annual report 2021). The consolidated financial statements have been prepared in accordance with the EU-approved IFRS and associated interpretative statements, as well as the additional Norwegian disclosure requirements that follow from the Accounting Act to be applied as of 31 December 2021. The parent company financial statements have been prepared in accordance with the Accounting Act, the Annual Accounts regulations, and additional requirements in the Norwegian Securities Trading Act. The annual report for the group and parent is in accordance with the requirements of the Accounting Act and Norwegian Accounting Standard no. 16 as of 31 December 2021. In the best belief of the Board and the CEO, the annual accounts for 2021 have been prepared in accordance with current accounting standards and the information in the accounts gives a true and fair view of the parent company’s and group’s assets, liabilities, financial position and results as a whole as of 31 December 2021. In the best belief of the Board and CEO, the annual report provides a correct and fair view of important events during the accounting period and their influence on the annual accounts of Storebrand ASA and the Storebrand Group. In the best belief of the Board and the CEO, the description of the most key risk and uncertainty factors the company faces in the next accounting period, as well as the description of related parties’ significant transactions, are also provided in a correct and fair view. Lysaker, 8 February 2022 Board of Directors, Storebrand ASA Didrik Munch (sign.) Board Chair Karin Bing Orgland (sign.) Martin Skancke (sign.) Marianne Bergmann Røren (sign.) Christel Elise Borge (sign.) Karl Sandlund (sign.) Fredrik Åtting (sign.) Hanne Seim Grave (sign.) Hans-Petter Salvesen (sign.) Bodil Catherine Valvik (sign.) Odd Arild Grefstad (sign.) Group Chief Executive Officer 86 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 46Strategic highlights 2021 47The Group’s results 2021 51Official Financial Statements of Storebrand ASA 56Outlook 57A driving force for sustainable investments 62Risk 72Climate risk and opportunities 74Working environment and HSE 84Progress on our most material sustainability KPIs 856. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix6 Shareholder matters Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixShare Capital, rights issue and number of shares Storebrand’s share is listed on the Oslo Stock Exchange (Oslo Børs) under the ticker code STB. Storebrand ASA’s share capital at the end of 2021 was NOK 2,360 million. The company has 471,974,890 shares with a nominal value of NOK 5. In 2021, the share capital was increased by NOK 21 million through the issuance of 4,160,908 new shares in a private placement to the sellers of Capital Investment. As of 31.12.2021, the company owned 1,839,776 own shares corresponding to 0.4 per cent of the shareholding. The company has not issued options that could lead to the dilution of existing shareholders. Shareholders Storebrand ASA is among the largest companies listed on Oslo Børs measured in terms of number of shareholders. The company has shareholders from almost all Norwegian municipalities and from 48 countries. At the end of the year, Storebrand was the 11th largest company to be included in the Oslo Stock Exchange’s benchmark index (OSEBX). Share purchase scheme for employees Storebrand ASA has every year since 1996 offered employees to buy shares in the company through a separate scheme. The purpose has been to link employees more closely to the economic development of the company. In 2021, just over half of the Group’s employees subscribed for a total of 391,365 shares. Share-based remuneration for executive management Storebrand’s executive management team will work to ensure that the Group develops for the benefit of customers, shareholders and employees. The Board of Directors of Storebrand ASA believes that the share remuneration model, in which a substantial part of the Group management’s remuneration is paid in the form of shares in Storebrand ASA, provides good incentives for Executive management to act in line with the long-term interests of customers and owners. The table below shows how much of gross salary went to share purchases in 2021, actual equity exposure and normative equity exposure at the end of 2021. For more information, please refer to the Storebrand ASA Report on Salaries and Other Remuneration to Executive Personnel available on our website. Foreign ownership At the end of 2021, the share of shares owned by foreign investors amounted to 50.9 per cent, compared with 56.6 per cent at the end of 2020. Trading volume for shares in Storeband In 2021, 289 million Storebrand shares were traded, down from 585 million shares in 2020. Turnover was NOK 22,931 million in 2021, down from NOK 30,552 million in 2020. Relative to the average number of shares, the turnover rate of the share was 62 per cent. GEOGRAPHICAL DISTRIBUTION 49 % - Norway 13 % - USA 11 % - Sweden 9 % - Germany 9 % - England 9 % - Other countries Name Odd Arild Grefstad Staffan Hansén Lars Løddesøl Heidi Skaaret Jan Erik Saugestad Geir Holmgren Karin Greve-Isdahl Terje Løken Trygve Håkedal Tove Selnes Share-based remuneration as a share of gross salary Actual equity exposure Normative equity exposure 41% 39 % 37 % 38 % 37 % 37 % 29 % 27 % 25 % 25 % 88 244 % 135 % 199 % 186 % 157 % 171 % 79 % 60 % 50 % 77 % 200 % 150 % 150 % 150 % 150 % 150 % 100 % 100 % 100 % 100 % Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixShare price performance last 10 years Time period 2011-12-31 to 2021-12-31. Source: https://www.storebrand.no/en/investor-relations/share/share-graph Share price performance Storebrand had a total return of +43 per cent through 2021. In the corresponding period, the OSEBX index of the Oslo Stock Exchange ended at +19 per cent, while the European insurance index Beinsur had a total return of +12.7 per cent in the corresponding period, measured in NOK. Dividend policy Storebrand aims to pay an ordinary dividend of more than 50 per cent of Group profit after tax. The Board of Directors’ ambition is to pay ordinary dividends per share of at least the same nominal amount as the previous year. Ordinary dividends are subject to a sustainable solvency ratio above 150 per cent. If the solvency ratio is above 180 per cent, the Board of Directors intends to propose special dividends or share buy backs. In 2021, NOK 3.25 per share was paid in ordinary dividend for the financial year of 2020. Capital gains taxation Dividends for personal shareholders are taxable. Dividends after deduction for a shielding amount shall be multiplied by 1.6. This amount is taxed at the tax rate for capital income (22 per cent), which gives a real tax on dividends of 35.2 per cent. The deduction for risk-free return is calculated by multiplying the share’s basis for shielding (normally the purchase price of the share) by a shielding rate. The shielding rate is set by the Directorate of Taxes in January of the year after the income year. It is a rounded amount based on the average three-month interest rate on Treasury bills with a supplement of 0.5 percentage point reduced by the capital income tax rate. Dividends within the deduction for risk-free return are tax- free. Storebrand share Highest closing price (NOK) Lowest closing price (NOK) Closing price on 31/12 (NOK) 2021 92.08 62.30 88.52 2020 2019 74.24 34.73 64.20 73.98 50.86 69.02 2018 75.20 59.48 61.64 2017 70.45 46.97 66.9 2016 47.10 28.45 45.92 Market cap 31/12 (NOK million) 41,779 30,034 32,289 28,836 31,296 20,660 Annual turnover (1000s of shares) 288,998 585,004 335,202 445,614 427,632 589,322 Average daily turnover (1000s of shares) Annual turnover (NOK million Rate of turnover (%) 1,147 22,931 61.6 2,321, 30,552 125.1 1,346 21,348 71.7 3,094 30,477 95.3 2,450 25,359 94.9 2,780 21,249 131 Number of ordinary shares 31/12 (1000s of shares) 471,975 467,814 467,814 467,814 467,814 449,910 Earnings per ordinary share (NOK) Dividend per ordinary share (NOK) Total return (%) 6.68 3.50 42.9 5.02 3.25 -7.0 4.43 0 16.8 7.89 3.0 -4.7 5.28 2.1 49.1 4.73 1.55 31.4 89 201320142015201620172018201920202021102030405060708090Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixGeneral meeting Storebrand has one class of shares. Each share gives one vote. The annual general meeting is held every year before the end of June. Shareholders wishing to participate in the general meeting must register with the company no later than 16:00 on the third business day before the general meeting. Shareholders who have not registered their arrival before the deadline may participate in the general meeting, but not have the right to vote. Shareholders’ contact with the company Shareholders should generally contact their bank or operator of their securities account for questions or notification of changes, such as change of address. Insider trading As one of Norway’s leading financial institutions, Storebrand relies on having a professional relationship with the financial market and the regulatory authorities. The company therefore emphasises that routines and guidelines satisfy the formal requirements set by the authorities for securities trading. On this occasion, the company has prepared its own guidelines on insider trading and self-dealing based on relevant laws and regulations. The company has its own control system that ensure that the routines are complied with. Investor relations Storebrand attaches importance to having extensive and effective communication with the financial market. Continuous dialogue with owners, investors and analysts is a high priority. The Group has its own investor relations entity. This entity is responsible for establishing and coordinating the contact between the company and external connections such as stock exchanges, analysts, shareholders and other investors. All quarterly reports, press releases and presentations for the individual quarterly results can be found on the Group’s website: http://www.storebrand.no/ir. The 20 largest shareholders Based on a screening of the shareholder list per. 31.12.2021 Fund Manager Folketrygdfondet Allianz Global Investors T Rowe Price Global Investments EQT Fund Management Alfred Berg KLP Vanguard Group Handelsbanken Asset Management DNB Asset Management Storebrand Asset Management Danske Bank Asset Management HSBC Trinkaus & Burkhardt OM Holding AS BlackRock Nordea Asset Management M&G Investments Solbakken AS Lannebo Fonder BMO Global Asset Management (UK) SSGA Current rank Shares Change in 2021 Ownership in % 51,635,337 0 10.94 32,864,528 -1,000,840 28,069,733 18,500,000 -301,859 0 16,530,966 13,903,960 14,529,651 12,586,072 9,850,928 9,841,124 9,473,167 9,231,445 9,191,705 8,824,187 8,391,240 7,550,343 7,040,521 6,766,008 4,999,840 4,553,133 4,484,480 291,819 -924,012 -3,050,365 -419,877 -771,911 -167,350 2,817,735 4,167,970 -1,350,740 813,074 7,040,521 0 4,999,840 -164,374 47,517 6.96 5.95 3.92 3.50 3.08 2.67 2.09 2.09 2.01 1.96 1.95 1.87 1.78 1.60 1.49 1.43 1.06 0.96 0.95 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 90 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix7 Annual Accounts and Notes Storebrand Group 92 Income statement 93 94 96 97 Statement of total comprehensive income Statement of Financial Position Statement of changes in equity Statement of cash flow 99 Notes Storebrand ASA 180 Income statement 180 Statement of total comprehensive income 181 Statement of Financial Position 182 Statement of changes in equity 183 Statement of cash flow 184 Notes 197 Declaration by member of the Board and the CEO 198 Independent auditor’s report 91 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 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 92 Note 15 16 16 16 16 16 16 30 16 16 16 16 16 16 17 30 18 19 39 20 21,22,23,24 25 26 28 27 2021 53,681 37 220 94 3 220 720 30 53,776 780 -2,834 26 4,101 275 2,164 790 5,698 119,781 -52,529 -50,615 -4,827 -5,784 -836 -686 -115,278 4,503 -527 3,976 -846 3,130 3,121 9 3,130 6.68 467.1 2020 44,188 22 785 -397 37 212 687 52 14,632 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 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixSTOREBRAND GROUP Statement of total comprehensive income NOK million Profit/loss for the year Note 2021 3,130 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 Exchange rate adjustments Gains/losses from cash flow hedging Total other comprehensive income elements that may be reclassified to profit/loss 22 34 42 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 131 139 -139 8 140 -167 -52 -219 -79 3,051 3,042 9 3,051 2020 2,355 -110 83 -83 15 -95 305 -33 273 178 2,532 2,515 10 8 2,532 93 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 31.12.21 31.12.20 STOREBRAND GROUP Statement of Financial Position NOK million Assets company portfolio Deferred tax assets Intangible assets and fair value adjustments on purchased insurance contracts 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 27 28 29 30 1,104 6,667 1,266 387 10,31,32 12,955 10,31 67 10,31,33 38,503 32 8,13,34 Accounts receivable and other short-term receivables 31,35 11,024 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 8,13,31,36 543 8,10,13,31,37 27,706 10,13,31,38 33 10,31 903 489 3,543 54,912 160,101 30 7,141 10,31,32 104,974 10,31,32 10,31,33 8,441 23,051 13 8,13,34 33,376 13,34 31,35 1,659 638 8,13,31,36 8,10,13,31,37 10,13,31,38 33 10,31 277,783 140,810 2,916 7,443 6,443 614,689 774,790 94 1,780 6,303 1,397 283 10,639 103 31,058 56 50 67 7,018 384 28,833 1,389 722 2,775 59,845 152,701 6,167 92,846 13,026 23,769 24 32,067 1,609 404 230,446 148,162 8,587 7,665 10,290 575,061 727,763 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNOK million Equity and liabilities Paid-in capital Retained earnings Hybrid capital 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 31.12.21 31.12.20 13,192 24,291 226 37,709 11,441 33,693 9,31 39 12,858 22,839 226 35,923 9,110 29,319 39,40 575,457 536,028 22 27 181 832 9,13,31 9,13,31 9,13,31 10,13,31,38 10,13,31,38 29 9,31,41 502 17,239 24,924 208 1,840 1,210 14,643 54,912 737,081 774,790 352 849 1,653 15,506 20,649 114 851 1,355 16,209 59,845 691,840 727,763 Lysaker, 8 February 2022 Board of Directors of Storebrand ASA Didrik Munch (sign.) Board chair Karin Bing Orgland (sign.) Martin Skancke (sign.) Marianne Bergmann Røren (sign.) Christel Elise Borge (sign.) Karl Sandlund (sign.) Fredrik Åtting (sign.) Hanne Seim Grave (sign.) Hans-Petter Salvesen (sign.) Bodil Cahterine Valvik (sign.) Odd Arild Grefstad (sign.) Chief Executive Officer 95 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixSTOREBRAND 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 2019 2,339 -5 10,521 12,856 910 19,355 20,264 2,345 2,345 298 -128 170 226 10 298 2,217 2,515 10 52 33,398 2,355 178 2,532 8 8 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 Profit for the period Total other comprehensive income elements Total comprehensive income for the period Equity transactions with owners: Own shares Issues of shares Hybrid capital classified as equity Paid out interest hybrid capital Dividend paid Other 36 3 -10 -35 35,923 3,130 -79 3,051 -104 341 2 -9 -1,513 18 37,709 Equity at 31 December 2020 2,339 -2 10,521 12,858 1,208 21,631 22,839 3 3 33 3 24 33 3 24 -10 226 9 -59 3,121 3,121 -167 87 -79 -7 21 320 -7 341 -167 3,208 3,042 9 -97 -97 2 2 -1,513 -1,513 18 18 -9 Equity at 31 December 2021 2,360 -9 10,842 13,192 1,041 23,249 24,291 226 1) 471,974,890 shares with a nominal value of NOK 5. 2) Includes undistributable funds in the risk equalisation fund amounting to NOK 547 million and security reserves amounting NOK 154 million. 3) Perpetual hybrid tier 1 capital classified as equity. 96 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixSTOREBRAND 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 Receipts - sale of investment properties Payments - purchase of 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 Receipts - sale of subsidiaries Payments - purchase of subsidiaries Net receipts/payments - sale/purchase of fixed assets Net receits/payments - sale/purchase of associated companies and joint ventures 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 Payments - interest on hybrid capital Net cash flow from financing activities Net cash flow for the period 97 2021 2020 31,510 -22,151 -7,313 2,942 918 -64 -222 -5,851 5,582 5,350 -6,762 1,733 -6,524 178 721 -1,859 3,674 -8,839 -3,489 815 -408 -292 -4 111 6,430 -2,106 -260 4,211 -1,072 -388 -1,150 44 -144 -1,513 -9 4,043 665 28,825 -21,606 7,285 366 953 -102 -187 -5,197 3,816 14,152 -1,801 1,102 -12,270 -511 -2,657 -16,137 -1,984 -220 -48 -269 9,012 -7,048 -371 499 -872 -388 1,205 26 -10 2,052 -201 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 2021 2,878 68 3,611 67 3,543 3,611 2020 3,160 -81 2,878 103 2,775 2,878 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 activiti- es are included from the insurance companies, and these cash flows are invested in financial assets that are also defined as opera- ting 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 invest- ments 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. Pay- ments 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. 98 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixSTOREBRAND GROUP Notes Business and risk Note 1: Corporate information and accounting policies Statement of financial position Note 28: Intangible assets and fair value adjustments on pur- Note 29: Note 30: Note 31: Note 32: Note 33: Note 34: Note 35: Note 36: Note 37: Note 38: Note 39: Note 40: Note 41: Other Note 42: Note 43: Note 44: Note 45: Note 46: Note 47: chased 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 Sold/liquidated operations Note 2: Note 3: Note 4: Note 5: Note 6: Note 7: Note 8: Note 9: Note 10: Note 11: Note 12: Note 13: Note 14: 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 Climate risk Valuation of financial instruments and properties Solidity and capital management Income statement Note 15: Premium income Note 16: Note 17: Note 18: Note 19: Note 20: Note 21: Note 22: Note 23: Note 24: Note 25: Note 26: Note 27: 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 99 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 1: Corporate 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 2021 were approved by the Board of Directors of Storebrand ASA on 8 February 2022. The Storebrand Group offers a comprehensive range of insurance and asset management services, as well as securities, banking and investment services, to private individuals, companies, municipalities, and the public sector. The Storebrand Group consists of the business areas Savings, Insurance, Guaranteed Pensions and Other. The Group’s head office is located at Professor Kohts vei 9, in Lysaker, Norway. 2. BASIS FOR PREPARATION OF THE FINANCIAL STATEMENTS The accounting policies applied in the consolidated financial statements are described below. The policies are applied consistently to similar transactions and to other events involving similar circumstances. There is no required use of uniform accounting policies for insurance contracts and this exemption is applied for insurance contracts in the consolidated financial statements. This is discussed in section 14. Storebrand ASA’s consolidated financial statements are presented using EU-approved International Financial Reporting Standards (IFRS) and related interpretations, as well as other Norwegian disclosure requirements laid down in legislation and regulations. Use of estimates when preparing the consolidated financial statements. The preparation of the consolidated financial statements in accordance with IFRS requires the management to make judgements, estimates and assumptions that affect assets, liabilities, revenue, expenses, the notes to the financial statements and information on potential liabilities. Actual amounts may differ from these estimates. See Note 2 for further information. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR MATERIAL ITEMS ON THE BALANCE SHEET For the most part, the asset side of the Group’s balance sheet comprises financial instruments and investment properties and a differentiation 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 de- ferred 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 acco- rdance 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 inco- me 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. 100 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 1.1.2021 1.1.2021 31.12.2021 31.12.2021 Booked value Fari value Booked value Fari value AC AC AC AC AC AC AC AC AC AC AC AC AC AC 13,065 13,065 9,986 9,976 116,511 125,604 126,371 129,726 103 103 67 67 FVOCI 54,534 54,533 61,138 61,138 AC AC AC AC AC AC AC 294 294 416 416 7,422 7,422 11,661 11,661 191,928 201,021 209,640 212,985 15,506 1,653 20,649 9,110 16,209 63,127 15,506 1,653 20,738 9,115 16,209 63,221 17,239 17,239 502 24,924 11,441 14,643 68,749 502 25,000 11,441 14,643 68,824 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 1.1.2021 1.1.2021 31.12.2021 31.12.2021 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 230,830 230,830 278,326 278,326 176,995 176,995 168,516 168,516 8,386 8,386 7,931 7,931 Derivatives Total financial assets Financial liabilities Derivatives Total financial liabilities FVP&L/ Hedge accounting FVP&L/ Hedge accounting 9,977 9,977 3,820 3,820 426,188 426,188 458,593 458,593 FVP&L/ Hedge FVP&L/ Hedge accounting accounting 964 964 964 964 2,048 2,048 2,048 2,048 101 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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. Balance Sheet items — not covered by IFRS 9 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. The liabilities side of the balance sheet primarily comprises of insurance liabilities, however also includes items such as financial liabilities and minority shares of managed securities funds. With the exception of derivatives and minority shares, financial liabilities are measured at amortised cost. Insurance liabilities must be adequate and cover liabilities relating to issued insurance contracts. Various methods and principles are used in the Group when assessing the reserves for different insurance contracts. A considerable part of the insurance liabilities relate to insurance contracts with interest guarantees. The recognised liabilities related to Norwegian insurance contracts with guaranteed interest rates are discounted by the basic interest rate (which corresponds to the guaranteed return/interest rate) for the respective insurance contracts. The recognised liabilities related to the Swedish insurance contracts with guaranteed interest rates in the subsidiary SPP are discounted by an observable market interest rate and by an estimated market interest rate for terms to maturity when no observable interest rate is available and corresponds essentially to the same interest rate that is used in the solvency calculations. In the case of unit-linked insurance contracts, reserves for the savings element in the contracts will correspond to the value of related asset portfolios. Due to the fact that the customers’ assets in the life insurance business (guaranteed pension) have historically yielded a return that has exceeded the increased value in guaranteed insurance liabilities, the excess amount has been set aside as customer buffers (liabilities), including in the form of additional reserves, value adjustment reserve and conditional bonus. Insurance liabilities include Incurred But Not Settled (IBNS) reserves, which consist of amounts reserved for claims either incurred but not yet reported or reported but not yet settled (Incurred But Not Reported ”IBNR” and Reported But Not Settled ”RBNS”). IBNS reserves are included in the premium reserve. IBNS reserves are measured using actuarial models based on historical information about the portfolio. 4. Changes in accounting policies New accounting standards that have a significant impact on the consolidated financial statements have not been implemented in 2021. For changes in estimates, see Note 2 for further information. Storebrand selected early implementation of “Interest Rate Benchmark Reform—Amendments to IAS 39 and IFRS 7” (IBOR Reform) that was issued in September 2019. The discontinuation of LIBOR rates has had no impact other than for hedge accounting (see note 42) because all ISDA/CSA agreements have been renegotiated, and EURSTR + 8.5bps has replaced EONIA based on the “fallback” calculation under the auspices of ISDA. 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 disclosure of issued insurance contracts. The standard was adopted by the European Union in 2021 and will enter into force from 1 January 2023. The purpose of the new standard is to establish uniform practices for the accounting treatment of insurance contracts and greater transparency between insurance companies. 102 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixIFRS 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. The unearned profit is the sum total of each contract’s service margin and is recognised as income over the contract’s service period in line with how the insurance services are provided. Loss-making contracts must be recognised immedi- ately. As a starting point, the retrospective transition method must be applied upon transition to IFRS 17, however the modified retrospective transition method or application is permitted or application based on the fair value on the transition date if retrospective application is impracticable. IFRS 17 will be introduced into Storebrand’s consolidated financial statements. The implementation date is 1 January 2023, with a requi- rement that comparable figures are stated for 2022. The financial regulatory authorities in Norway and Sweden have yet to decide on the rules for the company accounts of the legal entities, however it is expected that only the Group’s P&C insurance companies will introduce IFRS 17 into the company accounts. The life insurance companies are expected to follow equivalent regulations to those that presently apply for the company accounts, and discrepancies will arise between the legal company accounts of the life insurance activities and the consolidated values from the activities in the consolidated financial statements. 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 inclu- ded 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 Hol- ding 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 ow- nership 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 elimina- ted 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. 103 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix7. 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 decisi- on-maker. Four segments are reported for: • • • • Other Savings Insurance Guaranteed Pension There are some differences between the result lines used in the income statement and the segment results. The Group’s income sta- tement 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 recogni- sed 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 expe- cted to benefit from the acquisition so that it can subsequently be tested for impairment. If the discounted cash flow for the cash-genera- ting 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. 104 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix 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 properties 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. 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 Financial assets held to maturity Financial assets, loans and receivables 105 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixHeld 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). • • Investments 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 Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, with the exception of assets that the company intends to sell immediately or in the near term that are classified as held for trading and those that the company upon initial recognition designates at fair value through profit or loss. Loans and receivables are recognised at amortised cost using the effective interest method. The category is used in the Norwegian life insurance business linked to insurance contracts with a guaranteed interest rate, and in the banking business. Loans and receivables that are designated as hedged items are subject to measurement under the hedge accounting requirements. 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. Deriva- tives 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. 106 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixCash 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. Hedging of net investments Hedging of net investments in foreign businesses is recognised in the accounts in the same way as cash flow hedging. Gains and losses on the hedging instrument that relate to the effective part of the hedging are recognised through total comprehensive income, while gains and losses that relate to the ineffective part are recognised in the income statement. The total loss or gain in equity is recognised in the income statement when the foreign business is sold or wound up. 13-5. Financial liabilities Subsequent to initial recognition, all financial liabilities 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 acqu- ired 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 compani- es, 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 (admi- nistration 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 admi- nistration costs expected to be financed by future premium receipts. 107 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix 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 customer assets in the guarantee portfolio and Garanti90. 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 histo- rical 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 as they are accrued, 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 assig- ned 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 insu- rance 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. 108 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixMarket value adjustment reserve The current year’s net unrealised gains/losses on financial assets at fair value in the group portfolio are allocated to or reversed from the market value adjustment reserve in the balance sheet assuming the portfolio has a net unrealised excess value. The portion of the current year’s net unrealised gains/losses on financial current assets denominated in foreign currencies that can be attributed to fluctuations in exchange rates is not transferred to the market value adjustment reserve. The foreign exchange fluctuations associated with investments denominated in foreign currencies are largely hedged through foreign exchange contracts on a portfolio basis. Similarly, the change in the value of the hedging instrument is not transferred to the market value adjustment reserve, but is charged directly to the 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 any future negative risk result. The risk equalisation reserve is not considered to be a liability according to IFRS and is included as part of the equity (undistributable equity). 14-3. Life insurance Sweden Life insurance liabilities The life insurance liabilities are estimated as the present value of the expected future guaranteed payments, administrative expenses and taxes, discounted by the current risk-free interest rate. Insurance reserves with guaranteed interest rates in SPP use a marked-based yield curve. A real discount curve is used for risk insurance within the defined-contribution portfolio. For endowment insurance within the defined-benefit and defined-contribution portfolios, as well as sickness insurance in the defined-benefit portfolio, the provisions are discounted using the nominal yield curve. As a starting point, the applicable discount rate is determined based on the methods used for the discount rate in Solvency II. When calculating the life insurance liabilities, the estimated future administrative expenses that may reasonably be expected to arise and can be attributed to the existing insurance contracts are taken into account. The expenses are estimated according to the company’s own cost analyses and are based on the actual operating costs during the most recent year. Projection of the expected future costs follow the same principles on which Solvency II is based. Any future cost-rationalisation measures are not taken into account. Conditional bonus and deferred capital contribution The conditional bonus arises when the value of customer assets is higher than the present value of the liabilities, and thus covers the 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. 109 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix15-1. Defined-benefit scheme Pension costs and pension obligations for defined-benefit pension schemes are determined using a linear accrual formula and expected final salary as the basis for the entitlements, based on assumptions about the discount rate, future salary increases, pensions and National Insurance benefits, future returns on pension plan assets as well as actuarial estimates of mortality, disability and voluntary early leavers. The net pension cost for the period comprises the total of the accrued future pension entitlements during the period, the interest cost on the calculated pension liability and the calculated return on pension plan assets. Actuarial gains and losses and the impact of changes in assumptions are recognised in total comprehensive income during the period in which they arise. Employees who resign before reaching retirement age or leave the scheme will be issued ordinary paid-up policies. 15-2. Defined-contribution scheme A defined-contribution pension scheme involves the Group in paying an annual contribution to the employees’ collective pension savings. The future pension will depend upon the size of the contribution and the annual return on the pension savings. The Group does not have any further work-related obligations after the annual contribution has been paid. No provisions are made for ongoing pension liabilities for these types of schemes. Defined-contribution pension schemes are recognised directly in the financial statements. 16. Tangible fixed assets and intangible assets The Group’s tangible fixed assets comprise equipment, IT systems and properties used by the Group for its own activities. Equipment, inventory and IT systems are valued at acquisition cost less accumulated depreciation and any write-downs. Properties used for the Group’s own activities are measured at appreciated value less accumulated depreciation and write-downs. The fair value of these properties is tested annually in the same way as described for investment properties. The increase in value for buildings used by the Group for its own activities is recognised through total comprehensive income. Any write-down of the value of such a property is recognised first in the revaluation reserve for increases in the value of the property in question. If the write-down exceeds the revaluati- on 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 inco- me statement. Reference is made to Note 27 - Tax for further information. 110 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix 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 propo- sed dividend is not included in the calculation of the solvency capital. 19. Leases Leases are recognised in the balance sheet. The present value of the combined lease payments shall be recognised on the balance sheet as debt and an asset that reflects the right of use of the asset during the lease period. Storebrand has chosen to classify the right to use the asset as tangible fixed assets and the lease liability as other debt. The recognised asset is amortised over the lease period and the 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. 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 state- ments 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 14 for Solvency II and in Note 27 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 3.1 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 impai- rment may be offset by a reduction in the market value adjustment reserve and additional statutory reserves, so that the effect on the owner’s result may be limited. Correspondingly, increases in values could, to a large extent, increase the size of such funds. In the Swedish business, there are no contracts with an annual interest rate guarantee, but there are insurance contracts with interest rate guarantees which enable them to receive a guaranteed terminal value. These contracts are discounted by a market-based calculated interest rate where parts of the yield curve used are not liquid. Changes in the discount rate may have a significant impact on the size of the insurance liabilities and impact the result. If the associated customer assets have a higher value than the recognised value of these insurance liabilities, then the difference will represent a conditional customer allocated fund – conditional bonus (buffer capital). Changes in the assumptions for future cost, mortality and other biometric assumptions may also have a significant impact on the recognised insu- 111 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendixrance 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, 39 and 40. 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 valuati- on during a 3 year period. Reference is also made to Note 13 in which the valuation of investment properties at fair value is described in more detail. Financial instruments at fair value There will be some uncertainty associated with the pricing of financial instruments, particularly instruments that are not priced in an active market. This is particularly true for the types of securities priced on the basis of non-observable assumptions, and for these investments various valuation techniques are applied in order to fix fair value. These include private equity investments, investments in foreign proper- ties, and other financial instruments where theoretical models are used in pricing. Any changes to the assumptions could affect recogni- sed 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 13, in which the valuation of financial instruments at fair value is described in more detail. Covid-19 Storebrand is impacted by Covid-19 and the uncertainty associated with future economic development. Mutations and new waves of infection resulted in more stringent infection control measures and effects for the economy during 2021. Th- ere is an uncertainty relating to future developments and the impact on Storebrand’s accounts. The risk associated with Covid-19 is consi- dered to have declined over the course of the year, however there is a risk that the scaling down of financial and monetary policy support packages could potentially weaken financial recovery. Negative financial market effects may be compounded by a high rate of savings, low interest rates and good access to credit having contributed to good investment returns and high valuations. Both the stock market and the property market are priced higher than before the pandemic. The risk for the property market is that demand for commercial space will fall as a consequence of a faster transition to online trade and increased use of remote work. There is still uncertainty associated with the effect of the outbreak of Covid-19 on the insurance risk at Storebrand Livsforsikring. The assessment generally remains unchanged from 2020, however the uncertainty related to Covid-19 directly and financial uncertainty from infection control measures on the business sector have been more extensive than estimated in 2020. At the same time, the uncertainty of the insurance risk associated with the fall in oil prices during the first quarter of 2020 has proved less dramatic. There is thus considered to have been grounds for the extraordinary provisions relating to Covid-19 and financial uncertainty that were made in 2020. There is major uncertainty relating to these provisions and future developments. There is particular uncertainty associated with indications that Co- vid-19 may in some cases result in delayed harmful effects. New mutations (Delta — Omicron) may also be of significance to the potential effects of the virus. On the whole, there is still major uncertainty regarding the development of potential delayed harmful effects, and there are thus grounds for maintaining the provisions. 112 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixIn 2020, there were temporary regulations which stipulated that benefit periods for the work assessment allowance (AAP) were extended by six months without consideration to the provisions concerning duration. The decision was applicable for jobseekers until 30 June 2021. Some AAP decisions, which were initially due to be clarified during the 2020 financial year and the first half of 2021, have therefore been deferred. In subsequent regulations, the extension has been expanded to apply until the end of June 2022. A reduction in unemploy- ment has resulted in fewer people starting to receive AAP. At the same time, the option to access AAP for a longer period of time during the pandemic has resulted in fewer people no longer receiving AAP and disability pensions from Storebrand Livsforsikring are therefore maintained. The Norwegian Institute of Public Health (FHI) recorded a “somewhat higher” mortality rate in the fourth quarter. Due to the increased mortality rate in the community, a good accident result was expected during the period. The increased mortality rate is viewed in conne- ction with the infection control measures potentially having contributed to people who did not die one year ago dying now. This refers to delayed death, which occurs due to the limited prevalence of other infectious respiratory diseases and influenza viruses. An indication of mortality deficit was observed in 2020. This trend is observed evenly across the products, however, factors such as different dynamics in product regulations, previous provision levels and differences in portfolios mean that there are varied effects on the result. No significant shifts in assumptions related to future mortality have been assumed in the provisions. The developments relating to Covid-19 directly and the financial uncertainty are being closely monitored. A continuation of the situation of high unemployment may lead to increased disability and result in higher provisions. The provisions as at 31 December 2021 are the company’s best estimate and these provisions are considered adequate. Storebrand has a risk management system which, through principles that have been adopted, manages and mitigates the impact of volatile financial markets. Storebrand will continue 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. Covid-19 and the uncertain macroeconomic situation mean that there is greater uncertainty relating to several estimates at the end of 2021 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. Management fee In April 2021, the Financial Supervisory Authority of Norway sent an identical letter to all life insurance companies and pension funds regarding the treatment of management fees to management companies for securities funds and other managers of ’fund’ structures. A united industry, including Storebrand, is of the opinion that the Financial Supervisory Authority of Norway’s interpretation of the law is incorrect. Both Finance Norway and the Norwegian Association of Pension Funds have therefore asked the Ministry of Finance to revi- ew the Financial Supervisory Authority of Norway’s interpretation. Both associations have obtained opinions supporting the industry’s position. The question in the case is whether the management fee the fund pays to the manager should be deducted from the return (net entry) or should be covered by the company’s cost result as part of the premium (gross entry). For some investment classes, for example, investments in infrastructure funds and private equity funds, for which investments are made in underlying funds to achieve effective risk diversified management, costs are recognised in the funds included in the customer’s investment result. Storebrand considers the industry’s legal understanding to be correct, and has therefore chosen to continue with previous practices, pending further clarification from the Ministry of Finance. The estimated annual effect for Storebrand, given present allocations and investments, is approximately NOK 45 million. 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 estima- tes. 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 27. 113 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix Note 3: Acquisition Storebrand has acquired Capital Investment, which is a Danish real estate investment advisory and asset manager with close to DKK 20 billion in assets under management headquartered in Copenhagen. The acquisition includes two legal companies: Capital Investment A/S and CI AM ApS. The transaction was completed on 30 September 2021. Capital Investment delivers a comprehensive suite of real estate investment management services, handling the entire investment process from the beginning to the end on behalf of national and international clients. Capital Investment has 18 employees. The acquisition of Capital Investment is in line with Storebrand’s growth strategy within Nordic alternative investments and will further build Storebrand’s position as a gateway to the Nordic market in asset management. All shares in Capital Investment that were acquired by Storebrand ASA were transferred to Storebrand Asset Management AS as of 30 September 2021 as a contribution in kind. Storebrand has paid the selling shareholders consideration for the shares amounting to NOK 692 million upon completion of the transa- ction, divided between newly issued shares in Storebrand ASA and a cash consideration of NOK 351 million. Upon completion of the transaction, 4,160,908 new shares have been issued in Storebrand ASA as a partial financing of the share acquisition by the capital incre- ase having been carried out in return for contributions in the form of assets other than cash so that shareholders do not have preferen- tial rights. The value of the consideration that Storebrand ASA is paying for the shares in Capital Investment is based on the price of the shares in Storebrand ASA of NOK 82.02 per share. In addition, there may be additional consideration based on developments in results and income in Capital Investment, estimated to NOK 93 million as of 30 September. The additional consideration has an upper limit of NOK 273 million. The acquisition of the shares in Capital Investment was made public on 31 August 2021, and the transaction has been approved by the Financial Supervisory Authority of Norway and the Norwegian Ministry of Finance. The table below shows the acquisition analysis. Excess value of NOK 242 million has been identified before deferred tax related to custo- mer contracts and deferred tax of NOK 53 million has been calculated on the excess value. Goodwill amounts to NOK 586 million and this item is not depreciated, but is tested yearly against impairment. ACQUISITION ANALYSIS CAPITAL INVESTMENT Book values in the company Excess value upon acquistion Book values Assets Customer contracts Other assets Bank deposits Total assets Liabilities Current liabilities Deferred tax Net identifiable assets and liabilities Goodwill Fair value at acquisition date Conditional payment Cash payment 6 20 27 11 16 242 242 53 189 242 6 20 269 11 53 205 581 785 93 692 The tables below show the distribution of the consideration and an overview of the profit in Capital Investment in 2021 prior to acquisition and after acquisition on 30 September 2021. 114 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixSETTLEMENT OF CASH CONSIDERATION Consideration shares Paid in cash Total INCOME STATEMENT CAPITAL INVESTMENT 2021 Income Profit Amount 341 351 692 After acquisition Before acquisition 18 4 70 5 Danica Pensjonsforsikring Norge Storebrand Livsforsikring AS has 20. December 2021 entered into an agreement to buy 100% of the shares in Danica Pensjonsforsikring AS, Norway (”Danica”). Danica, a subsidiary of Danske Bank, is the 6th largest provider of Defined Contribution pensions in Norway with 5% market share. Storebrand Livsforsikring AS will pay NOK 2.01 billion for the shares of Danica (adjusted for the change in the net asset value of Danica in the period from 30 September 2021 to 31 December 2021). The conclusion of the transaction is expected in the first half of 2022 and is subject to approval from the Norwegian Financial Supervisory Authority and the Norwegian Competition Authority. 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 business area encompasses long-term pension savings products that give customers a guaranteed rate of return. The area includes defined contribution pensions in Norway and Sweden, paid-up policies and individual capital and pension insu- rances. 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 Life Insurance and SPP. This also includes minority interests in securities funds and eliminations of intra-group transactions included in the other segments. 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. 115 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix Fee and administration income consists of fees and fixed administrative income. In the Group’s income statement, the item is classified as premium income, net interest income from bank or other income depending on the type of activity. The Group’s income statement also includes savings elements for insurance contracts and possibly transferred reserve. Price of return guarantee and profit risk (fee incomes) – Storebrand Life Insurance AS The return guarantees in group pension insurance with a return guarantee must be priced upfront. The level of the return guaran- tee, 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 traditio- nal individual products with profit sharing. Financial items and risk result life and pensions include risk result life and pensions and financial result includes net profit sharing and Loan Losses. Risk result life and pensions consists of the difference between risk premium and claims for products relating to defined-contribution pension, unit linked insurance contracts (savings segment) and defined-benefit pension (guaranteed pension segment). Risk premium is classified as premium income in the Group’s income statement. The financial result consists of the return for the company portfolios of Storebrand ASA, Storebrand Livsforsikring AS and SPP Pension & Försäkring AB (Other segment), while returns for the other company portfolios in the Group are a financial result within the segment which the business is associated with. Returns on company portfolios are classified as net income from financial assets and property for companies in the Group’s income statement. The financial result also includes returns on customer assets relating to products within the insurance segment, and in the Group’s income statement this item will be entered under net income from financial assets and property for customers. In the alternative income statement, the result before tax of certain unimportant subsidiaries is included in the financial result, while in the Group’s income statement, this is shown as other income, operating costs and other costs. Net profit sharing Storebrand Livsforsikring AS A modified profit-sharing regime was introduced for old and new individual contracts that have left group pension insurance policies (paid-up policies), which allows the company to retain up to 20 per cent of the profit from returns after any allocations to additional statutory reserves. The modified profit-sharing model means that any negative risk result can be deducted from the customers’ inte- rest profit before sharing, if it is not covered by the risk equalisation fund. Individual endowment insurance and pensions written by the Group prior to 1 January 2008 will continue to apply the profit rules ef- fective prior to 2008. New contracts may not be established in this portfolio. The Group can retain up to 35 per cent of the total result after allocations to additional statutory reserves. Any negative returns on customer portfolios and returns lower than the interest guarantee that cannot be covered by additional statu- tory reserves must be covered by the company’s equity and will be included in the net profit-sharing and losses line. 116 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix 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 insurance (KF portfolio), the company is entitled to charge an indexing fee if the group profit allows the inde- xing of the insurance. Indexing is allowed up to a maximum equalling the change in the consumer price index (CPI) between the previous two Septembers. Pensions that are paid out are indexed if the ratio between assets and guaranteed insurance liabilities in the portfolio as at 30 September exceeds 107 per cent, and half of the fee is charged. The entire fee will be charged if the ratio between assets and gua- ranteed insurance liabilities in the portfolio as at 30 September exceeds 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 Livforsikring Group, these will not be included on this line in either the alternative income statement or in the Group’s income statement, but in the Group’s income statement will be included in the item, net income from financial assets and property for customers. Amortisation of intangible assets includes depreciation and possible write-downs of intangible assets established through acquisitions of enterprises. GROUP PROFIT BY SEGMENT NOK million Savings Insurance Guaranteed pension 1) Other 1) Group profit before amortisation Amortisation of intangible assets Group pre-tax profit 2021 2,355 423 1,432 293 4,503 -527 3,976 2020 1,730 204 805 -28 2,711 -492 2,219 1) Comparing figures for previous periods have been revised. The result for Euroben has been moved from ”Other” to ”Guaranteed pension”. 117 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix 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 2) 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 2) Group pre-tax profit Savings 2021 5,215 2020 4,392 Insurance Guaranteed pension 2021 2020 2021 1,631 2020 1) 1,511 1,201 5,175 -3,974 -875 326 97 423 825 4,331 -3,506 -712 113 91 204 -890 741 691 1,432 -2,927 2,288 67 2,355 -2,611 1,781 -51 1,730 Other 3) Storebrand Group 2021 -239 2020 1) -227 14 -225 518 293 116 -111 83 -28 2021 6,607 1,201 5,175 -3,974 -4,678 3,130 1,372 4,503 -527 3,976 -861 650 155 805 2020 5,676 825 4,331 -3,506 -4,068 2,433 278 2,711 -492 2,219 1) Comparing figures for previous periods have been revised. The result for Euroben has been moved from ”Other” to ”Guaranteed pension”. 2) Amortisation of intangible assets are included in Storebrand Group 3) Includes eliminations of group transactions The Storebrand Group are represented in the following countries: Segment/Country 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 118 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixKEY 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 14 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. 2021 2020 6.68 37,709 21,212 308,351 1,096,556 57,015 6,445 77% 17% 94% 5.02 35,923 19,292 268,331 962,472 49,474 5,288 81% 16% 97% 290,862 287,614 48.5% 447 11.2% 17.8% 175% 74,074 20.3% 16.8% 51.7% 704 11.0% 11.4% 178% 72,766 18.7% 16.7% 119 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 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 GroupIndependent control functons Internal auditing Risk management Actuary function Compliance Anti-money laundering (AML) Privacy (DPO) The boards of directors of both Storebrand ASA and the group companies have the overall responsibility for limiting and following up the risks associa- ted with the activities. The boards set annual limits and guidelines for risk-taking in the company, receive reports on the actual risk levels, and perform a forward-looking assessment of the risk situation. The Board of Storebrand ASA has established a Risk Committee consisting of 3 Board members. The main task of the Risk Committee is to prepare matters to be considered by the Board in the area of risk, with a special focus on the Group’s appetite for risk, risk strategy and investment strategy. The Committee should contribute forward-looking, decision-making support related to the Board’s discussion of risk taking, financial forecasts and the treatment of risk reporting. Managers at all levels in the company are responsible for risk management within their own area of responsibility. Good risk management requires targeted work on objectives, strategies and action plans, identification and assessment of risks, documentation of processes and routines, prioritisation and implementation of improvement measures, and good communication, information and reporting. Independent control functions Independent control functions have been established for risk management for the business (Risk Management Function/Chief Risk Officer), for comp- liance with the regulations (Compliance Function), for ensuring the insurance liabilities are calculated correctly (Actuary Function), for data protection (Data Protection Officer), for money laundering (Anti Money Laundering) and for the bank’s lending. Relevant functions have been established for both the Storebrand Group (the Group) and all of the companies requiring a licence. The independent control functions are organised directly under the companies’ managing directors and report to the respective company’s board. In terms of function, the independent control functions are affiliated with Governance Risk & Compliance (GRC). GRC is a knowledge community hea- ded by the Group CRO. The Group CRO is responsible to the Group CEO and reports to the Board 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 regulations for risk management and the consolidated companies’ operations. The internal audit function is organised directly under the Board and shall provide the boards of the relevant consolidated companies with confirmation concerning the appropriateness and effectiveness of the company’s risk management, including how well the various lines of defence are working. 120 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix Note 6: Operational risk Operational risk is the risk of financial loss, damaged reputation or sanctions related to violations of internal or external regulations as a result of ineffective, insufficient or defective internal processes or systems, human error, external events or rules and guidelines not being followed. 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 and in 2021 the entire asset mana- gement business was migrated to cloud. Risks increase in connection with the actual transformation, and the consequence of errors can be greater when services are provided online. Cloud-based services and infrastructure have good inbuilt security solutions and re- duce the risk associated with self-developed systems and, in the long term, outdated infrastructure. 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. In 2021, the security function was divided into two formal lines of responsibility. These consist of an independent second line placed with the Group’s other control functions and an operational first line as an integrated part of infrastructure operations. Staffing was increased for both lines of responsibility and expanded monitoring systems were also implemented. During the pandemic, the threat landscape for information security and cyber-risk has changed in nature, and “home office fatigue”, combined with migration to cloud platform, complex and manual processes, third-party vendors and dependency on key personnel have created increased short-term uncertainty. The latter has to some extent already been addressed through the reinforcement and division of responsibilities that took place earli- er in the year. The control function has been given a defined mandate and resources have been allocated that specifically address the expertise and awareness of employees now that we have a distributed work model. There is also an increased focus on and resources assigned to monitor third-party suppliers and technical vulnerabilities in infrastructure. 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. 121 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixThe 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 necessary 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. In the Guaranteed Pensions segment, the Group has a significant insurance risk relating to estimation of life expectancy and future pension payments for group and individual insurance agreements. In addition, there is an insurance risk associated with estimates of disability and pensions left to spouses and/or children. The disability coverage in Guaranteed Pensions is primarily sold together with a retirement pension. The risk of mortality is low in Guaranteed Pensions when viewed in relation to other risks. In SPP it is possible to change the future premiums for the IF portfolio, reducing the risk significantly. In Norway it is also possible to change the future premiums of group policies, but only for new accumulation, entailing reduced risk. 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. Own pension accounts are also included in the Savings segment. In 2021, 1.5 million Norwegians received an own pension account. During 2021, defined-contribution pensions from current and former employers were combined in the person’s own pension acco- unt. There is no longer a requirement for 12 months of employment for employees to be able to take their accrued pension capital with them. Storebrand has no insurance risks related to own pension accounts. 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, pregnancy 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 insu- rance is considered to be limited based on the volume and underlying volatility of the products. Within P&C insurance, the risk of fire in commercial buildings, housing cooperatives and residential homes, as well as personal injury for motor vehicle insurance constitute the main risks. Covid-19 and the impact on the insurance business There is still uncertainty related to the effect of the Covid-19 outbreak on the insurance risk in the Group. See the reference to Co- vid-19 under Note 2: Important accounting principles and discretionary assessments. Rules for laid-off employees in private occupational pension schemes The duration of the temporary statutory amendments which give employers the option to decide that laid-off employees shall conti- nue as members of the private pension scheme has been extended until 28 February 2022. The employer can choose whether the laid-off employees shall still be covered by the insurance coverage in the pension scheme. Laid-off employees who do not have their insurance coverage continued are entitled to take out separate individual insurance (continuation insurance). The employees who remain members of the pension scheme will not be issued with pension capital certificates, paid-up policies or pension certificates. The temporary statutory amendments are not considered to be of significance to Storebrand Livsforsikring’s insurance risk. Rules for pension from the first krone and day enter into force The rules for pension from the first krone and day enter into force on 1 January 2022. The companies will be given until 30 June 2022 to adjust their pension schemes to the new rules. Among other things, the new rules entail that there will be requirements for all private occupational pension schemes to save a minimum of 2 per cent of the members’ income and that the option of exempting employees with salaries below 1 G (the National Insurance base amount) will be removed. Furthermore, the minimum requirement of 122 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendixhaving a 20 per cent position to be entitled to membership in the schemes has been abolished. Like the National Insurance scheme, the age limit for membership has been reduced from 20 to 13 years. Employees are entitled to membership in the schemes when their income exceeds the limits for reportable salary in the a-ordning (a-scheme)1. There will no longer be separate exemption rules for seasonal workers. The overall annual increased savings for Storebrand Livsforsikring are estimated at NOK 500 million. Increased savings also depend on how companies with savings rates that are higher than the minimum rate will potentially adapt the pension scheme. Introduction of buffer funds for municipal pension schemes The introduction of buffer funds for municipal pension schemes will enter into force on 1 January 2022. The new rules entail the introduction of a combined and customer-distributed buffer fund for municipal pension schemes effective from 1 January 2022. This buffer fund replaces the current additional statutory reserves and market value adjustment reserves for these schemes. Among other things, the rule change will facilitate a more neutral regulatory framework when transferring municipal pension schemes. The Ministry of Finance has stipulated transitional rules in regulations which entail that transfer processes initiated before the new rules enter into force must comply with the rules that applied at the time the decision to transfer was made. The new rules have no significance for Storebrand Livsforsikring as at 31 December 2021. 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 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. Newer individual endowment policies are priced without taking gender into account. The tariffs for all individual endowment policies are based on the company’s own experiences. For P&C insurance (occupational injury, property and motor vehicle) the tariffs are based on the company’s own experiences. 1) The a-ordning is a coordinated method for employers to report information about employees and income to Statistics Norway, the Norwegian Labour and Welfare Administration (NAV) and the Norwegian Tax Administration. This information will be sent electronically either via a service in Altinn or the employer’s payroll system and entered into force on 1 January 2015. Through the scheme, employer reporting was simplified by going from five forms to one a-message (a-melding). 123 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixManagement of insurance risk Insurance risk is monitored separately for every line of insurance in the current insurance portfolio. The development of the risk results is followed throughout the year. For each type of risk, the ordinary risk result for a period represents the difference between the risk premiums the company has collected for the period and the sum of provisions and payments that must be made for insured events that occur in the period. The risk result takes into account insured events that have not yet been reported, but which the company, on the basis of experience, assumes have occurred. When writing individual risk cover, the customer is subject to a health check. The result of the health check is reflected in the level of premium quoted. When arranging group policies with risk cover, all employees of small companies are subject to a health check, while for companies with many employees a declaration of fitness for work is required. In the assessment of risk, 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 2021 33 229 249 -3 -7 -1 500 2020 2021 2020 7 243 -26 5 -44 -33 153 83 3 48 -1 -22 30 139 54 23 134 0 -26 1 186 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 2021, and these therefore had no impact on the results in the financial statements for 2021. 124 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix Sensitivity The volatility of the risk results depends on the development in insurance risk, and the sensitivities indicate the uncertainty associated with different insurance risks. Storebrand’s products have different insurance risks, however when calculating sensitivity, the starting point is the same changes, since the development in, for example, disability in the community, is assumed to be the same across the products. However, it is expected that there will be different effects on the risk results because the premium is calculated using a tariff that is specific for the product. Some forms of coverage have a stronger tariff for which a better risk result is expected, while other products have a weaker tariff for which the risk result is expected to be weaker. The tariff will also reflect any differences in the risk for products taken out as a collective or individual agreement. It will also reflect the different waiting periods, i.e. the period from when the claim is made until the right to compensation. The pension products typically have a waiting period of 12 months, while employee insurance is paid out in the event of permanent disability. In the table below, the following stress factors are used: • • • • 5% increase for disability 5% reduction for reactivation 5% increased mortality 5% increased longevity STOREBRAND LIFE INSURANCE AND STOREBRAND INSURANCE Guaranteed pension NOK million Mortality Longevity Disability Recovering to work after disability Group pension Occupational private sector pension Paid-up policies Individual with guarantee -4 -11 -6 -2 NA -2 NA -11 -15 -66 -16 -3 -3 -7 -4 NA Sum -22 -87 -26 -16 The table above shows the sensitivity as a one-year gross effect on the risk result. It varies as to how the gross effect is 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 collective 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. The risk result for individual insurance policies is included in the profit sharing between the customers and Storebrand. Furthermore, the need for an increased premium reserve has been estimated as a result of a permanent change in the assumptions. There has been an estimated increase in the premium reserve for increased longevity of NOK 1.6 billion and an increase of NOK 0.4 billion as a result of increased disability and reduced reactivation as stated above. Such a development may also entail the need for an increased premium. Pursuant to Sections 3-15 and 3-16 of the Insurance Activity Act, increased premium reserves can be fully or partly covered by the profit for the year on the risk result, risk equalization fund and future profit on the risk result if the Financial Supervisory Authority of Norway has consented to the plan for strengthening reserves. Insurance Effect on profit before tax 5 per cent change in premium income 5 percentage point change in combined ratio Effect NOK million +/- 259 +/- 242 The table above shows the effect on earnings and equity before tax of a 5 per cent change in gross premiums earned and a 5 percen- tage point change in the combined ratio. The combined ratio is the most commonly applied criterion for measuring profitability within P&C insurance and may result from a change in claims frequency, level of compensation and/or operating costs. 125 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixSPP PENSION & FÖRSÄKRING Guaranteed pension Savings Individual pension and occupational pension NOK million Mortality Longevity Disability Recovering to work after disability insurance Group pension Unit Linked -1 -9 -6 -7 -4 -21 -3 -3 NA -4 NA NA Total -5 -34 -9 -10 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. For the life insurance companies, the financial assets are invested in a variety of sub-portfolios. Market risk affects Storebrand’s income and profit differently in the different 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. Ne- vertheless, 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 returns on the financial market than expected will therefore have a negative effect on Storebrand’s future inco- me 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 dura- tion 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 be- cause it reduces the probability of achieving a return higher than the guarantee. Both short-term money market rates and long-term interest rates increased in Norway in 2021. Long-term rates have increased 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. 126 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixASSET 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 12 % 37 % 1 % 21 % 12 % 16 % 1 % 2 % 0 % 2 % 15 % 81 % 1 % 0 % 1 % 29 % 19 % 42 % 0 % 7 % 1 % 100 % 100 % 100 % Storebrand aims to take low financial risk for the company portfolios, and most of the funds were invested in short and medium-term fixed income securities with low credit risk. 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. The investment allocation was not significantly changed during 2021. 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. The market risk is managed by segmenting the portfolios based on 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. 127 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixFINANCIAL ASSETS AND LIABILITIES IN FOREIGN CURRENCIES NOK million Net in balance sheet Net sales in currency in NOK Balance sheet items excluding currency derivatives Forwad contracts Net position 2021 DKK CHF HKD CAD EUR GBP JPY SEK USD NOK 1) Other currency types Insurance liabilities in SEK Total net currency positions 162 110 200 233 1,625 128 338 261,046 4,595 62,478 -237 -128 -802 -406 -1,707 -267 -542 -9,918 -6,444 -1,319 -76 -18 -603 -172 -150 -140 -204 250,809 -1,851 61,158 -251,134 -251,134 -102 -178 -682 -1,203 -807 -1,668 -1,567 244,595 -16,320 61,158 -312 -244,602 38,312 Net position 2020 in NOK -176 -398 -797 -703 -1,454 -1,139 -969 234,084 -9,161 37,520 -144 -233,735 22,929 1) Equity and bond funds denominated in NOK with foreign currency exposurein i.a. EUR and USD NOK 57 billion. The table above shows the currency positions as at 31 December 2021. The currency exposure is primarily related to investments in the Norwegian and Swedish insurance business. Storebrand Livsforsikring: 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. The company hedges most of the foreign exchange risk in the customer portfolios on an ongoing basis. Most of the non-guaranteed pension profiles are currency hedged. Most of the fixed-interest portfolios for the guaranteed pension portfolios are currency hedged, while approximately 70 per cent of global equity portfolios are currency hedged. Foreign exchange risk due to subordinated loans in a foreign currencies is currency hedged. Hedging is performed by means of forward foreign exchange contracts at the portfolio level, and the currency positions are monito- red continuously against a total limit. Negative currency positions are closed out no later than the day after they arose. In addition, separate limits have been defined so that active currency positions can be taken. Storebrand employs a currency hedging principle called block hedging, which makes the execution of currency hedging more efficient. 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. 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 17 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. 128 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixThe 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 2021 0.2 % 0.2 % 39.8 % 0.4 % 28.9 % 1.7 % 10.5 % 14.3 % 0.1 % 1.8 % 0.6 % 2.5 % 3.8 % 2.3 % 3.2 % 0.1 % 3.1 % 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 % There is a 0 per cent interest rate guarantee for premium funds, defined-contribution funds, pensioners’ surplus funds and additio- nal 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 trans- fers 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 im- portant risk management tool. 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 defi- ned-benefit pension (KF) is closed to new members. 129 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix 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 2021 10.2 % 0.1 % 4.9 % 50.6 % 4.9 % 0.1 % 5.3 % 0.0 % 1.4 % 3.5 % 10.8 % 2.4 % 5.9 % 2021 3.0 % 2.9 % 3.1 % 3.1 % 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 % 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. Sensitivity analyses The tables show the fall in value for Storebrand Life Insurance and SPP’s investment portfolios because 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 cate- gory of asset. The stresses have been applied to the company portfolio and guaranteed customer portfolios as of 31 December 2021. The effect of each stress changes the return in each investment 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. 130 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix 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 assumed that the market changes occur over a period of time, then dynamic risk management would reduce the effect of the negative outco- mes 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 2021, the customer buffers are of such a size that the effects on the result are significantly lower. Stresstest 1 Resultatrisiko Interest rate risk Equtiy risk Property risk Credit risk Total Stresstest 2 Resultatrisiko Interest rate risk Equtiy risk Property risk Credit risk Total Storebrand Life Insurance SPP Pension & Försäkring NOK Million Share of portfolio NOK Million Share of portfolio 4,811 -4,406 -2,723 -1,097 -3,415 2.1% -1.9 % -1.2 % -0.5 % -1.5 % -283 -2,565 -1,333 -796 -4,977 -0.3% -2.8 % -1.4 % -0.9 % -5.4 % Storebrand Life Insurance SPP Pension & Försäkring NOK Million Share of portfolio NOK Million Share of portfolio -4,814 -2,643 -1,588 -658 -9,703 -2.1 % -1.1 % -0.7 % -0.3 % -4.2 % 283 -1,539 -778 -478 -2,512 0.3 % -1.7 % -0.8 % -0.5 % -2.7 % Storebrand Livsforsikring For Storebrand Livsforsikring it is stress test 2, which includes an increase in interest rates, that makes the greatest impact. The overall market risk is NOK 9.7 billion, which is equivalent to 4.2 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 5.0 billion, which is equivalent to 5.4 per cent of the investment portfolio. The buffer situation for the individual contracts will determine if all or portions of the fall in value will affect the financial result. Only the portion of the fall in value that cannot be settled against the customer buffer will be charged to the result. In addition, the reduced profit sharing or loss of the indexing fees may affect the financial result. Other operations The other companies in the Storebrand Group are not included in the sensitivity analysis, as there is little market risk in these areas. The equity of these companies is invested with little or no allocation to high-risk assets, and the products do not entail a direct risk for the company as a result of price fluctuations in the financial market. 131 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix 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. UNDISCOUNTED CASH FLOWS FOR FINANCIAL LIABILITIES 1) NOK million Subordinated loan capital 2) Loans and deposits from credit institutions Deposits from bank customers Debt raised from issuance of securities Other current liabilities Uncalled residual liabilities Limited partnership Unused credit lines lending Lending commitments Total financial liabilities Derivatives related to funding 0-6 7-12 months months 1,109 905 502 2-3 years 5,282 4-5 Total Total booked Total booked years > 5 years cashflows value 2021 value 2020 3,361 3,290 13,947 11,441 9,110 502 502 1,653 16,752 1 94 150 242 17,239 17,239 15,506 3,302 14,457 4,870 13,416 3,516 57,719 -118 1,155 11 11,619 132 9,309 42 780 2,276 17,127 12,862 4,313 87 1,253 -96 61 13,556 18,340 -88 -2,357 26,165 14,643 4,870 13,416 3,516 94,297 -154 80,143 -284 24,924 14,643 20,649 16,209 68,749 -3 63,127 4 Total financial liabilities 2020 49,351 Derivatives related to funding 2020 -149 74 -209 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. 132 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixSPECIFICATION OF SUBORDINATED LOAN CAPITAL 1) NOK million Issuer Perpetual subordinated loan capital 2) Storebrand Livsforsikring AS Storebrand Livsforsikring AS Dated subordinated loan capital Storebrand Livsforsikring AS 3) 4) Storebrand Livsforsikring AS 3) Storebrand Livsforsikring AS 3) Storebrand Livsforsikring AS 3) Storebrand Livsforsikring AS Storebrand Livsforsikring AS 3) Storebrand Livsforsikring AS 3) 5) Storebrand Bank ASA Storebrand Bank ASA Storebrand Bank ASA Nominal value Currency Interest Maturity 2021 2020 Book value Book value 1,100 900 750 1,000 900 1,000 500 250 300 150 125 300 NOK SEK SEK SEK SEK SEK NOK EUR EUR NOK NOK NOK Variable Variable Variable Variable Variable Variable Variable Fixed Fixed Variable Variable Variable 2024 2026 2021 2022 2025 2024 2025 2023 2031 2022 2025 2026 1,100 876 976 877 976 499 2,685 2,876 150 125 300 1,100 789 1,044 938 1,045 499 3,420 150 125 Total subordinated loans and hybrid tier 1 capital 11,441 9,110 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 42 4) The loan has been repaid on 11.10.21 5) 300 million EUR in Storebrand`s first green bond issuance in March 2021 SPECIFICATION OF LOANS AND DEPOSITS FROM CREDIT INSTITUTIONS NOK million Call date 2021 2022 Total loans and deposits from credit institutions SPESIFICATION OF SECURITIES ISSUED NOK million Call date 2021 2022 2023 2024 2025 2026 2027 Book value 2021 502 502 Book value 2021 5,532 3,282 6,100 6,139 3,075 795 2020 1,653 1653 2020 1,637 6,011 4,766 4,997 3,239 Total securities issued 24,924 20,649 133 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixThe 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 200 million, expiration December 2025. FINANCING ACTIVITIES - MOVEMENTS DURING THE YEAR Subordinated Liabilities to Securities loan capital financial institutions 9,110 4,211 -1,072 -22 -629 -156 11,441 1,653 502 -1,652 -1 issued 20,649 6,430 -2,106 -48 502 24,924 NOK Mill. Book value 1.1.21 Admission of new loans/liabilities Repayment of loans/liabilities Change in accrued interest Exchange rate adjustments Change in value/amortisation Book value 31.12.21 Note 10: Credit risk Storebrand is exposed to risk of losses as a result of counterparties not fulfilling their debt obligations. This risk also includes losses on lending and losses related to the failure of counterparties to fulfil their financial derivative contracts. The maximum limits for credit exposure to individual counterparties and for overall credit exposure to rating categories are set by the boards of the individual companies in the Group. Particular attention is paid to ensuring diversification of credit exposure in order to avoid concentrating credit exposure on any particular debtors or sectors. Changes in the credit standing of debtors are monitored and followed up. Thus far, the Group has used published credit ratings wherever possible, supplemented by the company’s own credit evaluation. Underlying investments in funds managed by Storebrand are included in the tables. 134 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixCREDIT RISK BY COUNTERPARTY BONDS AND OTHER FIXED-INCOME SECURITIES AT FAIR VALUE Category by issuer or guarantor NOK million Government and government guaranteed bonds Corporate bonds Structured notes Collateralised se- curities Total interest bearing securities stated by rating Bond funds not managed by Storebrand Non-interest bearing securities managed by Storebrand AAA AA A BBB NIG Not rated Fair value Fair value Fair value Fair value Fair value Fair value Fair value Fair value 2021 2020 Total Total 23,450 18,378 10,257 6,596 343 34,270 6,172 203 10 34,892 30 30 8 4,493 13 34,068 39,622 1,604 100,233 106,228 43 35 6,405 7,883 48,000 17,056 34,613 34,962 4,513 1,604 140,749 153,769 24,224 20,847 3,543 2,379 Total Total 2020 48,000 56,989 17,056 19,147 34,613 32,182 34,962 39,776 4,513 5,675 1,604 168,516 1 176,995 INTEREST BEARING SECURITIES AT AMORTISED COST Category of issuer or guarantor NOK million Government and government guaranteed bonds Corporate bonds Structured notes Collateralised securities Total Total 2020 AAA AA A BBB NIG Not rated Fair value Fair value Fair value Fair value Fair value Fair value Fair value Fair value 2021 2020 Total Total 12,398 11,575 913 24,886 30,481 13,360 8,470 136 21,966 26,559 3,815 22,320 26,135 24,947 15,558 15,558 19,441 23,529 17,652 41,181 24,135 29,574 81,451 17,788 913 129,726 29,056 85,728 9,177 1,602 125,562 135 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixCOUNTERPARTIES NOK million Derivatives Of which derivatives in bond funds, managed by Storebrand Total derivatives excluding derivatives in bond funds Total derivatives exclu- ding derivatives in bond funds 2020 Of which bank deposits in bond funds, mana- ged by Storebrand Total bank deposits excluding bank deposits in bond funds Total bank deposits excluding bank deposits in bond funds 2020 Loans to financial institutions 1) of which tied-up bank deposit (tax deduction account) AAA AA A BBB NIG Not rated Fair value Fair value Fair value Fair value Fair value Fair value Fair value Fair value 31 1,703 2,091 52 22 213 2021 4,113 2020 11,024 Total Total 92 201 293 1,047 31 1,611 1,889 52 22 213 3,820 Bank deposits 1) 318 4,311 3,771 5,393 7,574 114 28 134 24 11,690 9,977 14,569 2 1,674 28 1,704 1,504 318 3,769 5,900 9,987 50 3,626 9,265 124 13,064 19 48 67 103 324 324 280 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 2021 Total 2020 3,764 2,048 1,716 163 1,553 56 3,820 9,977 2,048 964 56 1,772 9,143 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. 136 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 LOAN PORTFOLIO CREDIT RISK FOR THE LOAN PORTFOLIO Lending to and receivables 2021 176,448 2020 185,382 176,448 185,382 586 47 10 -914 NOK million customers creditlines commitments commiments commitments write- downs commitments from Unused Total Unimpaired Impaired Individual Net defaulted 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 receiva- 10,270 4 56,727 2,626 69,626 -101 -39 3,362 21 3,384 10,270 4 60,089 2,647 73,010 -101 -39 bles from customers 2021 1) 69,486 3,384 72,870 Total loans to and receivables from customers 2020 2) 63,214 3,128 66,342 1) 2021: - Of which Storebrand Bank 38,992 3,322 42,314 - Of which Storebrand Livsforsikring 30,495 62 30,556 2) 2020: - Of which Storebrand Bank 31,780 3,063 34,843 - Of which Storebrand Livsforsikring 31,435 64 31,500 47 1 48 48 66 48 50 15 16 14 29 29 71 29 13 5 18 18 17 18 71 17 29 66 1 59 59 119 59 104 15 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. The 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. 137 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixAs at 31 December 2021, Storebrand had loans to customers totalling NOK 69.5 billion net after provisions for losses of NOK 0.1 billion. Of this, NOK 12.9 billion was to the corporate market and NOK 56.7 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. Approximately 58 per cent of home loans have a loan to value ratio within 60 per cent, 97 per cent are within 85 and 99 per cent are within a 100 per cent loan to value ratio. The portfolio is considered to have a low credit risk. TOTAL COMMITTMENTS BY REMAINING TERM Loans to and receivables 2021 2020 Loans to and Unused Total receivables Unused Total NOK million from customers credit line commitments from customers credit line commitments Up to one month 1 - 3 months 4 months - 1 year 2 -5 years More than 5 years Total gross commitments 56 686 633 12,858 55,395 69,627 1 29 191 477 2,686 3,384 57 716 823 13,334 58,081 73,011 9 553 2,060 10,267 50,423 63,312 2 32 172 609 2,311 3,128 12 586 2,232 10,876 52,734 66,440 Default occurs after 90 days with arrears/overdrafts above both absolute and relative thresholds. All debtor commitments are consi- dered defaulted if default has occurred for at least one of these. The absolute threshold is set at NOK 1,000 (per commitment), and the relative threshold is 1% of total debtor exposure. CREDIT RISKS BY CUSTOMER GROUPS NOK million commitments write-downs commitments 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 2021 Total 2020 16 60 1 77 121 13 5 -85 -66 -4 3 55 1 59 104 4 -4 -85 -85 -3 In the case of default, Storebrand Bank ASA will sell the securities or repossess the properties if this is most suitable. 138 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixTOTAL ENGAGEMENT AMOUNT BY REMAINING TERM TO MATURITY NOK millionon Overdue 1-30 days Overdue 31-60 days Overdue 61-90 days Overdue more than 90 days Total Loans to and receivables 2021 2020 Loans to and Unused Total receivables Total from customers credit line commitments from customers commitments 76 14 5 48 142 1 1 77 14 5 48 143 223 58 29 77 387 223 58 29 77 387 Note 11: Concentrations of risk Most of the risk for the Storebrand Group relates to the guaranteed pension products in the life insurance companies. These risks are consolidated in the Storebrand Life Insurance Group, which includes Storebrand Livsforsikring AS 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. Note 12: Climate risk Storebrand is exposed to climate risk. This risk is not only commercial, but also applies to investments, including property, and the insurance liabilities. Both physical climate change and risks associated with the transition to low emissions may have an impact. For Storebrand, the transition risk is of the greatest importance, particularly in the short and medium term. A rapid transition to low emissions could impact the Norwegian economy in general and the fossil fuel sector in particular. This could result in an increased disability frequency and lower interest rates that increase insurance liabilities. For investments, the effect of climate risk is difficult to differentiate from other factors that influence financial market developments. Reference is made to further descriptions of climate risk in the annual report under the chapter “Climate risks and opportunities”. 139 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix Note 13: 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. 140 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 2021. 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 2021, 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 Nor- way. 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 knowledge available about the market’s required rate of return, including transactions and appraisals, is used when determining the cash flow. Risk-free interest Risk premium, adjusted for: Type of property Location Structural standard Environmental standard Duration of the contract The required rate of return is divided into the following elements: • • • • • • • • 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 Arealstatistikk, as well as data and observations from brokers. 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. 141 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixExternal 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 2021, external valuations were obtai- ned for properties worth NOK 24.6 billion (98 per cent of the portfolio’s value as at 31 December 2021). 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 31.12.2021 Total financial assets 31.12.2020 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 31.12.2021 Total financial liabilities 31.12.2020 Level 1 Level 1 Level 1 Non- Total Observable observable fair value Book value Quoted prices assumptions assumptions 31.12.21 31.12.21 Total fair value 31.12.20 Book value 31.12.20 5,055 18,021 23,077 25,419 67 5,058 56,521 9,103 67 5,046 56,507 8,441 103 6,076 48,763 14,244 103 6,064 48,763 13,026 120,623 117,929 111,359 103,484 191,372 187,991 180,546 171,441 25,000 24,924 20,750 20,649 502 502 1,653 1,653 17,239 11,584 17,239 11,441 15,506 9,184 15,506 9,110 54,324 54,106 47,094 46,918 67 3 38,499 9,103 120,623 168,296 155,128 25,000 502 17,239 11,584 54,324 47,094 142 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 31.12.21 Total equities and fund units 31.12.20 Loans to customers - Loans to customers - corporate - Loans to customers - retail Loans to customers 31.12.21 Loans to customers 31.12.20 Bonds and other fixed-income securities - Government bonds - Corporate bonds - Collateralised securities - Bond funds Total bonds and other fixed-income securities 31.12.21 Total bonds and other fixed-income securities 31.12.20 Derivatives: - Interest derivatives - Currency derivatives Total derivatives 31.12.21 - of which derivatives with a positive market value - of which derivatives with a negative market value Total derivatives 31.12.20 Properties: Investment properties Properties for own use Total properties 31.12.21 Total properties 31.12.20 Level 1 Level 2 Level 3 Quoted prices Observable assumptions Non- observable assumptions 31.12.21 31.12.20 375 14,678 15,054 10,266 7,443 489 7,932 8,387 8 12,663 12,670 9,514 33,376 1,659 35,035 33,726 40,707 237,619 278,326 7,443 489 7,932 31,148 55,354 5,550 76,464 168,516 2,292 -519 1,772 3,820 -2,048 33,376 1,659 35,035 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 9,977 -964 9,012 32,117 1,609 33,726 40,071 40,071 31,446 261 222,940 223,201 189,117 14,426 55,346 5,550 63,802 139,124 151,367 2,292 -519 1,772 3,820 -2,048 9,012 16,722 16,722 16,114 143 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixMOVEMENTS BETWEEN QUOTED PRICES AND OBSERVABLE ASSUMPTIONS NOK million Equities and fund units From quoted prices to From observable observable assumptions assumptions to quoted prices 83 59 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 01.01.21 Net gains/losses on financial instruments Supply Sales Exchange rate adjustments Other Equities Fund units customers bonds Bond funds properties for own use Loans to Corporrate Investment Properties 907 9,360 8,387 318 9,196 32,117 1,609 -18 4 -517 6,350 1,523 -2,212 -136 -207 35 1,338 -1,334 -495 -311 38 -38 113 5,740 -1,846 -541 558 1,793 -721 -775 406 124 66 -143 3 1,659 Book value 31.12.21 376 14,678 7,932 8 12,663 33,376 As of 31.12.21, Storebrand Livsforisikring had NOK 7.141 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 Forest investment 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 valuations. These utilise an estimated market-related required rate of return. NOK million Change in fair value per 31.12.21 Change in fair value per 31.12.20 Change in value at change in discount rate Increase + 25 bp Decrease - 25 bp -11 -12 10 11 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. NOK million Change in fair value per 31.12.21 Change in fair value per 31.12.20 Change MSCI World Increase + 10 % Decrease - 10 % 861 430 -861 -430 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. 144 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNOK million Change in fair value per 31.12.21 Change in fair value per 31.12.20 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 determinated 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 31.12.21 Change in fair value per 31.12.20 Change in marketspread + 10 bp -26 -30 - 10 bp 26 31 Corporate bonds Bonds registered as Tier 3 bonds are typically non-performing loans or convertible bonds. They are not priced based on a discount rate as bonds normally are, and these investments are therefore included in the same sensitivity test as private equity. NOK million Change in fair value per 31.12.21 Change in fair value per 31.12.20 Properties The sensitivity assessment for properties includes investments properties. Change MSCI World Increase + 10 % Decrease - 10 % 15 -15 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 5.5 per cent. In the order of 25 percent of the property’s cash flow is linked to lease agreeements 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 0.70 to 0.75 per cent. NOK million Change in fair value per 31.12.21 Change in fair value per 31.12.20 Change in required rate of return 0.25 % -2,128 -1,827 -0.25 % 2,401 2,041 145 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 14: 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 moti- vating 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 Counting subordinated loans Deferred tax assets Risk equalisation reserve Deductions for CRD IV subsidiaries Expected dividend Total basic solvency capital Subordinated capital for subsidiaries regulated in accordance with CRD IV Total solvency capital Total solvency capital available to cover the minimum capital requirement 31.12.21 Group 1 limited Group 2 Group 3 2,002 8,857 356 616 2,002 9,473 356 Group 1 unlimited 2,360 10,842 28,711 -3,728 -1,645 36,538 Total 2,360 10,842 28,711 10,860 356 616 -3,728 -1,645 48,369 3,728 52,098 40,688 36,538 2,002 2,148 31.12.20 Total 2,339 10,521 31,851 4,815 8,734 247 438 -3,006 -1,519 49,605 3,006 52,611 43,533 146 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixSOLVENCY 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 31.12.21 31.12.20 25,258 720 10,829 931 590 1,550 -7,804 -5,218 26,856 2,944 29,800 175 % 10,738 379 % 25,675 951 10,859 935 523 1,578 -7,948 -5,533 27,040 2,565 29,605 178 % 11,074 393 % 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 31.12.21 31.12.20 3,125 26,856 29,982 3,728 48,369 52,098 22,116 2,739 27,040 29,779 3,006 49,605 52,611 22,833 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 2021, the difference amounted to NOK 181 million. 147 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix2021 25,265 11,409 36,674 15,461 3,071 694 1,159 284 5,208 59 9,233 415 225 1,927 11,800 6,544 53,681 22,064 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 Note 15: Premium income NOK million Savings: Unit Linked Storebrand Life Insurance Unit Linked SPP Total savings Of which premium reserve transferred to company Insurance: P&C & Individual life 1) Group life 2) Pension related disability insurance Pension related disability insurance SPP Total insurance Of which premium reserve transferred to company Guaranteed pension: Defined Benefit (fee based) Storebrand Life Insurance Paid-up policies Storebrand Life Insurance Traditional individual life and pension Storebrand Life Insurance SPP Guaranteed Products Total guaranteed pension Of which premium reserve transferred to company Other: 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 148 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 16: Net income analysed by class of financial instrument NOK million income etc. assets investments Net gains and Net Dividend/ losses on revaluation interest financial on Of which Total 2021 Company Customer Total 2020 Profit on equities and fund units 714 11,073 42,026 53,813 37 53,776 14,654 Profit on bonds and other fixed- income securities at fair value Profit on financial derivatives Profit on loans Total gains and losses on financial assets at fair value - of which FVO (fair value option) - of which trading - of which available-for-sale Net income bonds to amortised cost Net income loans Total gains and losses on financial assets at amortised cost LOSSES FROM LOANS NOK million 3,155 1,230 26 5,124 51 3,970 995 4,965 -83 869 -2,072 -4,838 3 1,000 -2,740 28 11,859 35,119 52,102 -22 14 43 351 351 4,321 995 5,316 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 220 94 3 354 43 220 720 940 780 -2,834 26 4,335 5,374 60 51,748 24,423 3,547 2,676 4,413 1,595 4,101 275 4,376 6,009 2021 2020 -1 -12 -1 -2 -5 1 -20 3 -27 -1 -2 -13 1 -37 149 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 17: Net income from properties NOK million Rent income from properties 1) Operating expenses (including maintenance and repairs) relating to properties 2) Result minority defined as liabilities Total Realised gains/losses Change in fair value Total income properties 1) Of which real estate for own use 2) Of which properties for own use Allocation by company and customers: Customer Total income from properties Note 18: 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 Profit sale of subsidaries Other income Total other income 2021 1,589 -381 -183 1,025 206 933 2,164 104 -42 2,164 2,164 2021 96 96 3,128 1,321 324 235 591 1 5,698 2020 1,648 -393 -68 1,187 494 1,680 97 -42 1,680 1,680 2020 114 114 2,342 1,217 264 180 -8 4,109 150 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 19: Insurance claims NOK million Savings: Unit Linked Storebrand Life Insurance Unit Linked SPP Total savings Of which premium reserve transferred to company Insurance: P&C & Individual 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 Life Insurance Paid-up policies Storebrand Life Insurance Traditional individual life and pension Storebrand Life Insurance SPP Guaranteed Products Total guaranteed pension Of which premium reserve transferred to company Other: 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 2021 -23,582 -10,166 -33,748 -29,032 -2,077 -716 -236 -3,029 -60 -1,835 -6,709 -1,200 -6,009 -15,752 -685 -52,529 -29,777 The table below shows the anticipated compensation payments DEVELOPMENT IN EXPECTED INSURANCE CLAIM PAYMENTS - LIFE INSURANCE NOK billion 0-1 year 1-3 years > 3 years Total Storebrand Life Insurance 14 29 300 343 151 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 SPP 7 16 207 231 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixDEVELOPMENT IN INSURANCE CLAIM PAYMENT - P&C INSURANCE, EXLUSIVE RUN-OFF NOK million 2016 2017 2018 2019 2020 2021 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 31.12.21 Total disbursed to present Claims reserve Claims reserve for previous years (before 2016) Total claims reserve 793 774 750 741 736 727 713 14 797 764 756 745 738 707 30 760 749 744 734 825 814 805 998 1,026 1,457 699 34 734 71 916 110 936 521 4,705 780 26 806 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 20: Change in capital buffer NOK million Change in market value adjustment reserve Change in additional statutory reserves Change in conditional bonuses Total change in capital buffer Note 21: 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 29) (see note 29) (see note 28) (see note 34) 152 2021 861 -1,566 -4,122 -4,827 2021 -2,725 -329 -2,731 -5,784 2021 -7 -136 -185 -1 -329 2020 -1,670 -2,434 -223 -4,327 2020 -2,320 -267 -2,328 -4,914 2020 -7 -135 -123 -2 -267 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNUMBER 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. 2021 1,901 1,862 1,886 1,845 2020 1,824 1,789 1,802 1,767 Note 22: Pension expenses and pension liabilities Storebrand Group has country-specific pension schemes. Storebrand’s employees in Norway have a defined-contribution pension scheme. In a defined-contribution scheme, the company 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 106,399 at 31 December 2021) 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 2021. 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 pensiona- ble salary up to 30 times the ”basic income amount” (inkomstbasbelopp). The insurance includes retirement pension with or without mortality inheritance, disability pension and children’s pension. The premium is calculated independently of age and is calculated primarily based on the monthly salary. The premium is paid monthly in two parts, a fixed part that is 2.5 per cent of the pensionable salary up to and including 7.5 times the “basic income amount”. The optional part of the premium is 2 per cent of salary up to and including 7.5 times the “basic income amount” and 30 per cent of salary between 7.5 and 30 times the “basic income amount”. The pension in the BTP2 agreement (defined-benefit occupational pension that is a closed scheme) amounts to 10 per cent of the annual salary up to 7.5 times the “basic income amount” (which was SEK 68,200 in 2021 and will be SEK 71.000 in 2022), 65 per cent of salary in the interval from 7.5 to 20, and 32.5 per cent in the interval from 20 to 30. No retirement pension is paid for the portion of salary in excess of 30 times the ”basic income amount”. Full pension entitlement is reached after 30 years of membership in the pen- sion 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”. 153 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix 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 Asset ceiling 1) Present value of unsecured liabilities Net pension liabilities recognised in statement of financial position 1) Pension assets that cannot be recognized in the statement of financial position BOOKED IN STATEMENT OF FINANCIAL POSITION NOK million 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 Pension liabilities additions/disposals and currency adjustments Net pension liabilities 31.12 CHANGES IN THE FAIR VALUE OF PENSION ASSETS NOK million Pension assets at fair value 01.01 Expected return Estimate deviation Premiums paid Pensions paid Pension liabilities additions/disposals and currency adjustments Net pension assets 31.12 Expected premium payments (pension assets) in 2022 Expected premium payments (contributions) in 2022 Expected AFP early retirement scheme payments in 2022 Expected payments from operations (uninsured scheme) in 2022 154 2020 1,237 -1,082 155 196 351 2020 351 2020 1,259 15 21 79 -1 -51 111 1,433 2020 995 16 -31 25 -30 107 1,082 2021 1,009 -1,035 -26 31 175 181 2021 181 2021 1,433 13 16 -155 -49 -74 1,185 2021 1,082 12 7 29 -27 -67 1,035 19 192 18 44 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixPENSION ASSETS ARE BASED ON THE FINANCIAL ASSETS HELD BY STOREBRAND LIFE INSURANCE/SPP COMPOSED AT 31.12: NOK millionon 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 2021 13 % 39 % 15 % 13 % 19 % 1 % 2020 15 % 34 % 20 % 12 % 17 % 3 % 2021 13 % 21 % 13 % 53 % 2020 12 % 18 % 13 % 57 % 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 4.5 % 4.4 % 1.9 % 4.8 % NET PENSION EXPENSES BOOKED TO PROFIT AND LOSS ACCOUNT, SPECIFIED AS FOLLOWS NOK million Current service cost Net interest cost/expected return Total for defined benefit schemes The period's payment to contribution scheme The period's payment to contractual pension Net pension cost recognised in profit and loss account in the period OTHER COMPREHENSIVE INCOME (OCI) IN THE PERIOD NOK million Actuarial loss (gain) - change in discount rate Actuarial loss (gain) - change in other financial assumptions Actuarial loss (gain) - experience DBO Loss (gain) - experience Assets Investment management cost Asset ceiling - asset adjustment Remeasurements loss (gain) in the period MAIN ASSUMPTIONS USED WHEN CALCULATING NET PENSION LIABILITY 31.12 NOK million Discount rate Expected earnings growth Expected annual increase in social security pensions Expected annual increase in pensions payment Disability table Mortality table Storebrand Life Insurance 2021 2.0 % 2.25 % 2.25 % 0.0 % KU 2020 1.5 % 1.75 % 1.75 % 0.0 % KU 2021 13 4 18 243 24 285 2021 -117 -33 -16 5 31 -131 SPP 2021 1.8 % 3.5 % 2020 15 5 20 220 17 258 2020 103 -11 -11 25 3 110 2020 1.2 % 3.5 % 2.0 % 2.0 % K2013BE K2013BE DUS14 DUS14 155 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix 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 uncer- tainty. 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 assumpti- ons. Actuarial assumptions: In Norway standardised assumptions on rates of mortality and disability as well as other demographic factors are prepared by Finance Norway. With effect from 2014 a new mortality basis, K2013, has been introduced for group pension insurance in life insurance companies and pension funds. Storebrand has used the mortality table K2013BE (best estimate) in the actuarial calculations at 31 December 2021. 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 2021 and are calculated for each individual when all other assumptions are kept constant. SWEDEN Percentage change in pension: - Pension liabilities - The period's net pension costs Discount rate earnings growth in pensions payment expected life expectancy Expected Expected annual increase Mortality - change in 1.0 % -1.0 % 1.0 % -1.0 % 1.0 % + 1 år - 1 år -8 % -10 % 10 % 13 % -2 % 5 % -4 % -4 % 0 % 0 % 0 % 0 % 2 % 1 % -2 % -1 % 156 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 23: 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 5) Total 2021 Total 2020 Total Post remunera- Pension terminati- Ordinary Other tion for the accrued for on salary No. of shares salary 1) benefits 2) year the year (months) Loan 3) owned 4) 7,638 5,900 5,025 5,053 6,528 6,531 3,210 3,527 3,215 3,527 185 201 202 177 28 153 41 41 168 158 7,823 6,101 5,227 5,230 6,555 6,684 3,251 3,568 3,382 3,686 50,154 47,812 1,354 1,498 51,507 49,311 1,493 1,130 945 950 1,682 1,256 566 629 562 629 9,842 9,598 24 18 12 12 12 12 12 12 12 12 5,384 221,242 10,000 140,384 6,035 3,009 100,770 110,379 99,083 1,200 120,176 18,598 8,989 11,282 6,786 71,284 69,128 29,551 24,848 29,538 24,695 900,666 754,613 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, excess loan amounts will be subject to market terms. 4) The summary shows the number of shares owned by the individual, as well as his or her close family and companies where the individual exercises significant influence, cf. the Accounting Act, Section 7-26. 5) Resigned from his position on 31 December 2021. Since Løken will commence in a different position outside of the Storebrand Group, he will not receive severance pay. NOK thousand Board of Directors Didrik Munch Laila Synnøve Dahlen 3) Martin Skancke Karin Bing Orgland Christel Elise Borge 3) Karl Sandlund Marianne Bergmann Røren Fredrik Åtting Bodil Catherine Valvik Hans-Petter Salvesen Magnus Gard 3) Hanne Seim Grave 3) Total 2021 Total 2020 Remuneration Loan 1) No. of shares owned 2) 874 141 677 566 303 477 428 630 472 428 155 317 5,468 5,077 255,000 15,500 30,000 27,000 7,000 5,000 18,500,000 1,390 325 325 18,841,540 18,615,503 5,047 4,854 6,829 1,932 18,662 17,122 1) Employees can borrow up to NOK 7.0 million at a subsidised interest rate, excess loan amounts will be subject to market terms. 2) 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. 3) Board member only part of the year Loans to Group employees totalled NOK 3.263 million. 157 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 24: Remuneration paid to auditors NOK million Statutory audit Other reporting duties Other non-audit services Total remuneration to auditors The amounts above are incluing VAT Note 25: Other expenses NOK million Losses on claims, insurance Management fees Interest expenses Insurance Other expenses Total other expenses Note 26: 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 27: Tax TAX EXPENSES ON ORDINARY PRE-TAX PROFIT NOK million Tax payable Change in deferred tax Total tax expenses on ordinary profit 158 2021 -11 -2 -2 -15 2021 -7 -463 -91 -276 -836 2021 -413 -193 -41 -12 -27 -686 2021 -90 -755 -846 2020 -11 -2 -1 -15 2020 -128 -448 -138 -112 -826 2020 -364 -295 -85 -20 -30 -793 2020 -84 220 136 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixRECONCILIATION 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 profit subject to return tax permanent differences deferred tax on the increase in value of properties for customer assets 1) deferred tax on the increase in value of properties for customer assets covered by customer returns 1) change in tax rate Changes from previous years Total tax charge Effective tax rate 2) 2021 3,976 -986 38 2 4 161 -26 -582 582 -25 -14 -846 21% 2020 2,219 -555 228 4 82 -61 -566 566 437 136 -6% 1) Provisions are made for deferred tax on the increase in value during the ownership of real estate in SPP Fastigheter AB in accordance with IAS 12 and guiding principles for consolidation. The real estate investments are made on behalf of the customer assets. Each real estate is owned by a separate investment company, and a sale of real estate itself would entail a tax expense that will reduce the return on the customer assets and will not affect the income tax for SPP / Storebrand. The deferred tax is in the consolidated financial reporting recognised as a claim on the customer funds and will not affect the income tax expense for SPP / Storebrand. Deferred tax relating to real estate investments in the customer assets is not netted against other temporary differences in the balance sheet. 2) The effective tax rate is influenced by the fact that the Group has operations in countries with tax rates that are different from Norway. The income tax expense is also influenced by tax effects relating to previous years. The tax rate for companies in Norway 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 was changed to 20.6 per cent for 2021, from 21.4 per cent in 2020. 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 2021 8 8 2020 15 15 159 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixCALCULATION 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 Gains/losses account Total tax-reducing temporary differences Carryforward losses Basis for net deferred tax and tax assets Write-down of basis for deferred tax assets Net basis for deferred tax and tax assets Net deferred tax assets/liabilities in balance sheet 1) 2) 3) Recognised in balance sheet Deferred tax assets Deferred tax Uncertain tax positions 2021 22 2,748 27 48 1,234 4,078 -59 -16 -21 -150 -1 -248 -3,332 499 6 504 -273 1,104 832 2020 178 2,696 24 62 1,212 4,173 -27 -24 -36 -171 -259 -6,530 -2,616 -2,616 -931 1,780 849 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 probable that the Norwegian Tax Administration’s interpretation will be accepted in a court of law. Significant uncertain tax positions are described below. A. In 2015, Storebrand Livsforsikring AS discontinued the Norwegian subsidiary, Storebrand Eiendom Holding AS, with a tax loss of approximately NOK 6.5 billion and a corresponding increase in the tax loss carryforward. In January 2018, Storebrand Livsforsikring AS received notice of an adjustment to the tax returns for 2015 which claimed that the calculated loss was excessive but provided no further quantification. Storebrand Livsforsikring AS disagrees with the arguments that were put forward and submitted its response to the Norwegian Tax Administration on 2 March 2018. The notice was unclear, but based on the notice, a provision was made in the 2017 annual financial statements for an uncertain tax position of approximately NOK 1.6 billion related to the former booked tax loss (appears as a reduction in the loss carryforward and, in isolation, gave an associated increased tax expense for 2017 of approximately NOK 0.4 billion). In May 2019, Storebrand Livsforsikring AS received a draft decision from the Norwegian Tax Administration claiming changes in the tax return from 2015. Storebrand disagrees with the notice from the Norwegian Tax Administration and submitted its response in October 2019. In March 2021 Storebrand received a decision from the Norwegian Tax Administration based on similar grounds as the ones outlined in the draft decision. Storebrand continues to disagree with the view of the Norwegian Tax Administration in this case and has in May 2021 challenged the decisi- on to the Norwegian Tax Appeals Committee. Storebrand considers it to be probable that Storebrand’s understanding of the tax legislation will be accepted by the Tax Appeals Committee or a court of law, and thus, no additional uncertain tax position has been recognised in the financial statements based on the received 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. 160 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix 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. However, in October 2019 Storebrand received a notice of adjustment of tax assessment in line with the interpretive statement from the Norwegian Directorate of Taxes and the clarification from the Ministry of Finance. Storebrand Livsforsikring AS disagrees with the Norwegian Tax Administration’s interpretation but considers it uncertain as to whether the company’s interpretation will be accepted if the case is decided by a court of law. The uncertain tax position has therefore been recognised in the financial statements. Based on our 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 derecog- nised 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 an additional tax income of approximately NOK 0.8 billion if Storebrand’s position under (B) is accepted. If the Norwegian Tax Administration prevails with its argument under point (A), Storebrand will recognise a tax expense of approximately NOK 0.6 billion. Storebrand has reviewed the uncertain tax positions as part of the annual reporting process. The review has not reduced the company’s assessment of the probability that Storebrand’s in- terpretation will be accepted in a court of law. The timeline for the continued process with the Norwegian Tax Appeals Committee is unclear, but if necessary, Storebrand will seek clarification from the court of law for the aforementioned uncertain tax positions. Note 28: Intangible assets and fair value adjustments on purchased insurance contracts NOK million Acquisition cost 01.01, Additions in the period - Developed internally - Purchased separately - Purchased via acquistion/merger Disposals in the period Exchange rate adjustments Acquisition cost 31.12 Accumulated depreciation and write-downs 01.01 Write-downs in the period Amortisation in the period 2) Disposals in the period Exchange rate adjustments Acc. depreciation and write-downs 31.12 Book value 31.12 Intangible assets IT systems 1,454 VIF 1) 10,602 Other intangible assets 1,811 7 459 -51 2,227 Goodwill 2,552 581 -64 3,069 2021 16,419 60 191 1,067 -8 -817 16,912 2020 14,901 105 200 14 -10 1,209 16,419 -679 9,923 -7,954 -1,149 -305 -10,116 -8,681 -365 -162 527 -7,792 2,131 47 -1,264 963 -305 2,764 -23 -689 5 577 -10,245 6,667 -22 -592 7 -828 -10,116 6,303 60 183 27 -8 -23 1,693 -708 -23 -162 5 3 -884 809 1) Value of business-in-force, the difference between market value and book value of the insurance liabilities in SPP and Silver 161 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 Useful Depr. 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 Customer relations Capital Investment Total economic life 5 years 20 years 10 years 10 years 7 years 10 years 5 years 5 years 10 years 3 years 7 years GOODWILL DISTRIBUTED BY BUSINESS ACQUISITION rate 20 % 5 % 10 % 10 % 14 % 10 % 20 % 20 % 10 % 33 % 14 % 2021 -366 -161 -527 2020 -372 -120 -492 Book value Book value 2021 809 1,963 168 238 138 205 63 86 2 232 3,903 2020 746 2,451 197 278 170 1 13 90 102 8 4,056 Depr. method Straight line Straight line Straight line Straight line Straight line Straight line Straight line Straight line Straight line Straight line Straight line Business Acquisition write-downs Book value currency Book value Book value Accumulated Supply/ disposals/ NOK million area cost 01.01 Delphi Fondsforvaltning Storebrand Bank ASA SPP SPP Fonder Skagen Cubera Capital Investment Total Savings Other Guarant. pension/ Savings Savings Savings Savings Savings 35 422 831 48 1,007 206 01.01 -4 -300 01.01 32 122 831 48 1,007 206 2,550 -304 2,246 effect 31.12.21 31.12.20 32 122 778 47 1,007 206 572 2,764 32 122 831 49 1,007 206 2,247 -53 -1 572 518 Goodwill is not amortised, but is tested annually for impairment. Intangible assets linked to the acquisition of SPP In 2007, Storebrand Livsforsikring AS acquired SPP Pension & Försäkring AB and its subsidiaries (SPP). The majority of the intangible assets linked to the acquisition of SPP include the value of business in force (VIF), for which liability adequacy tests are conducted in accordance with the requirements in IFRS 4. To determine whether goodwill and other intangible assets linked to SPP have declined in value, an estimate is made of the recoverable amount by calculating the entity specific value of the business. SPP is considered to be a separate cash flow generating unit. 162 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 .The management has made assessments for the period from 2025 to 2031, and the annual growth for each element in the income statement has been estimated. When calculating the terminal value, a growth rate equivalent to observed inflation of 1.7 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 expec- ted regulatory tying-up of capital is also used in the valuation. The utility value is calculated using a required rate of return of 6.7 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 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 assess- ments for the period from 2025 to 2031, and the annual growth has been determined in the income statement. A growth rate of 1.8 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 5.2 per cent. The requ- ired 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 products, technology and goodwill. Budgets and forecasts approved by the Board for the next three years are used as the basis for the valuation. For the period from 2025 to 2026, 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 1.8 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 6.7 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 are used as the basis for the valuation. For the period from 2025 to 2026, a projected forecast has been used that is based on the expected development in the private equity market. A growth rate of 1.8 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 after tax of 6.7 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. 163 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix 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. Silver has been integrated into Storebrand Livsforsikring’s business and is predominantly part of the savings segment. The recoverable amount is determined by calculating the entity specific value of the business. The assessment of the intangible assets is done by estimating the value of the con- tracts that were purchased, despite these not being a separate cash-generating unit. In order to determine whether there has been impairment that is less than the book values, the parameters used in the valuation and acquisition analysis are assessed. A compari- son is also made with the development of expected values used in the valuation upon acquisition. The value will be influenced by the assumptions regarding expected returns in the financial markets, costs, transfers, income develop- ment and the discount rate. Simulations with reasonable and also conservative assumptions indicate a value that justifies the book value, cf. IAS 36. knyIntangible assets related to the purchase of customer portfolio from Insr In 2020, Storebrand Forsikring AS entered into an agreement to acquire a customer portfolio from Insr Insurance Group ASA. The policies were renewed in Storebrand’s systems during 2020 and 2021, and the intangible asset was accrued based on actual renewals, cf. IAS 38. The customer portfolio from Insr is integrated into Storebrand’s business and primarily Storebrand Forsikring AS and the In- surance segment. The recoverable amount is determined by calculating the utility value of the business. It is considered most accurate to estimate the value of the contracts that were acquired, despite these not being a separate cashflow generating unit. In order to determine whether there has been impairment that is less than the book values, the parameters used in the valuation and acquisition analysis are assessed. A comparison is also made with the development of expected values used in the valuation upon the entering into of the agreement to acquire the customer portfolio. The utility value will be influenced by the assumption of profitability and claims ratio, customer loss, and the required rate of return that is used. Simulations with reasonable and also conservative assumptions indicate a value that justifies the book value, cf. IAS 36. Intangible assets related to the acquisition of Capital Investment Storebrand Asset Management AS acquired Capital Investment in 2021. See Note 3 for the acquisition analysis. This acquisition analy- sis is still considered to be the best estimate of the value of Capital Investment and further calculations have not been carried out as at 31 December 2021. Note 29: Tangible fixed assets and lease agreements NOK million Book value 01.01 Additions Disposals Depreciation Book value 31.12 Vehicles/ equipment Real estate 2021 2020 59 24 -2 -7 73 2 1 2 60 24 -2 -7 75 49 20 -2 -7 60 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 164 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 AGREEMENTS 2021 75 1,191 1,266 1266 1,266 2020 60 1,337 1,397 1397 1,397 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 Exchange rate adjustments Book value 31. 12 Accumulated write-downs/depreciations 01.01 Depreciation Exchange rate adjustments Accumulated write-downs/depreciations 31.12 Booked value 31.12 Buildings IT-equipment Other equipment 1,519 41 -6 -43 1,510 -222 -117 -338 1,172 83 -4 78 -44 -18 2 -60 18 2 2 -1 -1 1 2021 1,604 41 -7 -47 1,591 -267 -135 3 -400 1,191 2020 1,167 406 -1 33 1,604 -139 -135 7 -267 1,337 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. Depreciations lease agreements Lease agreements for right-of-use assets are depreciated on a straight-line basis over the lease term. NON-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. 2021 144 126 114 113 113 651 1,260 2020 145 141 112 108 107 793 1,406 165 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixCHANGES 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 adjustments 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 2021 1,355 34 -145 11 -44 1,210 2021 -17 -17 2020 1,037 404 -146 19 40 1,355 2020 -14 -14 Note 30: 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. 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 Storebrand Helseforsikring AS Storebrand Helseforsikring AS 2021 2020 Equity-method Insurance Joint venture Equity-method Insurance Joint venture 748 120 89 451 26 937 35 35 694 121 74 446 34 862 67 67 166 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix PROFIT AND OWNERSHIP INTERESTS IN ASSOCIATED COMPANIES AND JOINT VENTURES NOK million Associated companies Inntre Holding AS Storebrand Eiendomsfond Norge KS Other associated companies Joint ventures Försäkringsgirot AB Ruseløkkveien 26 AS Storebrand Helseforsikring AS Total Booked in the statement of financial position Investments in associated companies - company Investments in associated companies - custo- mers Total Business location Ownership share Profit 31.12 Book value Book value 31.12.21 31.12.20 Steinkjær Bærum Stockholm Oslo Lysaker 0.0 % 31.0 % 16.7 % 50.0 % 50.0 % 398 4,089 8 8 3,259 164 7,528 387 7,141 7,528 3 402 17 820 30 790 820 127 3,694 3 5 2,472 147 6,449 283 6,167 6,449 Note 31: Classification of financial assets and liabilities NOK million Financial assets Bank deposits Shares and fund units Bonds and other fixed-income securities Loans to financial institutions Loans to customers Accounts receivable and other short-term receivables Derivatives Total financial assets Total financial assets 2020 Financial liabilities Subordinated loan capital Loans and deposits from credit institutions Deposits from banking customers Securities issued Derivatives Other current liabilities Total financial liabilities Total financial liabilities 2020 Investments, Liabilities Loans and held to Fair value, Fair value, at amortised receivables maturity held for sale FVO cost Total 2021 Total 2020 9,986 117,929 67 61,555 11,661 201,199 178,902 8,441 8,441 13,026 3,760 3,760 9,903 278,326 168,516 7,931 60 454,833 416,284 9,986 278,326 13,065 230,830 294,887 293,506 67 69,486 11,661 3,820 668,233 103 63,214 7,422 9,977 618,116 11,441 11,441 9,110 502 17,239 24,924 14,643 68,749 63,116 51 51 78 502 17,239 24,924 2,048 14,643 70,797 1,653 15,506 20,649 964 16,209 64,091 1,997 1,997 898 167 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 32: Bonds at amortised cost LOANS AND RECEIVABLES NOK million Government bonds Corporate bonds Structured notes Collateralised securities Total bonds at amortised cost Storebrand Bank Modified duration Average effective yield Storebrand Livsforsikring Modified duration Average effective yield Distribution beween company and customers Loans and receivables company Loans and receivables customers with guarantee Total BONDS HELD TO MATURITY NOK million Corporate bonds Total bonds at amortised cost Modifed duration Average effective yield Distribution beween company and customers: Bonds held to maturity - customers with guarantees Total 2021 2020 Book value Fair value Book value Fair value 28,171 70,854 17,993 911 29,574 71,189 17,581 913 26,249 66,944 8,699 1,592 29,261 73,488 9,177 1,602 117,929 119,257 103,484 113,529 0.1 0.6 % 6.6 1.7% 0.1 0.9 % 8.0 2.5% 1.6% 10,639 92,846 103,484 3.0% 12,955 104,975 117,929 2021 2020 Book value Fair value Book value Fair value 8,441 8,441 4.3% 8,441 8,441 9,103 9,103 3.5 2.0% 13,026 13,026 4.4% 13,026 13,026 14,244 14,244 3.1 1.1% For the individual securities, the effective interest rate is calculated based on the fair value of the security and when capitalised at amortized value. For fair value, the weighted average effective interest rate for the total portfolio is calculated using the individual se- curity’s share of total fair value as weightings. For fixed-interest securities assessed at book (amortized) value, the weighting takes place with the individual security’s share of total amortized value, including accrued interest. 168 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 33: Loans to customers NOK million Corporate market Retail market Gross loans Write-downs of loans losses Net loans 1) 1) 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. 2021 12,532 57,042 69,574 -88 69,486 38,992 30,494 38,992 30,493 69,486 2021 48 29 77 -18 59 2020 13,738 49,553 63,291 -77 63,214 31,780 31,434 31,780 31,434 63,214 2020 71 50 121 -17 104 169 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 34: Properties NOK million 31.12.21 31.12.20 of return % 1) lease (years) 3) m2 31.12.21 Average Required rate duration of 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 8,715 4,988 724 5,611 2,807 8,435 4,811 790 5,497 2,693 933 858 3,905 2,550 2,434 709 33,376 1,659 35,035 30,202 4,833 35,035 270 2,589 2,692 2,750 683 50 32,117 1,609 33,726 50 29,261 4,415 33,726 3,25 - 3,75 4,00 - 5,35 4.40 5,00 - 6,30 5.20 4.20 3.16 4.25 4.33 7.63 5.9 4.1 3.7 3.4 5.0 1.0 0.2 11.4 10.0 94,165 85,225 16,987 180,173 112,329 27,393 90,191 35,872 49,579 38,820 730,734 730,734 1) The properties are valued on the basis of the following effective required rate of return (included 2.5 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 31.12.21, Storebrand Life Insurance had NOK 7 141 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 8 per cent (7.4 per cent) at the end of 2021 The vacancy rate for areas that are not available for rent due to ongoing development projects is 91.8 per cent (78.6 per cent). At the end of 2021, a total of 10.7 per cent (13.8 per cent) of the floor space in the investment properties was vacant Sweden At the end of 2021, the vacancy for investment properties was 0,5 per cent Transactions: Purchases: Further SEK 539 millions in property acquistions in SPP have been agreed on in 4th quarter 2021 in addtition to the figures that have been finalised and included in the finacial statements as of 31 December 2021. Sale: No further property sales has been agreed on in Storebrand/SPP in addiition to the figures that has been finalised and included in the finacial statements as of 31 December 2021. 170 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 Exchange rate adjustments 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 2021 1,609 27 124 -13 12 -106 6 1,659 559 586 -692 -705 1,659 1,659 Note 35: 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 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 2021 1,078 498 272 886 5,350 45 2,335 284 699 215 11,661 11,024 638 11,661 171 2020 1,375 8 72 -14 13 108 48 1,609 551 559 -677 -692 1,609 1,609 Straight line 50 years 2020 863 261 231 458 2,093 182 2,022 324 717 271 7,422 7,018 404 7,422 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 Gross accounts receivable Provisions for losses Net accounts receivable Note 36: Equities and fund units NOK million Equities Private Equity fund investments Fund units Infrastructure funds 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 37: Bonds and other fixed-income securities NOK million Government bonds Corporate bonds Structured notes Collateralised securities Bond funds Total bonds and other fixed-income securities Allocation by company and customers: Bonds and other fixed-income securities - company Bonds and other fixed-income securities - customers with guarantee Bonds and other fixed-income securities - customers without guarantee Total 2021 1,061 18 1 1,081 -3 1,078 2021 Fair value 38,946 76,237 162,308 834 278,326 543 28,714 249,069 278,326 2021 Fair value 31,148 55,354 2,023 3,528 76,464 168,516 27,706 90,011 50,800 168,516 2020 858 6 1 0 865 -2 863 2020 Fair value 30,402 1,268 199,160 230,830 384 21,839 208,607 230,830 2020 Fair value 34,634 62,043 7,051 73,267 176,995 28,833 97,223 50,939 176,995 172 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixModified duration Average effective yield Fair value Storebrand Life SPP Pension & Storebrand Storebrand Storebrand Insurance Insurance 7.3 3.3% 6.7 1.4% Bank 1.6 0.9% Insurance 0.6 1.3% ASA 0.6 1.3% For individual fixed-interest securities, the effective rate is calculated based on the fair value (market value) of the security. The average effective interest rate for total holdings is calculated using the individual security’s share of fair value as a weighting. Interest derivatives are included in the calculation of modified duration and average effective interest rate. Note 38: 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. NOK million Interest derivatives Currency derivatives Total derivater 31.12. Total derivater 31.12.20 Distribution between company and customers: Derivatives - company Derivatives - customers with guarantee Derivatives - customers without guarantee Total 1) Values 31.12. Gross nominal Gross booked volume 1) value fin. assets 167,367 168,575 2,992 828 3,820 9,977 Gross booked value fin. liabilities 675 1,373 2,048 964 Net amount Net amount 2021 2,317 -545 1,772 695 1,514 -437 1,772 2020 5,659 3,353 9,012 1,275 5,753 1,984 9,012 Note 39: 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 Total Total Storebrand Storebrand pension Savings Insurance 1) Group 2021 Group 2020 13,602 13,781 6,173 33,557 173 13,602 13,781 6,309 33,693 11,380 10,769 7,170 29,319 136 136 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixSPECIFICATION OF BALANCE SHEET ITEMS CONSERNING LIFE INSURANCE NOK million Premium reserve/pension capital - of which IBNS Pension surplus fund Premium fund/deposit fund Other technical reserves - of which IBNS Guaranteed pension 255,380 2,253 1 2,881 Savings Insurance 1) Group 2021 Group 2020 Total Total Storebrand Storebrand 308,351 20 5,645 1,906 619 661 573 569,376 4,180 1 3,500 661 573 531,715 5,526 2,266 702 587 Total insurance liabilities - life insurance 258,263 308,351 6,925 573,539 534,683 1) Including personal risk and employee insurance of the Insurance segment. MARKET VALUE ADJUSTMENT RESERVE NOK million Equities Interest-bearing Total market value adjustment reserves at fair value NOK million Total insurance liabilities - life insurance 01.01 Premium income Capital return Change in market value adjustment reserve Insurance claims Change in conditional bonuses Fair value adjustment of properties for own use in Other comprehensive income Fee and administration income Surplus allocated to additional statutory reserves Allocated risk equalisation fund Profit sharing to owner Other changes Total change in insurance liabilities in income statement Transfer between products Yield tax Fair value adjustment of properties for own use in Other comprehensive income Change in reinsurance share Change in premium fund Other Acquisition of insurance portfolio Exchange rate adjustments Total insurance liabiliteis - life insurance 31.12. 1) Including personal risk and employee insurance of the Insurance segment. See note 40 for insurance liabilities - P&C. Guaranteed pension 259,489 12,084 10,921 819 -15,994 -4,504 -127 -1,785 -1,653 -109 -166 332 -182 955 -77 127 893 381 2,550 -5,875 258,263 174 2021 5,195 1,115 6,309 2020 3,102 4,069 7,170 Insurance 1) Total 2021 Total 2020 Savings 268,345 36,674 47,682 -33,683 6,849 2,754 228 42 -1,268 -544 -229 -44 -482 49,603 -109 -58 1 -9,431 308,351 -215 -118 1,194 -986 -11 -97 -24 6,925 534,683 51,512 58,831 861 -50,945 -4,504 -127 -2,557 -1,653 -109 -425 -268 476,040 42,804 30,557 -1,670 -28,509 37 -2,294 -2,535 27 -135 -355 50,615 37,928 -31 -186 127 -11 796 299 2,551 -15,306 573,538 36 -184 -72 -11 484 -542 21,004 534,683 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 40: 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 39 for insurance liabilities - life insurance. Note 41: 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 to broker Liabilities tax/tax appropriations Minority SPP Fastighet KB Kick back 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 Exchange rate adjustments Book value 31.12 175 2021 32 32 985 933 893 41 1,918 2021 286 990 36 231 50 357 2,756 1,449 5,096 321 2,411 205 454 2020 56 56 695 650 620 30 1,345 2020 173 776 54 122 189 407 8,141 956 2,769 211 1,746 32 633 14,643 16,209 2021 54 7 -22 -3 36 2020 57 27 -34 4 54 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 42 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 amortised cost. Derivatives are recognised at fair value through profit or loss. Changes in the value of the hedged item that are attributable to the hedged risk adjust the carrying amount of the hedged item and are recognised through profit or loss. Hedge effectiveness is monitored at an individual security level. Storebrand uses cash flow hedging 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 recogni- sed 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 99 per cent per 31.12.21. HEDGING INSTRUMENT/HEDGED ITEM 2021 Book value 1) 2020 Book value 1) Recog- nised of compre- Conract/ hensive nominal Recog- nised of compre- hensive Assets Liabilities Booked income 699 2,685 475 -391 335 -4 -1 5 value 2,557 -2,238 284 Assets Liabilities Booked income 1,101 3,420 284 141 -173 8 -2 -7 Contract/ nominal value 2,374 -1,865 NOK millionon Interest rate swaps Subordinated loans Debt raised through issuance of securities 480 1) Book values as at 31.12. Fair value hedging of interest rate risk Storebrand uses fair value hedging for the interest rate risk. The items hedged are financial assets and financial liabilities measured at amortised cost. Derivatives are recognised at fair value through profit or loss. Changes in the value of the hedged item that are attributa- ble 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. Hedge effectiveness was 90 per cent as at 31 December 2021. HEDGING INSTRUMENT/HEDGED ITEM NOK million Renteswapper Ansvarlig lånekapital Gjeld stiftet ved utstedelse av verdipapirer 1) Book values as at 31.12. 2021 Book value 1) Contract/ nominal value 3 045 -3 039 Assets Liabilities Booked 158 2 876 2 Hedging of net investment in Storebrand Holding AB In 2021, 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 effective 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. A revenue of NOK 577 million were recognised in total comprehensive income in connection with the hedging of Storebrand Holding AB, compared with an expence of NOK 868 million in 2020. 176 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix HEDGING INSTRUMENT/HEDGED ITEM 2021 Book value 1) 2020 Book value 1) Contract/ Contract/ nominal value Assets Liabilities nominal value Assets Liabilities -4,693 -3,800 3 9,538 -18 3,704 -4,700 -3,650 27 3,815 10,045 NOK millionon Currency derivatives Loan used as hedging instrument Underlying items 1) Book values at 31.12. The phasing out of LIBOR as a reference rate for various currencies garnered considerable attention throughout 2021. The transition to new “overnight rates” has been demanding for many market players, however the transition has gone better than many feared. From 1 January 2022, LIBOR for USD, GBP, EUR, CHF and JPY will be replaced by new “overnight rates”, SOFR, SONIA, EURSTR, SARON and TONA. The value of some of the LIBOR rates will still be quoted in 2022, however this will only be synthetic for GBP and JPY. The transition to and use of the new official “overnight rates” will continue in 2022. For Storebrand, the process of LIBOR rates being discontinued has not been particularly difficult because exposure to LIBOR rates has been limited. The necessary adaptation of agreements related to EONIA when concerning certain counterparties was completed in Q4 2021. EONIA has been replaced by EURSTR and the stipulated “fallbacks” which has entailed a continuation of the values based on EONIA. NIBOR and STIBOR, which have the greatest significance to the management of Storebrand’s customer portfolios, will be continued until further notice. The same applies to EURIBOR. Storebrand hedges an exposure in the reference interest rate EURIBOR 3M that is divided among two cross currency swaps in EUR/NOK which has a total nominal amount of EUR 550 million. Note 43: Collateral NOK million Collateral for Derivatives trading Collateral received in connection with Derivatives trading Total received and pledged collateral 2021 2,324 -3,077 -753 2020 3,380 -8,828 -5,448 The CSA agreements entered into with 15 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. Most 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 calcula- ted 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 sheet and classified as other receivables and other current liabilities in Notes 35 and 41 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 2021 651 151 802 2020 1,703 151 1,854 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 one F-loan in Norges Bank as per 31.12.2021. 177 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix Of the total lending of NOK 38.6 billion in the Bank Group, NOK 26.4 billion is loans in Storebrand Boligkreditt AS. The loans in Storebrand Boligkreditt AS have been provided as security in connection with the issuing of covered bonds in Storebrand Boligkreditt AS. Storebrand Boligkreditt AS has over-collateralisation (OC) of 11 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 7.77 per cent at the end of 2021. 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 710 million more than what the present rating requires. Storebrand Bank ASA therefore considers the security to be adequate. Note 44: Contingent liabilities NOK million Unused credit limit lending Loan commitment retail market Uncalled residual liabilities re limited partnership Undrawn capital in alternative investment funds Total contingent liabilities 2021 3,322 3,516 4,870 10,093 21,801 2020 3,063 2,962 8,251 14,276 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 45: Securities lending and buy-back agreements UTLÅN AV VERDIPAPIRER OG GJENKJØPSAVTALER NOK million Lending of shares Collateral received for lent securities 2021 207 -227 2020 Storebrand Livsforsikring has entered into agreements for securities loans with a number of counterparties. JPMorgan Luxembourg is the agent for the securities loans and will execute the lending itself on behalf of Storebrand Livsforsikring. Only shares are loaned. Storebrand Livsforsikring receives 80% of the income from securities loans. JPMorgan charges a fee of 20%. 178 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 46: 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 23 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 30 and 41. Note 47: Sold/liquidated operations Storebrand has conducted a strategic review of its ownership in AS Værdalsbruket, which was a wholly owned subsidiary of Storebrand, and was owned 74.9% by Storebrand Livsforsikring AS and 25.1% by Storebrand ASA. AS Værdalsbruket is Norway’s second largest private forest owning company located in Trøndelag county. The company owns significant limestone resources, provides nature tourism experi- ences and is part owner of Inntre Holding AS, a large exporter of building timber. In 2021, Storebrand has sold AS Værdalsbruket. The sale has contributed to the accounts with a net gain of NOK 546 million. The gain is classified as Other income in the accounts. During the year, Storebrand Livsforsikring discontinued the wholly-owned subsidiary BenCo Insurance Holding B.V. A loss of NOK 24 million was incurred in the financial result as a consequence of this. 179 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix STOREBRAND ASA Income statement NOK million Operating income Income from investments in subsidiaries Net income and gains from financial instruments: - equities and other units - bonds and other fixed-income securities - financial derivatives/other financial instruments Other financial income Operating income Rentekostnader Andre finanskostnader Operating expenses Personnel expenses Other operating expenses Total operating expenses Total expenses Pre-tax profit Tax Profit for year Note 2021 2 3 3 3 8 4,5,6 6 4,542 -2 39 204 4,783 -18 -79 -44 -136 -180 -277 4,505 7 -258 4,248 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 2021 4,248 5 6 -1 4 2020 3,028 4 64 -3 1 3,095 -30 6 -40 -56 -96 -120 2,975 -171 2,804 2020 2,804 -15 4 -11 Total comprehensive income 4,252 2,793 180 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 Bank deposits Total current assets Total assets Equity and liabilities Share capital Own shares Share premium reserve Total paid in equity Other equity Total equity Non-current liabilities Pension liabilities Securities issued Total non-current liabilities Current liabilities Debt within group Provision for dividend Other current liabilities Total current liabilities Total equity and liabilities Note 31.12.21 31.12.20 7 12 8 46 27 23,006 23,079 15 4,542 9 10,11 11 5 11,13 15 15 55 4,811 28 9,450 32,530 2,360 -9 10,842 13,192 15,128 28,321 142 1,001 1,143 1,193 1,645 228 3,066 32,530 44 27 20,893 20,964 3,139 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 Lysaker, 8 February 2022 Board of Directors of Storebrand ASA Didrik Munch (sign.) Board chair Karin Bing Orgland (sign.) Martin Skancke (sign.) Marianne Bergmann Røren (sign.) Christel Elise Borge (sign.) Karl Sandlund (sign.) Fredrik Åtting (sign.) Hanne Seim Grave (sign.) Hans-Petter Salvesen (sign.) Bodil Cahterine Valvik (sign.) Odd Arild Grefstad (sign.) Chief Executive Officer 181 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixSTOREBRAND ASA Statement of changes in equity NOK million Share capital 1) Own shares Share premium Other equity Total equity Equity at 31. December 2019 2,339 -5 10,521 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 Profit for the period Total other result elements Total comprehensive income Issues of shares 2) Provision for dividend Own share sold 3) Employee share 3) 21 Equity at 31. December 2021 2,360 1) 471 974 890 shares with a nominal value of NOK 5. 3 -2 -7 -9 9,794 2,804 -11 2,793 1,517 -1,519 33 -10 12,609 4,248 4 4,252 -1,640 -97 4 10,521 320 10,842 15,128 22,650 2,804 -11 2,793 1,517 -1,519 36 -10 25,467 4,248 4 4,252 341 -1,640 -104 4 28,321 2) A capital increase was carried out in september2021 by issuing 4,160,908 shares with a subscription price of NOK 82.02. The shares have been used as consideration for the purchase of shares in Capital Investement. 3) In 2021, Storebrand ASA has bought 2 000 000 own shares. In 2021, 576 479 shares were sold to our own employees. Holding of own shares 31. December 2021 was 1 839 776. 182 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 Receipts - sale of subsidiaries 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 Net movement in cash and cash equivalents Cash and cash equivalents at start of the period Cash and cash equivalents at the end of the period 2021 130 -184 3,126 3,071 202 -1,675 -1 -1,473 -18 44 -144 -1,513 -1,631 -33 -33 61 28 2020 -1,577 -112 3,163 1,473 -1,144 -1,144 -800 500 -30 26 -304 26 26 34 61 183 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixSTOREBRAND ASA Notes 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 risks Note 12: Tangible fixed assets Note 13: Securities issued Note 14: Shareholders Note 15: Information about close associates Note 16: Number of employees/person-years 184 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 acco- rdingly 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 estima- tes 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 wri- te-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 reco- rded 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 state- ments. 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. 185 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 transaction date. When a financial asset or a financial liability is initially recognised in the financial statements, it is valued at fair value. Initial recognition includes transaction costs directly related to the acquisition or issue of the financial asset/liability. Financial assets are derecognised when the contractual right to the cash flows from the financial asset expires, or when the company transfers the financial asset to another party in a transaction by which all, or virtually all, the risk and reward associated with owners- hip 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 chan- ges 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 Total Group contribution from Storebrand ASA, see note 8 2021 3,210 238 948 146 4,542 2020 2,222 80 620 105 1 3,028 186 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 3: Net income for various classes of financial instruments NOK million income on realisation gain/loss 2021 2020 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 51 51 51 9 10 9 -2 -22 -24 -24 -2 39 37 37 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 2021 -24 -6 -7 -7 -44 4 64 -3 66 69 -3 2020 -21 -5 -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 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 106,399 as at 31 December 2021) 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 2021. 187 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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. Net pension assets 31.12 2021 2 -7 -6 147 142 2021 165 2 -6 -12 149 2021 7 7 2020 2 -7 -5 163 157 2020 161 3 15 -15 165 2020 7 7 Expected premium payments are estimated to be NOK 2 million and the payments from operations are estimated to be NOK 11 million in 2022. PENSION ASSETS ARE BASED ON THE FINANCIAL ASSETS HELD BY STOREBRAND LIFE INSURANCE, WHICH ARE COMPOSED OF AS PER 31.12.: NOK million Properties and real estate Bonds at amortised cost Loan Equities and units Bonds Other short term financial assets Total Booked returns on assets managed by Storebrand Life Insurance were: 2021 13 % 39 % 15 % 13 % 19 % 1 % 100 % 4.5% 2020 15 % 34 % 20 % 12 % 17 % 3 % 100 % 4.4% 188 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 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 2021 2020 2 2 5 7 2021 -6 -6 2021 2.0 % 2.25 % 2.25 % 0.0 % KU 3 3 4 8 2020 9 6 15 2020 1.5 % 1.75 % 1.75 % 0.0 % KU K2013BE K2013BE Financial assumptions: The financial assumptions have been determined on the basis of the regulations in IAS 19. Long-term assumptions such as future inflation, real interest rates, real wage growth and adjustment of the basic amount are subject to a particularly high degree of uncer- tainty. 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 assumpti- ons. 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 2021. 189 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix Note 6: Remuneration of the CEO and elected officers of the company NOK thousand Chief Executive Officer 1) Salery 2) Other taxable benefits Total remuneration Pension costs 3) Board chair Board of Directors including the Chair Remuneration paid to auditors 4) Statutory audit Other reporting duties Tax advice Other non-audit services 2021 7,638 185 7,823 1,493 874 5,468 1,125 871 50 664 2020 7,373 209 7,582 1,451 871 5,077 1,083 818 226 50 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. 4) The amounts are including VAT. For further information on senior employees, see note 23 in the Storebrand Group. Note 7: Tax The difference between the financial results and the tax basis for the year is provided below. NOK million Pre-tax profit Dividend Gain/loss equities Tax-free group contribution Permanent differences Change in temporary differences Tax base for the year TAX COST NOK million Payable tax group contribution Change in deferred tax Tax cost 190 2021 4,505 -135 -203 -3,214 83 6 1,042 2021 -260 2 -258 2020 2,975 -30 -2,253 -30 13 675 2020 -169 -2 -171 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixCALCULATION OF DEFERRED TAX ASSETS AND DEFERRED TAX ON TEMPORARY DIFFERENCES AND LOSSES CARRIED FORWARD NOK million Tax increasing temporary differences Total tax increasing temporary differences Tax reducing temporary differences Securities 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 (27%) Tax effect of: Dividends received Gains on equities Permanent differences Changes from previous year Tax cost Effective tax rate 2021 2020 -40 -142 -1 -183 -183 46 2021 4,505 -1,126 34 51 784 -258 6 % -18 -157 -2 -177 -177 44 2020 2,975 -744 8 567 -2 -171 6 % 191 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 8: Parent company’s shares in subsidiaries and associated companies NOK million Subsidiaries Storebrand Livsforsikring AS 1) Storebrand Bank ASA 2) Storebrand Asset Management AS 3) Storebrand Forsikring AS 4) Storebrand Facilities AS Jointly controlled/associated companies Storebrand Helseforsikring AS AS Værdalsbruket 5) Total Business office Interest/ votes in % Carrying amount 2021 2020 Oslo Oslo Oslo Oslo Oslo Oslo Værdal 100% 100% 100% 100% 100% 50% 25% 15,603 2,823 3,425 1,053 25 78 14,813 2,493 2,637 843 25 78 4 23,006 20,893 1) Group contribution in 2021 of NOK 790 million as capital contribution. 2) Group contribution in 2021 of NOK 80 million as capital contribution. 3) In 2021, a share capital increase of NOK 791 million was carried out through a non-cash contribution of the shares in Capital Investment. 4) Group contribution in 2021 of NOK 60 million as capital contribution. 5) Storebrand has conducted a strategic review of its ownership in AS Værdalsbruket, which was a wholly owned subsidiary of Storebrand, and was owned 74.9% by Storebrand Livsforsikring AS and 25.1% by Storebrand ASA. AS Værdalsbruket is Norway’s second largest private forest owning company located in Trøndelag country. The company owns significant limestone resour- ces, provides nature tourism experiences and is part owner of Inntre Holding AS, a large exporter of building timber. During the second quarter Storebrand has sold AS Værdalsbruket. The sale has contributed to the accounts with a net gain of NOK 202 million for Storebrand ASA, including in line Other financial income in Income statement. 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 Fair value 2021 55 55 Fair value 2021 4 811 4 811 0,6 1,25 % 2020 57 57 2020 4 894 4 894 0,3 0,67 % For individual fixed-interest securities, the effective rate is calculated based on the fair value (market value) of the security. The avera- ge effective interest rate for total holdings is calculated using the individual security’s share of fair value as a weighting. 192 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix Note 11: 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 State and state guaranteed Company bonds Covered bonds 54 1,013 Supranational organisations 439 1,506 1,494 Other Total 2021 Total 2020 COUNTERPARTIES NOK million Bank deposits 134 439 573 721 6 2,193 2,199 1,984 526 5 530 693 1 AAA AA Fair value Fair value 5 23 Total Total Fair value Fair value 2021 194 4,171 5 439 2 4,811 2020 261 4,353 278 1 4,894 Total Fair value 28 The rating classes are based on Standard & Poors’s Interest rate risk Storebrand ASA has both interest-bearing securities and interest-bearing debt. A change in interest rates will have a limited effect on the company’s equity. Liquidity risk UNDISCOUNTED CASH FLOWS FOR FINANCIAL LIABILITIES NOK million Securities issued/bank loans Total financial liabilities 2021 Total financial liabilities 2020 0-6 months 7-12 months 508 508 7 4 4 7 2-3 years 14 14 516 4-5 years 505 505 510 Total value 1,031 1,031 1,042 Carrying amount 1,001 1,001 1,001 Storebrand ASA had as per 31 December 2021 liquid assets of NOK 4,8 billion. Currency risk Storebrand ASA has investments of SEK 51 million. 193 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 12: Tangible fixed assets EQUIPMENT, FIXTURES & FITTINGS NOK million Acquisition cost 01.01 Accumulated depreciation Carrying amount 01.01 Additions Disposals Carrying amount 31.12 Property, plant and equipment mainly includes art that is not depreciated. Note 13: Securities issued 2021 2020 34 -7 27 1 27 34 -7 27 -1 27 NOK million Bond loan 2020/2025 Bond loan 2017/2022 Total bond and bank loans 1) Interest rate Currency Variable Variable NOK NOK Net nominal value 500 500 2021 500 501 1,001 2020 500 501 1,001 1) 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 2025. 194 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix Note 14: Shareholders THE 20 LARGEST SHAREHOLDERS Folketrygdfondet Allianz Global Investors T Rowe Price Global Investments EQT Fund Management Alfred Berg KLP Vanguard Group Handelsbanken Asset Management DNB Asset Management Storebrand Asset Management Danske Bank Asset Management HSBC Trinkaus & Burkhardt OM Holding AS BlackRock Nordea Asset Management M&G Investments Solbakken AS Lannebo Fonder BMO Global Asset Management (UK) SSGA Foreign ownership of total shares Ownership interest in % 10.9 7.0 5.9 3.9 3.5 3.1 2.7 2.1 2.1 2.0 2.0 1.9 1.9 1.8 1.6 1.5 1.4 1.1 1.0 1.0 51% 195 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. AppendixNote 15: 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 2) Board of Directors Didrik Munch Martin Skancke Karin Bing Orgland Christel Elise Borge Karl Sandlund Marianne Bergmann Røren Frode Åtting Bodil Catherine Valvik Hans-Petter Salvesen Hanne Seim Grave Number of shares 1) 221,242 140,384 100,770 110,379 99,083 120,176 29,551 24,848 29,538 24,695 255,000 30,000 27,000 7,000 5,000 18 500 000 325 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. 2) Resigned from his position on 31 December 2021. Since Løken will commence in a different position outside of the Storebrand Group, he will not receive severance pay. 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 16: Number of employees/person-years Number of employees Number of full time equivalent positions Average number of employees 196 2021 4,542 -108 4,542 1,193 2021 8 8 8 2020 3,028 -47 3,139 910 2020 7 7 7 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 2021 financial year and as at 31 December 2021 (2021 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 Norwegian Accounting Act that must be applied as at 31 December 2021. 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 2021. In the best judgment of the Board and the CEO, the annual financial statements for 2021 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 2021. 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, 8 February 2022 Board of Directors of Storebrand ASA Didrik Munch (sign.) Board chair Karin Bing Orgland (sign.) Martin Skancke (sign.) Marianne Bergmann Røren (sign.) Christel Elise Borge (sign.) Karl Sandlund (sign.) Fredrik Åtting (sign.) Hanne Seim Grave (sign.) Hans-Petter Salvesen (sign.) Bodil Catherine Valvik (sign.) Odd Arild Grefstad (sign.) Chief Executive Officer 197 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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 2021, the income statement, statement of total 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, and • The consolidated financial statements of Storebrand ASA and its subsidiaries (the Group), which comprise the statement of financial position as at 31 December 2021, the income statement, statement of total 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 comply with applicable statutory requirements, the financial statements give a true and fair view of the financial position of the Company as at 31 December 2021, 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, and the financial statements give a true and fair view of the financial position of the Group as at 31 December 2021, 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. Our opinion is consistent with our additional report to the Audit Committee. Basis for Opinion We conducted our audit in accordance with 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 the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International 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 198 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix Independent Auditor's Report - Storebrand ASA Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided. We have been the auditor of the Company for 4 years from the election by the general meeting of the shareholders on 11 April 2018 for the accounting year 2018. 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 2021 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 39 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 (2) 199 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate 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, 13 and 34 in the financial statements for management’s further description of investment properties, the methods used and the assumptions the valuations are based on. 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. 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 challenged the management and external valuers on the possible effects from climate risk in setting fair value. We assessed the explanations reasonable. 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. (3) 200 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix Independent Auditor's Report - Storebrand ASA We challenged management on substantial deviations and obtained explanations on deviations. We assessed management’s explanations as reasonable. We also assessed and came to the conclusion that the information about investment properties in the notes to the financial statements were in accordance with the accounting principles and provides an adequate description of the method and the underlying assumptions that is used for the valuation. 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. 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 13 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 27 uncertain tax positions have occurred as 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 (4) 201 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix Independent Auditor's Report - Storebrand ASA 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. 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. Other Information The Board of Directors and the Managing Director (management) are responsible for the information in the Board of Directors’ report. The other information comprises information in the annual report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the information in the Board of Directors’ report. In connection with our audit of the financial statements, our responsibility is to read the Board of Directors’ report. The purpose is to consider if there is material inconsistency between the Board of Directors’ report and the financial statements or our knowledge obtained in the audit, or whether the Board of Directors’ report otherwise appears to be materially misstated. We are required to report if there is a material misstatement in the Board of Directors’ report. We have nothing to report in this regard. Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report • • is consistent with the financial statements and contains the information required by applicable legal requirements. Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate Governance and Corporate Social Responsibility. Responsibilities of Management for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view 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 and using 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. (5) 202 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix Independent Auditor's Report - Storebrand ASA 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 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 ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error. We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • 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. (6) 203 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix Independent Auditor's Report - Storebrand ASA We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on Other Legal and Regulatory Requirements Report on compliance with Regulation on European Single Electronic Format (ESEF) Opinion We have performed an assurance engagement to obtain reasonable assurance that the financial statements with file name storebrandasa-2021-12-31-nb.zip have been prepared in accordance with Section 5-5 of the Norwegian Securities Trading Act (Verdipapirhandelloven) and the accompanying Regulation on European Single Electronic Format (ESEF). In our opinion, the financial statements have been prepared, in all material respects, in accordance with the requirements of ESEF. Management’s Responsibilities Management is responsible for preparing, tagging and publishing the financial statements in the single electronic reporting format required in ESEF. This responsibility comprises an adequate process and the internal control procedures which management determines is necessary for the preparation, tagging and publication of the financial statements. Auditor’s Responsibilities For a description of the auditor’s responsibilities when performing an assurance engagement of the ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger Oslo, 8 February 2022 PricewaterhouseCoopers AS Thomas Steffensen State Authorised Public Accountant Note: This translation from Norwegian has been prepared for information purposes only. (7) 204 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 92Statement of total comprehensive income 93Statement of Financial Position 94Statement of changes in equity 96Statement of cash flow 97Notes 99Storebrand ASAIncome statement 180Statement of total comprehensive income 180Statement of Financial Position 181Statement of changes in equity 182Statement of cash flow 183Notes 184Declaration by member of the Board and the CEO 197Independent auditor’s report 1988. Corporate governance9. Sustainability Assurance10. Appendix 8 Corporate governance 206 Corporate governance 214 Companies in the Storebrand Group Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 206Companies in the Storebrand Group 2149. 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 can be found on page 19. Storebrand complies with the Code of Practice without significant deviations - with the exception of a minor deviation in section 3 below on Board authorisations to make capital increases and to purchase own shares. The discrepancy relates to the fact that it was not facilitated for the general meeting to vote separately on each individual purpose to which the board authorisations apply. Statement in line with the Norwegian Code of Practice for Corporate Governance (NUES) of 17 October 2018 The statement below describes how Storebrand complies with the 15 sections of the NUES Code of Practice. 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 on page 46. 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 shareholders. is to deliver profitable growth within Storebrand’s strategy 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 Director’s 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. 206 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 206Companies in the Storebrand Group 2149. Sustainability Assurance10. AppendixThese principles are: • We base our business activities on the UN Sustainable Development Goals (SDGs). • We help our customers to live more sustainably through the products and services we offer. • 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 work with our customers, suppliers, authorities and partners to achieve the UN Sustainable Development Goals. • We are transparent about our work on sustainability and the results we achieve. The Board of Directors adopts Storebrand’ s overall goals for the work on sustainability, which is in line with these principles. Executive management is responsible for realising the strategic goals. An overall strategic goal in 2021 has been to strengthen sustainability 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 Executive 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. On page 26, 33, 44 and 71, 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 2021. Read more about Storebrands dividend policy on page 54. 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 2021 Annual General Meeting, the Board was granted authorization to increase the share capital through issuing new shares for a total maximum value of NOK 233,906,990. This authorisation may be used for the acquisition of businesses in consideration for new shares or for increasing the share capital by other means. The Board of Directors may decide to waive the shareholders’ preferential rights to subscribe for new shares in accordance with the authorization. This authorisation may be used for one or more new issues. This authorisation is valid until the next Annual General Meeting. At the same General Meeting, the Board of Directors was authorised to buy back shares for a maximum value of NOK 233,906,990. 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. 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 authorisations to increase the share capital and buy back shares are limited to defined purposes. However, no provision was made for the General Meeting to vote on each individual purpose to be covered by the authorisations. 207 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 206Companies in the Storebrand Group 2149. Sustainability Assurance10. Appendix4. 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. The 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. For a complete account of shareholder matters, see page 87 above. 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 18th April 2021. 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. 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 Board Chair, 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 Chair. The Board of Directors endorses an independent chairman of the meeting, elected by the General Meeting. The General Meeting shall: • • • • • • • • • • • • consider the annual accounts, consisting of the income statement, the balance sheet and the annual report, including the consolidated income statement and balance sheet, and the auditor’s report, decide upon adoption of the income statement and balance sheet, decide upon adoption of the consolidated income 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 Chair of the Nomination Committee, elect members to the Board of Directors, and this should include the Board Chair, 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. 208 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 206Companies in the Storebrand Group 2149. Sustainability Assurance10. Appendixlaw, however, a special majority Decisions are generally made on the basis of an ordinary majority. Pursuant to Norwegian 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) The Nomination Committee of Storebrand ASA is statutory and consists of a minimum of 3 and a maximum of 5 members. For the election period 2021-2022, the nomination committee has consisted of five members. The Chair of the Nomination Committee and the other members are elected annually by the General Meeting. The majority of the nomination committee is independent of the board and the administration. The committee is put together with a view to safeguarding the interests of the shareholder community. The general meeting’s instructions to the nomination committee include provisions on rotation for members of the nomination committee. The articles of association stipulate that the nomination committee shall follow instructions laid down by the general meeting in its work. The nomination committee’s instructions were most recently revised at the annual general meeting in the spring of 2019. In accordance with the instructions, the nomination committee shall pay attention to, among other things, the following factors in the preparation of its settings of candidates for the company’s Board of Directors: competence, experience, capacity, gender distribution, independence and consideration for the interests of the shareholder community. More information about the members is posted on Storebrand’s website. The Nomination Committee annually attributes the company’s 30 largest shareholders with a call to come forward with proposals for candidates for the Board of Directors and the Nomination Committee. A similar call to shareholders has been made on the company’s website. The nomination committee’s mandate in accordance with the company’s articles of association is to propose candidates and remuneration to the board and the nomination committee, through settings to the general meeting. The remuneration of the members of the nomination committee has been sought adapted to the nature of the work and the time spent in the committee work. The Nomination Committee held 14 meetings in 2021. 8. Composition and independence of the Board (No deviations from the Code of Practice) The Articles of association stipulate that between five and seven Board members are elected by the General Meeting at the recommendation of the Nomination Committee. The Board Chair is elected separately by the General Meeting. Two members, or three members if the General Meeting elects six or seven Board members, are elected by and among the employees. Members of the Board 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 2021, the Board consisted of 10 members (five men and five women). None of the Board 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 on page 230 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 during 2021). 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 of 31 December 2021 is included in the notes to the financial statements for Storebrand ASA (Information on related parties) on page 193. None of the board members have held office for more than ten years. 9. The work of the Board of Directors (no deviations from the Code of Practice) Duties of the Board of Directors In 2021, 19 board meetings were held. Storebrand’s future strategic direction 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 familiarize 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. 209 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 206Companies in the Storebrand Group 2149. Sustainability Assurance10. AppendixAll Board members attended all Board meetings in 2021. The work of the Board is regulated by special rules of procedure for the Board, which are reviewed annually. In order to ensure sound and well-considered decisions, importance is attached to ensuring that meetings of the Board are well prepared so that all the members can participate in the decision-making process. The Board prepares an annual schedule for its 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 Board Chair. 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 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 2021, 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 held four meetings during 2021. The Board annually carries out an evaluation of its work and its working method that provides the basis for changes and measures. The report from the Board’s evaluation, or relevant excerpts, will be made available to the Nomination Committee, which will use the evaluation in its work. Board Committees The Board has established four subcommittees in the form of the Compensation Committee, Audit Committee, Risk Committee and Strategy Committees. 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 2021. 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 seven meetings in 2021, including one 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. 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 where it has operations that require a licence, including the Financial Supervisory Authority of Norway, as well as its own supervisory bodies and external auditor. 210 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 206Companies in the Storebrand Group 2149. Sustainability Assurance10. AppendixRisk 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. Storebrand’s independent control functions for risk management, compliance, actuary professional and information security are gathered in a competence community, Governance Risk & Compliance, led by the Group Chief Risk Officer (CRO) The CRO reports directly to the CEO and the Board of Directors. The CRO function is responsible for supporting the Board and Executive 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. Financial information and Storebrand’s accounting process Storebrand publishes four interim financial statements, 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. 11. 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 211 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 206Companies in the Storebrand Group 2149. Sustainability Assurance10. Appendix13. 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 inside information, see also section 10 - Overall 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 Code of Practice) The external auditor is elected by the General Meeting of Storebrand ASA and conducts a financial audit. The external auditor issues an auditor’s report in connection with the annual financial statement, conducts limited audits of the interim accounts. The external auditor attends board meetings where the quarterly accounts are processed, and all meetings of the Audit Committee, unless the items on the agenda do not require the presence of the auditor. The external auditor shall rotate the responsible partner on the audit assignment every seven years, and Storebrand shall carry out tenders for the election of an auditing company 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. 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 Note 15 (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 Executive 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 Note 15 (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. 212 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 206Companies in the Storebrand Group 2149. Sustainability Assurance10. AppendixOther As one of the largest owners in the Norwegian stock market, Storebrand has a major potential influence on the development of listed companies. Storebrand is committed to exercising its ownership interest in listed companies on the basis of a set of simple and uniform ownership principles, which place considerable emphasis on sustainability. Storebrand uses the Norwegian code of practice for corporate governance in its corporate governance practice. Storebrand has had an administrative Corporate Governance Committee since 2006. The committee helps ensure good corporate governance across Storebrand. 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. Storebrand Asset Management AS has held a Corporate Governance Committee for several years. The Committee has a mandate to set a level of ambition and establish limits for active ownership. The Committee shall coordinate Storebrand’s exercise 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. 6. 7. 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. The provisions in the Articles of Association that regulate the appointment and replacement of board members are discussed in Item 8 above. Further information on Storebrand’s corporate governance can be found on the 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. 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. 9. Guidelines for gender equality and diversity, including goals, implementation and effect. Statement in accordance with Section 3-3b, second 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. 213 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 206Companies in the Storebrand Group 2149. Sustainability Assurance10. AppendixCompanies in the Storebrand Group STOREBRAND ASA Storebrand Livsforsikring AS Storebrand Holding AB SPP Konsult AB SPP Spar AB SPP Pension & Försäkring AB SPP Fastigheter AB SPP Hyresförvaltning Storebrand & SPP Business Services AB Storebrand Eiendomsfond Invest AS Storebrand Eiendom Trygg AS Storebrand Eiendom Vekst AS Storebrand Eiendom Utvikling AS Storebrand Pensjonstjenester AS Storebrand Infrastruktur AS Norsk Pensjon AS 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 Capital Investment A/S CVR CI AM Aps CVR Storebrand Forsikring AS Storebrand Facilities AS Storebrand Helseforsikring AS Organisation number Ownership interest 916 300 484 958 995 369 556734-9815 556045-7581 556892-4830 556401-8599 556745-7428 556883-1340 556594-9517 995 871 424 876 734 702 916 268 416 990 653 402 931 936 492 991 853 545 890 050 212 953 299 216 990 645 515 930 208 868 556397-8922 556801-1802 867 462 732 989 580 353 556812-8184 32343775 37939374 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 % 25.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0% 100.0% 100.0 % 100.0 % 50.0 % 214 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 206Companies in the Storebrand Group 2149. Sustainability Assurance10. Appendix9 Sustainability Assurance 216 TCFD-index 220 GRI-index 226 Auditor’s Statement Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability AssuranceTCFD-index 216GRI-index 220Auditor’s Statement 22610. AppendixPages 72 and 74 72 and 74 TCFD-index TCFD-recommended disclosures Governance Disclose Storebrand’s governance around climate-related risks and opportunities. a Describe the Board’s oversight of climate-related risks and opportunities. b Describe the management’s role in assessing and managing climate- related risks and opportunities. - Storebrand assesses climate risk in the same framework as other business risks. The overall risk, including climate risk, is summarised in the Risk Review in Executive management and the Board twice a year. Climate risk is also assessed in the annual ORSA (Own Risk and Solvency) report which is adopted by the Board of Directors and submitted to the Financial Supervisory Authority. - Sustainability, hereunder climate risk, is part of the Board’s risk - discussions and strategy agenda. “Setting the agenda for sustainable finance” is one of the CEOs Must Win Battles, and status and progress on selected ESG (hereunder climate) KPIs are reported to the Board regularly. The EVP sustainability reports on ESG related risks and opportunities to the Board twice a year. - All subsidiaries are expected to perform a climate risk assessment that is included in the group’s climate risk analysis. - Management includes transition risks in strategic planning, especially in our role as asset owners and asset managers. - Physical risks, with a specific focus on extreme weather insurance important for our property and is particularly subsidiaries. - Storebrands CEO has appointed an EVP of sustainability that is part of the executive management team. 216 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability AssuranceTCFD-index 216GRI-index 220Auditor’s Statement 22610. AppendixKAPITTEL11 - VERIFISERING BÆREKRAFT Strategy 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. a Describe the climate-related risks and opportunities Storebrand has identified over the short, medium and long term. - Storebrand’s climate risk assessment is based on the following 74-84 risk formulations: - Reduced return on investment (as a result of climate change or the transition to low emissions). - Declining demand for our products (due to market changes as a result of climate change or the transition to a low carbon economy). Increased costs, higher compensations/losses or increased requirements for reserves (as a result of climate change or the transition to low emissions). - - Missed opportunities from the lack of, or too late climate adaptation. - Non-compliance with new regulations climate adaptation or reporting. - Not reaching our own climate adaptation targets, or our to zero-emission (in relation ambitions are commitments or customer expectations). insufficient - Some of these risk formulations can also materialise as opportunities: - - Increased return on investment (as a result of climate change or the transition to low emissions) due to our investment strategies. Increasing demand for our products (as a result of market changes caused by climate change or the transition to a low carbon economy) due to successful strategies. - Reduced costs, lower compensations/losses than our peers (as a result of climate change or the transition to low emissions). - Best in class compliance with new regulations climate adaptation or reporting. - Reaching our own climate adaptation targets and having a sufficient level on our ambitions (in relation to zero-emission commitments or customer expectations). b Describe the impact of climate- related risks and opportunities on Storebrand’s businesses, strategy, and financial planning. - Business strategy is influenced to a large degree by transition risks, as can be seen through our climate strategy for investments, our exclusions and our tilt towards solution companies. - Business strategy is influenced by reputational risks related to 14-15, 62-70, 74-83, 85 customer as well as regulators expectations. - All the executive vice presidents at Storebrand have appointed a strategic and operational sustainability general to ensure that sustainability is well integrated into the strategy processes and followed up during the year in executive management meetings. Moreover, the CEO is followed up by the board on the sustainability KPIs he is responsible for. 217 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability AssuranceTCFD-index 216GRI-index 220Auditor’s Statement 22610. Appendixc Describe the resilience of Storebrand’s strategy, taking into consideration different climate- related scenarios, including a 2°C or lower scenario. - By aligning our analysis to the NGFS climate scenarios, we are able to evaluate the robustness of our business strategies and investment strategies across different climate-related scenarios, including a 2 °C or lower scenario. We have a strategic ambition to contribute to the achievement of the 1,5 degree target. - We have set a target to have a carbon neutral investment portfolio by 2050 at the latest, and intermediate targets for 2025. In our intermediate reporting we are in line with this trajectory. 14-15, 62-70, 74-83 Risk Management Disclose how Storebrand identifies, assesses and manages climate-related risks. a Describe Storebrand’s processes for identifying and assessing climate-related risks. b Describe Storebrand’s processes for managing climate-related risks. - Climate risk is an integrated part of the Group’s enterprise risk 72 and 74-83 assessment. - Storebrand assesses climate risk in the same framework as other business risks. The overall risk, including climate risk, is summarized in the Risk Review in Executive management and the Board twice a year. Climate risk is also assessed in the annual ORSA (Own Risk and Solvency) report which is adopted by the Board of Directors and submitted to the Financial Supervisory Authority of Norway. - A climate risk assessment is conducted on a group level, and for each of the subsidiaries/business areas within the group. - We track and assess exposure to sectors with significant climate and sustainability risks. - We conduct physical climate risk assessments for our property portfolio on a property level. - For investments, we analyse all companies in our investment universe using our in-house sustainability rating, including climate risks. - We track our exposure to fossil fuels, high emitting sectors and assess our 20 top emitting companies. We engage in one to one dialog with the top emitters. For property investments, we utilize sustainability due diligence to support pre investment decisions, and an active ownership post-investment process to align portfolios to the 1.5 degree target, through surveys and action plans at asset level. - - We integrate climate factors in risk assessment and pricing in the insurance underwriting process. We improve risk assessment by analysing for extreme precipitation and flooding in different areas. At the same time, we provide a higher price for insurance of buildings with basements in risk areas. 74-83 c Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management. - Our processes are described in the chapters Risk and Climate 57, 72, 74-83 risk and opportunities of this report. 218 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability AssuranceTCFD-index 216GRI-index 220Auditor’s Statement 22610. AppendixMetrics and Targets Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material. a b c Disclose the metrics used by Storebrand to assess climate- related risks and opportunities in line with its strategy and risk management process. 40, 44, 62-70, 74-83 - Carbon footprint investments: 12 tonnes CO2 equivalents per NOK/SEK 1 million in sales income (compared to 18 index). in equity - Carbon footprint in bond investments: 9 tonnes CO2 equivalents per NOK/SEK 1 million in sales income (compared to 17 index). - Carbon intensity in real estate investments (scope 1-3 (kg/m2)): 5.91. - Exposure to high emitting sectors: NOK 42,5 billion / 9 per cent of total equity investments - Number of active company engagements related to climate and environmental-related risks and opportunities: 318. - Number of companies that have been excluded due to severe climate and environmental damage: 176. Disclose Scope 1, Scope 2 and Scope 3 GHG emissions, and the related risks. - All our greenhouse gas emissions are reported in the chapters Keeping our house in order, A driving force for sustainable investment, and in the appendices Sustainability indicators and definitions and Carbon Accounting Report. 44, 71, 85 Disclose the targets used by Storebrand to manage climate- related risks and opportunities and performance against targets. - - Targets for each asset class are described in the chapters Keeping our house in order and the Director’s report. 40, 44, 71, 74-83, 85 219 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability AssuranceTCFD-index 216GRI-index 220Auditor’s Statement 22610. AppendixGRI-index An index of the GRI indicators we are reporting on and where the report contains information about the indicators follows below. GRI-ref. Title Account Chapter Section Reporting Full Full Full Full Full Full Full Full Full Partial Partial Full Full Full Organisation profile 102-1 The name of the organisation Storebrand ASA GRI-index GRI-index Activities, brands, products and services This is Storebrand Our driving force The location of the head office Professor Kohts vei 9, Lysaker, Oslo, Norway GRI-index GRI-index 102-2 102-3 102-4 The places where your organisation operates 102-5 Ownership and legal form This is Storebrand Our driving force This is Storebrand; Director’s report Organisation; Companies in the Storebrand Group 102-6 The markets covered This is Storebrand Our driving force 102-7 The size of the organisation This is Storebrand Our driving force 102-8 Information about employees and other workers 102-9 Supply chain 102-10 Significant changes in the organisation and supply chain 102-11 Precautionary principle or approach People Key performance indicators Director's report The Group’s results 2021 People People Engaged, competent and courageous employees Key performance indicators Keeping our house in order Sustainable practices through our value chain Foreword by our CEO Foreword by our CEO This is Storebrand; Director’s report Sustainability as a core business; Climate risks and opportunities; A driving force for sustainable investments 220 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability AssuranceTCFD-index 216GRI-index 220Auditor’s Statement 22610. AppendixGRI-ref. Title Account Chapter Section This is Storebrand; Keeping our house in order; Director’s report Sustainability as a core business; Corporate governance; A driving force for sustainable investments Reporting Full 102-12 External initiatives 102-13 Membership in organisations CDP Finance for Biodiversity Pledge UN’s Sustainable Development Goals United Nations Convention Against Corruption Universal Declaration of Human Rights UN Environmental Conventions UN Women’s Empowerment Principles UN Principles for Responsible Business Conduct UN Treaty on Plastic Pollution Global Real Estate Sustainability Benchmark (GRESB) Global Reporting Initiative Global 100 ILO Conventions Montreal Pledge Paris-Agreement 2015 Platform for Living Wages Financials Investor Alliance on Human rights Portfolio Decarbonisation Coalition Task Force on Climate-related Financial Disclosures (TCFD) Taskforce on Nature-related Financial Disclosures (TNFD) Tobacco-Free Portfolios Accounting for Sustainability Investor group under UNEP FI working with TCFD Climate Action 100+ Net-Zero Asset Owner Alliance Net-Zero Asset Manager Alliance Nordic CEOs for a Sustainable Future NORSIF PRI Investor Commitment to Support a Skift – Næringslivets klimaledere Just Transition on Climate Change UN Global Compact UNEP Finance Initiative UN Principles for Responsible Investment UN Principles for Sustainable Insurance This is Storebrand; Director’s report Full Sustainability as a core business; Climate risks and opportunities; A driving force for sustainable investments Strategy 102-14 Opinion from the chief decision-maker Ethics and integrity 102-16 Values, standards, principles and norms Foreword by our CEO Foreword by our CEO Full This is Storebrand; Keeping our house in order; Director’s report Sustainability as a core business; Corporate governance; Full 221 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability AssuranceTCFD-index 216GRI-index 220Auditor’s Statement 22610. AppendixGRI-ref. Title Management 102-18 Governance structure Account Chapter Section Reporting This is Storebrand; Director’s report Organisation; Group Executive Management; Board of Directors and Committees; Risk; Corporate governance Stakeholder engagement 102-40 List of stakeholder groups This is Storebrand Material issues 102-41 102-42 Collective bargaining agreements 100 % in Norway and 100 % in Sweden GRI-index GRI-index Identification and selection of stakeholders This is Storebrand Material issues 102-43 Approach to stakeholders This is Storebrand Material issues 102-44 Important topics and questions that have been addressed Reporting practices 102-45 Entities covered by the organisation’s consolidated financial statements 102-46 Defining report content and topic boundaries This is Storebrand; all chapters Material issues; “Why” paragraphs in the beginning of each section Director's report The Group’s results 2021 Full This is Storebrand Material issues 102-47 List of material topics This is Storebrand Material issues 102-48 Restatements of information 102-49 Changes in reporting No significant changes 102-50 Reporting period 102-51 Date of previous report January 1, 2021 – December 31, 2021 January 1, 2020 – December 31, 2020 102-52 Reporting frequency Annually 102-53 Contact https://www.storebrand.no/en/ investor-relations Keeping our house in order; Director’s report Key performance indicators GRI-index GRI-index GRI-index GRI-index GRI-index GRI-index GRI-index GRI-index GRI-index GRI-index 102-54 Reporting in accordance with GRI standards This is Storebrand Material issues 102-55 GRI-index This table is the GRI-index. GRI-index GRI-index 102-56 External verification Appears in the auditor’s statement Appears in the auditor’s statement Competitive long-term return to shareholders and customers 103-1 Explanation of the material topic and its boundary This is Storebrand; Director’s report; Customer relations 103-2 The management approach and its components Director’s report Risk; Climate risks and opportunities; A driving force for sustainable investments; Strategy 2021-2023: “Leading the way in Sustainable Value Creation” Corporate governance; A driving force for sustainable investments; Strategy 2021-2023: “Leading the way in Sustainable Value Creation” 222 Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability AssuranceTCFD-index 216GRI-index 220Auditor’s Statement 22610. AppendixGRI-ref. Title Account Chapter Section 103-3 Evaluation of management’s approach 201-1 201-2 Direct financial value generated and distributed Financial implications and other risks and opportunities resulting from climate change Corporate governance and compliance 103-1 Explanation of the material topic and its boundary Director’s report Director’s report Director’s report Keeping our house in order 103-2 The management approach and its components Keeping our house in order 103-3 Evaluation of management’s approach Keeping our house in order Corporate governance; Strategy 2021-2023: “Leading the way in Sustainable Value Creation” Strategic highlights 2021; The Group’s results 2021 Climate risks and opportunities; A driving force for sustainable investments; Privacy and digital trust; Countering corruption; Information security; Anti-money laundering and terror financing Privacy and digital trust; Countering corruption; Information security; Anti-money laundering and terror financing Privacy and digital trust; Countering corruption; Information security; Anti-money laundering and terror financing Countering corruption; Key performance indicators Privacy and digital trust; Countering corruption; Key performance indicators Responsible resource use; Sustainable practices through our value chain; A driving force for sustainable investments; Climate risks and opportunities Responsible resource use; Sustainable practices through our value chain; A driving force for sustainable investments; Climate risks and opportunities Responsible resource use; A driving force for sustainable investments; Climate risks and opportunities Key performance indicators Reporting Full Full Full Full Full Full Partial Full Full Full Full Full Full Keeping our house in order Keeping our house in order Keeping our house in order; Director’s report Keeping our house in order; Director’s report Keeping our house in order; Director’s report Keeping our house in order; Director’s report Keeping our house in order; Director’s report Key performance indicators 223 205-2 418-1 Communication and training on policies and procedures for combating corruption Documented complaints about privacy violations and loss of customer data Responsible resource use 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 305-4 The intensity of greenhouse gas emissions 305-5 Reduction in greenhouse gas emissions Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability AssuranceTCFD-index 216GRI-index 220Auditor’s Statement 22610. AppendixGRI-ref. Title Account Chapter Section Reporting Diversity and equal opportunities 103-1 103-2 103-3 405-1 405-2 Explanation of the material topic and its boundary The management approach and its components Evaluation of management’s approach Diversity in governing bodies and among employees Ratio of basic salary and remuneration of women to men Assessing human rights 103-1 103-2 103-3 412-3 Explanation of the material topic and its boundary The management approach and its components Evaluation of management’s approach Significant investment agreements and contracts that include human rights provisions or have undergone human rights screening Corporate social responsibility 103-1 Explanation of the material topic and its boundary People People People People People Diversity and equal opportunities Diversity and equal opportunities Diversity and equal opportunities Key performance indicators Key performance indicators Director's report Director's report Director's report Director's report A driving force for sustainable investments A driving force for sustainable investments A driving force for sustainable investments A driving force for sustainable investments Keeping our house in order Countering corruption; Anti-money laundering and terror financing; Coporate social responsibility Countering corruption; Anti-money laundering and terror financing; Coporate social responsibility Countering corruption; Anti-money laundering and terror financing; Coporate social responsibility Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full 103-2 The management approach and its components Keeping our house in order 103-3 Evaluation of management’s approach Keeping our house in order 415-1 Political contributions We do not make contributions to political parties. GRI-index GRI-index Simple and seamless customer experiences 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 Customer relations; Keeping our house in order Customer relations; Keeping our house in order Customer relations; Keeping our house in order Greater security and financial wellness; Privacy and digital trust; Digital innovator in financial services Greater security and financial wellness; Privacy and digital trust; Digital innovator in financial services Greater security and financial wellness; Privacy and digital trust; Digital innovator in financial services 224 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability AssuranceTCFD-index 216GRI-index 220Auditor’s Statement 22610. AppendixGRI-ref. Title Account Chapter Section 417-2 Cases of non-compliance with information and labelling of products and services Customer relations; Keeping our house in order 417-3 Cases of non-compliance with market communication requirements Engaging, relevant and responsible advisory services 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 418-1 Documented complaints about privacy violations and loss of customer data Active ownership 103-1 103-2 103-3 FS10 FS11 Explanation of the material topic and its boundary The management approach and its components Evaluation of management’s approach Percentage and number of companies held in the institution’s portfolio with which the reporting organisation has interacted on environmental or social issues. Percentage of assets exposed to positive and negative environmental or social screening Customer relations; Keeping our house in order Customer relations; Keeping our house in order Customer relations; Keeping our house in order Customer relations; Keeping our house in order Customer relations; Keeping our house in order Director's report Director's report Director's report Director’s report Greater security and financial wellness; Privacy and digital trust; Digital innovator in financial services; Key performance indicators Privacy and digital trust; Digital innovator in financial services; Key performance indicators Greater security and financial wellness; Privacy and digital trust; Digital innovator in financial services Greater security and financial wellness; Privacy and digital trust; Digital innovator in financial services Greater security and financial wellness; Privacy and digital trust; Digital innovator in financial services Greater security and financial wellness; Privacy and digital trust; Digital innovator in financial services; Key performance indicators A driving force for sustainable investments A driving force for sustainable investments A driving force for sustainable investments A driving force for sustainable investments; Key performance indicators Reporting Partial Full Full Full Full Full Full Full Full Full Full Director’s report A driving force for sustainable investments; Key performance indicators 225 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability AssuranceTCFD-index 216GRI-index 220Auditor’s Statement 22610. AppendixAuditor’s Statement To the Board of Directors in Storebrand ASA To the Board of Directors in Storebrand ASA Independent statement regarding Storebrand's sustainability reporting Independent statement regarding Storebrand's sustainability reporting We have examined whether Storebrand ASA has prepared a GRI Index for 2021 and measurements and reporting of key performance indicators for sustainability (sustainability reporting) for the year We have examined whether Storebrand ASA has prepared a GRI Index for 2021 and measurements ending 31 December 2021. and reporting of key performance indicators for sustainability (sustainability reporting) for the year ending 31 December 2021. Storebrand's GRI index for 2021 is an overview of which sustainability topics Storebrand considers material to its business and which key performance indicators Storebrand uses to measure and report its sustainability performance, together with a reference to where material Storebrand's GRI index for 2021 is an overview of which sustainability topics Storebrand sustainability information is reported. Storebrand’s GRI Index for 2021 is available and included considers material to its business and which key performance indicators Storebrand uses to measure and report its sustainability performance, together with a reference to where material in Storebrand’s annual report for the period ending 31 December 2021. We have examined whether Storebrand has developed a GRI Index for 2021 and whether mandatory disclosures are sustainability information is reported. Storebrand’s GRI Index for 2021 is available and included presented according to the Standards published by the Global Reporting Initiative in Storebrand’s annual report for the period ending 31 December 2021. We have examined whether Storebrand has developed a GRI Index for 2021 and whether mandatory disclosures are (www.globalreporting.org/standards) (criteria). presented according to the Standards published by the Global Reporting Initiative (www.globalreporting.org/standards) (criteria). Key performance indicators for sustainability are tables that show indicators of sustainability that Storebrand measure and control. The tables are available and included in Storebrand’s annual Key performance indicators for sustainability are tables that show indicators of sustainability that report for the period ending 31 December 2021, specifically at the end of each of the chapters "A Storebrand measure and control. The tables are available and included in Storebrand’s annual driving force for sustainable investments", "Customer relations", "People" and "Order in one's own house". The various tables are also available in the summary overview «Sustainability report for the period ending 31 December 2021, specifically at the end of each of the chapters "A indicators and definitions» which is an appendix to the annual report. Storebrand has defined the driving force for sustainable investments", "Customer relations", "People" and "Order in one's own house". The various tables are also available in the summary overview «Sustainability key figures and explained how they are measured in notes to the tables that are available and indicators and definitions» which is an appendix to the annual report. Storebrand has defined the included in the appendix to the annual report (criteria). We have examined the basis for the key figures and explained how they are measured in notes to the tables that are available and measurements and checked the calculations of the measurements. included in the appendix to the annual report (criteria). We have examined the basis for the measurements and checked the calculations of the measurements. Management's responsibility Management's responsibility Management is responsible for Storebrand’s sustainability reporting and for ensuring that it is prepared in accordance with criteria as described above. The responsibility includes designing, Management is responsible for Storebrand’s sustainability reporting and for ensuring that it is implementing and maintaining an internal control that ensures the development and reporting of the prepared in accordance with criteria as described above. The responsibility includes designing, GRI Index and key performance indicators for sustainability. implementing and maintaining an internal control that ensures the development and reporting of the GRI Index and key performance indicators for sustainability. Our independence and quality control Our independence and quality control We are independent of the company in accordance with the law and regulations and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants We are independent of the company in accordance with the law and regulations and the International (including International Independence Standards) (IESBA Code), and we have fulfilled our ethical Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants obligations in accordance with these requirements. We use ISQC 1 - Quality control for audit firms that (including International Independence Standards) (IESBA Code), and we have fulfilled our ethical perform audits and simplified audit of accounts as well as other certification assignments and related obligations in accordance with these requirements. We use ISQC 1 - Quality control for audit firms that services and maintain a comprehensive system of quality control including documented guidelines and perform audits and simplified audit of accounts as well as other certification assignments and related procedures regarding compliance with ethical requirements, professional standards and applicable services and maintain a comprehensive system of quality control including documented guidelines and legal and regulatory claim. procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory claim. Auditor's tasks and duties Auditor's tasks and duties Our task is to express a limited assurance conclusion on Storebrand’s sustainability reporting based on our control. We have performed our checks and issue our opinion in accordance with the Standard on Our task is to express a limited assurance conclusion on Storebrand’s sustainability reporting based on our control. We have performed our checks and issue our opinion 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 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 226 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability AssuranceTCFD-index 216GRI-index 220Auditor’s Statement 22610. Appendix Assurance Engagements ISAE 3000: “Assurance engagements other than audits or review of historical financial information". A limited assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both the risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks. Our work involves performing actions to obtain evidence that Storebrand's GRI Index for 2021 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 explained in relation to each individual table of key performance indicators. The procedures selected depend on our judgment, including assessments of the risks that the sustainability reporting contains material misstatement, whether due to fraud or error. In making those risk assessments, we take into account the internal control that is relevant for the preparation of the sustainability reporting. The purpose is to design control procedures that are appropriate in the circumstances, but not to express an opinion on the effectiveness of internal control. Our procedures include an assessment of whether the criteria used are appropriate, as well as an assessment of the overall presentation of the sustainability reporting. Our procedures include meetings with representatives from Storebrand who are responsible for the material sustainability topics covered by the sustainability reporting; review of internal control and routines for reporting key performance indicators for sustainability; obtaining and reviewing relevant information that supports the preparation of key performance indicators for sustainability; assessment of completeness and accuracy of the sustainability reporting; and controlling the calculations of key performance indicators for sustainability based on an assessment of the risk of error. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. Conclusion Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that Storebrand’s GRI Index for 2021 is not, in all material respects, developed and presented in accordance with the requirements of the Standards published by The Global Reporting Initiative; Storebrand’s key performance indicators are not, in all material aspects, developed, measured and reported in accordance with the definitions and explanations provided in relation to each table containing the key performance indicators. Oslo, 8 February 2022 PricewaterhouseCoopers AS Thomas Steffensen State Authorized Public Accountant (This translation from Norwegian has been made for information purposes only) (2) 227 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability AssuranceTCFD-index 216GRI-index 220Auditor’s Statement 22610. Appendix 10 Appendix 229 Executive management CVs 234 Board of Directors CVs 240 Sustainability indicators and definitions 247 Carbon Accounting 248 Taxonomy reporting Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Executive management CVs Odd Arild Grefstad (1965) Group Chief Executive Officer Storebrand ASA Education State-Authorised Public Accountant Authorised Financial Analyst (AFA) Previous positions Lars Aa. Løddesøl (1964) Group Chief Financial Officer, Storebrand ASA Education MSc in Economics and Business Administration, BI Norwegian Business School MBA Thunderbird School of Global Management (AGSIM), USA AMP, Columbia University, USA Managing Director, Storebrand Livsforsikring (2011–2012) Previous positions Executive Vice President Finance and Legal, Storebrand ASA (2008–2011) Executive Vice President, Life and Pensions Norway and Managing Director, Executive Vice President Finance, Storebrand ASA (2002–2008) Storebrand Livsforsikring AS (2008–2011) Manager of the Group Controller Unit, Storebrand ASA (1998–2002) Executive Vice President, Corporate Market Life Insurance, Storebrand Group Controller, Life Insurance, Storebrand ASA (1997–1998) Livsforsikring AS (2004–2008) Vice President, Internal Auditing, i Storebrand ASA (1994–1997) CFO, Storebrand ASA (2001–2004) External Auditing, Arthur Andersen & Co (1989–1994) Vice President/Relationship Manager, Citibank International plc (1994–2001) Asst. Treasurer, Scandinavian Airlines Systems (1990–1994) Ownership in Storebrand Number of shares as of 31.12.2021: 219 242 Ownership in Storebrand Number of shares as of 31.12.2021: 140 384 229 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Heidi Skaaret (1961) Executive Vice President, Retail Market Education Staffan Hansén (1965) Executive Vice President, SPP Education MSc in Economics and Business Administration, University of Washington, Licentiate Degree (Economics), Åbo Academy, Finland Seattle, USA Previous positions PhD studies at the Finnish Doctoral Programme in Economics (FDPE) Stockholm School of Economics Lindorff Group AB, Executive Vice President, Scandinavia Region, Managing Previous positions Director of Lindorff AS in Norway (2008–2012) Executive Vice President, SPP Livförsäkring AB (2013 to present) Managing Director, IKANO Finans ASA (2001–2008) CIO, Storebrand Livsforsikring AS (2011–2013) Managerial positions at DNB ASA (1987–2000) CIO, SPP Livförsäkring AB (2008–2011) Financial Services Officer, Bank of America, San Francisco, USA (1986–1987) Responsible for strategi allocation, SPP Livförsäkring AB (2006–2008) Ownership in Storebrand Handelsbanken (2003–2006) Number of shares as of 31.12.2021: 110 379 Head of Fixed Income, Alfred Berg Finland (1996–2003) Head of Government and Covered Bond trading, Svenska Trainee, Pohjola Bank (OKOBANK) (1994–1996) Eierforhold i Storebrand Number of shares as of 31.12.2021: 99 083 230 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Jan Erik Saugestad (1965) Executive Vice President, Storebrand Asset Management Geir Holmgren (1972) Executive Vice President, Corporate Market Education Education MSc in Engineering, Norwegian University of Cand.scient. degree with actuarial qualifications, University of Oslo, Norway Science and Technology (NTNU) MBA INSEAD, France MBA, Griffith University Brisbane, Australia Previous positions Previous positions Executive Vice President, Guaranteed Pension, Storebrand ASA (2013–2015) Investment Director, Storebrand Asset Management (2006–2015) Manager Customer Service and Product, Storebrand Livsforsikring AS (2011–2012) Senior Portfolio Manager, Storebrand Asset Management (1999–2006) Product Manager, Storebrand Livsforsikring AS (2003–2011) Sector Head Equities, Energy/Shipping, Handelsbanken Markets (1997–1999) Product Manager Unit-linked Insurance, Storebrand Livsforsikring AS (2002–2003) Partner, Marsoft Capital (1995–1997) Product Manager, Defined Contribution Pensions, Storebrand Livsforsikring AS Head of Research, Christiania Markets (now: Nordea Markets) (1992–1995) (2000–2002) Junior Consultant, McKinsey & Company (1990–1991) Sales International Life Insurance, Storebrand Livsforsikring AS (1998–2000) Ownership in Storebrand Number of shares as of 31.12.2021: 120 176 Actuary Trainee, Storebrand Livsforsikring AS (1997–1998) Teacher, University of Oslo (1995–1997) Ownership in Storebrand Number of shares as of 31.12.2021: 100 770 231 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Geir 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 Executive Vice President, Guaranteed Pension, Storebrand ASA (2013–2015) Manager Customer Service and Product, Storebrand Livsforsikring AS (2011–2012) Product Manager, Storebrand Livsforsikring AS (2003–2011) Product Manager Unit-linked Insurance, Storebrand Livsforsikring AS (2002–2003) Product Manager, Defined Contribution Pensions, Storebrand Livsforsikring AS (2000–2002) Sales International Life Insurance, Storebrand Livsforsikring AS (1998–2000) Actuary Trainee, Storebrand Livsforsikring AS (1997–1998) Teacher, University of Oslo (1995–1997) Ownership in Storebrand Number of shares as of 31.12.2021: 100 770 Karin Greve-Isdahl (1979) Executive Vice President, Sustainability, Communications and Industry Policy Education Master of International Relations, Bond University, Australia Bachelor of Communications, Bond University, Australia Previous positions Vice President Communications, Opera Software (2014–2018) Communications Director, SN Power (2009–2014) Business Reporter, TV 2 (2008–2009) TV Reporter, CNBC/FBC Media (2005–2008) Researcher, CNBC Europe (2004–2005) Ownership in Storebrand Number of shares as of 31.12.2021: 29 551 Trygve Håkedal (1979) Executive Vice President, Technology Education Master of Science, Advanced Computing, Imperial College London, UK Bachelor of Science, Computing Science, Newcastle University, UK Previous positions SVP IT Strategy & Architecture, Storebrand Group (2017–2020) Chief Architect & Head of IT Strategy, Storebrand Group (2013–2015) Enterprise Architect, Storebrand Group (2009–2013) Analyst, Goldman Sachs (2008–2009) Consultant, Accenture (2006–2008) Project Test Manager, Opera Software (2003–2004) Ownership in Storebrand Number of shares as of 31.12.2021: 24 848 232 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Tove Selnes (1969) Executive Vice President, People Education Terje Løken (1975) Executive Vice President, Digital & Innovation Education Master in Law, University of Oslo, Norway Master of Science, Computer Science, NTNU, Norway Previous positions Previous positions HR Director, Storebrand Livsforsikring (2015–2020) Chief Digital Officer (CDO), Storebrand Livsforsikring (2018-2020) Group Director HR, Opera Software (2007–2015) Head of Digital and Mobile IT, Storebrand Livsforsikring (2013-2017) HR Director, Eltel Networks (2004–2007) Chief Architect (CTO), Storebrand Livsforsikring (2009-2013) HR Manager East Norway Region, Avinor (1997–2004) Enterprise Architect, Storebrand Livsforsikring (2008-2009) Legal Advisor, Aetat (1995–1997) Technology Manager (previously Technical Lead, Sr. Software Ownership in Storebrand Number of shares as of 31.12.2021: 29 538 Engineer, Software Engineer), Fast Search & Transfer (2001-2008) Computer Engineer, SINTEF Tele & Data (1999-2001) Ownership in Storebrand Number of shares as of 31.12.2021: 24 695 233 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Board of Directors CVs Christel Elise Borge (1967) Board Director, Storebrand ASA since 2021 Position CEO, Entur AS Education Master of Science, Computer Science, NTNU, Norway MBA Programme INSEAD, Fontainebleau, France Previous positions Telenor ASA (2005-2020) CEO, Dipper AS Senior Vice President, Head of Group Strategy and CEO Office Senior Vice President, Head of Group Strategy and Portfolio Development Strategy Director, Telenor Nordics, Oslo Strategy Advisor, Innovation AS (2002-2004) Project Manager, Schibsted (2001) Director, Cell Network AS (2000-2001) Strategy Advisor, McKinsey & Company (1991-1999) Ownership in Storebrand Number of shares as of 31.12. 2021: 0 Didrik Munch (1956) Board Chair, Storebrand ASA since 2017 Position Self-employed Education Norwegian Police University College Master in Law 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 Chair, NWT Media AS Board Director, Grieg Maritime Group AS Board Director, Lerøy Seafood Group Board Chair, SH Holding (Solstrand Fjord Hotell) Ownership in Storebrand Number of shares as of 31.12.2021: 40 000 Number of shares owned by the close associate: NWT Media AS: 215 000 234 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Karin Bing Orgland (1959) Board Director, Storebrand ASA since 2015 Position Self-employed Education Marianne Bergmann Røren (1968) Board Director, Storebrand ASA since 2020 Position CEO, Mesta AS Education MSc Economics and Business Administration, Norwegian School of Economics (NHH) Master in Law, University of Oslo, Norway Top Manager Programme (IMD, BI and Management in Lund) Previous positions Previous positions Executive Vice President of DNB, and various managerial positions in the same group (1985–2013) Consultant, Ministry of Trade and Shipping Handels og skipsfartsdepartementet (1983–1985) Danske Bank Corporate & Institutions (2007-2019): Global Head of COO Office Global Head of Risk Global Head of AML Programme COO and Deputy Country Manager Chief Legal Adviser Board Director and Chair of the Audit Committee at Norske Skog ASA Managing Associate (lawyer) Thommessen (2005-2007) Board Director, Norwegian Finans Holding ASA Managing Associate and Associate (lawyer) Wiersholm (2001-2005) Board Director, Scatec Solar ASA Board Director, HAV Eiendom AS Board Director, Boligselskapet INI AS, Grønland Advisor and international coordinator Finanstilsynet (1999-2001) Lawyer, Advokatfirmaet Arthur Andersen (1998-1999) Board Chair, Røisheim Hotell AS and Board Director, Røisheim Eiendom AS Positions of trust Board Chair, Visit Jotunheimen AS Member of the Nomination Committee, Telenor ASA Board Director and Chair of the Audit Committee, Grieg Seafood ASA Board member, EBA Board member, SmartCraft ASA Ownership in Storebrand Number of shares as of 31.12. 2021: 5 000 Positions of trust Board Chair, Entur AS Board Chair, GIEK Board Director and Chair of the Audit Committee, KID ASA Board Director, Eksportfinansiering Norge (eksfin) Ownership in Storebrand Number of shares as of 31.12. 2021: 27 000 235 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Karl Sandlund (1977) Board Director, Storebrand ASA since 2019 Position Executive Vice President & CCO, SAS Education Martin Skancke (1966) Board Director, Storebrand ASA since 2014 Position Self-employed Education MSc Industrial Engineering and Management, University of Linköping, Authorised Financial Analyst, Norwegian School of Economics (NHH), Norway Sweden Previous positions EVP Commercial, SAS (2017-2020) MSc Econ, London School of Economics and Political Science, UK Intermediate level Russian, University of Oslo, Norway International Finance Programme, Stockholm School of Economics, Sweden MSc Economics and Business Administration, Norwegian School of Economics, EVP & Chief Strategy Officer, SAS (2014-2017) Norway Vice President, Network, SAS (2009-2014) Vice President, Commercial, SAS (2007-2009) Previous positions Vice President, Corporate Development, SAS (2006-2007) Special Adviser, Storebrand (2011–2013) Director, Business Strategies, SAS (2004-2006) Deputy Director General and Director General, Consultant, McKinsey & Company (2001-2004) Ministry of Finance, Norway (1994–2001, 2006–2011) Ownership in Storebrand Number of shares as of 31.12. 2021: 7 000 Director General, Office of the Prime Minister, Norway (2002–2006) Management Consultant, McKinsey & Company (2001–2002) Positions of trust Board Director, Norfund Board Chair, Principles for Responsible Investment (PRI) Board Director, Storebrand Livsforsikring AS Member of the Task Force on Climate-related Financial Disclosure (TCFD) Ownership in Storebrand Number of shares as of 31.12. 2021: 30 000 236 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Fredrik Åtting (1968) Board Director, Storebrand ASA since 2020 Hanne Seim Grave (1974) Employee Representative, Board at Storebrand ASA since 2021 Position Position Partner and CO-Head of EQT Public Value Senior Authorised Insurance Advisor, Storebrand Forsikring AS Education MSc (Stockholm School of Economics) Previous positions Education Market Economics, IHM Forsikringsakademiet KAN Finans and FinAut Various positions in EQT, Sweden, Hong Kong, Germany and England (1996-) Associate Enskilda Securities, Sweden (1993-1996) Previous positions Positions of trust Member of the Nomination Comittee AFRY AB Member of the Nomination Comittee, BioGaia AB Member of the Nomination Comittee, Securitas AB Member of the Nomination Comittee, Storytel AB Ownership in Storebrand Number of shares as of 31.12.2021: 0 Authorised Insurance Agent, Akademikernes Insurance Customer advisor, settlement, Storebrand Livsforsikring, Employee advisor, Storebrand Livsforsikring Customer service, Life, Storebrand Livsforsikring Professional training manager, IF Skadeforsikring Professional support, Storebrand Skadeforsikring Sales, Storebrand Skadeforsikring Manpower, Storebrand Eiendom Number of shares owned by the close associate, EQT Public Ownership in Storebrand ValueInvestments S.à r.l.: 18 500 000 Number of shares as of 31.12.2021: 325 237 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Hans-Petter Salvesen (1968) Employee Representative, Storebrand ASA since 2020 Position Head of Union Representantives, Bodil Catherine Valvik (1973) Employee Representative, Storebrand ASA since 2020 Position Head of Fund Administration, the Finance Sector Union of Norway, Storebrand ASA Storebrand Asset Management ASA Education Education Marketing Communications, BI Norges Markedshøyskole/NMH BA(Hons) Travel & Tourism Management, People Management, Høyskolen i Akershus, Norway University of Northumbria at Newcastle Previous positions Previous positions Sales Manager, Storebrand Bank ASA (2016-2020) Manager, Customer Services, Public pensions, Sales Manager, Storebrand Finansiell Rådgivning AS (2014-2016) Storebrand Pensjonstjenester AS (2019-2020) Head of Dialogue Marketing/CRM, Storebrand ASA (2012-2014) Manager, Customer Services, Pensions & Savings, Storebrand PM (2013-2018) Operational Manager, Storebrand Baltic UAB (2010-2012) Manager, Customer Services, Link and Mutual Funds, Storebrand Key Account Manager, Storebrand Bank ASA (2005-2010) Kapitalforvaltning (2007-2012) Web Manager/Project Management, Storebrand Bank ASA (2003 – 2005) Manager, Customer Services, Link, Storebrand Livsforsikring (2002-2006) Web Manager/Project Management, Finansbanken ASA (2000-2003) Manager for Helpline Link, Storebrand Livsforsikring (2001-2002) Employee, Gjensidige Forsikring (1988-2000) Financial Advisor, Storebrand Livsforsikring (1999-2001) Ownership in Storebrand Number of shares as of 31.12. 2021: 0 Ownership in Storebrand Number of shares as of 31.12.2021: 1 390 238 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Page 1, Photographer: Johnér Bildbyrå AB / Mikael Svensson Page 5, Photographer: Lise Eide Risanger / Storebrand Page 7, Photographer: Brooke Alderson / Offset.com Page 11, Photographer: Johnér Bildbyrå AB / Hans Berggren Page 20, Photographer: Shutterstock Page 22, Photographer: Shutterstock Page 25, Photographer: Shutterstock Page 27, Photographer: Johnér Bildbyrå AB Page 34, Photographer: Shutterstock Page 38, Photographer: Maskot / Offset.com Page 42, Photographer: Johnér Bildbyrå AB / Henrik Trygg Page 43, Photographer: Johnér Bildbyrå AB / Susanne Kronholm Page 45, Photographer: Johnér Bildbyrå AB Page 50, Photographer: Johnér Bildbyrå AB / Lina Arvidsson Page 52, Photographer: Maskot / Offset.com Page 55, Photographer: Johnér Bildbyrå AB Page 56, Photographer: Johnér Bildbyrå AB Page 60, Photographer: Shutterstock Page 62, Photographer: Shutterstock Page 67, Photographer: David Pereiras / Offset.com Page 69, Photographer: Galyna Andrushko Page 73, Photographer: Johnér Bildbyrå AB Page 84, Photographer: Cultura / Offset.com Page 87, Photographer: Johnér Bildbyrå AB Page 202, Photographer: Johnér Bildbyrå AB / Michael Jönsson Page 211, Photographer: Johnér Bildbyrå AB Page 224, Photographer: Johnér Bildbyrå AB / Fredrik Schlyter Page 243, Photographer: Johnér Bildbyrå AB / Håkan Hjort Important notice This document may contain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may be beyond the Storebrand Group’s control. As a result, the Storebrand Group’s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in these forward-looking statements. Important factors that may cause such a difference for the Storebrand Group include, but are not limited to: (i) the macroeconomic development, (ii) change in the competitive climate, (iii) change in the regulatory environment and other government actions and (iv) market related risks such as changes in equity markets, interest rates and exchange rates, and the performance of financial markets generally. The Storebrand Group assumes no responsibility to update any of the forward-looking statements contained in this document or any other forwardlooking statements it may make. This document contains alternative performance measures (APM) as defined by The European Securities and Market Authority (ESMA). An overview of APM can be found at www.storebrand.com/ir. 239 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Sustainability indicators and definitions Definitions under each table apply to the key figures in chapters 2-5 of this report, and all the indicators in the complete list below. 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 70 Carbon footprint from equities investments: tonnes of CO2e per NOK 1 million in sales income (against index) 71 Carbon footprint from bond investments: tonnes of CO2e per NOK 1 million in sales income (against index) 72 Total carbon emissions from equity investments: tonnes of CO2 Scope 1-2 73 Exposure to high emitting sectors: NOK billion / share of equity investments Investments in solutions (solutions companies, green bonds, gre- en infrastructure and property with environmental certification): NOK billion / share of total assets 74 Investments in green bonds: NOK billion/ share of total bond investments Investments in green infrastructure: NOK billion / share of total infrastructure investments Investments in solution company equities: NOK billion/ share of total equity investments Investments in certified green property: NOK billion/ share of total real estate investments 75 Companies excluded from the investment universe of the Storebrand Group: number 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 universe 76 Votes at general meetings to promote Storebrand’s ESG criteria: number/ share of investment universe 77 Energy intensity direct real estate investments: kWh/m2 Water intensity direct real estate investments: m3/m2 Waste quantity direct real estate investments: kg/m2 78 Share of waste sorted for recycling direct real estate investments Total carbon emissions from direct real estate investments (Scope 1-3): Tonnes CO2e / kgCO2 per m2 investments Scope 1 emissions: tonnes CO2 (kg/m2) Scope 2 emissions: tonnes CO2 (kg/m2) Scope 3 emissions: tonnes CO2 (kg/m2) GRESB score direct real estate investments (value-weighted average) 79 Results Results Results Results 2018 13.7 % 173 % 68 % 100 % 68 2019 8.0 % 176 % 0 % 100 % 277 2020 8.6 % 178 % 65 % 100 % 379.2 2021 10.7 % 175 % 52 % 100 % 483 22 (32) 18(24) 12(18) 12(18) New 7(15) 9(16) 9(17) New 3,661,218 3,261,366 3,318,508 37.7 / 19 % 34.6 / 13 % 32.2 / 8 % 42.5 / 9 % Goals 2022 >10 % Goals 2025 >10 % >150 % >150 % >50 % 100 % N/A N/A N/A N/A N/A >50 % 100 % N/A N/A N/A N/A N/A 38.8 / 5.5 % 53.7 / 6.5 % 92.6 / 9.6 % 123.1 / 11.2 % 13 % 15 % 8.4 / 2.9 % 12.4 / 3.1 % 22.2 / 5 % 25.7 / 6 % New New New 1.5 / 100 % New 24.3 / 9.3 % 50.3 / 13 % 62.6 / 13 % N/A N/A N/A N/A N/A N/A 13 / 30 % 17 / 41 % 20.1 / 43 % 33.3 / 68 % 75 % 90 % 171 182 215 257 New 178 / 7.6 % 198 / 8.1 % 212 / 7.9 % 314 / 10.8 % 408 / 9.7 % 572 / 12 % 601 / 12 % 530 / 41.6 % 151 / 4.3 % 503 / 13 % 947 / 22.5 % 201 0.38 8.2 71% 194 0.46 9.4 74 % 181 0.44 9.2 69 % 170 0.38 8.3 72 % 10,818 / 9.96 10,228 / 9.12 8,456 / 7.9 6,703 / 5.9 New New New 0.15 7.67 1.26 0.08 6.80 1.04 0.02 4.87 1.02 N/A N/A N/A N/A 190 0.45 N/A 73 % 8.6 N/A N/A N/A N/A N/A N/A N/A 181 0.43 N/A 80 % 6.5 N/A N/A N/A 76 % 82 % 85 % 88.6 % Increase Increase 70) Fossil-free products are one of several ways to achieve our overall goal of net zero emissions, and we have therefore not set a specific goal for how much to invest in fossil-free products. 71) The method for calculating carbon footprints has been further developed for the annual report 2021. Data are obtained through Trucost (S&P Global)’s systems and weighted by market value per position. For index figures, corresponding calculations are weighted per index and it is weighted together with the portfolios’ indices based on portfolio values. This represents a coverage ratio of 96.7% in our carbon footprint from equity investments, and a coverage ratio of 93.8% for index. 72) The method for calculating carbon footprints has been further developed for the annual report 2021. Data is obtained through Trucost (S&P Global)’s systems and calculated data from management, weighted by market value per position. For index figures, corresponding calculations are weighted per index and it is weighted together with the portfolios’ indices based on portfolio values. This represents a coverage ratio of 48.8% in our carbon footprint from bond investments, and a coverage ratio of 92.1% for index. 73) In total, carbon emissions in equity investments have decreased since 2019, but have increased somewhat from 2020 to 2021. At the same time, the coverage ratio has increased from 89.5% in 2020 to 96.7% in 2021. Since the coverage ratio has increased by 8%, while the increase in emissions is only 1.7%, emissions have relatively decreased also since 2020. 74) We have decided to set an overall goal for resp. 2022 and 2025, instead of one target for each asset class. 75) Capital Investment, which we acquired in 2021, has not yet reported to GRESB, and the properties the company manages are not included in the figures for certification. 76) The number of companies we have engaged in has increased at the same time as the investment universe has increased. Commitments as a share of the investment universe will thus be the same as in 2020. 77) The increase from 2020 to 2021 is due to a partial automation of the voting process. 78) Figures for waste volume in real estate investments only apply to Norway. 79) The goal is for all our portfolios to achieve 5 stars in GRESB. This means that one must be among the 20% best globally, and can therefore not be directly translated into a score (value-weighted average). Capital Investment, which we acquired in 2021, has not yet reported to GRESB, and is not included in the figures. 240 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Definitions for key performance indicators related to A driving force for sustainable investments Return on equity: Return on equity after tax, adjusted for amortisation of intangible assets. Green bonds are for companies that both meet the Storebrand standard and are in line with international standards such as the Green Bond Principles, the forthcoming EU Green Bond standard, and with the framework of the International Capital Market Association (ICMA). Solvency margin: Degree of solvency according to European regulations for insurance regulation. Under Solvency II, the size of the capital requirement will be defined by how much risk the company is exposed to. Dividend ratio: Share dividend as a share of the profit for the year after tax (see dividend policy on page 54). Investments in green infrastructure: share of investments in sustainable infrastructure. The fund (Storebrand Infrastructure Fund) invests in projects that contribute to a green transition, for example through land-based wind power, offshore wind and electric train sets. Share of total assets screened for sustainability: All companies in our investment universe are screened for sustainability according to our standards: https://www.storebrand.no/en/sustainability/ investments Investments in certified green property: Share of direct real estate investments under operational control in Norway and Sweden with environmental certification. The certification system is mainly BREEAM, but can also include LEED, the Nordic Ecolabel or Miljöbyggnad. Investments in fossil-free products: The sum of funds / products with a mandate that requires them to be fossil-free. The companies in the portfolio cannot have more than 5 per cent of their income related to the production or distribution of fossil energy, and the fossil reserves shall not exceed 100 million tonnes of CO2. Energy intensity 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. Carbon footprint in equity investments: The figures for the calculations for carbon footprints are based on data from our data supplier in Q3 2021. Based on TCFD’s definition. The total carbon footprint of the investments is the sum of the companies’ carbon emissions over the companies’ income, weighted for our ownership in the respective companies. The unit of measurement shows carbon emissions per million NOK in sales revenue. The method is the same for equities and bonds. Carbon footprint in bond investments: The figures for the calculations for carbon footprints are based on data from our data supplier in Q3 2021. Based on TCFD’s definition. The fund’s total carbon footprint is the sum of the companies ‘carbon emissions over the companies’ income, weighted for our ownership in the respective companies. The unit of measurement shows carbon emissions per million NOK in sales revenue. The method is the same for equities and bonds. Investments in solutions (solutions companies, green bonds, infrastructure and property with environmental green certification): Total share of assets under management invested in sustainable solutions. Sustainable solutions consist of green bonds, environmentally certified real estate, investments in green infrastructure and shares in companies that we believe are well positioned to solve challenges related to the UN’s Sustainable Development Goals. Investments in solution company equities: Share of investments in equities in solution companies in Storebrand and SPP. These are investments in shares in companies that we believe are well positioned to solve challenges related to the UN’s Sustainable Development Goals. in solution companies are segmented into four thematic areas; renewable energy and climate solutions, the cities of the future, the circular economy and equal opportunities. Investments Investments in green bonds: Share of investments in green bonds. intensity direct real estate investments: Water Water consumption in cubic meters 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. Waste quantity 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. Carbon footprint in 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 in accordance with the GHG protocol (The Greenhouse Gas Protocol). Nordic mix emission factor is the basis for calculating location-based emissions from electric power. Exposure to high-emitting sectors: Exposure to high-emission sectors shows our exposure to high-emission sectors as a share of total equity investments. The definition of high-emission sectors follows the recommendations of the Net Zero Asset Owner Alliance, and includes the following GICS codes. Aluminium: 15104010 Aviation: 20302010, 20301010 Cement: 15102010 Chemicals: 15101050, 15101040, 15101030, 15101020, 15101010 Energy: 10102050, 10102040, 10102030, 10102020, 10102010, 10101020, 10101010 Heavy Duty Automobiles: 20304020 Light Duty Automobiles: 25102010 Shipping: 20303010 Steel: 15104050 Utilities: 55105010, 55103010, 55102010, 55101010 241 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Customer relations Key performance indicators Customer satisfaction 80 Market share: Savings, retail market Norway Market position: Pension, corporate market Norway Proportion of women, pension savings Recognised for sustainable value creation (Retail market Norway) Recognised for sustainable value creation (Corporate market Norway) Customer satisfaction (Net Promoter System, Corporate Market Sweden) Results Results Results Results 2018 No. 4 21 % No. 1 43 % New New No. 7 2019 No. 4 20 % No. 1 44 % No. 3 No. 1 No. 5 2020 No. 6 21.7 % No. 1 44.2 % No. 5 No. 4 No. 7 2021 No. 5 19.6 % No. 2 44.9 % No. 3 No. 3 No. 7 Goals 2022 Top 3 Goals 2025 Top 3 increase increase No. 1 No. 1 increase increase Top 3 No. 1 No. 1 No. 1 Top 3 Top 3 indicators related to Definitions for key performance Customer relations Customer satisfaction: Scores based on Net Promoter System (NPS) figures as of November 2021. NPS is a measurement tool for customer satisfaction where the customer gives a score from 0 to 10 with 10 as the best result. Market share: Savings, retail market Norway: Total assets for respectively free funds retail market (incl. nominee) & Unit Linked products retail market including Pension Capital Certificate and Paid-up Policy with investment choice. Based on Q3 figures from Finans Norge and VFF (Verdipapirfondenes forening). Market position: Pension, corporate market Norway: Private group pension insurance, gross overdue premium, defined contribution, market share. Based on Q3 figures from Finance Norway (Finans Norge). Proportion of women, pension savings: Proportion of women with money invested in respectively Extra pension and IPS at Storebrand (in number of customers, not volume). Recognised for sustainable value creation: Proportion that connects Storebrand with the statements “Invest in a way that combines profitability and sustainability”, “Manages people’s savings in a way that combines profitability and environmental responsibility” and “Manages people’s savings in a way that combines profitability and social responsibility” (these are average responses to the statements and 3-month rolling average). 80) Net Promoter System, retail market Norge 242 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248People Key performance indicators Sick leave Norway Sick leave Sweden Turnover rate, women, Group Turnover rate, men, Group Number of employees 81 New hires to the Group Number of women recruited this year Number of men recruited this 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 Results 2018 2.7 % 3.3 % New New 1,667 220 78 116 115 102 526 408 235 284 Results Results Results 2019 3.1 % 2.5 % 9.7 % 9.2 % 1,742 204 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 2021 2.5 % 1.6 % 5.2 % 7.8 % 1,914 337 152 175 154 132 631 484 260 280 Female Board of Directors at Storebrand ASA 5 out of 9 4 out of 9 4 out of 10 5 out of 10 Women in the Group Executive Management 3 out of 9 3 out of 10 3 out of 10 3 out of 9 Women at management level 3: share of women / number of women Women at management level 1-4: share of wo- men / number of women Gender balance all managers: share of women / number of women 46 % New 39 % 41 % 38 % / 24 37 % / 22 New 38 % 39 % 39 % 39 % / 103 37 % / 102 Average salary female employees, Norway (NOK) 699,228 Average salary male employees, Norway (NOK) 871,146 Average salary female employees, Sweden (SEK) 608,551 Average salary male employees, Sweden (SEK) 762,151 743,684 914,107 644,484 811,717 760,948 923,686 671,159 842,226 796,854 968,096 705,162 873,155 Goals 2022 < 3.5 % < 3.5 % Goals 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 50 % 40 % 50 % 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 50 % 50 % 50 % 50 % 50 % N/A N/A N/A N/A 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/ avera- ge worker pay Average hours per FTE of training and development Average amount spent per FTE on training and development (NOK) 110 % 100 % 104 % 97 % 100 % 100 % 99 % 99 % 97 % 97 % 100 % 100 % New New New 8.2 : 1 8.9 : 1 8.9 : 1 New New 3.9 New 3.63 8,353 N/A N/A N/A N/A N/A N/A 81) The total number of employees includes employees from Capital Investment in 2021. 243 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Definitions for key performance indicators related to People Sick leave: Number of sick leave days divided by number of working days at end-December 2021. Sick leave in Norway includes sick children days. Sick leave in Sweden does not include sick children days. Number of hires to the Group: Number of hires including permanent employees, substitutes and internships in Norway and Sweden. The figures also include recruited employees who left the Group later in 2021. Number of employees: Total number of employees at Storebrand and SPP as of 31.12.2021. Management level 1-4: • • • Level 1: Group Chief Executive Officer. Level 2: Group Executive Management. Level 3: Reports to Group Executive Management, irrespective of personnel responsibilities. Administrative roles are not included. Capital Investment is not included. Level 4: Reports to management level 3. Everyone at this level has personnel responsibilities. Administrative roles are not included. • Number of employees in different age groups / genders: 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. 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. Gender balance all managers, share of women: Includes all female managers with personnel responsibilities. For management level 3, all female managers are counted, except personal assistants. Average salary: Basic salary as of 31.12.2021, all companies in the group in a common salary system. This does not include Capital Investment. Turnover: Permanent employees who quit in the last 12 months with the exception of voluntary severance agreements between employer and employee, reduction in workforce or retirement, divided by the average number of permanent employees in 2021. CEO - Average Worker Pay Ratio: Basic salary for CEO relative to average salary for all employees in Norway. 244 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248 Keeping our house in order Key performance indicators Environmentally certified purchases (share of the total expenditure that went to suppliers with certified environmental management system) 82 Greenhouse gas emissions from own opera- tion (total) Scope 1-3: tonnes of CO2 / tonnes CO2 per FTE Scope 1 emissions: tonnes CO2 / tonnes CO2 per FTE Scope 2 emissions: tonnes CO2 / tonnes CO2 per FTE Scope 3 emissions: tonnes CO2 / tonnes CO2 per FTE CO2e-emissions per FTE due to air travel: Scope 3, tonnes per FTE 83 Energy consumption, head offices (kWh per m2) Water consumption, head offices (m3 per m2) Results 2018 Results 2019 Results 2020 Results 2021 Goals 2022 Goals 2025 46 % 57 % 62% 60% 55 % 60 % 1,444 / 0.9 1,519 / 0.92 477 / 0.28 320 / 0.18 1.4 / 0 1.1 / 0 1.2/0 0.5 / 0.00 201 / 0.13 179 / 0.11 164 / 0.09 130.6 / 0.07 1,241 / 0.69 1,339 / 0.74 313 / 0.18 188.9 / 0.11 0.69 151 0.29 0.67 150 0.32 0.1 142 0.18 0.07 139 0.16 0.8 N/A N/A N/A N/A 148 0.31 0.6 N/A N/A N/A N/A 145 0.30 Total waste, head offices (tonnes / kg per FTE) 209 / 130 203 / 123 120 / 73 99.7 / 51 198 / 119 190 / 110 Share of waste sorted for recycling, head offices (share of total waste) CDP-rating DJSI score / global percentile E-learning conducted, ethics: total / share of man-years E-learning carried out, anti-corruption work: total / share of man-years E-learning completed, combating money laundering and financial crime: total / share of man-years E-learning completed, privacy: total/ share of man-years Number of information security incidents Number of complaints processed by the Finan- cial Appeals Board 84 Number of breaches of the Code of Conduct 85 Number of privacy incidents 86 71 % A - 63/74 72 % A - 75/81 71 % A- 82% A- 79 % A 82 % A 81 / 93 82 / 92 Top 10% Top 10% New 1,518 / 88.9 % 1,660 / 91 % 1,694 / 91% 100 % 100 % New 1,479 / 86.6 % 1,642 / 90 % 1,659 / 89% 100 % 100 % New 1,523 / 89.2 % 1,678 / 92 % 1,673 / 90% 100 % 100 % New 0 135 N/A 60 New 1,368 / 75 % 1,662 / 89% 100 % 100 % 30 192 9 48 20 218 2 41 28 198 3 125 N/A N/A N/A N/A N/A N/A N/A N/A 82) Since we exceeded the target for 2021, new targets have been set for 2022 and 2025. 83) CO2 emissions from flights have been recalculated for 2018–2020 as a result of updates to the emission factors in our travel agencies’ systems, so that it is comparable with the 2021 figures. 84) The figures apply to our Norwegian companies, as these are complaints processed by the Financial Appeals Board. SPP is not included here. 85) Internal misconduct by agents is not included in the key figure for breaches of Code of Conduct, but is included in the detailed reporting of breaches of Code of Conduct on page 36. 86) The Privacy Ombudsman’s assessment is that the increase in incidents is primarily related to increased awareness of reporting incidents, and not a real increase in the number of non-conformities compared with previous years. In addition, a new reporting tool has made it possible to include SPP (Sweden) in the figures. 245 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248 Definitions for key performance indicators related to Keeping our house in order Environmental requirements for suppliers: Share of contracts with suppliers where Storebrand has over NOK 1 million 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. CO2 emissions: CO2 emissions per man-year in Norwegian and Swedish operations. Includes direct and indirect discharge; transport, other transport, energy consumption and waste (Scope 1-3). 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 business 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 in accordance with 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 meters 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. CDP rating: Rating performed by CDP. CDP is an independent organisation that works with increasing company reporting on greenhouse gas emissions. CDP evaluates and scores companies accordingly. CDP is used by investors and managers to gain access to analysis and information on climate reporting from companies. DJSI score: The Dow Jones Sustainability Indexes (DJSI) assesses companies’ performance in sustainability, and rank companies based on a range of economic, social and environmental (ESG) criteria. E-learning course completed: Employee who is registered as completed in our e-learning system. Number of complaints processed by the Financial Appeals Board: Customers complain Storebrand to the Financial Appeals Board who processes a case. These are processed by the Financial Appeals Board on an ongoing basis. Information security incidents: An information security incident is a suspected, attempted, successful or imminent threat of unauthorised access, use, disclosure, breach, alteration or destruction of information; or a material breach of Storebrand’s guidelines for information security. Violation of ethical guidelines/Code of Conduct: Below are definitions of corruption, internal misconduct, other breaches of ethical rules, and discrimination, which we describe as breaches of ethical guidelines. • • Corruption: abusing one’s position to gain personal or business-related benefits for oneself or others. Internal misconduct: to perform actions for the purpose of enriching oneself or one’s loved ones at the expense of Storebrand and / or Storebrand’s customers. • • Other breaches of ethical rules: breaches of internal or external regulations that are covered by and have consequences in line with the sanction matrix in Storebrand’s ethical rules. Discrimination: discrimination based on gender, pregnancy, maternity or adoption leave, care responsibilities, ethnicity, religion, outlook on life, disability, sexual orientation, gender identity, gender expression, age, and other significant factors of a person. Privacy incidents: A privacy incident is an incident where there have been deviations related to compliance with the privacy policy. 246 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248 Carbon Accounting Total greenhouse gas emissions from Storebrand’s operations Key performance indicators Scope 1 emissions: tonnes CO2 Scope 2 emissions: tonnes CO2 Scope 3 emissions: tonnes CO2 (operations, equity investments, real estate investments) Scope 3 emissions: tonnes CO2 Own operations Results Results 2019 1.1 179 2020 1.2 164 1,339 313 Scope 3 emissions: tonnes CO2 equity investments (Scope 1-2) 87 3,661,218 3,261,366 Scope 3 emissions: tonnes CO2 real estate investments (Scope 1-3) 88 10,228 8,456 Total emissions, Scope 1-3: Tonnes CO2 3,672,965 3,270,300 Results 2021 0.5 130.6 188.9 3,318,508 6,703 3,325,531 In total, carbon emissions in equity investments have decreased since 2019, but have increased somewhat from 2020 to 2021. At the same time, the coverage ratio has increased from 89.5 per cent in 2020 to 96.7 per cent in 2021. Since the coverage ratio has increased by 8 per cent, while the increase in emissions is only 1.7 per cent, emissions have relatively decreased also from 2020 to 2021. 87) Equity investments are included in our Scope 3, but we are looking at Scopes 1 and 2 for these companies because Scope 3 data is still of limited quality. 88) Real estate investments are included in our Scope 3 and we look at Scopes 1 to 3 for these investments. 247 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Taxonomy reporting The EU Taxonomy for sustainable finance is a classification system that aims to establish common criteria for sustainable economic activities. The Taxonomy regulation entered into force on 12 July 2020 in the EU, but the new requirements will only apply from 2022 for the first two environmental goals (climate change mitigation and climate change adaptation), and from 2023 for the other four environmental goals (sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biological diversity and ecosystems). In accordance with Article 8 of the EU Taxonomy Regulation and the underlying Disclosures Delegated Act, the Taxonomy reporting must be done on two levels. Firstly, companies must report on how much of their turnover, investments and operational costs are covered by the Taxonomy, defined as Taxonomy eligible activities. Secondly, companies must report the share of their activities that are aligned to the Taxonomy, which means that the activities are considered to be environmentally sustainable activities due to meeting the specified technical criteria as defined by the Taxonomy. For example, an entire car company will be covered by the Taxonomy (Taxonomy- eligible), but only the cars with zero emissions or emissions below the defined threshold value (Technical Screening Criteria), and in compliance with Do no significant harm criteria and the minimal safeguards will be in accordance with the Taxonomy (Taxonomy- aligned). In accordance with the regulations, Storebrand must disclose the degree of insurance premiums, loans and investments that are Taxonomy-eligible. For the investments, this is based on data from underlying investments. Storebrand works actively to meet the reporting requirements in accordance with the EU Taxonomy, and follows the regulatory aspects closely. We interact with third-party suppliers, and internally in the organisation, so we are well prepared to fully implement the regulations. Storebrand has worked to obtain data related to our underlying investments’ share of economic activities that are covered by the Taxonomy. In the selection of data suppliers, the providers have been thoroughly assessed based on, among other things, data quality, coverage rate and the suppliers’ ability to adapt and change the delivery in accordance with the regulations. Our reporting of key figures related to the EU Taxonomy will become increasingly important as a measure of climate change as data quality and coverage increase. We have divided the reporting into two parts: mandatory reporting and voluntary reporting. The regulations for how the reporting is to be done are still unclear and the reporting is thus done to the best of our ability and available data. Note that interpretations of the regulations may change, and that the definitions behind the figures for next year may thus have to be adapted to new understandings. Mandatory reporting for Storebrand as an insurance- dominated cross-sectoral financial group: The mandatory Taxonomy reporting for financial companies can only include actual reported data from companies that are required to report under the Non-Financial Reporting Directive (NFRD). This means that, for example, companies with less than 500 employees or companies located outside Europe cannot be included in the mandatory Taxonomy reporting. Key indicators related to non-life insurance activities Share of non-life insurance premiums that is Taxonomy-eligible 63.4 % Storebrand offers non-life and health insurance to Norwegian customers. In order to analyse the share of non-life insurance premiums covered by the Taxonomy, Storebrand has segmented the insurance activities according to the Lines of Business defined in the Solvency II regulations.89 In addition to segmenting products under Solvency II, the product categories must refer to a policy on climate-related risks in order to be fully covered by the Taxonomy.90 We have analysed each insurance product to determine whether the products refer to climate-related risks. Some players have chosen to include product categories as long as they do not explicitly exclude compensation as a result of climate- related risks. We have chosen a stricter interpretation by only including products that refer to climate-related risks specifically in the policy terms, or in additional coverage, when we have calculated the share of insurance premiums covered by the Taxonomy. Workers’ compensation insurance, income protection insurance and health insurance, including expenses for medical treatment, do not mention climate-related risks and are in our assessment not Taxonomy eligible. Most of our non-life insurance products have additional coverage defined by the natural perils regulations and will then be covered by the Taxonomy eligibility requirements.91 The insurance products in Storebrand, which are both defined under Solvency II and which refer to climate-related risks, correspond to 63.4 per cent of the total insurance premium. The rest of our insurance business is not covered by the taxonomy. 89) Lines of Business categorised in the Solvency II regulations (Annex 1 of Regulation 2015/35) and are as follows: (a) medical expense insurance; (b) income protection insurance; (c) workers’ compensation insurance; (d) motor vehicle liability insurance; (e) other motor insurance; (f) marine, aviation and transport insurance; (g) fire and other damage to property insurance; (h) assistance 90) The criteria for non-life insurance are under Annex 2 of the delegated act that accompanies the Taxonomy Ordinance, Chapter 10.1. For classification of climate-related risks, see page 289: https://ec.europa.eu/finance/docs/level-2-measures/taxonomy-regulation-delegated-act-2021-2800-annex-2_en.pdf 91) Natural perils regulations: Act of 16 June 1989 no. 70 on natural perils insurance 248 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248Key indicators related to activities within the bank’s lending Share of the bank’s lending that is Taxonomy-eligible 99 % respective companies. Exposures to governments, central banks and supranational issuers are excluded from the calculation of the numerator. Storebrand is a retail market bank. The loans are mainly mortgages with a small proportion of unsecured credits. Mortgages are covered by the Taxonomy. In the calculation of what is Taxonomy eligible within the bank’s activities, we have chosen not to include unsecured credits. Thus, 99 per cent of the bank’s activities are covered by the Taxonomy. Key indicators related to investment activities Share of investments that is Taxonomy-eligible in the mandatory reporting 0 % Since the implementation of the Taxonomy Regulation started on 1 January 2022, the underlying NFRD companies we invest in have not yet had time to publish information on how much of their business is covered by the Taxonomy. We use third-party data providers to collect this information for listed shares and bonds, as we have an investment universe of approximately 5,000 companies, which makes it almost impossible to obtain the information directly from the companies. We have compared most data providers and evaluated them carefully before we chose to collaborate with Sustainalytics. Sustainalytics has estimated data for a large number of companies, on which we base our voluntary reporting below. But as mentioned above, actual reported data is still missing. In addition to investments in listed companies, we also invest in other types of assets where we have been in contact with the companies to obtain relevant data. None of these qualify for reporting under the NFRD, which means that they are also not reported in the mandatory reporting, but below in the voluntary reporting. Since none of the companies that are required to be assessed in the mandatory reporting, i.e. those that follow the NFRD, have reported their data yet, the figure on the share of investments covered by Taxonomy will be 0 per cent. Below you will find the voluntary taxonomy description, with a more detailed description for equities, corporate bonds, real estate, infrastructure and private equity. includes all The denominator investments globally, with the exception of exposures to central governments, central banks and supranational issuers. Thus, only 3.4 per cent of Storebrand’s equity investments and 3.4 per cent of Storebrand’s bond investments are covered by the Taxonomy. investments For equity in Europe, we have estimates from Sustainalytics covering 77.6 per cent of the companies we have invested in based on assets under management. If we had only used the investments in the companies where we have available data as a basis for our calculations, 11.9 per cent of our equity investments in Europe would have been covered by the Taxonomy. For equity investments globally, we have estimates from Sustainalytics covering 82.3 per cent of the companies we have invested in based on assets under management. If we had only based our calculations on investments in the companies where we have available data, and including companies outside Europe, 12.7 per cent of our global equity investments would have been covered by the Taxonomy. These are estimates based on information from our data providers and will probably change somewhat when the data quality improves. Key indicators related to activities within investments in infrastructure Share of infrastructure investments that is Taxonomy-eligible 100 % All our infrastructure investments are in activities that are covered by the Taxonomy. Infrastructure investments are not covered by the NFRD, and are thus not reported as mandatory reporting, but as voluntary. Since infrastructure is direct investment made from Europe, we have defined that investment in infrastructure projects located outside Europe is also covered by the Taxonomy. Key indicators related to activities within investments in private equity Voluntary reporting for Storebrand as an insurance-dominated cross-sectoral financial group Share of investments in private equity that is Taxonomy-eligible 3 % Key indicators related to activities within equity and bond investments Only 3 per cent of private equity investments are covered by the taxonomy. 53 per cent of investments in private equity are outside Europe, and the remaining companies are not covered by the NFRD. Share of equity investments that is Taxonomy-eligible Share of bond investments that is Taxonomy-eligible 3.4 % 3.4 % The data provider Sustainalytics provides estimates of how much of the investee companies’ activites that are covered by the Taxonomy. The numerator multiplies our (assets under management) in companies with headquarters in Europe by the proportion of activities covered by the Taxonomy of the investments Key indicators related to activities in real estate investments Share of real estate investments that is Taxonomy-eligible 100 % All the direct real estate investments are in activities that are covered by the taxonomy. Real estate investments are not covered by the NFRD, and are thus not reported as mandatory reporting, but as voluntary. 249 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixExecutive management CVs 229Board of Directors CVs 234Sustainability indicators and definitions 240Carbon Accounting 247Taxonomy reporting 248 Storebrand ASA Professor Kohts vei 9, P.O. Box 474, N-1327 Lysaker, Phone: +47 915 08 880, storebrand.no 250 Table of contentsFacts and figures 2021 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2021 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix

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