Storebrand ASA Annual Report 2022

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Storebrand ASA Annual report 2022 Table of contents How to navigate in the Annual report Previous page Next page Full screen Introduction 3 Facts and figures 2022 5 7 Foreword by our CEO Foreword by the Chair 9 Highlights in 2022 1. This is Storebrand 10 About Storebrand 12 Organisation 13 Sustainability as an important guideline 15 Group Executive Management 16 Board of Directors 2. Customer relations 20 Greater security and financial wellness 22 Engaging, relevant and responsible advice 23 Digital innovator in financial services 6. Shareholder matters 7. Annual Accounts and Notes Storebrand Group 104 Income statement 105 Statement of total comprehensive income 106 Statement of Financial Position 108 Statement of changes in equity 109 Statement of cash flow 112 Notes Storebrand ASA 198 Income statement 198 Statement of total comprehensive income 199 Statement of Financial Position 200 Statement of changes in equity 24 Simple and seamless customer experiences 201 Statement of cash flow 25 Key performance indicators 203 Notes 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 3. People 27 A culture for learning 29 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 always go back to this page for a 42 Sustainable practices through our value chain complete overview. 44 Corporate social responsibility 45 Key performance indicators 5. Director’s report 47 Strategy 2021-23 48 Strategic highlights 2022 53 The Group’s results 2022 58 Official Financial Statements of Storebrand ASA 59 Outlook 64 A driving force for sustainable investments 81 Risk 83 Climate risk and opportunities 96 Working environment and HSE 97 Progress on our most material sustainability KPIs 2 215 Declaration by members of the Board and the CEO 216 Indepentent auditor’s report 8. Corporate governance 225 Corporate governance 231 Companies in the Storebrand Group 9. Sustainability assurance 233 Sustainability indicators and definitions 247 Financed emissions 252 Carbon accounting summary 253 TCFD-index 257 GRI-index 263 Auditor’s statement 10. Appendix 266 Taxonomy reporting 270 Group Executive Management CVs 275 Board of Directors CVs Facts and figures 2022 Number of employees 2,161 Return on equity2) 8.3 % Group profit1), NOK million 2,716 Solvency ratio 184 % Assets under management NOK billion Assets under management screened for sustainability criteria 1,020 100 % Investments in fossil free funds, NOK billion / share of assets under management Investments in solutions3) NOK billion / share of assets under management 449 126.8 Real estate investments with green certificates4) 61% Dow Jones World Sustainability Index, score/percentile 88/99 1) Profit before amortisation and tax. 2) After tax, adjusted for amortisation of intangible assets. 3) Equity and bond investments in solution companies, investments in green bonds, green infrastructure, and investments in certified green real estate. 4) In 2022, we included properties in Denmark for the first time. The share of environmentally certified real estate investments has therefore been somewhat reduced. Certifications per country are the following: Norway (89 %), Sweden (93 %), Denmark (9 %). 3 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 3 years*) 4.9 % 4.1 % 2.4 % 2.9 % 1.2 % Storebrand Competitor 1 Competitor 2 Competitor 3 Competitor 4 Assets under management, Unit Linked (NOK billion) Assets under management, Asset Management (NOK billion) Written premiums, Insurance (NOK billion) +2% -7% +21% 308 315 1,097 1,020 7.82 6.45 2021 2022 2021 2022 2021 2022 Fee and administration income Group Profit** (NOK billion) (NOK million) Earnings per share, adjusted for amortisation (NOK) -8% -40% -19% 6,607 6,062 4,503 7.81 6.34 2,716 2021 2022 2021 2022 2021 2022 *) Returns based on comparable investment portfolios with moderate risk (ca. 50 % equity exposure) for active Defined Contribution plans. **) Result before amortisation and tax. 4 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 Geopolitical turmoil, energy crisis, interest rate hikes and inflation affected businesses and households throughout almost all of 2022. Once again, Storebrand proved to be a responsible corporate citizen and an important advisor to customers who experienced uncertainty. Odd Arild Grefstad Group Chief Executive Officer At the beginning of 2022, we had high expectations for a new normal after several years of pandemic. However, only a few weeks into the new year the world was turned upside down as we witnessed Russia’s brutal attack on Ukraine. The war has dramatic consequences for the citizens of Ukraine. The situation also affects the world economy and threatens the supply of energy and food. At the same time, cohesion in the EU and the rest of Europe has been strengthened. Storebrand and SPP employees have shown solidarity and engaged in fundraising campaigns for the Ukrainian people. Storebrand has built solvency over a long period of time. Risk has been thoroughly assessed, and good contingency plans are in place. In combination with our skilled employees, this has made it possible to deliver market-leading returns to customers over several years, despite demanding market conditions. During the same period, we have created long-term value for both our customers and owners. Storebrand’s ability to handle market turbulence and sudden changes yielded good results in 2022, as in previous years. An increasing number of customers chose Storebrand’s products and services within pensions, savings, insurance, banking and asset management. Group profit before amortisation and tax was NOK 2.7 billion. Active and good risk management limited the consequences of demanding financial markets. A relatively stable operating result and a strengthened solvency ratio demonstrated that the Group’s diversified operations are resilient. 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. Our business in the Norwegian retail market grew significantly in 2022. It was gratifying to see that we succeeded with our relevant products and services, efficient sales and service solutions, and good customer service in a highly competitive market. The acquisitions of Danica and Kron strengthen our position in the corporate and savings markets, respectively. We manage occupational pensions for more than two million people in Norway and Sweden. Through our asset management business, customers in and outside the Nordic region get the opportunity to invest in our broad offering of funds and alternative asset classes. We are also grateful for the confidence the global investor market has given us in 2022. Customers, investors, and society at large place ever higher demands on us, particularly related to our work on sustainability, both in our own operations and through the exercise of active ownership in other companies. I am pleased to see that more and more companies are working thoroughly and systematically with sustainability. In 2022, Dow Jones again named Storebrand as one of the world’s most sustainable listed companies. Together with the rest of the organisation, I am proud of both this and other recognitions we receive for our work. Storebrand aims to demonstrate sustainable leadership also in the future. Human rights, inclusion and protection of nature and biodiversity will receive particular attention in 2023. It has always been difficult to predict the future. The unexpected events of recent years have made it even more demanding. We can, however, conclude that Storebrand is growing rapidly, with ambitious plans for 2023 and the coming years. We are an attractive employer and have recruited many new employees in 2022. With solid experience, new expertise, and highly skilled employees, we will continue to develop Storebrand as a safe, inclusive and engaging place to work. Together, we will work to deliver good customer experiences and market-leading returns to customers and owners. Odd Arild Grefstad 5 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 Foreword by the Chair In 2022, Storebrand demonstrated both resilience and adaptability in the face of market turbulence caused by the brutal war in Ukraine. The Group delivered good results thanks to a strong risk management culture, combined with good contingency, a solid and diversified business model, and diligent work from proficient employees. The board is pleased with the company’s ability to manage the business through challenging times and deliver good returns to customers. Didrik Munch Chair, Storebrand ASA Over the past decade, Storebrand has adapted to a situation with interest rates lower than the average guaranteed interest rates for our pension customers. During the pandemic, the policy rate dropped to zero per cent. Throughout this period, customers nevertheless received the return they were promised, while Storebrand’s solvency strengthened continuously. Storebrand now consists of capital-efficient operations that are growing rapidly. The guaranteed pensions that are mainly affected by interest rates are run-off. Half of the pension assets on our balance sheet and 75 per cent of total assets under management consist of non-guaranteed savings. Higher interest rates in 2022 will make it easier for Storebrand to deliver guaranteed returns to our customers in the years to come, with lower financial risk for shareholders. The benefit was not reflected in the Group’s results for the year. On the contrary, higher interest rates contributed to a weak financial result in 2022 due to fair value revision of investments. As interest rates stabilise at the level we experienced at the end of 2022, pension customers with guaranteed contracts will gradually achieve higher pension payments. At the same time, the Group’s profit will increase, and solvency will strengthen at a higher rate than we have seen in recent years. Never has Storebrand been better capitalised than in 2022. The solvency ratio remained above 180 per cent for a large part of the year. In the third quarter, we carried out a share buy-back programme of NOK 500 million, corresponding to NOK 1.07 per share. This was in addition to an ordinary dividend of NOK 3.50 per share, paid in 2022 for the 2021 financial year. By 2030, we have an ambition to return NOK 10 billion in excess capital to our shareholders, in addition to nominally growing dividends. At the same time, we expect to have additional surplus capital available to finance further growth in the Group’s focus areas. S&P Global Ratings recognised our strong capitalisation and upgraded Storebrand Livsforsikring’s credit rating from ‘A-’ to ‘A’. Storebrand grew in 2022, both in absolute and relative terms, within occupational pensions, asset management, insurance, and banking. Storebrand is the market leader in Defined Contribution pension schemes in Norway with a market share of 31 per cent, and the largest challenger in Sweden with a market share of 15 per cent. Throughout the year, Storebrand climbed from being the fifth largest asset manager in the Nordic region to becoming the fourth largest. In the Norwegian private market for banking and insurance, Storebrand grew about 20 per cent in 2022. While we continue to be a relatively small player in this market, we demonstrated that we are a fast-growing challenger. The diversified growth in the Group resulted in a strong operating result for 2022, despite weaker results from asset management due to market decline and somewhat lower total assets. The total return on the Storebrand share of 8 per cent in 2022 may be modest. However, the return exceeds that of the Oslo Stock Exchange (-1 per cent) and comparable companies in Europe at an average 3 per cent. The Board is very pleased with Storebrand’s ability to navigate through a challenging year. The Group has a solid basis for creating future growth and value for the benefit of customers, society, and shareholders in the years to come. 6 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 2022 Q1 January - March Q2 April - June • Storebrand becomes the largest shareholder in the fast-growing fintech company Quantfolio. Together, the two companies will develop new services, build common knowledge around quantitative allocation methods and sustainable for international expansion. investments, and support ambitions • Corporate Knights ranks Storebrand as one of the insurance companies. world’s most sustainable Corporate Knights is a Canadian financial magazine that also produces analytics and financial information. Since 2005, it has presented a Global 100-list based on evaluations of around 7,000 companies. The 100 companies with the highest score on 23 different parameters are selected. • Storebrand excludes Russian companies. Due to Russia’s attack on Ukraine, Storebrand excluded all Russian companies from our portfolios. • SPP awarded Best Customer Service in the insurance category by Swedish survey company Brilliant Future. The Brilliant Awards recognise organisations that succeed in creating exceptional customer experiences. The annual award is based on quantitative data from approximately 2.2 million customer reviews. • SPP named Sweden’s most gender-equal pension company. For the second year in a row, SPP was named Sweden’s most gender equal pension company as part of EYs Nordic SHE Index ranking. • SPP Fonder becomes Storebrand Fonder. Storebrand Asset Management and SPP Fonder united under Storebrand as one strong, common brand. With a broader palette of funds that can be offered in several markets under one common brand, Storebrand will be better equipped to retain customers and grow more efficiently in our markets. • Storebrand Conference 2022: Invest in the future! Around 3,000 customers and partners attended the conference, which was aimed at highlighting the financial industry’s role in the green transition. Former Vice President Al Gore and Pfizer’s chief scientist Mikael Dolsten were among the keynote speakers. • S&P upgrades Storebrand to ‘A’. An ‘A’ rating means that the rating agency S&P considers Storebrand to have a strong capacity to meet financial obligations. Only a few companies have such a high rating in Norway. S&P is one of the most recognised global rating agencies with extensive experience in assessing the ability to pay and security of countries, companies, and institutions worldwide. The upgrade is a recognition of the work done to transform Storebrand into a robust group with a solid balance sheet and a belief that we will continue to create profitable growth. • SPP launches digital concept for small businesses. The new offering includes occupational pension, health insurance, premium exemption in case of illness, capital insurance, counselling and family care insurance. In December, the concept won the Swedish newspaper Privata Affärer’s small business award for its holistic approach to making it easier for small businesses to create financial security for owners and employees. 7 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 July - September Q4 October - December • Storebrand asks the EFTA Surveillance Authority to clarify tendering practices for occupational pensions in municipalities and state health enterprises. The municipalities buy occupational pension for almost NOK 60 billion a year, but very few contracts are put out to tender. Storebrand believes that the municipalities’ largest purchases should be exposed to competition, in line with other public procurements. • Storebrand launches nature strategy for investments. Storebrand’s new nature strategy takes a clear stand against activities that may harm vulnerable nature. Companies that invest in seabed minerals, mines with sea deposits, or operations in vulnerable parts of the Arctic risk are being excluded from Storebrand’s investment portfolio. • Storebrand listed on Dow Jones Sustainability World Index. As the only company in Norway, Storebrand was listed on the renowned Dow Jones Sustainability World Index in 2022. This means that the company is considered one of the world’s most sustainable listed companies. • Storebrand’s acquisition of Danica Pensjon Norge is completed. The acquisition strengthens Storebrand’s presence within occupational pensions in the market for small and medium-sized businesses, and the insurance offering within personal risk. • Storebrand strengthens personal savings offerings through the acquisition of the Norwegian fintech company Kron. The acquisition will give one million Storebrand customers access to first-class digital savings and investment services. • Arendalsuka 2022: Storebrand hosted 18 events and participated in 14 events during the week-long Arendalsuka event in Norway. We focused on personal economy, inclusive work environment, monetary policy, sustainability competencies in the boardrooms, climate reporting and future pensions solutions in the public and private sectors. • SPP enters partnership with the digital mortgage provider Stabelo. The cooperation with Stabelo gives SPP’s customers an attractive interest rate through a transparent pricing model. SPP’s customers receive a discount of 0.10 per cent on all fixed interest rate periods at Stabelo. • Storebrand conducts first share buy-back programme under Solvency II. After reporting a solvency ratio of more than 180 per cent in the first two quarters of 2022, Storebrand bought back its own shares for NOK 500 million. The ambition is to buy back shares for about NOK 10 billion in excess capital by 2030, in addition ordinary dividend payments. 8 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 10 About Storebrand 12 Organisation 13 Sustainability as an important guideline 15 Group Executive Management 16 Board of Directors Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is StorebrandAbout Storebrand 10Organisation 12Sustainability as an important guideline 13Group Executive Management 15Board of Directors 162. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix About 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. Storebrand has been 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 1,020 billion invested in more than 5,000 companies around the world. More than two million people in Norway and Sweden have placed their savings with us. We shall manage our customers’ money efficiently and responsibly, so that we contribute to giving customers greater financial freedom and security. We invest for the future and want the funds we manage to be invested in a way that ensures both a good financial return for our customers and a positive impact on society. We make it easy for our customers to make good decisions. Our purpose is clear: We create a brighter future. Our driving force Our driving force helps create a future to look forward to. We will be closest to the customer, in a simple and sustainable way, to deliver increased financial security and freedom. 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 don’t simply choose the path of least resistance, rather we act in ways that are best for our customers 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 customers’ 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. 10 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is StorebrandAbout Storebrand 10Organisation 12Sustainability as an important guideline 13Group Executive Management 15Board of Directors 162. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixStorebrand’s history 1767 Almindelige Brand- Forsikrings- Anstalt is established as a compulsory ﬁ re insurance for buildings in Norwegian cities. 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. 1999 Storebrand, Skandia and Pohjola gather their non-life insurance activities in the new Nordic Swedish-registered company “If Skadeförsäkring ab”. Storebrand sells out ﬁ ve years later. 2017 Storebrand acquires SKAGEN and celebrates its 250th anniversary. 2021 Storebrand’s Capital management exceeds NOK 1000 billion. 1847 Private interests establish Christiania almindelige Brandforsikrings-Selskab for Varer og Eﬀ ecter. The company is referred to as Storebrand. 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. 1996 The company changes its name to Storebrand ASA and establishes Storebrand bank ASA. 2009 Storebrand conﬁ rms that talks have been held about a possible merger with Gjensidige. The talks ended without result. 2006 Storebrand re-enters P&C insurance 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. 1963 Storebrand takes over Norske Fortuna. Brage and Fram merge and become the country’s largest life company. 1995 Storebrand establishes sustainable investment in Storebrand Asset Management. 1861 Storebrand’s owners establish Norway’s ﬁ rst privately owned life insurance company, Idun. 1925 Christiania Almindelige Forsikrings- Aksjeselskap, referred to as Storebrand, changes its name to Christiania almindelige Forsikrings- Aksjeselskap Storebrand. 1984 Norges Brannkasse and Norske Folk become UNI Forsikring. 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. 2022 Storebrand acquires Danica Pensjon Norway and the investment app Kron, and introduces a policy on nature for investments. 2005 The Storting decides that all companies must introduce occupational pensions (OTPs) by 2012 Storebrand launches its new vision: “Our customers recommend us”. Odd Arild 2007. 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. 1990 Storebrand and UNI Forsikring decide to merge and receive a formal licence in January 1991. 1999 Storebrand, Skandia and Pohjola gather their non-life insurance activities in the new Nordic Swedish-registered company “If Skadeförsäkring ab”. Storebrand sells out ﬁ ve years later. 2017 Storebrand acquires SKAGEN and celebrates its 250th anniversary. 2021 Storebrand’s Capital management exceeds NOK 1000 billion. 1767 Almindelige Brand- Forsikrings- Anstalt is established as a compulsory ﬁ re insurance for buildings in Norwegian cities. 1867 The non-life insurance company Norden is established as a competitor to Storebrand. 1936 Storebrand buys Europeiske, Norway’s leading travel insurer. 1847 Private interests establish Christiania almindelige Brandforsikrings-Selskab for Varer og Eﬀ ecter. The company is referred to as Storebrand. 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. 1996 The company changes its name to Storebrand ASA and establishes Storebrand bank ASA. 2009 Storebrand conﬁ rms that talks have been held about a possible merger with Gjensidige. The talks ended without result. 2006 Storebrand re-enters P&C insurance 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. 1861 1917 The life insurance company Norske Folk is founded. 1963 Storebrand takes over Norske Fortuna. Brage and Fram merge and become the country’s largest life company. 1995 Storebrand establishes sustainable investment in Storebrand Asset Management. Storebrand’s owners establish Norway’s ﬁ rst privately owned life insurance company, Idun. 1925 Christiania Almindelige Forsikrings- Aksjeselskap, referred to as Storebrand, changes its name to Christiania almindelige Forsikrings- Aksjeselskap Storebrand. 1984 Norges Brannkasse and Norske Folk become UNI Forsikring. 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. 2022 Storebrand acquires Danica Pensjon Norway and the investment app Kron, and introduces a policy on nature for investments. 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. 11 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is StorebrandAbout Storebrand 10Organisation 12Sustainability as an important guideline 13Group Executive Management 15Board of Directors 162. 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 Fonder AB Storebrand Fastigheter AB SKAGEN AS Capital Investment A/S Institutional Holding P/S (20%) Cubera Private Equity AS Cubera Private Equity AB Storebrand Holding AB Storebrand Boligkreditt AS SPP Spar AB SPP Konsult AB SPP Pensjon & Forsäkring AB Storebrand & SPP Business Services AB SPP Fastigheter AB SPP Hyresförvaltning 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 (25%) Storebrand Danica Pensjonsforsikring AS Operational business areas The Group’s business is divided into four operational areas with a clear division of commercial responsibility: Corporate market Norway, Corporate market Sweden (SPP), Asset management, and Retail market Norway. See page 47 of the Director’s report for more information about the business strategy of each operational area. Storebrand ASA Corporate market Norway Corporate market Sweden (SPP) Asset management Retail market Norway Reporting segments In the Group’s financial reporting, the business is divided into four reporting segments: Savings, Insurance, Guaranteed pension, and Other. Within each reporting segment, products have comparable performance elements and comparable risks. Savings Products that encompass pension and savings without interest rate guarantees. This includes Defined Contribution pension schemes in Norway and Sweden, asset management and savings, and banking products for private individuals. Guaranteed pensions Consists of products that include long-term pension savings with guaranteed returns. These include occupational pension schemes in Norway and Sweeden, independent personal pensions and pension insurance. Insurance Consists of the Group’s risk products in Norway and Sweden. This includes health insurance in the corporate and retail markets, personal insurance and pension-related insurance in the corporate market, as well as non-life insurance and personal risk insurance in the Norwegian retail market. Other Consists of other companies within the Storebrand Group, including smaller subsidiaries of Storebrand Livsforsikring and SPP, as well as results from the company portfolios. 12 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is StorebrandAbout Storebrand 10Organisation 12Sustainability as an important guideline 13Group Executive Management 15Board of Directors 162. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixSustainability as an important guideline The financial sector plays a key role in helping to achieve the UN Sustainable Development Goals (SDG). Through responsible asset management, pension savings, other savings and investments can contribute to realising these goals. The transition to a low-emission society that considers nature, social conditions and international obligations and regulations, represents both financial risks and opportunities for Storebrand as an investor and asset manager. In recent years, there have been rapid regulatory developments in the field of climate and finance, greatly accelerated by the EU. A similar development is expected for nature. We expect companies that take this into account will manage risk better and be better positioned in the long term. At Storebrand, we believe that failure to taking climate, nature and social conditions into account poses a major risk of lost value. In December 2022, the world received a new nature agreement at COP15, the Convention on Biological Diversity. The agreement consists of 23 goals to be implemented over the next few years and compares with the Paris Agreement on climate. Storebrand led the work towards the nature agreement for the investor coalition Finance for Biodiversity. There are two points in the agreement that relate to the way in which global businesses take nature risk into account: The overall objective that the flow of private capital will be compatible with the new framework, and an assurance that efforts will be made to promote transparent, and up-to-date reporting by large companies on their impact and dependence on nature. The backdrop is the IPBES report on biodiversity and ecosystem services from 20195. The UN report concludes that the loss of biodiversity and ecosystems occurs on a scale that must be limited as soon as possible, to prevent irreversible consequences. In 2021, the Intergovernmental Panel on Climate Change (IPCC) notified Code Red for Humanity in its latest report on climate change. The report stated that climate change is intensifying continuously and that some changes are already irreversible.6 Sustainability in Storebrand Storebrand aims for sustainability to be an integrated part of our business, including investments, products, product development, procurement, recruitment, organisational development and corporate governance. Customer insights show that customers want to make sustainable choices and expect us, as a responsible corporate citizen, to take our share of the responsibility. Members of the Group Executive Management are responsible for achieving main strategic goals on sustainability within their respective business areas. Each area has appointed a strategic and operational sustainability manager to follow up these goals. Business unit goals and targets are reviewed three times a year by the Group Executive Management 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 products, Storebrand focuses on sustainability, both services and in our cooperation with suppliers and partners. This is fundamental to the Group’s strategy and brand. The following principles form the basis for Storebrand’s work within sustainability: • We base our business activities on the UN Sustainable • Development Goals (SDGs). Through our products and service-offering, we will help customers make more sustainable choices. • We are a responsible employer. • We consider sustainability in all processes and decisions – from the Board and executive management level, who have the overall responsibility, to each individual business manager and employee. • We cooperate with customers, suppliers, authorities, and partners in our work with sustainability. • We are transparent about our work on sustainability and what we achieve. 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. Sixth Assessment Report. https://www.ipcc.ch/assessment-report/ar6/ 13 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is StorebrandAbout Storebrand 10Organisation 12Sustainability as an important guideline 13Group Executive Management 15Board of Directors 162. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixWe have identified three SDGs (see page 13) 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. Products and services Storebrand is a leading financial player in the Nordic market and 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.7 We constantly work to adapt our products and services to create a positive impact on society. At the same time, through publication and reporting on our operations, we aim to ensure that we comply with new regulations and standards related to sustainability. Storebrand performs well on external sustainability rankings. In 2022, Prospera ranked us number one in the sustainable investments category in Norway, Sweden and Denmark.8 In 2022, Storebrand received a top score in Söderberg & Partners’ sustainability ranking among life insurance and non-life insurance policies. For the third year in a row, Storebrand was included in the Dow Jones Sustainability World Index, which means that Storebrand was rated as one of the world’s most sustainable listed companies. Storebrand was ranked number five in the insurance industry category worldwide. In 2022, Storebrand received a rating of A, the highest possible score on CDP, which means that we are constantly improving on highlighting climate-related data and our impact on the climate. This is up from A- over several years. These are important recognitions of our work on sustainability. investments in green bonds, green infrastructure investments or in environmentally certified real estate. In addition, almost 44 per cent (NOK 449 billion) of our assets under management were invested in fossil-free products. All assets under management in Storebrand Fonder in Sweden are invested in funds consisting of companies with no connection to the fossil fuel sector. We have identified 10 SDGs (below left) where Storebrand can have the greatest impact through our investment activities. The goals are used actively, for example when applying Storbrand’s sustainability rating. In addition, we look at the protection of peace, justice and strong institutions (SDG 16), with a particular focus on accountability and anti-corruption efforts, when making investment decisions. Specific measures and objectives related to these sustainability goals in our asset management are described in the chapter Driving force for sustainable investments. 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 CDP (former Carbon Disclosure Project), in line with the expectations of key stakeholders. In addition, we engage in international initiatives such as Net Zero Asset Owner Alliance, Net Zero Asset Manager Alliance, UN Principles for Sustainable Insurance (PSI) and Climate Action 100+ to join forces with like-minded partners to find solutions to global sustainability challenges and set requirements for reaching zero-emission targets. At the end of 2022, 12.4 per cent of our capital was invested in what we define as solutions. This includes equity investments in companies that contribute to solving the UN Sustainable Development Goals, 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 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 encourage companies to adopt sustainable practices and to integrate sustainability information into their reporting cycle (target 12.6). 7) 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 8) The ranking refers to five separate rankings conducted by Prospera in 2022: Norway (Institutional Customers and Distributors), Sweden (Institutional Customers and Distributors) and Denmark (Distributors). Storebrand was No. 1 on sustainable investments in all five rankings. 14 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is StorebrandAbout Storebrand 10Organisation 12Sustainability as an important guideline 13Group Executive Management 15Board of Directors 162. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixGroup Executive Management Back left to right: Jan Erik Saugestad (Executive Vice President Asset Mgmt.), Tove Selnes (Executive Vice President People), Trygve Håkedal (Executive Vice President Digital), Heidi Skaaret (Executive Vice President Retail Market), and Lars Løddesøl (Group CFO and Executive Vice President Strategy, Finance and Legal). Front left to right: Karin Greve-Isdahl (Executive Vice President, Communications, Sustainability and Public Affairs), Vivi Måhede Gevelt (Executive Vice President Corporate Market), Odd Arild Grefstad (Group CEO) and og Jenny Rundbladh (Managing Director, SPP). 9 See appendix on page 270 for Group Executive Management CVs 9) Geir Holmgren and Staffan Hansén were members of the Group Executive Management from 01.01.2022 to 03.06.2022, and from 01.01.2022 to 31.08.2022 respectively. 15 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is StorebrandAbout Storebrand 10Organisation 12Sustainability as an important guideline 13Group Executive Management 15Board of Directors 162. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixBoard of Directors Back left to right: Karin Bing Orgland (Board Director), Martin Skancke (Board Director), Hanne Seim Grave (Employee Representative), Marianne Bergmann Røren (Board Director), Hans-Peter Salvesen (Employee Representative), Fredrik Åtting (Board Director) and Karl Sandlund (Board Director). Front left to right: Christel Elise Borge (Board Director), Didrik Munch (Board Chair), Bodil Catherine Valvik (Employee Representative). See appendix on page 275 for full resumes for Board Directors and Committee members. Board of Directors The Board is ultimately accountable for management of the Storebrand Group. This means, among 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 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. 16 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is StorebrandAbout Storebrand 10Organisation 12Sustainability as an important guideline 13Group Executive Management 15Board of Directors 162. 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 227. Strategy Committee Audit Committee Leader Didrik Munch Members Fredrik Åtting Christel Elise Borge Hans-Petter Salvesen Leader Karin Bing Orgland Members Martin Skancke Hanne Seim Grave Compensation Committee Risk Committee Leader Didrik Munch Members Marianne Bergmann Røren Hans-Petter Salvesen Leader Martin Skancke Members Fredrik Åtting Bodil Catherine Valvik Nomination Committee Leader Per Otto Dyb Members (shareholder-elected) Lars Jansen Viste Nils Halvard Bastiansen Anders Gaarud Liv Monica Stubholt Material topics 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. 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. In 2022, we started the process to update our material topics by including the principle of double materiality and analysed gaps related to compliance with new sustainability standards within the EU’s Corporate Sustainability Reporting Directive. Double materiality means that companies must report on both the impact the company has on society and how ESG risks and opportunities affect the company’s ability to secure long-term profitability. The analysis will be completed in the second half of 2023 and will update our material topics, which will shape the structure of the next annual reports. Dialogue with stakeholders takes place through interviews, surveys and direct dialogue. We also emphasise information from other interactions with stakeholders, for example through general meetings, customer surveys and interactions, participation in committees and other initiatives that aim to solve a wide range of societal issues. Our materiality analysis from 2020 is still the basis for the annual report and is publicly available.10 10) See Storebrand’s Sustainability Library: https://www.storebrand.no/en/sustainability/sustainability-library/_/attachment/download/a66150fc-0f46-4c2d-8aa1-cbb3d5ebc00d:d12bc8eb4126c99c0ae- 94c0e72b9d8b0e6ad0c1a/Materiality%20analysis%20report%202019.pdf 17 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is StorebrandAbout Storebrand 10Organisation 12Sustainability as an important guideline 13Group Executive Management 15Board of Directors 162. 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 I J L F H HIGH D MODERATE M N i i s n o s c e d d n a s t n e m s s e s s a r e d o h e k a t s n o e c n e u fl n l I Significance of business impact Financial capital and investment universe A B C Competitive long-term returns to shareholders and customers A driving 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 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 Based on the materiality analysis, we identified four focus areas and associated topics. These are: Financial capital and investment universe 1. 2. Customer relations 3. Our people 4. Keeping our house in order The focus areas and associated themes are presented in the materiality matrix above. 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 impact our business. How to read this report The materiality analysis, including input from our stakeholders, forms the structure of this the annual report. The focus area Financial capital and investment universe, as well as the three underlying material topics, are generally ranked by our stakeholders as very significant. They are also very relevant to the Group’s strategy and risk management and are therefore included in the Directors Report. Unlike other focus areas and material topics, these do not have their own chapters nor sub-chapters. Topic A: Competitive long-term returns to shareholders and customers are covered through other chapters in the report such as Customer relations, Director’s report, and Annual accounts. Topic B and C have been merged into one chapter: Driving force for sustainable investment. 18 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. All chapters are divided into four parts; why it is important for Storebrand and for our stakeholders, goals and ambitions, our approach, and results. We do this to ensure that the topics cover how we as a company affect the outside world and how we manage risk from the outside world on our value creation. Key figures are presented in a table at the end of each chapter. A complete overview of key figures and results are presented in the chapter Sustainability Assurance at the end of the report. Key figures for each focus area are reported to Group Executive Management on an ongoing basis, and to the Board of Directors annually. This report has been prepared in accordance with the GRI standards. Our GRI index is available on page 257. The guidelines of the International Integrated Reporting Council (IIRC) are also used as a basis for the report. This annual report covers Storebrand’s entire business. 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 94 per cent of the Group’s employees. The figures do not include smaller, local offices or businesses, such as Cubera and Capital Investment. See page 231 for more information about companies in the Storebrand Group. Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is StorebrandAbout Storebrand 10Organisation 12Sustainability as an important guideline 13Group Executive Management 15Board of Directors 162. 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 20 Greater security and financial wellness 22 Engaging, relevant and responsible advice 23 Digital innovator in financial services 24 Simple and seamless customer experiences 25 Key performance indicators The chapter on customer relations describes the following material topics: Greater security and financial wellness, Engaging, relevant and responsible advice, Digital innovator in financial services, and Simple and seamless customer experiences. For a more detailed description of these topics, see page 17. We offer long-term savings and insurance solutions that help individuals and businesses achieve financial security and freedom. 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 risk management, we aim to ensure that our customers get good returns on their investments. Customer dialogue takes place in both digital and serviced channels. Our goal is to be closest to the customer, in a simple and sustainable way. Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relationsGreater security and financial wellness 20Engaging, relevant and responsible advice 22Digital innovator in financial services 23Simple and seamless customer experiences 24Key performance indicators 253. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixGreater security and financial wellness Why Recent reforms in the Norwegian and Swedish pension systems result in greater individual responsibility for personal, long-term finances. Life expectancy is increasing, and people can no longer expect the same level of financial support from the government. By taking active responsibility for your personal finances, you may strengthen your ability to live the life that you want, both throughout your working life and as a pensioner. All Norwegian residents received an Individual Pension Account (“Egen pensjonskonto”) in February 2021. The purpose was to give employees a better overview and control of their own pension, and the opportunity to achieve higher pension payments over time. In Sweden, a new law regulating transfer rights for unit-linked insurance and depository insurance taken before 1 July 2007, came to force in July 2022. The purpose was to make it easier and more affordable for employees to move pension funds saved from 1 July 2007 to the present. In addition, the Swedish Parliament has asked the Swedish government to investigate both how to facilitate the transfer of occupational pensions, and whether it is possible to remove the current requirement for signature from former employers when transferring occupational pensions. Goals and ambitions Storebrand aims to deliver security and financial freedom to customers through a wide range of services that meet their overall financial needs at all stages of life. In Norway we offer products and services within savings, banking and insurance. In Sweden, we offer savings and insurance. When customers take steps to secure their financial future together with Storebrand, they should feel confident that we will guide them to good decisions. Customers should experience that we offer relevant and attractive products, and that we manage their savings so that they 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 holisitic and individualised follow-up. Through digital solutions, customer seminars, and advisory services, we make it easier for companies to understand and explain their pension schemes, and for their employees to gain oversight and control of their own pension. We have qualified advisors and emphasise the use of simple and understandable communications. In total, this contributes to Storebrand being a preferred provider of pension services. 11 With the communication concept ”Invest in the future”, we want to motivate customers to make conscious choices for their financial future. We work diligently to make it as easy as possible to decide on complicated financial matters. We facilitate with simple tools, but also through advanced technology and competent advice. We take a long-term perspective in our efforts to create a future to look forward to. Storebrand shall be known for our ability to create value for our customers through sustainable investments and attractive financial products. Our ambition is to help our customers make sustainable choices. In 2022, we developed several new products and services that support this strategy. One example is our offering ”Miljøtiltakslånet” (Environmental Action Loan), which gives customers the opportunity to borrow money for the purchase of, among other things, photovoltaic systems, heat pumps, new windows or to install home- charging solutions for electric vehicles. In Sweden, we launched a new communication concept, “A sustainable link to the future”, to position ourselves more clearly as a broad Nordic financial group. This was the first time that SPP and Storebrand co-signed customer and market communications. With the rebranding of SPP Fonder to Storebrand Fonder, the ambition is to increase knowledge in Sweden of Storebrand and SPP’s connection to the Storebrand Group. The concept is based on our common logo symbol and expresses how we create value for our customers by connecting the present and future, working life and retirement, and investments today with tomorrow. We are continuously working to stimulate, and expand access, to banking and insurance services, and financial services for all (target 8.10). 11) After a survey of our customers, the result showed that 35 per cent of decision-makers in companies say they will contact Storebrand when considering pension and insurance schemes for the company, and as much as 65 per cent of our own customers. 20 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relationsGreater security and financial wellness 20Engaging, relevant and responsible advice 22Digital innovator in financial services 23Simple and seamless customer experiences 24Key performance indicators 253. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix 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. 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. 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, customers tend to have a higher demand for advisory services. SPP continued to further develop digital customer services in 2022, including a new service that gives both employers and employees a simple overview of salary development for each employee. Corporate services completed processing more than 40 000 cases, double the amount of the year before. More than 500,000 people checked their pension through Storebrand’s digital pension services in Norway in 2022.12 In Sweden, more than 370,000 customers logged into SPP’s website to find information about their pension, while over 5,400 corporate customers logged in to review and manage the company’s pension solutions. A significant number of corporate customers chose to enter into an agreement on digital payment of occupational pensions. 85 per cent of all private customers in SPP who retired in 2022 signed up for fully digital pension payments. 13 12) Customers checked their pension through the digital pension services My Pension and Smart Pension. 13) Private customers who retired earlier than the agreed retirement age is not included in this calculation. 21 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relationsGreater security and financial wellness 20Engaging, relevant and responsible advice 22Digital innovator in financial services 23Simple and seamless customer experiences 24Key performance indicators 253. 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 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.14 In Sweden, all our advisors are certified in line with legal requirements. Approach «Put the customer first» is a principle that guides all our customer relations. This is reflected in our service standards: Trustworthy – I keep what I promise, and I am a professional. Caring – I treat everyone individually, help them, and give advice. Enthusiastic – I am positive and exceed expectations. Efficient – I make the customer journey easy and improve your organisation. Our advisors in Norway are authorised through the financial advisor’s 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. 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. 14) The figures will be affected by turnover in the organisation “Your climate footprint” is a tool that shows the carbon footprint associated with the investments of employees’ pensions and savings, compared to the footprint if the money had been invested in funds without a sustainability profile. Companies use the information in communication with employees, in their own sustainability reporting, and to strengthen their own brand and reputation. Customers in Sweden report that the tool is useful in communicating with their own employees. Many companies also want to communicate information available in the tool in recruitment campaigns and in their own sustainability reporting. In Norway, the tool was further developed and launched through the platform for corporate customers in 2022. In the portal, corporate customers can enter and look at sustainability information related to their own pension saving schemes. Results For the second year in a row, Storebrand was ranked number one in the Norwegian Customer Barometer’s annual survey of customer satisfaction among pension customers in the corporate market. The score of 73 points (out of 100 possible points) showed that customers were satisfied with their relationship with Storebrand. The survey also ranked Storebrand highest on loyalty. High satisfaction in the corporate pension market was confirmed by results from Aalund’s corporate pension barometer. For the fourth consecutive year, Storebrand was ranked No. 1 in Mercer’s “DC Vendor Evaluation” , which also gave us the highest-possible score on ESG criteria. Sustainability has become an important parameter in an increasing number of customer processes. Storebrand’s commitment to profitable sustainability is an important message in both the corporate and retail markets.15 Mutual funds, total market 17 Unit-Link 18 16.2 % 22.3 % 83.8 % 77.7 % Non-life insurance 19 6.4 % Banking 20 2.0 % 93.6 % 98.0 % Storebrand market shares Other providers 15) Aalund conducts an annual customer satisfaction survey in the corporate pension market called the ”company pension barometer”. 16) Mercer conducts an annual evaluation of the quality of providers’ investment offerings and set-up for defined contribution pension schemes. The evaluation is a quantitative and qualitative analysis of asset management. 17) Mutual funds consist of share savings accounts and investor accounts and include AUM for Storebrand Asset Management and Skagen. Source: Norwegian Mutual Fund Associati- on – Norwegian Retail Customers (September 2022). Total assets. 18) Figures for retail customers, including Danica, from 2022. Source: https://www.finansnorge.no/siteassets/statistikk/livstatistikk/statistikker---livstatistikker/ma/2022/ma-q3-2022.xlsx. 19) Source: Finans Norge, Premium statistics non-life insurance 4. quarter 2022. Table 2.1 – private land-based insurance in total 20) Bank market share is measured in loans. Source: Statistics Norway and banks’ quarterly reports for Q3 2022 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relationsGreater security and financial wellness 20Engaging, relevant and responsible advice 22Digital innovator in financial services 23Simple and seamless customer experiences 24Key performance indicators 253. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixDigital innovator in financial services Smart use of data creates business value through the improvement of existing processes and new areas of application. Storebrand’s award-winning machine-learning model for identifying non-life insurance fraud identified twice as many cases of fraud or attempted fraud in 2022 as the year before. The use of data and artificial intelligence contributed to a doubling of the number of disability cases granted through automated case processing. In 2022, Storebrand’s environment for data and analysis also worked to improve internal processes. Money laundering and compliance risk have proven to be areas where the use of advanced analysis is highly effective. For example, in 2022, computer-based analysis models for anti-money laundering were developed for selected customer groups of Storebrand Bank. The asset management business has deep expertise in the use of data and analytics. In 2022, a dedicated analysis platform was acquired to further develop and support the investment process in Storebrand Asset Management (AS). Storebrand’s own sustainability score for fixed income and equities was made available to all managers in the asset management business in 2022. Why Storebrand’s technology platform is a key element in our production of financial products and services. As such, it can be described as our business factory. It is a modern platform that enables us to constantly meet new expectations from our customers. Goals and ambitions We work to increase the number of satisfied and loyal customers interaction through good, digital customer experiences. The between digital services and automated processes is important for both distribution and operations, as well as for our ability to ensure profitable growth and a future-oriented Storebrand. Approach At the beginning of 2022, Storebrand Digital was established as a business area. This area brings together employees working with digital service development, technology and data. The work methodology is agile and characterised by an interdisciplinary and seamless collaboration with the various business areas. Consolidation and renewal of the technology platform is vital to ensure innovation. Transforming Storebrand’s IT solutions into cloud-based infrastructure is an important part of this strategy. In addition, we see that advanced use of data and artificial intelligence can contribute positively to the further development of Storebrand and our industry. Results In 2022, Storebrand launched the concept “My home”, a service that creates value for both Storebrand and our mortgage customers. The service estimates the value of the property, provides insight of energy consumption and is linked to personal banking advice. As many as 80 per cent of the users gave positive feedback. In SPP, the modernisation of the core IT platform was completed in 2022. The Future Core programme has strengthened the basis for cost-effective digitalisation and has already yielded positive results. The number of self-service actions in our digital customer service portal doubled in 2022. In the corporate market, 80 per cent of all new signings took place digitally (in this or adjacent services). For pension withdrawals, 85 per cent were carried out digitally. Following a successful transfer of Storebrand Asset Management’s solution portfolio to the cloud solution Microsoft Azure in 2021, further work was carried out in 2022 to migrate the rest of the Group’s infrastructure to a similar solution. 23 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relationsGreater security and financial wellness 20Engaging, relevant and responsible advice 22Digital innovator in financial services 23Simple and seamless customer experiences 24Key performance indicators 253. 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 Digitalisation is a driving factor among product and service providers in all industries. Storebrand’s customers expect a seamless interaction between personal advice offered by our employees, and service in digital and serviced channels. As the public sector occupational pensions segment is important to Storebrand, we developed new and improved functionality for calculating pensions for customers in this market. This includes both flexible and early retirement. Satisfaction among customers who used the service increased by more than 70 per cent. In 2022, Storebrand acquired the fintech company Kron, which has succeeded in creating awareness and customer interest in the market for personal savings and investment activities. Kron’s platform for fund investments and pension savings will become Storebrand’s digital service for savings in the private market in 2023. Increasingly, small, and medium-sized companies are using Storebrand’s digital purchasing solution. 45 per cent of sales in the direct channel took place in the digital solution, and customer satisfaction increased by 20 per cent in the past year. In asset management, Salesforce was adopted to serve institutional customers. The customer portal for the same customer segment was upgraded, and we now offer modern solutions for reporting including status and progress on sustainability in companies that Storebrand has invested in. We also partnered with fintech company Quantfolio to develop a new consulting solution. Goals and ambitions Our aim and ambition are to offer personalised experiences to each of our customers, across digital and serviced channels. Approach Storebrand invests in technology, services and concepts to ensure relevance for our customers in the channels they prefer, with an increasing emphasis on self-service. At the same time, we know that customers have different preferences, and that customers’ need for personal advice may vary throughout a purchase or service journey. Therefore, it is important that the technology platform ensures a seamless transition between self-service and serviced channels. In 2020, we introduced Salesforce as an IT platform for customer dialogue and follow-up across channels. The platform is now the engine of customer service for both retail and institutional customers. In 2023, work will continue to ensure that the platform may also strengthen service to Storebrand’s corporate customers. Good functionality in all basic solutions that our customers use, has been the focus in 2022 and will continue to be important in the future. Results In 2022, Storebrand launched a new mobile bank solution that provides our banking customers with easier access to other services offered by the Group. The solution will help increase sales of several types of products to our customers. A new solution for processing loan applications and issuing financing certificates was launched during the year. The average processing time per loan application was reduced by 30 minutes through the integration with Salesforce, and advisors can in many cases grant loans while on the phone with the customer. In 2022, more than 40 per cent of health assessment cases were processed through an automated process. Many customers experienced significantly reduced waiting times, and customer satisfaction increased almost 20 per cent. A smart account product was incorporated into the Smart pension solution in 2022, making it easier for customers to serve themselves digitally. This resulted in a balance increase of NOK 1.4 billion on accounts created during the year. 24 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relationsGreater security and financial wellness 20Engaging, relevant and responsible advice 22Digital innovator in financial services 23Simple and seamless customer experiences 24Key performance indicators 253. 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 233 Categories and indicators Brand Brand awareness: Norwegians who answer that Storebrand is one of the first three companies they think of in a broad financial category (position / share) Recognised for sustainable value creation (Retail market, Norway) Recognised for sustainable value creation (Corporate market, Norway) Customer satisfaction Customer Satisfaction (Net Promoter System, retail market) Market share Market share: Mutual funds, Asset Management, Sweden Market share: Mutual funds, Asset Management, Norway 21 Markets share: Saving, retail market Norway 22 Market share: Banking, retail market, Norway Market share: Insurance, retail market, Norway Market share: Insurance, corporate market, Norway Market share: Pensions, corporate market, Sweden Market share: Pensions, corporate market, Norway 23 Market position Market positions: Saving, retail market, Norway Market position: Pensions, corporate market, Norway Results 2019 Results 2020 Results 2021 Results 2022 Targets 2023 Targets 2025 New No. 3 No. 1 New No. 5 No. 4 New No. 5 / 21.1 % Top 3 Top 3 No. 3 No. 3 No. 5 No. 3 Top 3 No. 1 No. 1 No. 1 No. 4 No. 6 No. 5 No. 5 Top 3 Top 3 4.7 % 4.9 % 4.9 % 5.3 % Increase Increase 16.1 % 16.1 % 15.4 % 16.2 % Increase Increase 20.0 % 21.7 % 19.6 % 21.0 % Increase Increase 1.7 % 3.6 % 2.0 % 1.6 % 4.1 % 2.1 % 1.8 % 5.9 % 2.5 % 2.0 % Increase Increase 6.4 % Increase Increase 2.8 % Increase Increase 14.1 % 15.1 % 14.3 % 14.6 % Increase Increase 29.1 % 29.4 % 27.0 % 30.8 % Increase Increase No. 2 No. 1 No. 2 No. 1 No. 2 No. 1 No. 2 No. 1 N/A N/A No. 1 No. 1 21) Market share includes total market (including institutional customers) for Storebrand and Skagen 22) Market share for savings retail market includes in 2022 Danica which we acquired in 2022. 23) Pension, corporate market share in 2022 includes Danica that we acquired in 2022. 25 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relationsGreater security and financial wellness 20Engaging, relevant and responsible advice 22Digital innovator in financial services 23Simple and seamless customer experiences 24Key performance indicators 253. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix3 People 27 A culture for learning 29 Engaged, competent and courageous employees 31 Diversity and equal opportunities 33 Key performance indicators The chapter on people describes the following material topics: A culture for learning, Engaged, competent and courageous employees, and Diversity and equal opportunities.. For a more detailed description of these topics, see page 17. ”People first, digital always” is Storebrand’s strategy for organisational and employee development. Our aim is to enable our organisation to adapt to continuous changes in an increasingly digitalised society while, at the same time, delivering on ambitious business targets. In 2022, we further developed a flexible hybrid working model through a project called Future Storebrand. Each organisational unit and team adjusted its routines as needed throughout the year. Flexibility in terms of place of work contributed to efficiency as well as a sense of freedom among our employees. In 2022, following the pandemic, it was important to resume physical collaboration to further strengthen company culture and a sense of belonging. Surveys showed that the degree of engagement among our employees continued to increase in 2022. Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. PeopleA culture for learning 27 Engaged, competent and courageous employees 29 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 Why While we offer both internal and external courses and training programmes, most of the learning and development take place through our daily work. Therefore, it is important to maintain a learning culture that promotes continuous learning, sharing and collaboration. A learning culture is key to improving performance and fostering diversity and innovation in a hybrid work model. Goals and ambitions Our ambition is to build a learning culture with a high degree of psychological safety. Employees should dare to experiment, fail and be open about what they master. Employees should feel encouraged to give input, share different perspectives, and offer feedback. Employees should take responsibility for their own development as well as that of their colleagues. the Storebrand Academy, a management program with participants from across the organisation. Following the pandemic, participants at various leadership meetings and programs enjoyed meeting physically in 2022. • For select employees with less than three years of experience, we offer a development program for young talents, Storebrand Future Impact. The goal is to engage future leaders and change agents, with emphasis on the development of three skills: self- management, relationships and collaboration, and complex problem solving. • Mentor programs also were continued. After an in introductory meeting between mentors and mentees, it is up to the participants to agree on the form and frequency of dialogue and cooperation. We offer knowledge networks, courses and programmes via platforms that both ensure a good learning experience and provide us with data to continuously improve. • Our aim is for all employees to continue learning throughout their employment with Storebrand, so that they may thrive, grow and be of increasing value to colleagues and the organisation as a whole. Approach Among the most important arenas for culture building and learning in 2022 were: • The workshop “Psychological safety – what, why and how?”, which was introduced in 2021, was further developed and offered to teams and departments throughout the company. • Our annual Employee Day focused on the theme “Growth – Conversations about development”, which was chosen based on insights from more than 100 employees and 20 managers representing more than 20 teams across the organisation. The insights showed that people wanted to talk more about their development as a Storebrand employee. • • Storebrand’s digital onboarding program, “Smart Start”, was offered to all new employees. The program includes four digital meetings during the first month as a new employee. The participants get to know other new employees and colleagues in different parts of Storebrand, in addition to learning more about development opportunities and offers. In collaboration with Front Leadership, a Norway-based leadership development firm, we offered programs designed for middle managers at different levels. A separate track was offered to new leaders. A new cohort of managers attended Storebrand Sandbox, a summer program for students, is a leading fintech program in Norway and Sweden, where students with different study backgrounds solve a real challenge facing Storebrand or our customers. Young talents get to know Storebrand, and we strengthen relations with potential employees. The programme is also an important contribution to Storebrand’s learning and innovation culture. Storebrand also has several other learning arenas. In 2022, we worked to make these more visible, combining physical gatherings with digital participation. The initiatives were promoted through internal channels and at our annual Employee Day. 24 Results Storebrand conducts regular employee surveys to ensure frequent feedback and employee satisfaction. When asked about development, the survey in 2022 showed a stable high score, 8.1 out of 10. The score on questions related to supervision increased from 8.1 to 8.2 out of 10, while the score measuring employees’ satisfaction with career development increased from 7.7 to 7.8 out of 10. The score for learning remained stable at 8.3 out of 10. Workshops about psychological safety were implemented in both 2021 and 2022 among 60 management teams, teams and corporate units. At our annual Employee Day, 1,815 participants used a newly developed dialogue tool focused on personal development. Increased emphasis on in 2022 contributed to several new initiatives in different parts of the organisation, regular appraisals, development opportunities for special roles, as well as internships in other units than one’s permanent place of employment. learning and development including structured and 24) Other popular learning arenas are practical leadership lunch, iWaffle (innovation talk), StorebrandTalks (internal ”TED-talk”) and Gemba Guild (network on agile working methods). 27 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. PeopleA culture for learning 27 Engaged, competent and courageous employees 29 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. Appendix In 2022, 391 new employees participated in the Smart Start introduction program. Our innovation talk, iWaffle, had weekly episodes with 50-90 listeners each week in 2022. addition, we continued various networks and arenas for experience sharing and professional development, especially for managers. Throughout the year, 17 digital meetings and gathering arenas were held for leaders at all levels in Norway and Sweden. Throughout 2022, we further developed and professionalised learning offerings and digital inspiration through an internal TV studio based in our offices in Norway and Sweden. Physical meeting places, including the Gemba Guild and other networks, provided opportunities for employees who joined Storebrand during the pandemic to develop and get to know each other. In 2022, 26 participants from across the organisation completed the Storebrand Future Impact program. Last year’s participants join an alumni network consisting of former participants. The network serves as an arena for personal learning and growth. The program will be continued in 2023 with 21 new young employees. In 2022, we organised three different mentoring programs: Reverse Mentoring, Mentor Program for Women, and Mentor Program for Future Impact. A total of 53 employees participated. The Storebrand Sandbox summer program comprised 20 participants, including 15 in Norway and five in Sweden, with backgrounds in economics, technology, psychology, development, entrepreneurship, and design. The program is an important part of our innovation strategy. The Storebrand Front Leadership management program was attended by 20 managers with and without personnel responsibility. The offer was expanded in 2022 to suit different roles and needs. In To ensure access to the necessary expertise going forward, it is important position Storebrand as an attractive employer among students and young employees. In 2022, Storebrand climbed from 41st to 27th place in the annual Young Professionals Attraction Index ranking. 25 We also offered courses and learning arenas to ensure smart use of our digital tools. For roles with additional competence needs, certifications and exams were conducted. Storebrand’s digital enthusiasts also contributed in 2022 with knowledge sharing and support on digital tools used in everyday work. For inspiration and professional skills and competence development, we use our learning portal, Campus Storebrand, where employees can find links to e-learning, internal courses, and various external course providers. In total, more than 1,900 people participated in one or more courses in 2022. Our employees completed 7,854 hours of learning, an average of six hours per person. However, this figure does not give a complete picture of all digital learning last year. We do not have data on the number of employees taking courses or completing digital learning on external online platforms, nor on non-digital training taking place internally or in collaboration with external providers. 25) The Young Professionals Attraction Index is a list of the most attractive employers for young graduates where companies are ranked annually. 28 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. PeopleA culture for learning 27 Engaged, competent and courageous employees 29 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 most important source of innovation, development, and growth. We need employees who are brave pioneers, who challenge and think creatively to create a brighter future for our customers. Goals and ambitions Our ambition is to strengthen employee satisfaction and commitment through meaningful work, good management, a motivating working environment, development opportunities and trust. Our managers should set clear guidelines and encourage employees to work together to achieve common and individual goals. Openness is a prerequisite for motivation, trust, and security. All employees must feel that they can raise issues with management and others in the Group. Storebrand has its own ethical guidelines. Approach Storebrand relies on the trust of customers, partners, authorities, shareholders, and society at large. High ethical standards are a prerequisite. All employees must act with due care, integrity, and objectivity. In 2022, we revised our e-learning courses on ethics, anti-corruption, money laundering and terrorist financing, privacy, and digital trust. The courses are mandatory and are conducted annually. The courses consist of digital broadcasts produced in our studio at Lysaker, where employees across the Group provide insight into the various topics. Storebrand has well-established routines for handling complaints, harassment, and other unacceptable behaviour. The organisation also has an external whistleblowing channel, which is administered through an audit firm. In 2022, we received26 two reports or complaints of harassment or other unacceptable behaviour through the external whistleblowing channel. Our driving force at Storebrand is to be closest to the customer and help them achieve greater safety and financial wellness, so that they may have a brighter future to look forward to. To create great customer experiences, we must give our employees the space and mandate needed to act as brave pioneers. Every year we award a Brave Pioneer Award. Particular emphasis was placed in 2022 on customer-focused initiatives and employees who, over time, have taken bold steps to be as close as possible to the customer. Employee surveys are conducted regularly (every two weeks or monthly) to measure workplace engagement. Work satisfaction, leadership, cooperation, self-determination, freedom of opinion, sustainability and development and learning area are among the topics measured. In 2022, we used two additional modules in the survey to include questions related to health, safety, and environment (HSE), and diversity and inclusion. Going forward, questions included in these modules will be conducted once a year, in September and October respectively. Targets related to the surveys are strategically anchored and regularly followed up by Group Executive Management. The surveys produce real-time data that makes it possible to implement continuous improvements, in line with our goal of being a smart and agile organisation. After the pandemic, we have focused on our new hybrid working day. Flexibility and autonomy in terms of the place and hours of work have been particularly important, both at team and employee levels. In 2022, we formalised routines related to working from home, in line with current legal regulation in Norway. At the same time, we emphasised physical meeting places, and social and professional events. We encourage employees to strive for a good work-life balance. This will guide our efforts to further improve the hybrid working day. In 2022, we began work to map opportunities related to our future headquarters. Among other things, all employees were invited to share their expectations of a future office, working environment, and employee experience. Results In 2022, an average of 73 per cent of employees completed e-learning courses in ethics, anti-corruption, money laundering and terrorist financing, and privacy and digital trust. In 2023, we will use the feedback from the organisation to further improve e-learning. From 2023, all employees will also take an annual e-learning course on sustainability. All internal members of the Board of Directors and Group Executive Management attend annual courses on ethics, anti-corruption, money laundering and terrorist financing, and privacy and digital trust as part of the Group’s risk management. More information about this can be found in the chapter Corporate governance and compliance. 26) Our external whistleblowing channel is through BDO: https://u.bdo.no/storebrand 29 Female managers in group 39% Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. PeopleA culture for learning 27 Engaged, competent and courageous employees 29 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. AppendixIn 2022, our Code of Conduct, Information Security and our Privacy Statement for Employees was distributed digitally through Workday, our HR system. All employees must review the documents annually and confirm that they have read and understood the content. a consequence, we initiated experimentation and learning related to a hybrid working day. In addition, office spaces were upgraded with the goal of strengthening agile work and collaboration opportunities across the organisation. Scores related to the work environment increased from 8.0 out of 10 in 2021 to 8.1 out of 10 in 2022. An average of 78 per cent of employees responded to the employee survey at least once in the last three months throughout 2022. The surveys showed a stable high engagement score of 8.4 out of 10, on average, in 2022. This was 0.5 above the average for companies in the financial industry. In 2022, employees gave particularly high scores on questions about organisational topics (including core values, sustainability and equality), meaningful work, support from managers, relationships with colleagues, self-determination, freedom of opinion and development. During the pandemic, the results showed room for improvement when it came to the physical working environment. As Survey results from the HSE module showed a score of 8.2 out of 10, which was 0.3 above the industry average. In 2022, the questions were distributed in October in connection with HSE Week, which we offered for the first time. During the week, we carried out several activities in the office and digitally, on issues related to health, safety, and work environment for all employees. The results from the module on diversity and inclusion gave valuable input for various initiatives in the future. You can read more about this in the next sub-chapter Diversity and equal opportunities. 30 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. PeopleA culture for learning 27 Engaged, competent and courageous employees 29 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. AppendixDiversity and equal opportunities Why It important that Storebrand’s organisation and business is activities reflect our customers and the market in which we operate. Storebrand aims to be a good workplace for all employees, regardless of background. We strongly believe in building an agile organisation and a culture of trust, inclusion and belonging. Independent sustainability analyses show that companies that focus on diversity are more innovative and profitable than other businesses. We must be able to attract the best talents to create a brighter future for our customers, employees, and society. Goals and ambitions We always strive to be an organisation characterised by inclusion and belonging. All Storebrand employees shall be treated equally, regardless of age, gender, disability, cultural background, religious beliefs, or sexual orientation, both in recruitment processes and throughout their employment. We have zero tolerance for harassment, discrimination, and gender-based violence. We will contribute to UN Sustainable Development Goal 5 ‘Gender equality’, by promoting gender equality in the workplace. Our goal is greater diversity and better gender balance in senior positions in all parts of the Group. Measures include nomination of an increased proportion of women to leadership development programs, and in recruitment processes for management positions. Approach Storebrand works systematically to ensure diversity, inclusion, and equality through defined processes for recruitment, organisational changes, salary adjustments and management training. The CEO is followed up by the Board on several sustainability indicators. In 2022, one of these was to strengthen gender equality. We have a diversity committee with participation from the entire Group. In 2022, the committee focused on diversity, inclusion and belonging. In 2022, we continued to offer courses on inclusive leadership. We work actively to achieve gender balance and diversity through targeted recruitment measures and strive to nominate an equal number of women and men to leadership positions and leadership development programmes. Candidates and employees should experience a transparent and inclusive recruitment process, both in internal and external processes. In 2022, we continued our efforts to make the recruitment and interview process as inclusive as possible. Diversity must be demonstrated in the interview and recruitment process, as well as in job advertisements. Our goal is to be able to assess one female and one male final candidate when recruiting for management positions. For permanent employees, we offer paid parental leave beyond the statutory requirements in Norway and Sweden and pay 100 per cent salary during parental leave. Employees on parental leave are guaranteed an increase of one pay grade step during the leave. We continued our partnership with the Women in Finance Charter, which we signed in 2021. Companies that sign commit to set internal goals for gender balance at management level and among specialist positions, to have a dedicated manager with responsibility for following up such goals, to publish status and follow-up regularly, and to ensure coherence between goal achievement and compensation. Storebrand has participated in the tripartite Inclusive Working Life (IA) program since 2002. The program is based on the premise that work promotes good health and well-being, and that early, active intervention can prevent absenteeism. The Group’s managers have established routines for inclusive follow-up of employees in the event of illness. At Storebrand, we have zero tolerance for harassment, discrimination, and other unwanted behaviour. In 2022, we introduced an additional module in our employee survey, asking questions about diversity and inclusion. Diversity and inclusion in working life have been further emphasised through our collaboration with the Catalysts Association. The focus in 2021 was on inclusive leadership, and we therefore wanted to continue this work in 2022 by offering a programme for the entire organisation. We received support from the Norwegian Directorate of Integration and Diversity (IMDI) to develop a course designed to increase awareness of diversity, inclusion and belonging. We also conducted focus groups with representatives from various parts of the organisation, discussing their experiences related to diversity and inclusion in Storebrand. The e-learning course will be offered to all employees in 2023. Several managers participated in a reverse mentoring program, where the mentors were young students with minority backgrounds or international experience. We also continued a separate mentoring program for female employees. Work to study the link between psychological safety, diversity and inclusion continued in 2022. During the year, we used external and internal communication channels to put mental health and exclusion on the agenda, including the external marketing campaign “Hobby Psychologist”. Results A total of 120 leaders have completed Storebrand’s Inclusive Leadership course. In 2022, 30 managers completed Inclusive Leadership, which will be further developed in 2023 in connection 31 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. PeopleA culture for learning 27 Engaged, competent and courageous employees 29 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. Appendixwith the launch a new training programme on diversity and inclusion that will be offered to all employees. This will be developed in collaboration with Catalysts, with funding from Norway’s Directorate for Diversity and Inclusion. Ten leaders participated in our reverse mentoring program in 2022. Through our employee surveys, we achieved an even average score of 8.7 out of 10 on questions about gender equality and inclusion. The survey results showed that employees believe that Storebrand promotes a diverse and inclusive workforce, and that employees feel accepted regardless of background. There was a high degree of trust in Storebrand as an employer. The survey results are used to develop learning programs for competence development and culture building. On questions about diversity and inclusion, the score was 8.2 out of 10. This was 0.1 percentage point below the industry average. Our ambition is to lift the result in 2023 through targeted measures. In 2022, ten women from different parts of Storebrand co-founded a talent and leadership development program for women, FiftyFifty, together with women from a group of other Norway-based companies. The programme is currently led by AFF, a Norwegian leadership development foundation. The programme consists of participants who collaborate to develop measures that promote gender equality for the participants, the companies they work in, and society in general. For the mentor program for women, we established ten mentor pairs across the group, with participants from Norway and Sweden. In September, we offered a webinar for all employees on World Mental Health Day, to highlight employee benefits within mental health care and counseling. On internal social media channels, measures to counteract exclusion and include employees were regularly discussed. These included social arenas, sports and extracurricular activities used by many employees and which contribute to a sense of belonging. The goal is to ensure at least 40 per cent female participation in our leadership and talent development programs. In 2022, an equal number of women and men attended the Storebrand Academy. The Front Management Programme for middle managers included 40 per cent women and 60 per cent men. The Sandbox program included an equal number of women and men, 20 in total. Among the participants on the Storebrand Future Impact program, 43 per cent were women and 57 per cent were men. In recruitment processes, we have worked to achieve greater variation among Storebrand’s representatives, with contributions from employees and managers with different professional experience, cultural background, age, and gender. Several members of the diversity committee will be recruited from different parts of the organisation. We have regularly provided an overview of the proportion of women at various management levels within Storebrand. At the end of 2022, there was an average of 38 per cent women with management responsibility, up from 37 per cent from the previous year. At management levels 1 to 4, there were 37 per cent women at the end of 2022, compared to 39 per cent in 2021. At the end of 2022, the Group Executive Management consisted of 56 per cent women. Internal growth and development opportunities have a high priority. Both new appointments to Group Executive Management in 2022 were chosen among internal applicants. Five out of nine members (56 per cent) of Group Executive Management were women. Among the managers who reported directly to Group Executive Management, 42 per cent were women, and 50 per cent of the Board of Directors of Storebrand ASA were women. Salary levels were reviewed in 2022, as part of the annual salary adjustment process. The review showed somewhat lower average salaries among female employees than male employees. Several measures have been implemented to make salaries more comparable and equal for women and men, including an annual salary review in cooperation with employee representatives. 27 Number of employees per country 28 Gender distribution 413 1,710 Norway Sweden Denmark 30 1 6 1 Finland England Germany Total Norway Women 765 Men 945 Sweden Women 212 Men 201 2,161 0 500 1000 1500 2000 2500 27) More information available in Storebrand’s Gender Equality Report 2022, https://www.storebrand.no/en/sustainability/sustainability-library/_/attachment/inline/46d- 58fd1-d430-472e-993c-a5674efa0a2a:f4f2b49814c8b013574da630e084a62d1952a492/2022-Storebrand-gender-equality-report.pdf 28) Due to the limited number of employees in Denmark, Finland, England and Germany, we have chosen to only show total and not figures divided by gender. 32 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. PeopleA culture for learning 27 Engaged, competent and courageous employees 29 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. Appendix Number of employees: 2,161 Sick leave: Average age: 43 years Turnover: 8.1 % Average seniority: • • Norway: 10 years Sweden: 9 years Gender distribution, employees: 54 % male, 46 % female Gender distribution, Group Executive Management: 44 % male, 56 % female Sick leave has been low and stable for several years. Norway: 3.2 per cent Sweden: 1.9 per cent Accidents that resulted in physical injury: 1 Incidents with material damage: 0 Key performance indicators For more indicators and definitions see page 233. Categories and indicators Number of employees Results 2018 Results 2019 Results 2021 Results 2022 Targets 2023 Targets 2025 Number of employees (group) 1,742 1,824 1,914 2,161 Proportion of women in total (as a share of total employees) Employees: Gender balance in senior positions 46 % 46 % 46 % 46 % N/A N/A N/A N/A Number/proportion of women on the Board of Directors 4 / 44 % 4 / 40 % 5 / 50 % 5 / 50 % 50 % 50 % Number/proportion of women in Group Executive Management Number/proportion of women at management level 3 Number/proportion of women at management level 1-4 Number/proportion of female managers, regardless of level (as a percentage of all managers) 29 Proportion of women in management positions in revenue-generating functions (e.g. sales) Salary ratio: salary remuneration of senior executives Extended senior management, women's share of men's pay per job category (Hay Grade 21-26) 30 Employees, women's share of men's salary per job category (Hay Grade 12-20) 31 Employee engagement Engagement score all participants: Storebrand score (industry average in Peakon), scale 1-10 Recruitment 3 / 30 % 3 / 30 % 3 / 33 % 5 / 56 % 41 % new 24 / 38 % 22 / 37 % 27 / 42 % 38 % 83 / 39 % 86 / 37 % 50 % 50 % 50 % 50 % 50 % 50 % 39 % 103 / 39 % 102 / 37 % 116 / 38 % 50 % 50 % new 39 % 35 % 43 % N/A 50 % 100 % 104 % 99 % 97 % 97 % 97 % 95 % 100 % 100 % 96 % 100 % 100 % 8.0 (7.8) 8.3 (7.8) 8.4 (7.8) 8.4 (7.9) >8.0 >8.0 Number of employees recruited, group, total 204 285 337 416 N/A N/A 29) Includes all female managers with personnel responsibility. For Level 3, all female managers are included, except personal assistants 30) As of 2022, Hay Grade was expanded to 21-26 (from previously 21-25). The positions were re-evaluated as the complexity of the roles has changed since the last assessment. 31) As of 2022, Hay Grade has been expanded to 12-20 (from previously 13-20). 33 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. PeopleA culture for learning 27 Engaged, competent and courageous employees 29 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 42 Sustainable practices through our value chain 44 Corporate social responsibility 45 Key performance indicators This chapter describes the following material topics: Corporate governance and compliance, Responsible use of resources, Sustainable practices through our value chain, Corporate social responsibility. For a more detailed description of these topics, see page 17. To build and maintain the trust among customers, shareholders, authorities and society at large, we must ensure that all employees follow our ethical guidelines and practices. Ethical guidelines and practices must also guide the way we run our business. We must ensure that Storebrand complies with relevant laws, regulations, frameworks, and other requirements. Altogether, these important elements contribute to enhancing and securing our position as a company that works diligently and systematically with sustainability. Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 42Corporate social responsibility 44Key performance indicators 455. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixCorporate governance and compliance: Privacy and digital trust Why New technology and intelligent use of information and personal data enable us to better understand our customers and their needs. As long as customers entrust us with their personal data and we keep in line with relevant regulations, we are able to develop increasingly personalised products and services. Increased digitalisation of our day-to-day lives, raises the risk for personal data to go astray, being stolen, jepordised or shared with unauthorized persons. Thus, our customers must be able to trust us to manage their personal data responsibly. This requires good security measures, a well-established framework for data protection and compliance within our Group. In addition, our employees must know how to handle personal data in a responsible manner both in their daily work and generally throughout our business. Goals and ambitions Our ambition is to engage our customers and build long-term relationships through superior customer experiences across all channels. This requires safeguarding our customers’ rights in accordance with the Personal Data Act32. Safeguarding personal data in a good and correct manner is a prerequisite for working purposefully with sustainability in our business. Approach Our privacy guidelines contain purpose limitation, description of roles and responsibilities, and requirements for data processing. We also work systematically with information security. Through our internal control system, we set requirements for, verify, and improve the security of personal data in our own work processes, customer solutions and in cooperation with our partners. This is a continuous process. If a personal data breach occurs, and the risk to our customers is considered medium or high, we will contact those affected directly by phone or e-mail. In such cases, we inform customers about what has happened, what measures we have taken and, if necessary, what measures they should take to protect their own personal data. The CEO of each of the legal entities in the Group is responsible for all processing of personal data. This includes ensuring that internal control procedures are implemented and regularly reviewed. All managers are responsible for ensuring that employees with access to personal data have the necessary expertise and are qualified to safeguard our customers’ privacy. Managers must also ensure that employees follow our routines and guidelines for information security. All employees must complete basic digital training on privacy matters, which is carried out in smaller groups. In addition, differentiated training is carried out when needed. We have a network of data protection advisors throughout our organisation who provide advice and customised training in addition to assisting with operational compliance work within each business area. The protection of personal data is well integrated into our internal control systems and risk management processes. We continuously assess the privacy risks to which our customers are exposed. We update our privacy statement annually or whenever changes are made in our use of personal data. Our online customer portal gives the individual customer an overview of their personal privacy settings and gives them an opportunity to make changes to these. On our website, Storebrand.no33, we provide advice and recommendations to customers on how to safeguard themselves against online fraud. Fraudulent activities online often aim to steal personal information from the victims that may be misused by the fraudsters. Our approach to safeguarding personal data and other types of information against illegal and unwanted activity is further described in the section on Information Security. Results All employees should complete an e-learning course in privacy every year. In addition, departmental training is carried out when needed. 78 per cent of employees in the Group completed the basic training in privacy in 2022. In 2022, 141 incidents related to the processing of personal data were reported. 29 of these were reported to The Norwegian Data Protection Authority, in accordance with the EU’s General Data Protection Regulation (GDPR). The marginal increase in incidents is mainly due to a non-conformity report from 2021 in one of the Group’s new companies. Hence, there is a major shift in which companies within the Group that received the majority of the incident reports. All incidents from 2022 have been processed. The Norwegian Data Protection Authority/Integrity Protection Authority did not issue any fines, warnings or other actions for Storebrand in order to meet GDPR discrepancies in 2022. 34 32) The Personal Data Act consists of national rules for Norway as well as EU’s General Data Protection Regulation (GDPR). 33) For more information on digital security and privacy: https://www.storebrand.no/om-storebrand/sikkerhet-og-personvern 34) Storebrand also did not receive any fines, warnings or orders for improvements from the Norwegian Data Protection Authority in 2021 or 2020. Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 42Corporate social responsibility 44Key performance indicators 455. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixCorporate governance and compliance: Countering corruption Corruption is a criminal offence in all countries where Storebrand operates. It is also one of the major causes of poverty in many parts of the world. Potential corruption cases can reduce trust in us as a company but can also contribute to reduce trust in the financial and insurance industry in general. At the same time, corruption is destructive to healthy competition in all industries. Therefore, we must work systematically to prevent this form of crime. Goals and ambitions At Storebrand, we have zero tolerance for corruption and other economic misconduct. We work methodically to identify areas with high or higher risk of corruption than elsewhere in our business. We have taken a number of measures to prevent exploitation. Furthermore, we work systematically with our suppliers and partners to ensure that our relationships are free from corruption, and that they are aware and conscious about how to combat corruption in their own business. All permanent employees and selected groups of hired personnel conduct a course on how to combat corruption. Approach Our ethical guidelines establish our expectations to how employees, temporary staff and consultants should contribute to uncover, reject and report attempts of corruption or corrupt behaviour. These rules are reviewed by the Board of Storebrand ASA and the Boards of all subsidiaries annually. All employees must also confirm each year that they have read our Code of Ethics. In addition to these guidelines, we have other internal regulations, such as guidelines and job descriptions with more concrete and practical information, all aimed at countering corruption. These include elements such as questions to ask and other guidance on how the individual employee can identify possible corruption risks at an early stage and which measures, they can take to counter corruption. The Group’s compliance functions are responsible for information and training on anti-corruption work. In addition to updating and maintaining internal rules and routines, this also includes an annual updating of our basic training in anti-corruption and our intranet pages on the topic. Each employee is responsible for understanding and acting in accordance with our Code of Conduct and other guidelines for countering corruption. It is a management responsibility to follow-up practices and ensure compliance. New employees complete basic training in anti-corruption and ethics as part of their introductory programme. 35 We expect both employees and hired personnel to act in a way that helps build and maintain trust in the Group as a whole. As a general rule, no one is allowed to receive favours, services, gifts or other benefits from Storebrand’s suppliers or business partners. In the rare situations where such practices nevertheless may be acceptable, our guidelines specify acceptable threshold values in the relevant currency for each country. Any gift given on behalf of Storebrand are subject to the same threshold values. Our targeted work against corruption includes assessments of our subcontractors, partners, and customers to ensure that they meet the Group’s requirements for criteria and guidelines for anti- corruption. In this way, we ensure that the Group’s relationship with each of them does not imply an unacceptable risk of corruption for the Storebrand Group. 36 Storebrand has established both an internal and an external channel for whistleblowing. Employees who suspect corruption or other financial irregularities must report it, either through one of these channels or directly to their manager or other key personnel within our Group. When using the external whistleblowing channel, the whistle-blower can choose to remain anonymous. Results 80 per cent of the Group’s employees completed our basic anti- corruption training and 82 per cent completed our basic ethics course in 2022. 37 No cases related to corruption were uncovered or reported in 2022. Two cases of internal misconduct involving external agents was uncovered. In addition to this there were two cases of breaches to Storebrand’s Code of Conduct, but no misconduct. The breached of the Code of Conduct were handled by People and the managers in the areas where the breaches occurred. 38 Breaches to Storebrand’s Code of Conduct 39 Category Bribery/corruption Internal misconducts with agents Other violations of ethical rules Discrimination Number 2022 0 2 2 0 35) Our Code of Conduct is sent out to all employees every year for them to sign that are read and understood. In addition, both ethical rules and guidelines for anti-corruption are communicated to everyone in internal channels and are available to everyone on their own intranet pages. All employees, including senior management and board members, received and should complete our basic training in anti-corruption and ethics. 36) We have a Group-wide purchasing process that ensures that we comply with all regulatory requirements and ensures against becoming involved in corruption. 37) Figures do not include Cubera Private Equity, as it has its own anti-corruption programme. 38) The boards of relevant group companies and the ASA board are informed of violations and their consequences, both in operational risk assessments and i compliance reports. 39) Internal irregularities for agents are not included in the key figure for breaches of the Code of Conduct. For a full list of definitions, see the appendix Sustainability indicators and definitions on page 233. Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 42Corporate social responsibility 44Key performance indicators 455. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixCorporate governance and compliance: Information security Why Storebrand’s activities have a significant impact on the societies in which we operate. As a financial institution, the Group’s digital solutions and infrastructure are critical for the society. We manage large amounts of information on behalf of our customers. Due to our position in the market, our customers, suppliers, partners, and employees, are attractive targets for various threat actors. Digital attacks are becoming increasingly sophisticated, and in combination with hybrid work patterns, the risk of not detecting unwanted activity increases. If we fall victim to a cyber-attack, it may result in temporary loss of services and potentially high financial costs for restoring our systems and data. In turn, this may affect our customers’ trust in us. 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. Our approach to ensuring good information security is through people, processes, and technology. Goals and ambitions Digitalisation and innovation of the financial industry and of our services has resulted in more and more stringent requirements for information security. For Storebrand to be able to run a sustainable financial business and increase our innovative abilities in the years to come, a prerequisite is to have stable and secure IT-solutions and infrastructure. Our strategic and continuous work with information security help us to manage cyber risk and increase our resilience 40. This further contributes to sustainable value creation for Storebrand, our owners, and our customers. Approach Much of the work with security in the Group is carried out outside of the security department. This includes in customer services, business development and in the development of digital services. In Storebrand we consider all employees as security employees. In 2022, we appointed dedicated Resilience & Continuity Managers (RCM). The RCMs have an operational coordination responsibility for security within their business area. In addition, we have established a Security Champions programme, which means that we are building an internal security-community for employees who work with development of digital services. The programme promotes awareness, learning new skills, increasing competence and contributes to continuous improvement of our internal security posture. Thus, RCMs and Security Champions contribute to our strategy of incorporating security into everything we do. The internal security function is split into three lines of defence. Security Operations has responsibility for security monitoring, and for detecting and handling incidents. Group Security (control function) is integrated into Storebrand’s Governance, Risk & Compliance function. Group Security includes security governance, security testing, intelligence, and resilience and continuity planning. The independent internal audit forms the third line of defence. The Chief Information Security Officer (CISO) regularly reports to the Board and CEOs of the Group’s subsidiaries. Security and preparedness are high on the agenda in the Group, and cyber risk is defined as the most critical operational risk of the Group41. Storebrand has implemented an Information Security Management System (ISMS) and a Business Continuity Management System (BCMS) based on the international standards ISO/IEC 27001/2 and ISO/IEC 22302. The management system ensures that we have a systematic, risk based and verifiable approach to information security and business continuity. Storebrand faces a complex and dynamic threat landscape where we experience daily attempts of cyber-attacks. In 2022, we increased our investment in expertise and resources in preparedness, security testing, operational security monitoring and incident management to increase the Group’s overall resilience. In addition, crisis exercises have been carried out based on various simulated cyber-attacks targeting critical parts of Storebrand. Storebrand has our own CSIRT (Computer Security Incident Response Team). This is an operational first line of defence function for handling security incidents. The team is actively searching for attacks, threats to-, and vulnerabilities within, our systems. They respond to all tips regarding incidents, breaches and/or attacks. In addition, Storebrand is a member of the Nordic Financial CERT, a joint Nordic operations centre, 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. Storebrand also has its own team of ethical hackers who work to identify possible vulnerabilities in our systems. Together with the CSIRT, the two teams carry out “purple teaming”, also known as exercises, where 40) Storebrand assesses information security risk as part of our overall risk picture. The information security risk is reported to the Group Board every month. It is also summarised in the risk assessment by Group Executive Management ant the Board, including the Board Committees, twice a year. Information security risks are also assessed in the annual ORSA report which is adopted each year. 41) Storebrand assesses cyber risk in the same framework as other business risks. The overall risk is summarised in monthly risk assessments and biannual risk assessments that go to the Board. It is also included in the annual ORSA report which is adopted by the Board and sent to the Norwegian Financial Supervisory Authority. In addition to being an ongoing business risk, cyber security is also considered an emerging risk in a 3-5 year perspective. Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 42Corporate social responsibility 44Key performance indicators 455. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendixone group is the attacker (red team), and one is the defender (blue team). The red and blue teams use this concept to test and improve Storebrand’s capabilities to defend against cyber threats in the real world. employees have a responsibility to familiarise themselves with the rules. All employees must read through and sign the security rules annually. Skilled, motivated, and security-conscious employees are an important part of Storebrand’s preventive and detective security work. Storebrand has a strategy to ensure awareness of security and preparedness. Among other things, this includes regular measurements of the security culture carried out by the internal audit. In 2022, we introduced a new basic training program for employees. For nine years in a row, the Group highlighted our efforts during an annual Security Awareness Month, organised in October, with several activities and security talks. The 2022 theme was “Secure the Human”, addressing the risks we now face. Under “BeSecuritySmartFromTheStart”, employees could the slogan take part in a varied program, focusing on individuals as our most effective security control. All managers are responsible for ensuring that employees are familiar with and understand the Group’s routines and guidelines for information security. At the same time, Results In 2022, we launched a new basic training program in information security in our course portfolio. In the past, this training was run as a separate track, but we would like to see this training in conjunction with our other basic training programs. 78 per cent of all employees completed the information security training. We handled 55 cases that we categorize as security deviations, incidents, and vulnerabilities in 2022, almost twice the number of incidents reported in 2021 (28). We believe the increase was due to improved incident detection systems, our ability to detect incidents, improved our internal control activities and conducting more security tests. This enables us to detect deviations and vulnerabilities before they materialise into incidents with consequences. The figures only include deviations, incidents, and vulnerabilities that will have consequences and costs for Storebrand or others if they are not detected in time, nor prevented or handled. We divide the cases into four levels of severity, critical, high, medium, and low. Category Critical High Medium Low Number in 2022 Examples 2 8 25 20 Critical vulnerabilities that were discovered internally. Handled before they had consequences for Store- brand or others. Vulnerabilities, attempts at targeted fraud, or major deviations. Discovered internally and handled before they had consequences for Storebrand or others. Several users exposed to fraud or malware in emails. Individual users downloaded malware or disclosed their passwords. Handled automatically by security tools or manually before they had consequences. Errors or accidents caused by human error. Discovered and handled. Minor phishing cases that required follow-up but handled before there were consequences. Minor errors or mishaps caused by human error. Discovered and handled. 38 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 42Corporate social responsibility 44Key performance indicators 455. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixCorporate governance and compliance: Anti-money laundering and terrorist financing Why Storebrand is a key player in the Nordic financial market. Therefore, we have a responsibility to avoid being misused in connection with financing of terrorism, money laundering or other forms of financial crime. Our customers, owners, stakeholders and society at large expect us to handle this in accordance with our responsibilities. Succeeding in our work against money laundering, financial crime and terrorist financing is a crucial contribution to Storebrand’s sustainability work. Combating this type of crime is also an important part of fulfilling our corporate social responsibility. Our efforts to combat money laundering and terrorist financing are also essential to maintain our reputation. Goals and ambitions Storebrand shall act consistently and in compliance with all relevant legislation related to money laundering, terrorist financing and financial crime in general. We must ensure that our companies are not misused for such purposes. This requires systematic and continuous work. We seek to achieve this through training and ongoing follow-up of our customers and partners. Approach We have established guidelines and policies that describe and set requirements for our work against money laundering and terrorist financing. These guidelines and policies are reviewed by the Board of Directors of Storebrand ASA and the Boards of all subsidiaries subject to reporting obligations, annually and in the event of major changes. In addition to this, we have incorporated measures throughout the Group to avoid money laundering, financial crime, and terrorist financing. The companies within the Group’s with reporting obligations carry out an annual assessment of the risk of money laundering, financial crime and terrorist financing. Frameworks and routines have been established for managing risk, such as set requirements for establishing new customers and for ongoing follow-up of customers who are perceived to imply risk. In addition, we conduct internal audits and regular controls to detect, identify and report suspicious transactions or behaviour. Activities suspected to be in violation of the Money Laundering Act, such as activities related to money laundering, financial crime and terrorist financing, are reported to the police. All employees are required to know our guidelines for preventing financial crime. Thus, all employees should also complete our basic training program on money laundering, financial crime and terrorist financing every year. This training is part of our onboarding programme for all new employees. In addition to our basic training, differentiated training is carried out for employees with specific tasks related to our work against money laundering and terrorist financing. The basic training provides an understanding of possible risks, which rules apply and which requirements we set for our employees and managers. All senior executives and board members of the Group and its subsidiaries are expected to complete the basic training in money laundering, financial crime and terrorist financing and be familiar with how we work with this in the Group. Storebrand is a member of Finance Norway’s economic crime committee. The committee cooperates closely with Norwegian authorities and provides guidance to all member companies. Results In 2022, 57 cases related to suspected financial crime were reported to the police (MT reports), up from 15 in 2021. The cases varied in severity, from suspected money laundering, terrorist financing and tax evasion to falsifying documents and attempted insurance fraud or social engineering. In 2022, 79 per cent of our employees completed basic training in combating money laundering, financial crime and terrorist financing, compered to 80 per cent in 2021. The decline in completion of basic training is primarily due to technical challenges in our training platform. We are currently working to put in place a new training platform to solve these challenges.In addition to the basic training, several specific training measures were also implemented, such as internal and external courses completed by our employees. 39 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 42Corporate social responsibility 44Key performance indicators 455. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixResponsible use of resources Why At Storebrand, we want to take sustainability into account in all parts 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. compensate for emissions as a result of its own operations.44 We also have a climate strategy that applies to the entire group, where we set climate requirements for ourselves and our suppliers, in addition to setting specific targets to minimise our carbon footprint.45 Goals and ambitions In our own operations, we have a target of reducing greenhouse gas emissions by 7.6 per cent per year from the level in 201942, in line with the 1.5 degree target and the findings in the UN’s Emissions Gap report 2019.43 To reduce emissions, we are working to become more energy efficient, reduce waste production, increase the share of recycled waste, and reduce our carbon footprint in connection with business trips and commuting. Already in 2019, we committed to setting science-based climate targets for our emissions, which were to be verified by the Science- Based Targets initiative (SBTi). Since then, Storebrand has helped develop the method for the financial industry to set science-based climate targets. Storebrand’s climate goals have been approved by SBTi and the commitments for own operations are to reduce absolute scope 1 and 2 greenhouse gas emissions by 52 per cent by 2030, with 2018 as the base year. In addition, we commit to continuing the annual purchase of 100 per cent renewable electricity until 2030. To reach the 1.5 degree target, the Intergovernmental Panel on Climate Change (IPCC) and the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) point out that society must take immediate measures to stop and reverse the loss of nature. As the owner of large commercial properties, we have an ambition to promote cooperation, knowledge and coordinated measures related to the interaction with property management and biological diversity. In the property investments, Storebrand has also had a science-based target validated. Storebrand must reduce Scope 1 and 2 greenhouse gas emissions from its property portfolio by 64 per cent per square meter for residential buildings and by 71 per cent per square meter for commercial buildings (the management of direct property investments) by the target year 2030, with 2019 as a base year. Approach As early as 2008, Storebrand became Norway’s first “carbon- neutral” financial group, through the purchase of climate quotas to We use the precautionary principle when it comes to environmental management. Storebrand has been Eco-Lighthouse certified since 2009, and we disclose developments in our environmental and climate work every year. We have our own department and a working committee with representatives from operations, real estate and sustainability that follow up targets on energy and water consumption, waste production and sorting rate in the office premises to ensure that we achieve the goal of reducing our footprint. The committee meets quarterly and agrees on improvement measures. In 2022, we adjusted energy consumption in the summer months as there are otherwise few employees in the office. Storebrand also buys electricity from renewable energy sources with a guarantee of origin. To reduce the amount of waste, an internal campaign was launched to reduce the number of cardboard cups used by employees in the office. Storebrand buys in 400,000 cardboard cups a year and the aim of the campaign is to raise awareness and reduce the purchase volume. In addition, it was decided in 2022 that new cardboard cups will be procured without plastic elements and with a design that refers to reuse. Storebrand Grab & Go was another initiative launched in 2022 to reduce food waste at the headquarters in Lysaker. Through this measure, employees can put surplus food from internal events or meetings in the fridge for the enjoyment of other colleagues or departments, rather than throwing it away. In addition, we established color codes on the menus in the canteen to map whether employees choose greener options. We are also working to facilitate seamless digital meeting activities to reduce the scope of business travel. In 2022, we completed the renovation of the head office in Stockholm and video equipment was installed in the meeting rooms. Employees are encouraged to assess the need for travel and use public transport for necessary travel. In Storebrand, we have an internal carbon price on flights 42) In our own operations, we follow up scope 1-3 emissions from head offices, including emissions from business travel. 43) For more on the findings of the UN Emissions Gap 2019: https://wedocs.unep.org/bitstream/handle/20.500.11822/30797/EGR2019.pdf?sequence=1&isAllowed=y 44) Storebrand has a climate strategy that aims to limit global warming to about 1.5 degrees. A key instrument is for our investments to be carbon neutral by 2050 at the latest, with specific targets along the way. At the same time, Storebrand as a group must be carbon neutral. Through this, Storebrand contributes to limiting physical climate change. 45) Storebrand’s Climate and Environmental strategy: https://www.storebrand.no/en/sustainability/sustainability-library/_/attachment/inline/6e9b414d-0c27-4e67-94af-89c8ac2739d9:f7e0d4a- 894ba01e720b28ea813d356544f29df8e/19206-climate-environmental-strategy-2022.pdf 40 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 42Corporate social responsibility 44Key performance indicators 455. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendixof NOK 1,000 per tonne of CO2.46 The cost is charged to the employee’s department and is followed up by the managers in a system for increased insight into our travel habits. The funds from the carbon tax are used to buy climate quotas and for other climate- related projects. Employees are encouraged to cycle to work, and for the past three years employees have had the opportunity to buy their own electric bicycles at a discounted price with an interest-free loan from Storebrand. Residual emissions from own operations are compensated for by purchasing emission quotas and investing in carbon-positive projects. In 2022, Storebrand established a pilot project in collaboration with The Skift network, a Norwegian, business-driven climate initiative, and partners to increase knowledge about property management and biodiversity. As a consequence, pollinator-friendly plants replaced grassy areas outside the main office building. Results In 2022, our climate targets were validated by Science-Based Targets initiative to ensure that our roadmap towards net-zero is in accordance with recognized methodology and in line with the Paris Agreement. 47 In 2022, 22 employees took advantage of the offer to buy discounted electric bicycles. A total of 106 employees (approx. 5 per cent of all employees) have bought electric bicycles since the campaign started in 2020. Together with the Skift network, Storebrand has contributed to a new practical guide for greener property management. In 2022, upon the end of the pandemic, our activity related to business travel increased. Since 2019 (before covid-19), however, we have more than halved our emissions. This indicates that changed travel habits, as well as our internal carbon price and new guidelines for business travel help to reduce internal emissions. The funds from the carbon price are used for, among other things, the purchase of climate quotas, the planting of trees and supporting climate measures. In 2022, Storebrand ordered the planting of 30,000 mangrove trees and a further 30,000 for 2023. Since 2020, we have contributed to the planting of 103,750 trees through the Worldview Foundation. We have bought climate quotas from a forest conservation project in Kenya through Wildlife Works. We have also purchased CO2 removal certificates from the Norwegian start-up company Inherit Carbon Solutions. Inherit is developing a new method for removing CO2 from the atmosphere by capturing and storing CO2 that occurs in connection with biogas production. Storebrand is Inherit’s first customer, and thereby supports the development of a Norwegian start-up company that is working on an important solution to reach the Paris Agreement’s goal of 1.5 degrees of warming. The CO2 Inherit captures in this project will be stored in the Northern Lights CO2 storage project in 2024. 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. 12.5 We aim to significantly reduce the amount of waste through prevention, reduction, recycling and reuse. 12.6 We encourage companies to implement sustainability in their practices. 46) The carbon price of 1000 NOK is based on the price in Sweden in 2020. Sweden is among the countries with the most expensive carbon price. 47) Validated objectives will be published on the Science-based Targets Initiative website in early 2023: https://sciencebasedtargets.org/companies-taking-action 41 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 42Corporate social responsibility 44Key performance indicators 455. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix Sustainable 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. 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 operations and procurement activities, we aim to contribute to sustainable development, and to ensure that human rights and workers’ rights are not infringed. for 2022 was to maintain the share of Our ambition environmentally certified purchasing volume of at least 60 per cent.48 Although we exceeded the target, the dynamics of our supply chain and market conditions still make the 60 per cent target challenging. 13.2 We incorporate action on climate change into our policies, strategies and plans. 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. 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. We have defined three specific climate targets for suppliers and partners: • • • By 2025, our suppliers must have set short- and medium-term verifiable emission reduction targets. By 2025, our suppliers shall be climate neutral. 49 By 2030, 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.50 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.51 Our purchasing policy is based on the Group’s governing documents and related procedures, which are revised annually. 52 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. We exclude - Storebrand shall not choose vendors, products or services that are in violation of international agreements, national regulations, or internal policies. This is described in our sourcing principles. 48) Environmental certifications include Eco-Lighthouse, EMAS, ISO14001 and the Nordic Swan Ecolabel 49) This target allows suppliers to compensate for emissions they are unable to cut in the short term through the purchase of climate quotas. 50) For our Supplier requirements, see Storebrand’s Supplier Declaration for sustainability commitments and climate neutrality: https://www.storebrand.no/om-storebrand/barekraft/bare- kraft-i-egen-drift/baerekraftige-innkjop/_/attachment/inline/1cb014e9-7dde-4ac4-aecf-a0e084841635:64901b189f0df26e98697e89f7a1c564105df3d8/2023-02-Leverand%C3%B8rerkl%C3%A- 6ring-b%C3%A6rekraftforpliktelser-og-kliman%C3%B8ytralitet-NO.pdf 51) For more information about Storebrand’s list of exclusions: https://www.storebrand.no/en/asset-management/sustainable-investments/exclusions 52) 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”. Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 42Corporate social responsibility 44Key performance indicators 455. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixWe map all suppliers with annual sales volume to Storebrand of more than 1 million NOK. In 2022 we developed further routines for following up with our suppliers, both when establishing a new third- party agreement through the follow-up system and for updating the questions we ask them on an annual basis. The purpose of the questions we ask is to make sure that the suppliers meet our expectations, and to exercise our role as a promoter of sustainability. The questions include the following categories: • To what extent is sustainability integrated into the supplier’s strategy? • What results and goals does the supplier have for its climate work? • What results and goals does the supplier have for diversity? • To what extent does the supplier use environmental, quality and management systems? To what extent does the supplier have a process in place for mapping the risk of human rights violations in its own operations and in its supply chain? • • Which is the supplier’s most significant risks for violations of human rights? Based on the answers, we make assessments of any measures that should be initiated. This takes place through dialogue with the suppliers. In some cases, suppliers are excluded. An extended set of questions is used to evaluate suppliers in purchasing processes. Our most important and largest purchases include contracting IT and business processes, healthcare services, 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. Storebrand is concerned with safeguarding human rights and decent working conditions in our own business, supply chain and in our investments.53 In connection with the introduction of the Transparency Act in Norway in 2022, we prepared new routines and policies to be able to map and follow up risks related to violations of human rights and decent working conditions in our supply chain and in our own operations. We have primarily worked in the following areas to map risks and prepare the organisation to meet the reporting requirements by the deadline of 30 June 2023: • • • • • • Updated group-wide policy for human rights and responsible business conduct. Prepared group-wide framework for due diligence assessments of the supply chain and business relationships. In the first step, the risk of violations of human rights and decent working conditions is assessed objectively through the supplier’s sector, geographical affiliation and the specific product or service delivered. 54 In the second step, suppliers and business relationships are prioritised based on the result in step 1. Those with the highest risk undergo a broader due diligence assessment. Risks are assessed based on likelihood, severity, scope and remendability. Prepared update of the procurement process55 to reduce the risk of violations of human rights and decent working conditions in line with the methodology in point two. Carried out risk and due diligence assessments of the existing portfolio of suppliers and business relationships in line with point two. 56 Updated self-evaluation methodology for annual follow-up of our largest suppliers. In 2023, we will continue this work by implementing a framework for due diligence assessments and carrying out risk and due diligence assessments of our own operations.57 We will publicly disclose the reports with details of the due diligence assessments by 30 June 2023. In the first reporting year, the report will be included as part of our policy for human rights and responsible business conduct.58 It will then be reported as part of the annual report from 2023. Results In 2022, contracts worth more than NOK 1 million totalled around NOK 4.68 billion. This accounts for more than 89 per cent of our total purchasing volume and includes the management and development of direct real estate investments. Of this volume, 64.2 per cent comprises suppliers that are environmentally certified in accordance with our purchasing policy. This volume is divided into 495 suppliers, of which 166 (35.5 per cent) are certified according to a recognised environmental management standard. 59 At the end of 2022, we sent out an updated survey to our suppliers. The answers will be reviewed in 2023. 53) More about our work on human rights and decent working conditions can be read about in our Group's Responsible business conduct and human rights policy and in the chapter A driving for- ce for sustainable investments. Storebrandstandarden (The Storebrand Standard) sets the standard for what we invest in: https://www.storebrand.no/en/asset-management/sustainable-investments/ exclusions/the-storebrand-standard 54) This is supplemented by the contract owner's knowledge of the supplier in question, for example based on previous experience or media reports that may indicate a risk of human rights violations or decent working conditions. For geography, the following indices are used: ITUC and Human Development Index. For sectors, the EU FRA list is used and for products/services and for product/service risks the Norwegian Anskaffelser.no high-risk list is used. 55) Integrated into the group system in the first quarter of 2023. 56) Respective contract owners have carried out due diligence based on the established template and will follow up regularly. 57) Through investments, insurance activities, banking, own employees (”Keeping our house in order”), acquisitions, mergers and joint ventures. 58) Storebrand’s Policy for Human Rights and Responsible Business: https://www.storebrand.no/en/sustainability/sustainability-library/_/attachment/inline/9fbb435e-1a4a-4b8a-a45d-f473c56d3cb- b:92e6fa7160b8ea47016b5d2a5c798c8b94783676/Human%20Rights%20Policy%20and%20Responsible%20Business%20Conduct%20at%20Storebrand%202022.pdf 59) The proportion of environmentally certified suppliers has increased significantly this year because of the inclusion of the Insurance business area. The increase in the proportion of environ- mentally certified suppliers has compensated for the decline in turnover of some large and certified suppliers during the year. Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 42Corporate social responsibility 44Key performance indicators 455. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixCorporate social responsibility employees collected money to support Ukraine and employees contributed with voluntary efforts at refugee receptions. Results Dozens of youth companies competed in the sustainability category through the Ungt Entreprenørskap (Young Entrepreneurship), in 2022. Substantia UB won the award for the development of a solution to use local food waste as nutrition for larva-based salmon feed, which replaces the current use of soy-based fish feed. The solution helps to solve a global problem which have major environmental consequences. As a result of the two-day programme 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 2022, NOK 500,000 was awarded to 26 “We cheer on” projects around Norway, and 400,000 SEK were awarded to nine projects in Sweden. All the projects contributed to a future to look forward to. Storebrand contributed a total of NOK 107,000 to Doctors Without Borders’ TV Campaign, of which NOK 50,000 was direct support from company and the rest came from internal and external fundraising. In 2022, Storebrand and SPP employees collected several boxes of equipment and clothing for the benefit of Ukrainian refugees. Storebrand had continuous dialogue with certain refugee reception centres to be able to collect clothes and equipment tailored to their needs. In addition, we collected Christmas presents and financial support for “Fattighuset”, an organisation helping people in poverty. Why As a leading Nordic financial institution, we have an important social responsibility. We actively engage in the society in which we operate, both through our primary business as a provider of services, 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 We prioritise activities in three areas when relevant for social responsibility: Cooperation, financial support, and voluntary efforts among employees. These activities will promote and raise awareness about sustainability and demonstrate the connection between sustainability and profitability. 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 2022, we conducted a two-day programme 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 in Norway and in Sweden. This is a social responsibility initiative where we provide financial support to various social projects that contributes in 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. In 2022, Storebrand employees were given the opportunity to take time off for the hours they spent fundraising for Doctors Without Borders’ “TV campaign”. Many were particularly eager to support the citizens of Ukraine in 2022. Storebrand held an art auction where half of the auction money went to organisations supporting Ukraine. In addition, collection stations were placed at the offices in both Norway and Sweden, so that employees could easily collect equipment and clothing for institutions housing Ukrainian refugees. In SPP, 44 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 42Corporate social responsibility 44Key performance indicators 455. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixKey performance indicators The environmental data in the following table include the head offices in Norway and Sweden and Skagen’s head office, which represents the office premises of 94 per cent of the employees. For more indicators and definitions see page 233. Categories and indicators Results 2019 Results 2020 Results 2021 Results 2022 Targets 2023 Targets 2025 Sustainability rating CDP-rating DJSI score/global percentile Climate metrics: suppliers Environmentally certified purchases (share of the total expenditure that went to suppliers with certified environmental management system) Greenhouse gas emissions from own operations Greenhouse gas emissions from own operation (total) scope 1-3: tonnes of CO2e / tonnes CO2e per FTE Scope 1-emission: tonnes CO2e / tonnes CO2e per FTE Scope 2-emission: tonnes CO2e / tonnes CO2e per FTE Scope 3-emission: tonnes CO2e / tonnes CO2e per FTE CO2e-emissions per FTE due to air travel: Scope 3, tonnes per FTE 60 Governance incidents Number of complaints processed by the Financial Appeals Board 61 Number of breaches of code of conduct 62 Number of information security incidents Number of privacy incidents A - 75 / 81 A- 81 / 93 A- 82 / 92 A A A 88 / 99 Top 10 % Top 10 % 57 % 62 % 60.3 % 64.2 % 55 % 60 % 1,519 / 0.92 477 / 0.28 320 / 0.18 787 / 0.39 1.1 / 0 1.2 / 0 0.5 / 0 0.8 / 0 179 / 0.11 164 / 0,09 130.6 / 0.07 131.6 / 0.07 1,339 / 0.74 313 / 0.18 188.9 / 0.11 654.6 / 0.3 0.67 0.1 0.07 0.29 192 218 9 30 48 2 20 41 198 3 28 125 244 2 55 141 0.8 N/A N/A N/A N/A N/A N/A N/A N/A 0.6 N/A N/A N/A N/A N/A N/A N/A N/A 60) In 2022, our business travel activity increased, but since 2019 (before COVID-19) we have still more than halved our internal emissions. This indicates that changing travel habits, as well as our internal carbon price and new business travel policies, are helping to reduce internal emissions. 61) The figures apply to our Norwegian enterprises, as these are complaints handled by the Financial Complaints Board. SPP is not included here. 62) Internal misconduct by agents is not included in the key figure on breaches of ethical guidelines, but is included in the detailed reporting of breaches of ethical guidelines on page 241. 45 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 42Corporate social responsibility 44Key performance indicators 455. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix5 Director’s report 47 Strategy 2021-23 48 Strategic highlights 2022 53 The Group’s results 2022 58 Official Financial Statements of Storebrand ASA 59 Outlook 64 A driving force for sustainable investments 81 Risk 83 Climate risk and opportunities 96 Working environment and HSE 97 Progress on our most material sustainability KPIs The Director’s report describes the Group’s financial capital and investment universe through the following material topics: Competitive long-term returns to shareholders and customers, A driving force for sustainable investments, Active ownership and reducing ESG (environmental, social and governance) risk. For a more in-depth description of our material topics, see page 17. Storebrand delivers security and financial freedom to private individuals and companies. We want to motivate our customers to make good financial choices for the future by offering sustainable solutions. Together, we can create a future to look forward to. This is our philosophy as we create value for customers, shareholders, and society. Storebrand’s strategy aims to provide an attractive combination of capital efficient growth within what we call Future Storebrand, and capital release from the Guaranteed pensions business that is closed for new business and is in run-off. Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. 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 A B C 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 from earnings II NOK ~10bn in share buybacks by 2030 III Additional capital generation Storebrand delivers security and financial freedom to private individuals and companies. We want to motivate our customers to make good financial choices for the future by offering sustainable solutions. Together, we can create a future to look forward to. This is our philosophy as we create value for customers, shareholders, and society. Storebrand’s strategy aims to provide an attractive combination of capital efficient growth within what we call Future Storebrand, and capital release from the Guaranteed pensions business that is closed for new business and is in run-off. Storebrand aims to: (A) be the leading provider of occupational pensions in both Norway and Sweden (B) continue a strategy of building a Nordic powerhouse in asset management (C) ensure rapid growth as a challenger in the Norwegian retail market for financial services The interaction between our business areas provides synergies in the form of capital, economies of scale, and value creation based on customer insight. In 2020, we announced an ambition to grow our Group profit (before amortisation and tax) to more than NOK 4 billion in 2023. Despite challenging macroeconomic conditions and volatile financial markets, we are well on our way to reaching our goal. We believe the only way to secure a better future is to take part in creating it. We actively use our position to lead the way in sustainable value creation and to differentiate ourselves from our competitors. Read more about our social responsibility work in the chapters Customer relations, People, and Keeping our house in order. Storebrand offers financial products and services to retail and increasingly advanced commercial customers. Based on an 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 grow the ordinary dividend from our earnings and to ensure capital-efficient management of products with interest rate guarantees. We shall maintain a strong solvency as and balance sheet adapted to our risk capacity and our business. As pension products with interest rate guarantees are gradually being paid out, capital on our balance sheet is freed up. In 2022, we initiated a share buyback program to repay large parts of this capital to our shareholders. The ambition is to return around NOK 10 billion through share buybacks by the end of 2030. At the same time, we expect to release additional capital that will be available for further growth or distribution to shareholders. 47 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixStrategic highlights 2022 2022 was characterised by geopolitical unrest and market turmoil. Storebrand demonstrated both resilience and adaptability throughout the year. The war between Russia and Ukraine did not have direct consequences for Storebrand’s value chain or operations in 2022. However, inflation, higher interest rates and turbulent financial markets, had a major impact on Storebrand. In addition, write-downs of Russian investments in a limited number of mutual funds led to weaker returns to customers. Through a combination of dynamic risk management, a high degree of preparedness and a diversified business model, the Group nevertheless achieved good results and a strengthened solvency position. Underlying growth was strong, and higher interest rates will be positive for the Group going forward. Overall, Storebrand delivered on both its operational and capital strategy in 2022. 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. Total assets under management are the Group’s most important driver of revenue. Despite weak financial markets, where both fixed income investments and equity investments resulted in negative returns, assets under management remained above NOK 1,000 billion in 2022. On average, our customers invested more money throughout the year. In addition, we maintained high growth in the Norwegian retail market for banking and insurance services, which is becoming an increasingly important business area for Storebrand. Assets under management, Unit Linked, NOK billion CAGR +17 % 128 140 168 179 251 220 +2 % 308 315 85 105 64 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Leading provider of occupational pensions in Norway and Sweden In 2022, we maintained our leading position as provider of Defined Contribution pension schemes with a market share of 31 per cent in Norway and 15 per cent in Sweden. Following the acquisition of Danica, which was completed on 1 July, the Group collectively provides Occupational pensions to employees in 36,000 companies in Norway. The structural growth in Defined Contribution pension schemes contributed to a net inflow of NOK 12.4 billion in new Defined Contribution pension capital during the year (the sum of premiums received, pensions paid and transfers in both Norway and Sweden). The Swedish business, SPP, also achieved record new sales of NOK 2.6 billion (measured as the annual premium equivalent, APE) during the year. In total, we managed NOK 315 billion within Unit Linked at the end of the year. Due to weak market returns, this corresponded to a growth of only 2.2 per cent in 2022. However, over a ten-year period, assets under management have grown by 17 per cent annually. The value of equities, bonds and real estate all declined throughout 2022, which was a challenging year for the financial markets. Nevertheless, Storebrand once again delivered market-leading returns to Norwegian Defined Contribution pension customers in our default investment portfolios, compared to comparable investment portoflios. This applies to both of our largest and most common investment portfolios with high and moderate equity content. In 2022, we ended up on a solid second place in the Norwegian market with a decline in value of 8.5 per cent and 6.8 per cent, respectively. Over the past three and five years, we have delivered market-leading returns of 6.7 per cent and 6.8 per cent respectively for in our portfolio with high equity content, and 4.9 per cent and 5.2 per cent respectively for our protfolio with moderate equity content. Our dynamic and risk-adapted management ensures that we are able to book the guaranteed returns despite declines in the financial markets. 48 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixCompetitive return (annualised) on Defined Contribution pension funds in Norway 63 High equity content 2022 Last 3 years Last 5 years -8.5 % -9.6 % -7.6 % 6.7 % 5.7 % 4.7 % 3.9 % 4.0 % 5.6 % 5.5 % 5.7 % 4.7 % 4.0 % 6.8 % -12.0 % 2.1 % -14.2 % -14.1 % Storebrand Competitor Storebrand Competitor Storebrand Competitor Moderate equity content 2022 -8.2 % -6.8 % -11.4 % -11.0 % -10.8 % Last 3 years Last 5 years -6.4 % 4.9 % 5.2 % 4.1 % 4.0 % 3.6 % 3.9 % 4.3 % 2.9 % 2.9 % 2.4 % 2.8 % 1.2 % Storebrand Competitor Storebrand Competitor Storebrand Competitor Storebrand had a good start in the market for public service pensions in Norway, where we have won all tender processes since the new product regulations came into place in 2019. The only contract tendered in 2022 was also awarded to Storebrand. Storebrand has argued for an increasing number of tender processes in this market. The EFTA Surveillance Authority (ESA) is expected to clarify in 2023 whether the procurement of pension services is subject to tender in the public sector (read more under the section “Regulatory changes”). In 2022, we also continued to take over the management of closed pension funds, including S:t Erik Liv in Sweden, which contributes to profit growth in the Guaranteed pension area. Storebrand provided insurance coverage to corporate customers amounting to NOK 2.7 billion in premiums in 2022. Written premiums within commerical P&C insurance for small and medium- sized enterprises in Norway, our new growth area, grew 25 per cent to NOK 271 million at the end of 2022. Nordic Powerhouse in asset management Storebrand Asset Management aims to be a Nordic investment powerhouse by being a local Nordic partner for customers, the gateway to the Nordic region for foreign investors and a pioneer in sustainable investments. Despite challenging markets, we continued to attract investment funds throughout 2022. At the end of the year, we managed a total of NOK 1,020 billion, of which 54 per cent was on behalf of pension customers and 46 per cent represented external customers. Assets fell 7 per cent from 2021, mainly due to a fall in the value of investments. Net new drawings for the year amounted to NOK 17 billion. Since 2012, assets under management have grown by 9 per cent annually through a combination of customer growth, market returns, and acquired business. 63) 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. 49 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixAsset under management, NOK billion Change in assets under management, NOK billion CAGR +9 % -7 % 442 487 535 571 577 721 707 921 831 1,097 1,020 1,097 17 16 1,020 -110 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2021 Net Flow Return Currency 2022 In 2022 we strengthened our position as a local Nordic partner for our customers. With a wide range of long-term investment strategies, we succeeded in attracting new customers despite demanding and unpredictable markets. In Sweden, we were one of a few companies to achieve positive net flow. In Denmark, total assets under management have more than quintupled since we started our active management there in 2020. In 2022, we opened our first office in Finland. Storebrand’s offers within alternative investments classes and ESG funds in 2022, continues to be in demand among international investors. Through the private equity firm Cubera, which was acquired by Storebrand in 2019, EUR 500 million was committed to new investments in 2022. To strengthen the distribution of funds in the international market, we launched several new funds on the Asset Management Exchange (AMX) in Ireland. This opened for several British pension funds to consider Storebrand as an asset manager. We also took further steps to consolidate our position as a pioneer in sustainable investments. With assets under management of NOK 1,020 billion, Storebrand has a lot of influence. Our goal f is a cut in total emissions in investments of 32 per cent by 2025. To influence companies to adapt, we engage at senior management level with the 20 companies responsible for the largest emissions in our investment portfolios. In 2022, we launched a new strategy for nature that takes a clear stand against activities that can harm vulnerable nature. At the end of the year, we managed NOK 449 billion in fossil-free investments, and NOK 126.8 billion in what we call solutions. Solutions are either investments in companies that we believe contribute to sustainable development and in achieving the UN Sustainable Development Goals, or investments in green bonds, environmentally certified real estate and green infrastructure. 50 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixInsurance portfolio premiums, NOK billion Bank lending balance, NOK billion CAGR +9 % +21 % 7.8 6.4 3.3 3.6 3.7 4.3 4.5 4.5 4.5 4.7 5.3 24 24 24 27 CAGR +11 % 42 35 47 48 48 +18 % 67 57 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 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 between savings, insurance and banking. With 250 years of history, our brand name stands strong in Norway, where 1.3 million people are Storebrand customers through their pension savings. These customers are our main target group for additional financial services that may enable them to achieve greater security and financial wellness. Increased distribution power and strong demand in the retail market contributed to accelerating growth in 2022. Written premiums stock in insurance grew by 21 per cent and mortgage lending in the bank by 18 per cent. In order to strengthen our presence in the private savings market for funds, we entered into an agreement to acquire the fintech company Kron (the transaction was completed in January 2023). In just a few years, Kron has built up a customer base of over 70,000 customers, and NOK 7 billion in assets under management. Agreement throughout our value chain. We incorporate climate risk assessments into our ongoing risk monitoring, follow-up and reporting to supervisory authorities. Storebrand has ambitions to lead and develop the sustainability agenda within the financial industry also in the years to come. Storebrand was recognised for its sustainability work in 2022, both by customers, advisors, and financial analysts. Storebrand was once again included in the Dow Jones Sustainability Index as one of the world’s leading listed companies in sustainability work.64 Prospera ranked Storebrand first in the sustainable investments category in Norway, Sweden, and Denmark. In 2022, Storebrand also received the top score in Söderberg & Partners’ ranking of life insurance and non-life insurance policies that pay the most attention to sustainability.65 Our employee surveys showed that Storebrand employees are proud to be part of the Group, and that our work with sustainability gives their job further meaning. Our position on sustainability contributed to our ability to attract top talents. More 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. Leadership in sustainability For almost 30 years, Storebrand has pioneered sustainable investments. We strive to create value for our customers and positive ripple effects for society. We are committed to the Paris 64) https://www.storebrand.no/om-storebrand/presse#/pressreleases/storebrand-vurdert-som-ledende-paa-baerekraft-i-verden-3223009 65) The ranking refers to five separate rankings conducted by Prospera in 2022: Norway (Institutional Customers and Distributors), Sweden (Institutional Customers and Distributors) and Denmark (Distributors). Storebrand was No. 1 on sustainable investments in all five rankings. 51 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixDigital 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. The degree of automation is constantly increasing, which leads to more efficient processes, lower costs, increased sales and customer satisfaction. Below are some highlights. • • • In 2022, the processing time for advisor-assisted mortgage applications at the bank was reduced by 30 minutes to take place in real time. Electronic processing of applications for health assessments reduced the processing time for many customers from several weeks to one day. Using artificial intelligence, we detected 20 per cent more insurance fraud related to some products, compared to the amount detected through traditional methodology. • Offers for digital and automated purchase of Defined contribution pension and occupational injury insurance for small and medium-sized enterprises removed a full day’s manual processing time. 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. Distortions in Storebrand’s operations and balance sheet over the past 10 years 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 efficient 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 efficient growth business, and less than 47 per cent of the pension assets on the balance sheet were guaranteed reserves. Premiums paid and the Group’s profit were mainly related to non- guaranteed savings and insurance. Storebrand’s fast-growing capital efficient business generates a high return on equity, while the capital-intensive business with interest rate guarantees that is in run-off, generates a significantly lower return on equity. Guaranteed pensions tie up about 85 per cent of the Group’s equity and resulted in adjusted return on equity of 2 per cent in 2022. The growth business yielded an adjusted return on equity of 43 per cent.66 The Group’s overall return on equity (adjusted) was 8.3 per cent in 2022. The solvency ratio was 184 per cent at the end of 2022, an increase of 9 percentage points compared to the solvency ratio at the end of the previous year. This is after the dividend and share buybacks which detracted 8 percentage points in 2022. Our dynamic risk management throughout the year, especially in the aftermath of Russia’s invasion of Ukraine, yielded good returns to our clients. For the solvency ratio, this compensated for weak financial markets in 2022. Storebrand wants to contribute to a growing market for green bonds and stimulate the market for sustainable investments and financing. As the first Nordic insurance company, Storebrand Livsforsikring AS issued a green subordinated loan in 2021. In 2022, Storebrand Livsforsikring issued NOK 2.7 billion in green subordinated bonds, and in Storebrand Boligkreditt, our coverd bonds issuer, we issued a further NOK 5.5 billion in green loans. Premium payments, NOK million Profit, NOK million Assets under management, NOK billion 34,659 18 % 68 % 15 % 2022 24,584 15 % 36 % 49 % 2012 3,136 18 % 53 % 29 % 2022 1,898 22 % 15 % 63 % 2012 1,020 46 % 27 % 26 % 2022 442 27 % 14 % 59 % 2012 Guaranteed pension Insurance Guaranteed pension Insurance Guaranteed pension Savings (internally managed) Savings Savings External asset management customers 66) Based on a pro forma distribution of equity under Solvency II (uT1 adjusted for Vif) per business area. Capital is distributed based on capital consumption under Solvency II and CRD IV. Fund insurance (Unit Linked) and Insurance are calibrated to a solvency ratio of 160 per cent while Guaranteed pension (including others) consumes approx. 200 per cent of its capital requirement. 52 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix The Group’s results 2022 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. The insurance result was NOK 1,607 million (NOK 1,201 million) and resulted in a combined ratio of 91 per cent (94 per cent). This was in line with our targeted combined ratio of 90-92 per cent. Strong growth in P&C insurance and increased profitability from re-pricing of products with disability coverage, contributed to the positive development. Our financial result is reported by the following business segment: Savings, Insurance, Guaranteed Pension, and Other, as well as on a consolidated Group level. Results are reported using alternative performance measures (APM) as defined by the European Securities and Market Authority (ESMA). A summary of APMs used in financial reporting is available on www.storebrand.no/en/investor-relations/ reporting-changes-and-special-effects. The income statement is based on reported IFRS results for the individual companies. Group results NOK million Fee and administration income Insurance result Operational cost Operating profit Financial items and risk result life Profit before amortisation Amortisation Profit before tax Tax Profit after tax 2022 6,062 1,670 -5,008 2,724 -8 2,716 -596 2,120 270 2,390 2021 6,607 1,201 -4,678 3,130 1,372 4,503 -527 3,976 -846 3,130 Storebrand achieved a Group profit (before amortisation) of NOK 2,716 million (NOK NOK 4,503 million). The figures in parentheses show the corresponding figures for last year. Fee and administrative income for the year amounted to NOK 6,062 million (NOK 6,607 million). The decline from the previous year was partly related to lower total assets under management due to weak market returns in 2022, lower performance fees from active funds that contributed NOK 147 million in 2022 compared with NOK 550 million the previous year, and lower income from Defined Contribution pensions in Norway after the introduction of Individual Pension Accounts. Operational cost amounted to NOK -5,008 million (NOK -4,678 million). Adjusted for costs related to acquisitions and performance- related costs in asset management, operational cost was NOK 4,760 million, which was lower than the guidance for the year of NOK 4.9 billion. The total operating profit was NOK 2,724 million (NOK 3,130 million). ‘Financial items and risk result life’ amounted to NOK -8 million (NOK 1,372 million). This year’s loss is attributed to lower a fair value of fixed income investments due to rising interest rates and increased credit spreads. This is expected to increase return on investments and the Group’s financial results correspondingly going forward. At the same time, the Group achieved a significantly stronger risk result in 2022, after a period of weak results during the Covid-19 pandemic. Last year’s strong financial result can largely be explained by the sale of AS Værdalsbruket, which contributed with a gain of NOK 546 million. Amortisation of intangible assets amounted to NOK -596 million (NOK -527 million). The increase is mainly due to the acquisition of new business. The profit before tax was NOK 2,120 million (NOK 3,976 million). The Group ended the year with a net tax income of NOK 270 million (NOK -846 million). In isolation, the tax income amounted to NOK 770 million. This is a result of new information and a partly reversed decision by the Norwegian Tax Administration on an uncertain tax position for the income year 2018. It concerns the transitional rule when new tax rules were implemented for insurance and pension companies 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 27. Storebrand also has a policy for responsible taxation and publishes a separate report on tax on our website. Group profit after tax was NOK 2,390 million (NOK 3,130 million). 53 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixFinancial targets Return on equity* Target Status 2022 > 10 % 8,3 % 43 % 2 % 72 % Future Storebrand (Savings and Insurance) Run-off business (Guaranteed and Other) ** Dividend pay-out ratio > 50 % Solvency ratio (Storebrand Group) > 150 % 184 % * After taxes, adjusted for amortization of intangible assets. ** Based on a pro forma distribution of IFRS equity per business area. The capital is distributed based on capital consumption under Solvency II and CRD IV. The savings and insurance seg- ments are calibrated to a solvency ratio of 150%, while the rest of the capital is allocated to the Guaranteed pension segment including others Savings NOK million 2022 2021 Fee and administration income Operational cost Operating profit Financial items and risk result life 4,733 -3,031 1,701 -49 5,215 -2,927 2,288 67 Profit before amortisation 1,653 2,355 Financial results Fee and administrative income amounted to NOK 4,733 million (NOK 5,215 million). The decrease from previous year is primarily explained by lower total assets under management due to weak market returns in 2022 and lower performance fees from active funds, which in 2022 contributed NOK 123 million compared with NOK 550 million the previous year. Income growth within Defined Contribution pension schemes (Unit Linked) in Norway was 3 per cent, despite lower income margins after the introduction of Individual Pension Account in 2021. Underlying growth and the acquisition of Danica contributed positively to the development. Strong lending growth in Storebrand bank also contributed with an increase in income of NOK 106 million. Operating cost amounted to NOK -3,031 million (NOK - 2,927 million). The cost increase was a combination of costs from acquired business, inflation, as well as investments in growth and digitalisation initiatives. Cost related to excess returns in funds with performance fees amounted to NOK -53 million (NOK -255 million). Adjusted for the latter as well as currency effects and acquired business, cost increased by 9 per cent in 2022. Financial and risk result life amounted to NOK -49 million (NOK 67 million). The loss was mainly due to a lower fair value of fixed income investments and the effect of higher interest rates on fixed-rate mortgages in the bank. Profit before amortisation totalled NOK 1,701 million (NOK 2,288 million). 54 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixBalance sheet and market development Underlying inflow of assets under management continued in 2022, both within Unit Linked and in our asset management, but weak financial markets led to an overall fall in total assets. Unit Linked reserves grew by NOK 6.6 billion to NOK 315 billion in 2022, which corresponded to 2 per cent. Net inflow and transfer contributed NOK 39 billion, including NOK 26 billion through the acquisition of Danica. Market returns and foreign exchange reduced total assets by NOK 32 billion. Assets under management for Storebrand asset management were reduced by NOK 77 billion (-7 per cent) to NOK 1,020 billion. A total of NOK 17 billion (net) was received in new capital, but weak market returns during the year reduced the value of assets by NOK 94 billion. The bank’s retail lending balance grew by NOK 10 billion (18 per cent) to NOK 67 billion. Key figures Savings NOK million Unit Linked Reserves Unit Linked Premiums 2022 2021 314,992 308,351 23,482 21,212 AuM Asset Management 1,019,988 1,096,556 Retail Lending 67,061 57,033 The total combined ratio was 91 per cent (94 per cent) and the total operating profit was NOK 558 million (NOK 326 million) for the year. This was in line with our targeted combined ratio of 90 - 92 per cent. Pension related disability and the growth products P&C and Individual Life achieved a strong combined ratio of 86 per cent (96 per cent) and 90 per cent (88 per cent), respectively, while Group Life reported an improved but still weak combined ratio of 100 per cent (110 per cent). The financial result was NOK 22 million (NOK 97 million). The insurance investment portfolio amounted to NOK 10.6 billion at the end of 2022 (NOK 9.6 billion) and achieved a return of 2.1 per cent. Investments are primarily in fixed income securities booked at amortised cost or at fair value with short maturities. The profit before amortisation was NOK 580 million (NOK 423 million). Balance sheet and market development Total growth in in written portfolio premiums amounted to 21 per cent in 2022, ending at NOK 7,822 million. The acquisition of Danica contributed NOK 447 million, corresponding to approximately 32 per cent of the growth. Adjusted for this, written premiums grew 14 per cent, of which about 60 per cent is explained by increased volume and 40 per cent by price adjustments. P&C and Individual Life, grew 22 per cent to NOK 4,013 million, Group life and Health grew 17 per cent to NOK 2,071 million, and Pension related disability grew 27 per cent to NOK 1,738 million. Insurance NOK million Insurance pemiums f.o.a. Claims f.o.a. Operational cost Operating profit Financial result Profit before amortisation 2022 6,088 -4,419 -1,112 558 22 580 2021 5,175 -3,974 -875 326 97 423 Key figures Insurance Claims ratio Cost ratio Combined ratio Financial results Insurance premiums for own account (f.o.a) grew 18 per cent to NOK 6,088 million in 2022 (NOK 5,175 million), driven by strong volume growth in the retail market, but also price adjustments. Insurance claims increased to NOK -4,419 million (NOK -3,974 million) because of growth, but the claims ratio developed positively and ended at 73 per cent for the year, which is an improvement of 4 percentage points compared to the year before. Price adjustments for products with disability coverage, which in previous years has had weak profitability, contributed to the improvement. Total operating cost for the year amounted to NOK -1,112 million (NOK -875 million) and resulted in a marginal increase in the cost ratio from 17 per cent to 18 per cent in 2022. The cost increase was partly related to growth and sales commissions in external distribution channels. 2022 73 % 18 % 91 % 2022 4,013 2,071 1,738 2021 77 % 17 % 94 % 2021 3,301 1,775 1,369 Written premium, NOK million P&C & Individual life Health & Group life* Pension related disability insurance Nordic Total written premium 7,822 6,445 * Includes the entire written premium for Storebrand Helseforsikring AS (50/50 joint venture with Ergo International) Guaranteed pension NOK million Fee and administration income Operational cost Operating profit Risk result life & pensions Net profit sharing Profit before amortisation 55 2022 1,597 -850 747 262 -106 903 2021 1,631 -890 741 187 504 1,432 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixFinancial results The fee and administration income amounted to NOK 1,597 million (NOK 1,631 million), while operating cost amounted to NOK -850 million (NOK -890 million). The marginal decrease in income and cost was primarily due to a depreciation of the Swedish krona (SEK). The risk result life & pensions was NOK 262 million (NOK 187 million). The improvement was partly due to increased reactivation of customers who received disability benefits, but also because of a stronger longevity result due to increased mortality after the COVID- 19 pandemic. Net profit sharing amounted to NOK -106 million (NOK 504 million). The profit sharing in Norway totalled NOK 6 million, and NOK -112 million in Sweden. Risk management has limited the negative effects of higher interest rates and weak financial markets. The booked return averaged 1.4 per cent in Norway, compared with an average customer guarantee of 3.0 per cent at the end of the year. Contracts with insufficient returns have been compensated using buffer capital and have therefore had no material effect on results. In Sweden, assets and liabilities are duration matched. Although the average value-adjusted return was -10.4 per cent, the value of our liabilities also fell by 11.3 per cent. Deferred capital contributions to individual contracts have had a negative impact on profits. Profit before amortisation amounted to NOK 903 million (NOK 1,432 million). Balance sheet and market development At the end of the year, guaranteed reserves amounted to NOK 273 billion. This is NOK 17 billion less than in 2021. The reduction is mainly due to net inflows and outflows of NOK -11 billion, and a reduction in the market value of Swedish reserves due to a higher discount rate. At the same time, growth in public sector occupational pensions in Norway contributed with an inflow of reserves of NOK 4.5 billion, and the transfer of St Erik Liv’s portfolio to SPP by NOK 2.3 billion. As a share of the total balance, guaranteed reserves correspond to 46.5 per cent (48.5 per cent) at the end of the year, a reduction of 2 percentage points from last year. Buffer capital, which secures customer returns and shields shareholders’ equity under turbulent market conditions, fell to 6.3 per cent (11.2 per cent) of reserves in Norway, but increased to 19.6 per cent (17.8 per cent) in Sweden. Overall, the buffer capital fell by NOK 9.7 billion from 2021. Key figures Guaranteed Pension NOK million Guaranteed reserves 2022 2021 273,465 290,862 Guranteed reserves in % of total reserves 46.5 % 48.5 % Net inflows and outflows, excluding trans- -10,547 -10,268 fers Average booked return in Norway Average guarantee in Norway* 1.4 % 3.0 % Average value-adjusted return in Sweden -10.4 % Average guarantee in Sweden Buffer capital in % of customer reserves in Norway 2.8 % 6.3 % 4.5 % 3.1 % 3.7 % 2.8 % 11.2 % Buffer capital in % of customer reserves in Sweden 19.6 % 17.8 % * Danica excluded Other NOK million Fee and administration income Operational cost Operating profit Financial items and risk result life Profit before amortisation 2022 17 -299 -282 -138 -420 2021 21 -246 -225 518 293 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 Fee and administration income Operational cost Financial results Profit before amortisation 2022 -284 284 2021 -260 260 Financial results The operating profit in the Other segment was NOK -282 million, a decline from the previous year’s NOK 225 million. Transaction and integration costs related to acquired business contribute to increased cost and a lower operating profit. The financial result was NOK -138 million, a decline from last year’s NOK 518 million. The negative financial result is mainly explained by a lower fair value on credit bonds in the company portfolios, where credit spreads have increased in 2022. The comparative figure for 2021 includes a gain of NOK 546 million from the sale of AS Værdalsbruket. Profit before amortisation was NOK -418 million (NOK 293 million). Dividend for 2022 The Board has an established capital management framework that links dividends to the solvency ratio. The dividend policy should reflect the strong growth in earnings from operations, more volatile 56 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendixfinancial market-related earnings and future capital release from operations with guarantees. The Board’s ambition is to pay a steady, but nominally, increasing ordinary dividend. In addition, the expected release of capital will result in increased distribution over time, primarily in the form of share buybacks. After a thorough review of the Group’s balance sheet, solvency, and expected future developments, as well as the Group’s robustness in stress scenarios, the Board decided to lower the threshold for overcapitalisation in 2022 from the previous 180 per cent to 175 per cent. Based on the Group’s solvency, liquidity and expected profit generation, and taking into account the prevailing uncertainty in financial markets and macroeconomics, the Board proposes an ordinary dividend of NOK 1,718 million, corresponding to an ordinary dividend of NOK 3.70 per share and a dividend pay-out ratio of 72 per cent for 2022 to the Annual General Meeting. This is in addition to the share buyback of NOK 500 million, corresponding to NOK 1.07 per share, which was completed in the third quarter of 2022. For more information about historical dividends, Storebrand’s share and other shareholder relationships, see the chapter Shareholder relations. Capital situation Storebrand adapts the level of equity and debt in the Group continuously and systematically. The level is adjusted to the company’s financial risk and capital requirements. Growth and composition of business areas are important drivers for capital needs. Capital management is designed to ensure an efficient capital structure and contribute to achieving business goals within regulatory requirements. The balance sheet shall form a healthy foundation and support the Group’s growth strategy while returning released capital to shareholders. The Group’s target is to maintain a solvency ratio according to the standard model in Solvency II of at least 150 per cent. At the end of 2022, the solvency ratio for the Group was reported at 184 per cent, an increase of 9 percentage points from 175 per cent the year before. Profit generation in the Group contributed 11 percentage points, before dividends and share buybacks, which reduced the solvency ratio by 6 and 2 percentage points respectively. The acquisition of Danica reduced the solvency ratio by a further 6 percentage points. Prudent risk and capital management more than compensated for weak financial markets in 2022. Storebrand 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 reduced by NOK 24.5 billion in 2022 to NOK 49.6 billion. Issuances and redemptions of bonds resulted in a net reduction of NOK 1.1 billion in subordinated debt in 2022. The Market value adjustment reserve has been reduced by NOK 5.7 billion and amounted to NOK 0.6 billion at year- end. Conditional bonuses have been reduced by NOK 1.2 billion and amounts to NOK 12.5 billion. For parts of the guaranteed portfolio, booked return has been lower than the guaranteed return for the contract, which has contributed to a reduction in additional statutory reserves and the buffer fund. Transferred contracts to Storebrand increased the additional statutory reserves and the buffer fund by NOK 0.8 billion during 2022. Additional statutory reserves amounted to NOK 9.6 billion at the end of the year, a reduction of NOK 4.0 billion for the year. In connection with the implementation of the buffer fund in public occupational pensions, NOK 1 billion was transferred from additional statutory reseres and the market value adjustment reserve. Due to rising interest rates, the excess value of bonds and loans at amortised cost has been reduced by NOK 13.6 billion in 2022 and amounted to minus NOK 10.2 billion at the end of the year. The excess value of bonds and loans at amortised cost is not included in the accounts. Storebrand Bank Group had a Core Equity Tier 1 (CET1) ratio of 15.7 per cent and a capital adequacy ratio of 21.4 per cent at the end of 2022. The Group has satisfactory capital adequacy and liquidity based on its operations. The lending portfolio consists primarily of low-risk home mortgages with an average LTV (loan-to-value) of 58 per cent. Storebrand ASA (holding) held liquid assets of NOK 5.1 billion at the end of 2022. Liquid assets consist primarily of short-term fixed income securities with a high credit rating. Storebrand ASA’s total interest-bearing liabilities were NOK 0.5 billion at the end of the year, which matures in September 2025. In addition to its 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 of NOK 3,187 million in 2022. Dividends allocated to shareholders amounted to NOK 1,718 million. Rating Four companies in the Storebrand Group issue debt securities. These are rated by the credit rating agency S&P Global. Storebrand Livsforsikring AS, the main operating entity, aims to have at least an A-rating. Due to profitable growth and increased financial strength, S&P Global Ratings upgraded Storebrand Livsforsikring AS and Storebrand Bank ASA from ‘A-’ to ‘A’ with stable future outlook in 2022. Storebrand Boligkreditt AS’s covered bond program is rated ‘AAA’, and Storebrand ASA is rated ‘BBB+’. Storebrand’s 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 175 per cent, the Board of Directors intends to propose special dividends or share buy backs. 57 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. 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 3,082 million in 2022, compared to NOK 4,505 million in 2021. Group contributions from investments in subsidiaries amounted to NOK 3,187 million, compared to NOK 4,542 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 2022 3,187 115 -220 3,082 -143 2,939 2021 4,542 144 -180 4,505 -258 4,248 2022 2,939 2021 4,248 14 -3 10 6 -1 4 Total comprehensive income 2,949 4,252 Allocation of the profit Storebrand ASA reported a profit of NOK 2,939 million compared to NOK 4,248 million in 2021. The Board proposes a dividend of NOK 1,718 million to the Annual General Meeting, corresponding to an ordinary dividend of NOK 3.70 per share for the financial year 2022. 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 2022 2,939 2021 4,248 1,221 1,718 2,939 2,602 1,645 4,248 58 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. 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. 2022 was a turbulent year for financial markets, and there is an increased risk of global recession in the coming years. With a robust risk management framework, described in more detail in a separate section below, and with a diversified business, Storebrand has proven resilient under varying market conditions. The Board believes that the Group is well equipped to deliver its strategy, both under positive and more demanding financial markets. Financial Results At the capital markets day in December 2020, Storebrand announced an ambition to achieve a profit before amortisation and tax of about NOK 4 billion in 2023. The profit ambition was reached in 2021, helped by gains from the sale of AS Værdalsbruket and strong performance in funds with performance fees. Despite turbulent financial markets in 2022 reducing assets under management and the resulting fee income, the profit ambition for 2023 is maintained, supported by strong and profitable growth across the Group, and higher expected financial results in a higher interest rate environment. In Norway, the market for Defined Contribution pensions is growing structurally due to the young nature of the product. High single-digit growth in Defined Contribution premiums and double-digit growth in assets under management are expected during the next years. Storebrand aims to defend its strong position in the market, while also focusing on cost leadership and improved customer experience through end-to-end digitalisation. In July 2022, Storebrand acquired Danica in Norway, which will strengthen Storebrand’s presence in the segment for small and medium sized businesses, and it will increase Storebrand’s distribution capacity of both Defined Contribution pensions and personal risk products. In the coming years, Storebrand is also looking to leverage customer, product and capital synergies by expanding our insurance offering to corporate clients within P&C. This will generate an additional income stream for the Group. In Sweden, SPP is a leading market challenger within the segment for non-unionised pensions, with an edge in digital and ESG-enhanced solutions. SPP has become a significant profit contributor to the Storebrand Group, supported by an ongoing capital release from its guaranteed products in run-off. Growth is expected to continue, driven by new sales and transfers. 59 As a leading occupational pension provider in the private sector, Storebrand also has a competitive pension offering to the Norwegian public sector. It is a growing market which is larger than the private sector market. It is currently dominated by one monopolist. To succeed in the market, municipalities will need to tender their pension procurements to a larger extent than today. This represents a potential additional source of revenue for Storebrand. The ambition is to gain 1 per cent market share annually, or approximately NOK 5 billion in annual net inflow. Overall reserves of guaranteed pensions are expected to decrease in the coming years. Guaranteed reserves represent a declining share of the Group’s total pension reserves and amounted to 46.5 per cent of the pension reserves at the end of the quarter, 2 percentage points lower than a year ago. With interest rates having risen in 2022 to approximately the average level of interest rate guarantees, the prospects for future profit sharing with customers has increased. Higher interest rates also allow Storebrand to build customer buffers at a faster pace, which strengthens the group’s solvency position. In addition to managing internal pension funds, Storebrand Asset Management is growing its external mandates from institutional and retail investors. Storebrand is a local partner for Nordic investors, and a gateway to the Nordics for international investors. We offer a full product range of index, factor and actively managed funds. Storebrand is also one of the strongest providers of alternative assets (private equity, real estate, private debt and infrastructure) in the Nordic region. Over the past three decades, Storebrand has focused on ESG investments with a strong track record. The overall ambition is to grow assets under management by NOK 250 billion in the period 2021-2023, while maintaining a stable fee margin. The brand name ‘Storebrand’ is well recognised in Norway. It facilitates our rapid growth in the Norwegian retail market to leverage capital, customer, and operational synergies. The ambition is to grow more than 10 per cent annually within retail savings, mortgage lending and insurance through digital sales channels and distribution partnerships. P&C insurance is a key area for profitable growth. Storebrand Bank plays an important strategic role in offering a complete range of financial products and services to the retail market. In January 2023, Storebrand also strengthened its retail savings offering by acquiring the fast growing Norwegian fintech company Kron. The acquisition will combine Kron’s user experience with Storebrand’s product platform and distribution. Storebrand maintains a disciplined cost culture. The Group reported flat nominal costs from 2012-2020, adjusted for acquisitions, currency and performance related cost. Simultaneously, assets under management more than doubled. To accelerate growth Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix and the Group’s profit ambitions, investments in profitable growth has gradually increased costs. This includes growth in public occupational pensions and P&C insurance, in addition to acquired business. Should the growth not materialise, management has contingency plans in place to cut costs. There are also cost savings initiatives in place to manage the effects of excess inflation. The cost guidance for 2023 is NOK 5.3 billion. This includes the cost base of the acquired companies Danica and Kron, but is before integration cost of acquired business, any potential new acquisitions, currency and performance related cost. Capital management Storebrand aims to maintain a solvency ratio of at least 150 per cent. At the end of 2022 it was 184 per cent. On an annual basis, a net capital generation of about 8 percentage points of solvency is expected over the next few years. Of this, approximately 13 percentage points are generated in the business, 2 percentage points come from the fact that the guaranteed business in liquidation frees up more capital than the growth in the group requires, and around 7 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 175 per cent, the Board’s intention is to implement a share buyback program. The purpose of the buybacks will be to return excess capital from the guaranteed business that is in long-term liquidation. Our ambition is to return around NOK 10 billion in capital through share buyback programs by 2030. At the same time, we expect that there will be additional excess capital left to either grow the business further or that will be able to return to our shareholders. The combination of growing results and the release of capital 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 going forward. 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 investments and increasing the capacity to invest in European business. The Commission emphasises the insurance sector’s important role when it comes to financing the green transition and helping society to long-term adapt to climate change. The review intends to correct deficiencies in current regulation and make the insurance sector more robust. Storebrand currently applies the standard model. In the review, changes to the interest rate risk module could increase the solvency capital requirement for Norwegian and Swedish insurers. The Commission’s proposals appear more representative for Norwegian interest rates 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 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, and changes are not expected to enter into force until 2025. The Commission will 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. The act introducing the taxonomy and requirements for the publication of sustainability information in Norwegian law entered into force on 1 January 2023. Companies must map the consequences for their products and services. Large, listed companies will be required to report on the proportion of their turnover, investments and operating costs covered by the taxonomy. In 2023, companies must report on the share of turnover, investments and operating costs that are environmentally sustainable activities in accordance with the defined technical criteria drawn up by the EU for each economic activity. The new rules for sustainable finance will establish standards for sustainable asset management and clarify requirements for reporting and customer information. We take a positive view of this. It will provide higher quality financial and non-financial reporting, better information to key stakeholders, and make it easier to compare data across the financial sector. The challenge in implementing the new rules for sustainable finance is to get the right and necessary data. See appendix on page 266 for an overview of how much of our business is covered by the taxonomy. The taxonomy’s reporting requirements are increasing incrementally and, in the years to come, we will report on the proportion that is classified as sustainable based on these requirements. 60 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix 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. Storebrand believes it is positive that customers’ preferences related to sustainability should be mapped. This can contribute to increased awareness of ESG factors and make it easier to understand different types of funds or profiles with a lower carbon footprint. Storebrand is committed to good solutions that take sustainability into account and in 2022 used the consulting tool Quantfolio to start mapping sustainability preferences among customers. Regulation related to sustainability preferences and suitability assessment through MIFID and IDD will be introduced into Norwegian law in 2023. Corporate Sustainability Reporting Directive (CSRD) The EU has adopted a new Corporate Sustainability Reporting Directive (CSRD), which will replace the previous Non-Financial Reporting Directive (NFRD). The introduction of CSRD in Norwegian law will entail an extension of the current section 3-3c of the Entrepreneurship Act. Information related to sustainability will be provided in the annual report according to CSRD. CSRD aims to elevate sustainability information to the same level as financial information. The proposal aims to improve the flow of information on sustainability in corporate governance. CSRD includes new European standards on sustainability reporting, and a framework for double materiality analysis. Double materiality means that companies must report both on the company’s impact on society and how ESG affects the company’s ability to create long-term value. The standards will make corporate sustainability reporting more consistent, allowing financial players, investors and general public to base decisions and form opinions based on comparable and reliable information about sustainability. Storebrand’s annual report will be in line with this regulation when it enters into force. 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 extent to which our products consider sustainability. 61 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. New Insurance Recovery and Resolution Directive (IRRD) The European Commission has proposed a new directive on the recovery and liquidation of insurance companies, the Insurance Recovery and Resolution Directive, IRRD. The purpose is to ensure better protection of policyholders, maintain financial stability and continue critical functions. The insurance industry is critical of the proposal and believes any new rules must take into account national differences and the insurance industry’s distinctive characteristics compared to banking. The proposal entails, among other things, that recovery plans will be drawn up for companies that together make up more than 80 per cent of the market. There will also be a need to adapt the national crisis management rules, which were used when Silver Pension Insurance was placed under public administration in 2017. for insurance contracts and Changes in IFRS A new accounting standard for insurance contracts, IFRS 17, will be implemented in 2023. The purpose is to introduce common accounting rules improve the comparability of financial statements. IFRS 17 entails, among other things, fair value measurement of liabilities, grouping of insurance contracts based on risk characteristics, internal management and issue date, income recognition over the contract period rather than upfront, and an amendment of the profit and loss statement. Storebrand will implement IFRS 9 for financial instruments at the same time. Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixFor Storebrand’s consolidated financial statements, the new standards will lead to changes in the recognition, measurement and presentation of insurance contracts, classification of fixed income investments and how profits are recognised. A new balance sheet item called Contractual Service Margin (CSM), representing the unearned profits of insurance contracts, will be introduced as part of the transition to IFRS 17. Amortisations of CSM will be recognised as income as the service is provided. Storebrand expects that the transition to IFRS 17 will result in approximately 20% the Group’s equity to become CSM. Storebrand’s first quarter results 2023 will be the first reporting under IFRS 17. See further discussion of IFRS 17 in Note 1. Whether IFRS 17 is implemented in the statutory reporting requirements is decided by national regulations in each country. Storebrand will only implement IFRS 17 in the statutory reporting for Storebrand Forsikring AS (the P&C Insurance business). For the remaining companies within Storebrand Group, including the life insurance companies, the statutory reporting will remain unchanged from today. The Ministry of Finance has also passed a regulation allowing for the continued use of amortised cost valuation of assets in both customer accounts and life insurance companies’ financial statements when IFRS 9 is implemented. The implementation of IFRS 9 and IFRS 17 is not expected to significantly affect the solvency calculations nor the Group’s dividend capacity. To accommodate the new accounting standard, some adjustments will be made to financial targets that are based on IFRS accounts. IFRS has also established an International Sustainability Standards Board (ISSB) with the goal of developing a global standard for sustainability reporting. There are two standards that have been proposed. The first builds on general sustainability standards from the Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC). The second standard is aimed at climate and builds on the TCFD framework. In 2023, it is expected that there will be more information about the reporting standards, and different jurisdictions will be able to choose different solutions to deal with these. Through the EEA Agreement, the solution chosen by the EU will in practice also become a guiding principle for Norwegian businesses. Storebrand takes a positive view of this and believes it is an important standard work for harmonising and publishing sustainability information internationally. Norwegian regulations Evaluation of the pension reform A public committee that has evaluated the pension reform presented its proposals in June 2022. Changes are proposed to the National Insurance Scheme’s old-age pension that will also have an impact on occupational pension schemes. The Commission concludes that the pension reform has worked as intended and contributed to limiting growth in old-age pension expenditure from the National Insurance Scheme and establishing a financially sustainable pension system. A new work incentives have improved and contributed to more people continuing their employment longer than before. The Committee believes that three changes are needed: • Age limits in the pension system should be increased in line with increased life expectancy • Minimum benefits should follow general prosperity (regulated • by wage growth) Disabled people should be shielded to a greater extent from the life expectancy adjustment In total, the proposals do not reduce government expenditure, but the Committee believes that the last two proposals are necessary to strengthen social sustainability and thus support for the pension system. The Commission notes that if the age limits in the National Insurance Scheme increase, the age limits in occupational pension schemes, AFP and individual pension schemes should also be increased accordingly. The Committee conducts a thorough review of the various occupational pension schemes, and points to a need for more knowledge about how these and AFP affect the distribution in the pension system, and how the quality of the schemes varies between different groups. Just before the pension committee presented its report, the Norwegian Confederation of Trade Unions (LO) decided to demand a better occupational pension by doubling the minimum rate for compulsory occupational pensions from two to four per cent, as well as compulsory disability pensions. income Savings in Norwegian Defined Contribution pensions During 2022, new legislation which makes pension contributions mandatory on all in Defined Contribution pensions. Companies were given a deadline of 30 June to adjust their pension schemes. The changes mean that all loans up to 12 G will be earned. In addition, the requirement of 20 years of age and 20 per cent position lapsed. Thus, all employees must be members of the pension scheme, as long as they receive a salary above the threshold for reportable income (NOK 1000). The number of members in Defined Contribution schemes in the Norwegian market increased by about 350 000 in 2022, to more than 1.9 million. Guaranteed Retirement Products New regulations allowing for providers to build additional stautory acocunts seperately for individual contracts came into force in 2022. The change allows for profit sharing and increased benefits to policyholders on contracts with sufficient additional statutory introduced that allow reserves. Regulations have also been customers to choose faster pay-outs of small paid-up policies. A flexible buffer fund was introduced for public occupational pensions on 1 January 2022. The change means that market value adjustment reserves and additional stautory accounts have been merged into a flexible buffer fund, which is distributed among the contracts and can cover negative returns. There is no maximum limit to how large the buffer fund can be, but companies must have guidelines for the size of the buffer fund, and buffer funds beyond what the company 62 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendixdeems necessary can be allocated to the customer as profit. Thus, buffer fund requirements become a competitive parameter in the public sector market. Storebrand is positive to the new regulations, which increase the risk capacity of the available buffer and facilitate competition for municipal occupational pension schemes. Storebrand has worked actively to ensure that flexible buffer funds are also introduced for paid-up policies, as proposed by a working group appointed by the Ministry of Finance and Finanstilsynet (Financial Supervisory Authority of Norway). The case is still pending in the Ministry. Public Occupational Pensions schemes Storebrand has filed two complaints to the EFTA Surveillance Authority (ESA) in an effort to improve the competitive landscape for Public Occupational Pensions, which is dominated by a single player. Storebrand has claimed that municipalities, regional health authorities (RHFs) and hospitals have entered into occupational pension contracts in breach of the rules on public procurement. Storebrand has also claimed that municipalities, RHFs and hospitals have granted KLP State aid in violation of Article 61 of the EEA Agreement. According to Storebrand, the mutual company KLP is given access to capital from municipalities and hospitals on more favourable terms than other market participants would receive by withholding retained earnings when customers move to other providers. The Transparency Act The Transparency Act came into force on July 1, 2022. The Consumer Authority has been assigned the task of guiding and supervising the Transparency Act. The Act 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. • Obligation to conduct due diligence: All covered undertakings are obliged to carry out due diligence in accordance with the OECD Guidelines for Multinational Enterprises. The requirement for the scope of the due diligence shall be proportionate to the size of the enterprise and shall be carried out regularly. • Obligation to notify due diligence: An account of the due diligence assessments shall be published each year. The report must meet the minimum requirements of the Transparency Act but may 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. Disclosure obligation: Under the Transparency Act, anyone can request information from businesses about how they handle actual and potential negative consequences assessed in due diligence. The right to information includes both general information about how the business handles negative consequences, and specific information related to goods and services. • Adaptations to the new regulatory requirements has been implemented both in departments 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 reporting and transparency. A more detailed staus descriptions is available in the chapter Sustainable practices through our value chain on page 42. The due diligence report will be published by June 30, 2023, through our Human Rights and Responsible Business Policy at the Sustainability Library.67 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 cannot exceed 0.0127 basic amounts (equivalent to approximately SEK 600 in 2021). On the question of the right of transfer for agreements entered 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. 67) Human Rights Policy and Responsible Business Conduct at Storebrand: https://www.storebrand.no/en/sustainability/sustainability-library 63 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixA driving force for sustainable investments Through our core investment business, we seek to generate the best possible risk-adjusted returns for our clients without compromising the ability of future generations to meet their own needs. jeopardising the way of life for native peoples and ensuring living wages for workers within competitive supply chains involving a wide variety of locations, cost levels and regulatory domains. Storebrand has focused on sustainable investments since the mid-1990s when we became the first Norwegian asset manager to establish a dedicated ESG team. In 2005, we introduced minimum standards for all our investments through the Storebrand Standard, our group-wide exclusion policy, and in 2010 we integrated sustainability into all our funds through a proprietary ESG rating methodology. Guided by the SDGs in an evolving 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. One of our main goals is to positively support the achievement of the UN Sustainable Development Goals (SDGs), without negatively impacting society or the environment. The sustainability concerns of many stakeholders until recently focused primarily on cutting greenhouse gas emissions to reduce global warming. Now, the global sustainability agenda has evolved to include a wide range of environmental, social and governance issues. Biodiversity and ecosystems are emerging as crucial building blocks to solve the global warming and climate challenge. Increasingly, issues such as healthy working conditions and social and economic justice are seen as key components in a sustainable society. In addition, corporate governance and transparency have become critical enablers for both companies and investors. Reaching sustainability objectives often involve balancing acts and tackling dilemmas. Some examples of this include the balance between developing sources of renewable energy without Our approach to sustainable investments is three-fold: • • • Investing in solutions: Contributing to positive influence by allocating more capital to equity investments in solution companies (see below for definition), green bonds, bond investments in solutions, and investments in certified green real estate and green infrastructure. Engagement, including voting: Exercising active ownership to influence companies we invest in to reduce negative impact on climate or society. Exclusion: Screening out and/or exiting investments that are not likely to be aligned with our sustainability principles. This approach enables us to be a driving force for sustainable investments, contributing to positive change and development, while reducing financial risk. Integrated approach to sustainability We take an integrated approach to sustainable investments, combining our sustainability strategy with our investment strategy. We believe that companies with an advanced level of skill in managing sustainability risks and opportunities have a competitive advantage that may enable them to deliver better returns, while contributing positively to sustainable development. All entities in the Group operate within a framework that consists of a comprehensive set of exclusion criteria (norm-based and product- based), as well as principles that respective entities must adhere to throughout their investment processes. Storebrand also integrates sustainability risk ratings into investment decisions to avoid or invest less in companies with high-risk sustainability rates and prioritise investment in companies with low sustainability risk. Storebrand measures material ESG risk or the risk of causing adverse sustainability impact through an ESG Risk Rating. A company’s ESG risk is measured by: 1. Corporate governance: Applies to all companies irrespective of the sub-industry they represent. Reflects the conviction that poor corporate governance poses material risks for companies. 2. Material ESG issues: Assessment of material ESG issues occurs at the sub-industry level. Issues are examined based on the typical business model and business environment a company is operating in. 64 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix3. Idiosyncratic ESG issues: Unexpected and unrelated to the specific sub-industry and the business models that can be found in that sub-industry. Based on identified risks, Storebrand’s Risk and Ownership team considers how to reduce our vulnerability to these risks (further information available under Principle 11). Risk is inherent in many industries. Therefore, we not only assess risks but also each company’s ability to manage them. Storebrand assigns an ESG risk score to all companies we invest in. The score is available for our portfolio managers to integrate in investment decisions. Our Risk and Ownership team also uses the rating when identifying and prioritising thematic adverse impacts for specific industries, when engaging with individual companies to identify needs for sustainability improvements, and when deciding how to vote on shareholder resolutions. Directing investments towards sustainable solutions Storebrand aims to be a driving force for lasting change in the way companies are managed, while ensuring the best possible returns for customers and owners. We fundamentally believe that investing in companies well-positioned to deliver on the United Nations Sustainable Development goals (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. At the same time, we reduce exposure to activities that negatively impact society and the environment. increase our positive contribution to Storebrand works 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 assets under management in solution companies, bond investments in solutions, green bonds, green infrastructure, and certified real estate by 2025. At the end of 2022, 12.4 per cent of our equity investments was invested in solution companies. The following principles guide our investment and stewardship approach: • Make investment decisions in line with scientific consensus • Reorient capital flows towards low-carbon, climate-resilient and transition companies Avoid investments that contribute significantly to climate change Use ownership positions to stimulate ambitious ESG practices at portfolio companies • • • Make it simple for clients to understand how they may contribute to a low-carbon future 65 Equity investments in solutions Through proprietary analyses, we identify what we call “solution companies”. These are companies that help achieve the SDGs through products, services and operations, without causing significant harm to society or the environment. Companies that are defined as solution companies are included in a database that is updated regularly. The database is a valuable tool for fund managers 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. Integrating sustainability in other asset classes Debt Within fixed income, we invest both in investment grade and high yield instruments, including investments in green and sustainability- linked bonds, which allow fixed-income funds to increase their exposure to projects that are focused on sustainability. 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, as well as the International Capital Market Association (ICMA) framework. By the end of 2022, we had invested NOK 32 billion in green bonds. This accounts for 8.3 per cent of our total bond investments, up from 6 per cent in 2021. Storebrand also seeks to make bond investments within our “Solutions” category of bonds, besides Green Bonds. We have an ambition to increase our holdings in this category, which we believe will benefit long term risk-adjusted returns. Real Estate We integrate sustainability throughout our real estate business and aim to be the Nordic region’s leading player in real estate management that takes sustainability into account. Through a combination of different strategies, our approach focuses both on reducing adverse impacts and on contributing to positive impacts of our investments. Assessments of environmental, social and governance risks are conducted pre and post investments. Our main goal is to contribute to the UN SDG 11 on sustainable buildings, cities, and societies. Four main target areas have been defined as the most relevant to new investments, developments, and operational management of real assets: • • • • Climate and energy Circularity and material resources Biodiversity Health and well-being Potential negative impacts are assessed and addressed through several strategies: • • • Screening and excluding investments or partnerships Integrating adverse impacts in investment selection decisions Integration in investment decisions on property management and development Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixSPP Fastigheter AB and Storebrand Eiendomsfond Norge KS were named Global Sector Leader 2022 in their categories (Diversified and Diversified Office/Industrial, respectively) by the Global Real Assets Sustainability Benchmark (GRESB). All four participating Storebrand entities earned a 5-star recognition, which is awarded to the 20 per cent best among (more than) 1800 reporting real estate funds and companies across 74 countries. GRESB’s data is used by more than 170 institutional and financial investors. In 2022 the share of our buildings that hold an environmental certificate (BREEAM or equivalent) was 64.6 per cent, while emissions from our real estate investments were 5.6 kg CO2 per m2. In 2021 these figures were 68 per cent and 6.0 kg CO2 per m2 respectively.68 However, the figures are not directly comparable, as the composition of our portfolios have changed with the inclusion of our Danish real estate portfolio. Infrastructure Since the launch of the Storebrand Infrastructure Fund in 2021, Storebrand has invested directly and cooperatively in infrastructure projects that enhance the transition to a greener economy through increased renewable energy production and utilisation. The transition from fossil fuels to renewables requires significant investments in renewable energy infrastructure, from both the public and private sectors. The EU Commission’s Investment Plan for Europe aims to mobilise EUR 650 billion of public and private investments by 2027 to ensure the transition to a climate-friendly economy. The European energy crisis in 2022 highlighted the importance of the Fund’s mandate. The Fund has made multiple investments in infrastructure projects in Europe and North America, including direct investments in the City of Oslo’s district heating network, an onshore wind farm in the United States, as well as an offshore windfarm and two separate electric train fleets in the United Kingdom. The fund will contribute positively to SDGs 7, 9 and 11, and is committed to accelerating the transition to renewable energy and a greener economy. Private equity & private credit Storebrand’s private equity investments are carried out through a wholly- owned subsidiary, Cubera Private Equity (“Cubera”), an investment adviser and fund-of-funds manager. As a limited partner in a private equity fund, Cubera has limited formal influence on ESG issues during its ownership phase, and no direct influence on the underlying portfolio companies. However, Cubera generally invests with fund managers who share its view that ESG factors affect the long-term market value of assets. Cubera also actively encourages fund managers to undertake relevant ESG actions. Based on Cubera’s ESG policy, Cubera will continue to develop activities across all funds. For products, this means that Cubera will continue to develop its integration-activity across all funds and have dedicated impact products (Cubera Impact). Cubera will publish its HOW STOREBRAND CONTRIBUTES TO THE UN SDGS THROUGH INVESTMENTS IN SOLUTIONS We invest in companies that deliver climate solutions and contribute to achieving the Paris Agreement. 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 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. We support companies’ growth, generating new jobs, and promoting sustainable industrial development requires financial services, including affordable and accessible credit and women’s integration in value chains and markets. We invest in companies dedicated towards increasing access to equal opportunities, social services and economic empowerment. 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 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 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. 68) The reduction in certified green property is due to the inclusion of Capital Investment in Denmark in the overall share. Split by country the share of certified green property is the following: Norway (89%), Sweden (93%), Denmark (9%). 66 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendixfirst ESG report in 2023, including ESG metrics on invested funds. Lastly, Cubera is committed to driving the ESG agenda in the private equity community, actively involving investors in building ESG further into mandates, supporting industry initiatives, and collaborating with peers to standardise data. Active Ownership Exercising our influence through active ownership is a critical part of our approach to sustainability. We set expectations for the companies we invest in and use our position as an owner 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. indirectly for production processes such as through erosion control and flood protection. In 2022, Storebrand introduced a new Group policy aimed at battling the systemic risks that a loss of nature and biodiversity could pose to long-term asset returns. In 2022, we became a founding member of the Nature Action 100+, a coalition of investors aiming (to assemble a unified front) to engage and move global companies considered systemically critical to halting and reversing loss of nature and biodiversity. Resilient supply chains: The respect for labour rights in supply chains has been an important issue for Storebrand for many years and will dominate our social issue engagement work in the 2021 -2023 period. Our engagement aims to ensure healthy operations through robust supply chains, at the same time helping to reduce poverty, child labour, forced labour and low living standards. Our Risk and Ownership team assesses which companies require active engagement through dialogue, or whether we should express our opinions through the exercise of voting rights. In 2022, we continued our partnership with the Platform for Living Wages Financials (PLWF), as a foundation for efforts to conduct assessments and influence portfolio companies to pay a living wage for workers within the food, textile, and other retail sectors. Engagement Five principles of engagement guide Storebrand’s active ownership: 1. Creating shareholder value: Our engagement activities should contribute to long-term value creation in a responsible manner 2. Aiming for a positive impact: Our activities should aim to create actual difference, not symbolic value 3. Nordic approach: We prioritise opportunities where we are particularly well-positioned to impact positive change, but do not limit ourselves to the Nordic region 4. Multi-stakeholder engagement: We work with multiple stakeholders, including governments, organisations, business communities and investors, to solve complex challenges and influence large companies 5. Targeted engagement: We focus our resources on companies where we have a significant ownership stake Engagement themes The following themes are being prioritised for the period 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 2018 as a base year. Towards achieving this goal, we have identified the 20 largest sources of owned emissions in our portfolios and have begun a process to stimulate these companies to implement emissions reductions. Storebrand co-led the PLWF agrifood and food retail workstreams in 2022, actively participating in the writing of the PLWF 2022 report and presenting results for both sectors at the PLWF annual conference in October. Together with other investors through the Investor Alliance on Human Rights, we also were involved in efforts to reduce the amount of forced labour in the Xinxiang region in China. As a member of the Advisory Group, Storebrand last year contributed together with 220 other investors to a new PRI initiative on Human Rights stewardship. The initiative, Advance, is established to help select sectors and companies to engage with. Storebrand’s contribution has focused on war and conflicts zones and on the rights of indigenous peoples. Corporate advocates sustainability disclosure: Storebrand standardised and company-specific sustainability metrics to ensure transparency and benchmarking. The reporting of ESG-specific issues is a good indication of how a company measures and manages its exposure to sustainability risks. Engagement data summary By year-end 2022, we currently have 636 ongoing engagements in total, with 508 unique companies. In total, we have registered 551 interactions with companies during the year, through meetings, e-mails and letters. 299 of these activities were linked to an ongoing engagement with a company. The contact includes enquiries to obtain information, as well as direct dialogue about portfolio companies’ sustainability efforts. Biodiversity and ecosystems: The protection and sustainable management of oceans, forests, wetlands and other sensitive ecosystems are essential to ensure long-term social and economic stability. Nature underpins all economic activities. Businesses depend on nature for direct inputs such as water and materials, and In addition to dialogue with companies, we also had 79 dialogues with 33 external fund managers and 65 meetings with government representatives in 2022. Among notable trends, 77 per cent of our engagements in 2022 were collaborative, compared with 73 per cent in 2021. This reflects 67 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixEngagement by sector 2.02 % - Real Estate 3.57 % - Other 8.06 % - Financial 8.84 % - Consumer Discretionary 5.27 % - Information Technology 8.99 % - Energy 5.43 % - Healthcare 11.94 % - Industrials 5.74 % - Communication Services 12.40 % - Consumer Staples 7.44 % - Utilities 20.31 % - Materials Top 10 countries engaged in Country USA Japan Sweden Norway France Germany United Kingdom Switzerland China Indonesia South Korea Number of companies 159 58 54 44 31 29 28 21 18 15 15 our strategy to join forces with other investors and stakeholders to maximise impact, where appropriate. Several of the most significant collaborative engagements were related to nature and biodiversity, a fast-evolving area that lacks commonly accepted standards for operation and financial management. Demonstrating practices, building knowledge, and gaining support for shared standards are key components of our efforts. Among the new engagements initiated in 2022, 51 per cent focus on social issues, including labour rights as well as human rights in conflict zones. During the year, we concluded 9 engagements, with positive outcomes in four of those cases. Dialogue with companies One-on-one dialogues between Storebrand and companies accounted for 146 of our dialogues in 2022. In other cases, we took the initiative to engage together with other investors through a collaborative effort: 31 engagements were conducted with Storebrand in a leading role, and 459 with Storebrand in a supporting role. A total of 93 per cent of the engagements took place proactively, up from 87 per cent in 2021, while 7 per cent took place on a reactive basis. 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 7 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 engagements targeted companies in the materials, consumer staples and industrials sectors, which together accounted for approximately 44 per cent of our dialogues in 2022. Geography The majority of the companies we had dialogue with in 2022 were based in United States of America, Japan and Sweden. What aspects of ESG we engaged on (ESG categories) In 2022, our engagements with companies dealt with several topics within ESG and we addressed 16 of the 17 UN Sustainable Development Goals. 51 per cent of the dialogues dealt with environmental including climate change, emissions, deforestation and the use of chemicals, while 31 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. issues, Outcomes of engagements concluded During 2022, we concluded nine dialogues, four of which had a positive outcome. Four did not give the desired results, while one had a neutral outcome. In cases where the engagements concluded successfully, the results were primarily increased disclosure, awareness and understanding. In some cases, the companies changed their practices or committed to implementing specific changes. 68 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixReason for Engagements in 2022 Engagement communication methods used Other Shareholder Resolution Digital meeting E-mail Letter Phone call Site visit Conference Meeting 0 50 100 150 200 94% - Proactive (internally planned) 6% - Reactive (triggered by external event) ESG categories of engagements SDGs impacted by engagements 1. No poverty 2. Zero hunger 3. Good Health and Well-being 4. Gender Equality 5. 6. Clean Water and Sanitation Aﬀordable and Clean Energy 7. Decent Work and Economic Growth 8. 9. Industry, Innovation and Infrastructure Reduced Inequality 10. Sustainable Cities and Communities 11. Responsible Consumption and Production 12. Climate Action 13. Life Below Water 14. Life on Land 15. Peace and Justice Strong Institutions 29 31 94 23 0 2 8 114 80 15 98 11 158 115 400 0 50 100 150 200 250 300 350 400 450 51% - Environment 31% - Social 18% - Governance 69 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixJFE Steel dialogue A structured dialogue between JFE Holdings (“JFE”), one of Japan’s leading steelmakers, and a group of shareholders including Storebrand and Man Group, resulted in a May 22 JFE announcement about enhanced climate commitments and significant investments aligned with those commitments. JFE in 2021 was identified as one of the top 20 largest emitters in our portfolio, in terms of owned emissions. Global demand for steel is projected to rise by more than 30 per cent by 2050. Steel manufacturing is energy intensive, representing 7 per cent of global (energy sector) CO2 emissions and 15 per cent of Japan’s CO2 emissions annually, according to the International Energy Agency’s Iron and Steel Technology Roadmap 2020 and the Nippon Steel’s Carbon Neutral Vison 2050, respectively. Without measures to manage steel demand and overhaul production systems, the IEA projects that steel sector CO2 emissions would rise 7 per cent by 2050. Storebrand has initiated a dialogue with JFE and other top 20 emitters in our portfolios regarding their climate ambitions and the governance of relevant processes. These dialogues are based on our commitment to reduce emissions and reach net zero across our portfolios. In our dialogue with JFE, we highlighted the need to align the company’s planned investments with its emission reduction targets. JFE faced a significant investment to replace ageing blast furnaces. The scale and complexity of this aspect of the steel production process requires a long lead time between the time of an investment decision and an actual refurbishment of the furnace. Following the dialogue between JFE and the shareholder group, the company announced plans to replace a Kurashiki No.2 blast furnace with equipment based on an electric arc furnace (EAF). This was the first time that any of Japan’s top three steel companies decided to move towards electric blast furnaces, marking a significant step towards the decarbonisation of the steel industry. The use of electric arc furnaces could result in significantly lower emissions per tonne of steel produced, as compared to conventional methods such as blast or basic oxygen furnaces.69 Preliminary estimates indicate that JFE’s implementation could reduce CO2 by several million tonnes per year. 70 JFE’s announcement shows how shareholder dialogue and investor alliances can act as a catalyst for positive change. This case also highlights the importance of engaging at the right time, ahead of key decision moments or turning points. 69) Japan’s JFE to switch one furnace to electric in green push Steelmaker’s planned furnace could have 25% lower CO2 emissions: https://asia.nikkei.com/Business/Materials/Japan-s-JFE-to-switch-one-furnace-to-electric-in-green-push 70) Nippon Steel Carbon Neutral Vision 2050: https://www.nipponsteel.com/en/ir/library/pdf/20210330_ZC.pdf & International Energy Agency’s Iron and Steel Technology Roadmap 2020: https://www.iea.org/reports/iron-and-steel-technology-roadmap 70 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixSolar industry dialogues As a member of the Investor Alliance on Human Rights, Storebrand has participated actively in a working group for labour rights in the textile, IT and energy industries in China. Following reports of forced labour in the Chinese solar industry, we focused in 2022 on improving labour rights in the solar industry value chain, particularly in Xinjiang in the Uyghur region. In 2021, we carried out a risk-based sale of assets in two companies with operations in Xinjiang, Dago New Energy and GCL- Poly. The same year, we conducted an in-depth analysis of work conditions in the solar industry value chain, which resulted in a subsequent dialogue with Canadian Solar regarding its operations in China. The dialogue was led by SHARE, with Storebrand as a supporting investor, and the Investor Alliance as a contributor. The investor group calls on companies to conduct human rights due diligence in their supply chains, encouraging them to identify, assess, avoid and mitigate risks of human rights violations by implementing policies and practices in areas such as traceability, risk assessment and procurement. As Canadian Solar failed to meet shareholders’ requests to conduct a human rights assessment at its operations in Xinjiang, Storebrand decided in 2022 to co-file a shareholder resolution requesting that shareholders vote on the issue. Canadian Solar did not present the proposal at its 2022 Annual General Meeting. Following continued dialogue with Storebrand, however, the company noted the following in its Sustainability Report published in August 2022: “In May 2022, our Board passed a resolution mandating a third-party assessment, at reasonable cost, on the extent to which Canadian Solar’s policies and procedures effectively protect against forced labour in its operations, supply chains, and business relationships. The assessment will draw upon international standards such as the UN Guiding Principles on Business and Human Rights, ILO Declaration on Fundamental Principles and Rights at Work, and ILO Forced Labour Convention, 1930 (No. 29). We have initiated our efforts to search for a reputable, international auditing firm to conduct this assessment at reasonable cost and expect to report back to the Board on the results of the audit in due course.“ Storebrand also has ongoing dialogues with other companies involved in the solar energy supply chain in China. It can be difficult to determine whether third-party assessments or verifications of human rights violations are reliable, or whether such processes entail risks for third parties involved. As a result, it is also difficult to document violations, or links to companies. We will continue to look for ways to exercise influence through continued dialogue and supporting shareholder proposals. 71 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixVoting Voting data summary In 2022, we voted at the Annual General Meeting (AGM) of 1,348 companies based in a total of 60 countries. Our most extensive presence was in the United States of America, where we voted at 690 meetings. The sector with the highest number of meetings held during the period was Industrials with 249 meetings, while Utilities was the lowest with 49 meetings. In 89.45 per cent of our AGM votes in 2022, we supported proposals by the company management, while we voted against management proposals in 10.6 per cent of cases. Storebrand’s opposition entailed, among other things, voting against election and re-election of board members at companies deemed to have poor corporate governance, or where the Board of Directors had not followed up on corporate commitments to ESG-related reporting and targets. Examples in 2022 include: We have prioritised voting based on opportunities to maximise impact, rather than reaching a symbolic number of AGMs, and to make sure that we vote in line with Storebrand’s Sustainable Investment Policy. • Through the AGMs, we have continued to prioritise meetings at companies that represent: Storebrand voted against the discharge of several board members and the CEO at Ericsson, to express a lack of confidence in the Board’s oversight of the company’s management of alleged bribery related to the company’s operations in Iraq from 2011 to 2019. • • • our largest holdings the Norwegian and Swedish markets specific ESG-related resolutions at stake Among 51,980 votable proposals in 2022, we voted in 17,600 cases, or 31.7 per cent. This is an increase from 2021, when we voted on 10,374 of 51,263 votable proposals, equivalent to 20.2 per cent. This change reflected our strategy to use our voting rights more actively. Engagement tools also include filing shareholder resolutions, particularly in cases of stalled dialogues or ignored proposals, or matters of high importance for other shareholders, or collaborating with other shareholders for leverage. In 2022, we co-filed resolutions to be voted on at the AGMs of Amazon and Meta, among others. Among international investors, filing or co-filing resolutions during the past few years has become a more common way to exercise active ownership. • We voted against the re-election of two board members of Lundin Energy, following allegations that the individuals had violated international law in Sudan. Although the question of guilt must be decided in the court of law, we believed that it would neither be in the company’s nor shareholders’ interest for the accused individuals to maintain their role as active board members during the prosecution period. • In some instances, we voted against the election of male candidates to company boards that had no female members, or to boards with a lower female representation than the mandatory level in the respective country. • We supported a proposal made by a shareholder at AT&T’s AGM urging the company to oversee and report on a third-party audit of the company’s impacts on civil rights and non-discrimination, and the impacts of those issues on the company’s business. We supported this proposal despite an assessment by our proxy voting vendor ISS that the reporting was not necessary. Voting key figures General viting data Number of general meetings voted Number of items voted Number of votes on shareholder proposals Voted 1,348 17,600 792 Votable 4,244 51,980 1,188 Percentage voted 31.70 % 33.90 % 66.70 % 72 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix Top 20 countries voted in: Country USA Sweden China Norway India Japan Australia Cayman Islands South Africa United Kingdom Canada France Germany South Korea Netherlands Denmark Bermuda Switzerland Hong Kong Finland How we voted Votes with management Votes against management Votes with ISS Sustainability Policy74 Votes against ISS Sustainability Policy Voting by topic areas Audit Related Capitalization Company Articles Compensation Corporate Governance Director Election Director Related E&S Blended Environmental Miscellaneous Non-Routine Business Routine Business Social Strategic Transactions Takeover Related Votable meetings Voted meetings Turnout percentage 690 420 417 168 245 344 75 176 56 134 104 77 74 148 57 37 74 58 68 23 267 157 154 116 90 65 43 38 36 34 30 27 23 22 20 19 19 18 18 14 38.7 % 37.4 % 36.9 % 69.0 % 36.7 % 18.9 % 57.3 % 21.6 % 64.3 % 25.4 % 28.8 % 35.1 % 31.1 % 14.9 % 35.1 % 51.4 % 25.7 % 31.0 % 26.5 % 60.9 % % Vote 89.44 % 10.56 % 99.62 % 0.38 % % With ISS Proposals % with Management Sustainability policy 1,016 1,352 369 2,448 46 6,706 2,440 41 111 238 249 2,376 236 239 75 99 % 87 % 89 % 81 % 11 % 91 % 92 % 59 % 31 % 89 % 92 % 98 % 28 % 91 % 96 % 100 % 100 % 100 % 99 % 98 % 99 % 100 % 93 % 96 % 98 % 100 % 100 % 95 % 100 % 100 % 71) Institutional Shareholder Services (ISS) sustainability policy, is voting guidelines for ESG best practices. 73 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixHOW STOREBRAND CONTRIBUTES TO THE UN SDGs THROUGH ENGAGEMENT We take measures to avoid corruption and bribery enabled by inadequate corporate governance and systematic failure to uncover fraud and corruption. We also focus on company reporting. In our dialogue with portfolio companies in 2022, we highlighted the importance of consistent, reliable, and verifiable reporting on sustainability indicators. We also engaged with companies operating in war and conflict areas, demanding that they respect human rights and avoid contributing to conflict via their operations. (Storebrand has had a strong focus on occupied territories since 2009.) Biodiversity and ecosystems play a crucial role in supporting sustainable value creation and meeting climate commitments. Storebrand Nature Policy, launched late 2022, outlines clear expectations to companies. Our expectations are built on the mitigation hierarchy set out in the International Financial Corporation’s (IFC) Performance Standard 6 and guided by Science- Based Targets Network (SBTN) and Taskforce on Nature-related Financial Disclosures (TNFD). We expect companies to adopt and implement policies to address nature-related financial risks and opportunities in their investments and financial operations. The key elements vary by industry, but as a minimum we expect companies to report on a four-pillar approach: 1. Governance, 2. Strategy, 3. Risk Management, and 4. Metrics and Targets. In addition, we expect companies to incorporate the principle of “double materiality”, disclosing not only how nature impacts the organisation, but also how the organisation impacts nature. We also are committed to eliminating commodity-driven deforestation from our portfolios by 2025. Specific expectations of companies associated with deforestation risk are described in our deforestation policy. We continue our engagement with companies in the aquaculture sector, with a focus on climate issues and impacts on biodiversity. In 2022, we collaborated and published the results of a pilot project to improve the aquaculture sector’s reporting on influences and dependences on nature. The project was a cooperation with Grieg Seafood, WWF and the Norwegian Institute for Marine Research (NINA). In line with our nature policy enacted in 2022, we do not invest in companies that engage in deep-sea mining activities, or in marine or riverine tailings disposal. The transition to a low-emission society and net zero emissions in 2050 is a top priority. We encourage companies to define and implement climate strategies aligned with the Paris Agreement and to aim for net-zero emissions by 2050 or sooner. We pay special attention to the 20 largest emitters among our portfolio companies. We will continue to engage with (a number of) banks in order to understand their exposure to the fossil fuel industry. Our participation in the Climate Action 100+, The Institutional Investors Group on Climate Change (IIGCC), as well as the Principles for Responsible Investment (PRI), provides platforms for collaborative engagement. We expect investee companies to: • • • • Implement a strong governance framework that clearly articulates the board’s accountability and oversight of climate change risk. Take action to reduce greenhouse gas emissions across the value chain, consistent with the Paris Agreement’s goal of limiting global average temperature increase to well below two degrees Celsius above pre-industrial levels, aiming for 1.5 degrees Celsius. Provide enhanced corporate disclosure in line with the final recommendations of the Task Force on Climate related Financial Disclosures (TCFD). Support effective measures across all areas of public policy that aim to mitigate climate change risks and limit temperature rise to 1.5 degrees Celsius. Storebrand will not invest in companies that deliberately and systematically lobby against the goals and targets enshrined in the Paris Agreement. • Support just transition, by: • • including workforce and community issues in climate-related engagement on corporate practices, scenarios and disclosures. Specifically require renewable energy companies and mining companies supplying transition minerals to conduct human rights due diligence to identify the impact of their operations on workers, communities, indigenous peoples, and environmental and human rights defenders. 74 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixWe work with companies to reduce water consumption and greenhouse gas emissions in intensive livestock production. In 2022 we expanded our policies on nature protection to exclude operations in ecologically sensitive areas, and deforestation and conversion of native ecosystems for mining and unsustainable production of cocoa, rubber, and coffee. Working with Platform Living Wages Financials, we also engage with companies producing and sourcing cocoa and coffee on labour conditions. In addition, we have been engaging with companies regarding respect for the rights of communities and indigenous peoples, and on conducting responsible production without negatively affecting local communities. We are engaged with companies in our portfolio issues of working conditions, including living wage. We are part of the Platform for Living Wages Financials (PLWF) initiative, which we co-lead, and work with other investors to address issues of the living wage and create structures that support workers’ working conditions. The platform contributes to positive development on living wages in the garment, food and agricultural, and food 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 company dialogues and cooperation with the Investor Alliance on Human rights. Storebrand works 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 the supply chain of companies we invest in. We expect companies to have a proactive and structured approach to promoting gender diversity and diversity in general, as well as equity and inclusion, across their workforce and supply chains. Company policies should commit to conducting gender- responsive due diligence for their own operations, supply chains, products and services, and for the impact of their operations on communities and society. They should have a zero-tolerance policy against all forms of discrimination, violence and harassment and should implement appropriate training programmes and reporting mechanisms, as well as clear policies against retaliation. Storebrand has engaged with companies on these issues, as well as voting and supporting shareholder resolutions at AGMs aiming to: • • • • improve disclosure of processes to reduce gender inequalities, including policies and targets. achieve a balanced diversity at boards and/or within senior management. achieve better disclosure on gender pay gap and programmes to achieve it. conduct gender and diversity due diligence. We generally vote against, or withhold our votes from, the incumbent members of the nominating committee of boards, if they do not contain at least 40 per cent of people from underrepresented gender identities. We engage with policymakers. In 2022, Storebrand, together with other investors, encouraged EU policymakers to ensure that the upcoming Directive on Corporate Sustainability Due Diligence (CSDDD) explicitly captures a gender perspective. We strive to ensure that the companies we invest in ensure good health and quality of life for their employees. Together with other investors, we engaged with the pharmaceutical industry for fair distribution of Covid vaccines around the world. We are also part of the Access to Nutrition Initiative, aiming for the food industry to deliver nutritious, affordable products. 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. 75 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix• • Mining operations that conduct direct marine or riverine tailings disposal: With the aim of protecting coastal and marine environments from mining waste and to reduce marine pollution, from land-based activities, Storebrand will not invest in mining operations that conduct marine or riverine tailings disposal. Companies that operate in ecologically sensitive areas: Companies that derive more than 5 per cent of their revenues from Arctic drilling will be put on our observation list and closely monitored and engaged with based on our existing ownership. Some of the most iconic species in the world are endemic to the Arctic, and their habitats are under pressure by rapid climate change. The remote location and extreme weather conditions, combined with the lack of adequate infrastructure for responding to oil spills or other accidents, create an unacceptable risk of irreversible impacts of oil and gas operations in the Arctic. We will maintain a close dialogue with companies that derive more than 5 per cent of their revenues from Arctic where we inform them of our expectations of measures and results. We expect the companies to show improvement within a pre-determined time. Depending on the outcome, the companies will either be excluded from our investment universe, or they will be removed from the observation list. We will expand to other ecologically sensitive areas as data improves. Deep-sea mining: The deep sea contains many of the world’s most pristine, biodiverse, and poorly studied ecosystems, which provide a broad range of critical ecosystem services. Following the precautionary principle, Storebrand will not invest in companies involved in deep-sea mining until we have more scientific knowledge on the impacts of such activities. Significant challenges must be overcome before the sector can be recognised as environmentally and economically sustainable. Lobbying: We will not invest in companies that lobby against international agreements which promote sustainable use of biodiversity, such as the Convention on Biological Diversity. Deforestation or conversion of native ecosystems: Through our Deforestation Policy of 2019, we have made the commitment to not invest in companies with unsustainable production of soft commodities like palm oil, soy, cattle products, and timber. This commitment will be expanded to include deforestation or conversion for production of cocoa, rubber, coffee, and mining. • • • 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. Engagement with other relevant stakeholders Efforts to reduce the loss of biodiversity require government action in addition to company involvement. In July 2020, Storebrand established and subsequently co-led the Investors Policy Dialogue on Deforestation (IPDD), a collaborative initiative of financial institutions engaging with public agencies and industry associations in selected countries on deforestation. Storebrand also co-chairs the Public Policy Advocacy working group of the Finance for Biodiversity Foundation. Within this working group, financial institutions have advocated ambitious and effective outcome of the Convention on Biological Diversity (CBD) COP15 in 2022, with an emphasis on aligning financial flows with global biodiversity goals. The foundation is an official observer member of the CBD, which means that the working group can make interventions during the meetings of the convention and its protocols and make text suggestions for the Global Biodiversity Framework. Building on the lessons learned from this initiative, we will continue to engage with policy makers and regulating authorities with the aim to promote sustainable finance. Exclusions & Screening 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 the Norway’s 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. In 2022 we expanded the Storebrand Standard to include the protection of nature. This change is driven by a significant rise in the systemic risk that the loss of biodiversity and nature loss could pose to long-term asset returns, economic growth, and our planet’s capacity to support human life. As a result, we will now exclude companies that are practicing the following activities: 76 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixIn cases 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. 72 As of 31 December 2022, 281 companies listed on the MSCI ACWI Index were listed as excluded from all of our funds. An additional 313 companies on the same index were listed excluded from certain funds, solely based on our extended criteria. In case of product-based breaches, our exclusion process is based mainly on data analysis. 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 2022, our exclusion process resulted in the exclusion of 281 companies from our investment portfolios, which include more than 5,000 companies. A total of 9 companies were re-included, following observations and sustained returns to our required standards. Some examples of our exclusions during 2022 included the exclusion of Adecco Group and Doosan Enerbility, for involvement in nuclear weapons, the exclusion of the consumer goods company Mattel for long term issues regarding human rights and critical consumer safety, and our exclusion of five mining companies based on their practices of depositing mining tailings in the sea and thereby placing critical natural ecosystems at risk. Companies excluded based on the Storebrand Standard, by category, as of 31 December 2022 Total number of companies excluded Conduct-based exclusion - Environment Conduct-based exclusion - Corruption Conduct-based exclusion - Human Rights and International Law Tobacco Controversial weapons Climate - Coal Climate - Oil sands Climate - Lobbying Artic drilling Deep-sea mining Marine/riverine tailings disposal Deforestation Cannabis State-controlled companies Total number of companies 18 10 44 24 32 142 9 5 0 1 3 14 0 3 281* 72) For a detailed description of our exclusions and methodology, see: https://www.storebrand.com/sam/international/asset-management/sustainability/our-method/exclusions 77 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixEolus Vind Storebrand in 2022 placed Eolus Vind, a Sweden-based wind power company, on our observation list and asked that the firm address risks related to potential human rights violations among Sámi reindeer herders in Norway. Storebrand’s actions followed a landmark decision by the Norwegian Supreme Court on the human rights of indigenous peoples in a separate and unrelated project in the same sector. Although every case must be judged on its own merits, the ruling raised principal issues that we find relevant when evaluating risks and making investment decisions. The ongoing transition to a carbon- neutral economy will require investments in renewable energy, but such investments must also respect the rights of indigenous peoples and other vulnerable groups, in addition to minimising negative impacts on nature. Eolus Vind is the main project partner of Øyfjellet Wind AS, operator of Øyfjellet Wind Park in Norway. The park consists of 72 wind turbines and an extensive network of access roads in a concession area of 40 km2 in a mountain area in Vefsn, Nordland. Sámi reindeer herders of the Jillen-Njaarke district complained that windmills prevented their reindeer from using their natural migration route to and from seasonal grazing areas. Their claim was contested by Eolus and Øyfjellet Wind. We asked Eolus Vind AB to: • • Take appropriate steps to seek Free, Prior and Informed Consent (FPIC) of members of Jillen-Njaarke reindeer herding district to the wind park’s continued operation, including mitigating measures that should be taken to allow unhindered access to all grazing areas. Consultation should involve affected indigenous people, according to international best practice standards. The needs and input from members of Jillen-Njaarke reindeer herding district must be given weight, and the company mush show willingness to make the changes needed to allow co-existence of the wind park and continued reindeer husbandry in the area. Adopt a policy on respect for indigenous peoples’ rights, to be applied in all the company’s projects going forward. Storebrand’s dialogue with Eolus Vind began in February 2021 and continued into 2023, with Eolus Vind remaining on the observation list. Companies under observation must show improvement within a pre-determined time to avoid exclusion from our investment universe. Without the implementation of appropriate mitigation measures , the project might constitute a violation of the human right of indigenous people to enjoy their own culture, as protected by Article 27 of the International Covenant on Civil and Political Rights (ICCPR). The high vulnerability of the Southern Sámi culture, and the importance of reindeer herding for the survival of this culture and the Southern Sámi language, are key elements in our consideration. 78 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixEXCLUSION CRITERIA BASED ON THE UN SUSTAINABLE DEVELOPMENT GOALS Storebrand Standard (Applies to all funds) Additional criteria (Applies to selected funds) Companies involved in systematic corruption and economic crime. Companies where more than 5 per cent of the revenue comes from the production or Companies that cause or contribute to serious and systematic distribution of weapons (handguns and military violations of international law and human rights in war zones. weapons). 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 with mining operations that conduct direct marine or riverine tailings disposal. Companies involved in deep sea mining. Companies involved in serious environmental damage. Companies where more than 5 per cent of their revenues come from the production Companies that receive more than 5 per cent of their revenues from or distribution of fossil fuels, or which have coal or oil sands-based activities. more than 100 million tonnes of CO2 in fossil reserves. Companies that contribute to severe and/or systematic deforestation or conversion of native ecosystems through non-satisfactory production of palm oil, soy, cattle, timber, cocoa, rubber, coffee and mining. Companies that deliberately and systematically work and lobby to counteract the objectives enshrined in the Paris Agreement, or international agreements that promote the sustainable use of biodiversity, such as the Convention on Biological Diversity. Companies with serious and/or systematic unsustainable palm oil production. Companies that operate in ecologically sensitive areas. Companies that cause or contribute to severe violations of communities and Indigenous Peoples through their operations. Companies that cause or contribute to serious and systematic violations of workers’ rights, including forced labour, child labour or severe and systematic union busting. Companies causing or contributing to gross and/or systemic Companies where more than 5 per cent of gender discrimination including gross and/or systemic workplace their revenue comes from the production or discrimination, violence in any form, and or sexual harassment. distribution of pornography. Companies where more than 5 per cent of their revenue comes from Companies where more than 5 per cent of the production or distribution of tobacco or drugs. their revenue comes from the production or distribution of alcohol or gambling. 79 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix Key performance indicators For a complete list of sustainability indicators and definitions, see page 233 Categories and indicators Results 2019 Results 2020 Results 2021 Results 2022 2023 2025 Targets Targets Financial results Return on equity Solvency ratio Dividend ratio Sustainability 8.0 % 176 % 0 % 8.6 % 178 % 65 % 10.7 % 175 % 52 % 8.3 % >10 % >10 % 184 % >150 % >150 % 72 % >50 % >50 % Share of total assets screened against sustainability criteria 100 % 100 % 100 % 100 % 100 % 100 % Fossil-free investments NOK billion invested in fossil-free products / Share of AUM 73 277 / 33 % 379.2 / 39 % 483 / 44 % 449 / 44 % N/A N/A Solutions investments Investments in solutions (solutions companies, green bonds, green infrastructure and property with environmental certification): NOK billion / share of total assets Equity investments in solutions: NOK billion/ share of total equity investments Bond investments in solutions: NOK billion/ share of total bond investments Investments in green bonds: NOK billion/ share of total bond investments Investments in green infrastructure: NOK billion / share of total infrastructure investments Investments in certified green property: NOK billion/ share of total real estate investments Carbon emissions in equity and bond investments Carbon intensity from equities investments: tonnes of CO2e per NOK 1 million in sales income (against index) 74 Carbon intensity from corporate bond investments: tonnes of CO2e per NOK 1 million in sales income (against index) 75 Total carbon emissions from equity investments: tonnes of co2e Scope 1-2 76 Total carbon emissions from corporate bond investments: tonnes of co2e Scope 1-2 Carbon footprint in real estate investments Carbon footprint direct real estate investments: tonnes CO2e / kg CO2e per m2 Active ownership and exclusions Companies that have been contacted to discuss ESG through active ownership: number (share of invested capital) 77 Votes at general meetings to promote Storebrand’s ESG criteria: number (share of invested capital) 78 Social impact Ratio of female board members in companies as a percentage for equity investments. 79 53.7 / 6.5 % 92.6 / 9.6 % 123.1 / 11.2 % 126.8 / 12.4 % 13 % 15 % 24.3 / 9.3 % 50.3 / 13 % 62.6 / 13 % 39.3 / 9 % N/A New New New 35.0 / 9 % N/A 12.4 / 3.1 % 22.2 / 5 % 25.7 / 6 % 32 / 8.3 % N/A N/A N/A N/A New New 1.5 / 100% 3.5 / 100 % 75 % 90% 17 / 41 % 20.1 / 43 % 33.3 / 68 % 49.0 / 64.6% 70 % 78 % 14 (24) 13 (18) 12 (18) 14 (18) N/A 10 12 9 9 (5) N/A 3,258,508 3,113,714 2,504,453 2,492,038 N/A 482,504 616,743 262,922 391,993 N/A N/A N/A N/A N/A 10,228 / 9.12 8,456 / 7.9 6,803 / 6.0 5,704 / 5.6 8.6 6.5 408 151 572 503 601 645 (31.2 %) N/A N/A 947 1,348 (68.6 %) N/A N/A New New New 32.2 % N/A N/A 73) Fossil-free products are one of several ways to reach our overall goal of net zero emissions, and we have therefore not set a specific goal for how much should be invested in fossil-free products. 74) Data was obtained through Trucost (S&P Global) systems and weighted by market capitalization per position. For index figures, corresponding calculations are weighted per index and weighted together with the portfolios’ indices based on portfolio values. This represents a 95 % coverage ratio in our carbon footprint from equity investments, and a 93 % coverage ratio for the index. 75) Data were obtained through Trucost (S&P Global) systems and estimated management data, weighted by market value per position. For index figures, corresponding calculations are weighted per index and weighted together with the portfolios’ indices based on portfolio values. This represents a 42% coverage ratio in our carbon footprint from corporate bond investments, and a 48% coverage ratio for the index. Coverage has decreased because we no longer use estimates, but only data from data providers. Previously, we have included government bonds (government, municipalities, etc.) together with corporate bonds, but now look exclusively at corporate bonds because it is best practice in both the industry and SFDR to look at the figures separately. We will consider having a separate CPI for government bonds next year. 76) This year, we have chosen to change from financed emissions based on revenues at the companies we are invested in to reporting the figure based on enterprise value. We have done this both because it allows us to include corporate bonds in our emission figures, and because this is in line with the SFDR. Based on the old method, the number would have been reduced from 3,661,218 tco2e to 3,318,508 tco2e (2019-2021). 77) We have moved from reporting active ownership as part of the total investment universe to looking at it relative to our total investments to provide a better insight into the proportion of our invest- ments we are in dialogue with. 78) We have moved from reporting voting as part of the total investment universe to looking at it relative to our total investments to give a better insight into the proportion of the companies we are invested in that we vote at general meetings of. 79) Key figures are linked to PAI.1.13 in the SFDR regulations. 80 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix Risk Our dynamic risk management framework is designed to take the appropriate risk in order to deliver returns to customers and shareholders. At the same time, the framework shall ensure that we shield our customers, shareholders, employees and other stakeholders from undesirable incidents and losses. The framework covers all risks Storebrand may be exposed to. The backdrop for the risk assessment has changed significantly over the past year. The war in Ukraine has increased geopolitical risk. Higher and longer-lasting inflation has forced central banks to make rapid and large interest rate increases. Both short- and long-term interest rates have risen sharply and had a negative impact on equity and credit markets. Storebrand has addressed this through intensified monitoring and follow-up of risk. The immediate effect of rising interest rates leads to a loss in the value of fixed income investments. To reduce the financial impact of rising interest rates, Storebrand books bonds with shorter durations at fair value, and has over time built a robust portfolio of bonds with long durations and high credit quality that are booked at amortised cost. Changes in the interest rate have no accounting effect on the latter. Under prevailing market conditions, model-based valuations of financial instruments (level 3), such as investment property, contain greater uncertainty than usual. Storebrand has an active risk management strategy to optimise customer returns and shield shareholders’ equity under turbulent market conditions through dynamic risk management, strong customer buffers and by posting a significant proportion of bonds at amortised cost. 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 equity, 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 customers’ guaranteed return on investment. Other risk areas include business risk, insurance risk, counterparty risk, operational risk, climate risk and liquidity risk. At an overall level, we saw a stable development in the number of reported incidents in 2022. In 2021, we had an increase in the number of nonconformity reports to the Data Inspectorate. The number is the same for 2022, but which units report nonconformities has changed somewhat from the previous year. Weak equity and credit markets and higher interest rates have had a negative impact on investment returns in 2022. Customer buffers have been reduced, which has resulted in lower risk capacity for guaranteed pensions. On the positive side, higher interest rates increase return expectations and reduce the risk of not reaching the guarantee. Inflation has risen in much of the world, including in Norway and Sweden. High and rapidly rising inflation rates may increase costs and insurance claims in Storebrand. However, pension liabilities (payments) are not inflation linked, limiting the impact of inflation on the Group’s liabilities. Pension premiums and some insurance premiums are directly linked to wage inflation, which automatically results in premium growth. Other products, including P&C insurance, are actively repriced to mitigate the negative effects of inflation. 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. 81 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixThe 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. Guaranteed pensions Guaranteed pension encompasses savings and pension products with guaranteed interest rates. The greatest risks are financial market risk and longevity risk. A common feature of the products is that Storebrand guarantees a minimum return. In Norway, the return must exceed the guarantee in each year, while in Sweden it is enough to achieve the guaranteed return on average over time. The guaranteed insurance liabilities are sensitive to changes in interest rates, where lower rates will increase the value of the liabilities and make it harder to achieve the guaranteed 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 regard to recognised tax expenses. In 2022, the Norwegian Tax Administration ruled in favour of Storebrand, resulting in a positive tax result of NOK 770 million for 2022. In the case that Storebrand’s interpretation be accepted in all the three remaining cases, an estimated positive tax result of up to NOK 2 billion may be recognised. Should all the Norwegian Tax Administration’s interpretations be the final verdict, a tax expense of NOK 1.7 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. Uncertain tax positions are described in more detail in Note 26. 82 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. 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). The magnitude of physical climate risk depends on how much and how quickly the climate changes. A common reference for overall physical climate risk is an increase in global average temperature since pre-industrial times. The UN estimates that the global temperature increase is already 1.1 degrees80. Developments over the next decade are expected to be a consequence of emissions in the past, and the choices made in the next few years will have a significant impact on risk in the longer term. The magnitude of transition risk is determined by how rapid and powerful transition to low emissions will be. This depends on the orientation and strength of the authorities’ climate policy, technology development and how companies and consumers choose to adapt. Transition risk can vary considerably also in the short and medium term, and important choices and consequences are likely to be clarified in the coming decades. 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. We use the recommendations from the Task Force on Climate- Related Financial Disclosures (TCFD) as a framework for reporting of climate-related financial risks. Storebrand’s impact on the climate is described elsewhere in this report, mainly in the chapter A driving force for sustainable investments on page 64 and in the chapter Keeping our house in order on page 34. We have established a TCFD index, which explain where the information recommended through the TCFD is presented in this report.83 The index is in the chapter Verification sustainability on page 253. framework 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-report84, 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: Storebrand’s climate strategy shall contribute to limiting global warming to about 1.5 degrees81. A key instrument is that investments should be carbon neutral by 2050 at the latest, with specific targets along the way. Measures to reduce risk and exploit opportunities are described in the chapter A driving force for sustainable investments. • • • 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 The effects on investments and liabilities may be sudden in the form of market turbulence, or they may develop gradually through lower average returns and persistently low interest rates. Political decisions or regulatory requirements may also entail risk if these are difficult to meet due to limitations in technology or investment opportunities. Examples may be an abrupt change in Norway’s policy to achieve the goals of the Paris Agreement, a fall in interest rates, or lower oil prices and reduced activity in the Norwegian oil and gas industry. 80) IPCC. Sixth Assessment Report. https://www.ipcc.ch/assessment-report/ar6/ Storebrand uses scenarios developed by the Network for Greening the Financial System (NGFS).86 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. 81) Storebrand Climate Policy for Investments: https://www.storebrand.no/asset-management/barekraftige-investeringer/var-klimastrategi/_/attachment/inline/4378826b-d7e2-4dc7-a16d-62e1300f2b12:9f- 73b6f864f81af51ca8045668e4bc5f026a2674/86128%20STB_Clima_policy_investment_rapport.pdf 82) 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 83) Own Risk and Solvency Assessment, ORSA 84) Scenarios updated June 2021: https://www.ngfs.net/sites/default/files/media/2021/08/27/ngfs_climate_scenarios_phase2_june2021.pdf Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixNetwork 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. NGSF has defined six scenarios with risk varying along two dimensions. phasing out of oil and gas as energy sources. In addition, ambitions and preferred means are likely to vary significantly among various stakeholders and decision-makers. • How serious will the physical consequence of global warming be? • 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 consequences associated with a rapid Storebrand’s “Delayed transition” scenario is based on the NGFS- scenario carrying the same name. In this scenario, emissions continue to rise 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.” Our last scenario is “Current policies”, which is based on the NGFS scenario “Current Policies”. In this scenario where will not be policy restrictions beyond those already approved. The transition risk therefore is considered low. Emissions will continue to grow until 2080. Global warming is expected to be about 3 degrees, with a significant risk of even further increases. This will lead to irreversible climate change and extensive physical climate risk. 84 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix 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 policy is significantly changed, and technology development is taking place rapidly. The scenario is ambitious, and the goal of zero emissions by 2050 is reached. It is at least 50 per cent likely that global warming will be limited to below 1.5 degrees. Costs related to the transition will be considerable, especially for consumers, accelerated by a lack of coordination between countries and sectors. The use of oil for transportation 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. Lack of new austerity measures means that economic growth in the wake of Covid-19 is fuelled by 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. Overall, the decline in emissions will be sufficient that it is 67 per cent likely that global warming will remain below 2 degrees. The scenario is based on the NGSF ”Current Policies” scenario. Limited awareness of the climate crisis combined with short-sighted political priorities, prevent the implementation of future restrictions. Introduced emission reduction measures 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. Consequences of the different scenarios It is useful to understand what the various scenarios mean for conditions that affect Storebrand’s risks. Global temperature rise is a key indicator of physical risk. For transition risk, carbon price developments are a key indicator. 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. Physical risk indicators The scenarios are based on different paths for carbon emissions and associated consequences for global warming. In the current policy scenario, global emissions will continue to increase somewhat over the next few years and then stabilise. In the Rapid Transition, emissions will fall to near zero in 2050, helped by moderate opportunities for carbon capture and storage. In Delayed Transition, emissions follow the current policy until 2030, and then fall faster than in the Rapid transition up to 2050. Carbon Emissions and temperature increase in different scenarios 85 85) Source: IIASA NGFS Climate Scenarios Database, REMIND model 85 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixOver the next 10-20 years, further global warming will be the result of historical emissions, and thus quite independent of scenarios. The scenario-dependent differences will be greater from about 2040. With a rapid transition, it is more than 50 per cent likely that global warming in the year 2100 has increased less than 1.5 degrees above pre-industrial times, i.e. less than 0.4 degrees from current levels. With delayed transition, it is 67 per cent likely that global warming in the year 2100 will remain below 2 degrees. The uncertainty and scope for outcomes is greatest with the Current Policy scenario. Although expected global warming in the year 2100 is about 3 degrees, there is a risk that the increase will be significantly greater. litre of diesel) and further to around USD 700 per ton in 2050 (NOK 19 per litre of diesel). In Delayed Transition, carbon prices will only increase from 2030. By comparison, the price of carbon offsets in the EU was approximately EUR 90 per ton (NOK 2.5 per litre of diesel) in December 2022. Storebrand has defined its own stress tests to quantify the effect of transition risk and physical risk on its investment portfolios. These are discussed in Chapter 5.1. Climate risk from investments. A rise in temperature of three degrees or more will have major, irreversible effects on the climate. Global warming will have consequences for living conditions, health, productivity, agriculture, ecosystems and raise sea levels. It also affects the frequency and severity of extreme weather events such as heat waves, droughts, forest fires, tropical cyclones and floods. In addition, the risk must be seen in connection with the fact that parts of the world will experience higher than average warming. In general, warming is greater over land than over oceans. Transition risk indicators In the models underlying the NGFS scenarios, carbon pricing is used as a measure of how powerful the policy is. Carbon price developments should therefore not be interpreted solely in the sense of carbon tax or the price of emissions that can be bought and sold, but as an expression of the costs associated with the transition. In practice, a number of instruments can be used to stimulate restructuring. With the Current policy scenario, there is no further tightening of measures, consistent with the carbon price remaining low. In the Speedy Transition scenario, carbon prices will increase to approximately USD 200 per ton in 2025 (equivalent to NOK 5 per Areas where climate-related risks may 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. Carbon price in different scenarios 86 86) The chart represents shadow carbon prices, which is a measure of policy intensity. Carbon prices are weighted global. Regio- nally and sectoral granular information is available on the IIASA database. 86 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix 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). 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 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 above scenarios is how extensive the negative consequences of climate risk will be in the long term. 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. The authorities must therefore establish framework conditions that enable people and companies to adapt to society’s interests at a reasonable pace. Storebrand’s investments are to be carbon neutral by 2050 at the latest. 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 through 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 several adjustments to reduce the relative climate risk to which our investments are exposed, including: • • • • • Excluding companies that contribute to serious environmental damage. 87 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 202588. In 2020, we launched a new climate strategy for our investments, with the goal of entering investments that greatly contribute to climate change. We do not 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 does also 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. In 2022, we launched a new nature policy with increased expectations and requirements related to companies’ impact on nature. More information about the policy and requirements is available in the chapter A driving force for sustainable investments. 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: • • • investments in Storebrand’s total Emission targets for equity, corporate bonds, and real estate investments: We have a goal of reducing the carbon footprint89 in equities, corporate bonds and real estate by at least 32 per cent by 2025 (base year in 2018). 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 companies90, green bonds, certified green real estate and investments in green infrastructure. Be an active owner and driving force: In 2022, we focused on the 20 companies with the highest emissions.91 The impact work took place mainly in collaboration with other investors, including Climate Action 100+, and included meetings with executive management of the largest emitters in our portfolio. 87) 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 88) Solutions are defined as equity investments and bond investments in solution companies (companies that we believe are well positioned to solve challenges related to the UN Sustainable Development Goals), investments in green bonds, green infrastructure, and investments in certified green real estate. 89) Calculated as Weighted Average Carbon Intensity. See the full list of our financed emissions per sector and region on page 247. 90) See definitions for investments in solutions on page 245 in the appendix Sustainability indicators and definitions. 91) Calculated based on the share of owned share capital in the company multiplied by the company’s total Scope 1-2 emissions. Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix 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 an example of this. Overview of companies in prioritised high-emitting sectors Industry & Materials • • • • • Alcoa Corp Canfor Pulp Products Inc CF Industries Holdings inc Elkem ASA Holcim AG Linde PLC • • Norsk Hydro ASA • • • Republic Services Inc Sibanye Stillwater Ltd SSAB Svenskt Stal Steel Dynamics Inc • • Waste Management Inc • West China Cement Ltd • Westlake Corp • Yara International ASA Shipping • Wallenius Wilhelmsen ASA • AP Moller - Maersk AS Oil & Gas • • • Equinor ASA Shell PLC Lyse AS Lower expected future returns for fossil fuel companies than for solution companies is because the effects are assumed to be greater or to come faster than expected for solution companies. 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, also when the effects of climate risk are considered. Stress test transition risk - Rapid transition scenario Transition risk will have both a positive and negative impact on various companies and other players. However, in restructuring processes, the negative effects often come first, even though the positive effects may be at least as great over time. To quantify the risk from a rapid transition to zero emissions, Storebrand has defined a stress test that includes fossil fuel companies, climate-related solutions companies and real estate. Fossil fuel companies are stressed -50 per cent, while solution companies are stressed +10 per cent. Real estate is stressed -5 per cent. 92 Stress test transition risk – Speedy Transition Scenario Equities/Bonds/Real Estate NOK Million portfolio Stress total return Share of total Contribution to Fossil fuel companies 1.70 % - 50.00 % Solutions companies (climate-related) Real Estate SUM 6.00 % + 10.00 % 7.50 % - 5.00 % - 0.65 % + 0.60 % - 0.38% - 0.43 % Since Storebrand has taken tangible measures to reduce exposure to the fossil fuel sector and increased exposure to companies that contribute to solving climate challenges, it is assumed that the company’s funds would be less affected by the “Rapid transition” scenario. Stress test physical climate risk - Current Policy Scenario Physical climate change can have major consequences for economic growth and thus expected returns in the financial market. This will also affect Storebrand’s investments, and the consequences are greatest in the Current policy scenario. To quantify the risk associated with physical climate change, Storebrand has defined a stress test that includes equities, bonds and real estate, based on a decline of 20 per cent, 10 per cent and 2 per cent, respectively. 92) In the stress tests of transition risk and physical risk, selected stresses are used based on a discretionary assessment, but with a significant risk size to illustrate that the risk at the overall level remains limited for Storebrand. 88 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix Physical climate change and associated market consequences are very long-term. In practice, the consequences will probably be somewhat lower returns over many years, rather than as an immediate decline in value. But the financial market is pricing in all new information. An immediate stress test can therefore make sense, even if actual consequences occur far in the future. Stress test physical climate risk - Current Policy Scenario 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. MNOK Equities Bonds Real estate Other SUM Share of total Contribution to portfolio Stress total return 43.00 % 46.00 % 7.50 % 3.50 % -20.0 % -2.0 % -10.0 % 0.0. % -8.60 % -0.90 % -0.75 % 0.00 % -10.25 % Physical climate change, assuming that the current policy is continued, is also expected to have major consequences for the funds Storebrand owns, and the stress test shows an overall decline in value of approximately 8- 10 per cent. Exposure for different technologies The overview of high-emitting sectors in below shows our exposure to different sectors and the amount of emissions owned by each sector. Key indicators • • • • • • • Carbon footprint in equity investments: 14 tonnes of CO2 equivalents per NOK 1 million in sales revenue (against 18 index) 93 Carbon footprint in bond investments: 9 tonnes of CO2 equivalents per NOK 1 million in sales revenue (against 5 index)94 Carbon intensity in real estate investments: 5.6 kilo of CO2 equivalents per m2. Exposure to high-emitting sectors: NOK 49.7 billion / 11.3 per cent of total assets. Number of active dialogues related to climate and environmental risks and opportunities: 465 Number of companies that have been excluded due to serious climate and environmental damage: 199 Equity investments in fossil energy, NOK billion / share of equity investments: NOK 16.1 billion / 3.7 per Sector-specific exposure to high-emitting sectors 95 Sector Aluminium Aviation Cement Chemicals Energy Heavy duty automobiles Light duty automobiles Shipping Steel Utilities Grand Total 2019 (BNOK) 2020 (BNOK) 2021 (BNOK) 2022 Change 2019-2022 (BNOK) (BNOK) 1.2 3.6 0.4 8 12.2 0.9 3.8 0.6 1.1 2.9 34.6 1.5 3.3 0.6 9.8 7 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 2.5 3.4 0.9 12.8 16.1 1.3 4.9 1.7 2.7 3.4 49.7 1.3 -0.2 0.5 4.8 3.9 0.4 1.1 1.1 1.6 0.5 15.1 Other key performance indicators can be seen in the chapter A driving force for sustainable investment on page 64. 93) Data was obtained through Trucost (S&P Global) systems and weighted by market capitalization per position. For index figures, corresponding calculations are weighted per index and weighted together with the portfolios’ indices based on portfolio values. See chapter Sustainability indicators and definitions for a more detailed description of the calculation. 94) Data were obtained through Trucost (S&P Global) systems and estimated management data, weighted by market value per position. For index figures, corresponding calculations are weighted per index and weighted together with the portfolios’ indices based on portfolio values. See chapter Sustainability indicators and definitions for a more detailed description of the calculation. 95) This overview shows exposure to high-emission sectors based on climate risk considerations and uses GICS classification code because it is most adequate per sector. See chapter Financed emissions for details of financed emissions per sector. 89 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixClimate risk in real estate investments Storebrand manages direct real estate investments equivalent to NOK 79.4 billion, which represents 7.8 per cent of assets under management96. Physical risk is largely linked to the effects of extreme weather on physical assets. 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. 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 because 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. 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 is therefore a secondary strategy. towards a high global sustainability standard that reduces risk. Both frameworks include physical climate risk and transition risk as part of the overall assessment. The share of certified property is increasing and high in relation to the market, and a high proportion indicates reduced risk. The GRESB score for all portfolios is in the top 20 per cent globally, while SPP Fastigheter and Storebrand Eiendomsfond Norway have also been appointed “Sector Leader” globally in their categories. The average GRESB score for Storebrand’s four companies is 91 per cent, while the global average for over 1,800 reporting companies in 2022 is 74 per cent. Key indicators for climate risk in real estate: • • • Reduction of greenhouse gas emissions: measures to improve energy efficiency 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: Continuously improve management and ensure the maintenance of GRESB scores97. Carbon emissions kgCO2e/m2 per year 99 Certified green real estate, percentage share AuM 100 2019 2020 2021 202298 Goal 2025 9.12 7.9 6.0 5.6 Reduce 41 % 43 % 68 % 64.6 % 78 % GRESB-score 81.7 % 84.8 % 88.6% 91.5 % Increase Climate Risk in Life Insurance Life insurance obligations can be affected if the economy and financial markets are changed by climate risk. The risk may manifest itself both as increased disability and as an increase in the guaranteed pension obligation. The Norwegian economy may be particularly vulnerable to transition risk. A rapid transition to low emissions may result in higher unemployment in the fossil fuel sector, but also affect other industries (negatively) because economic activity is slowing. Historically, there has been a correlation between lower economic growth and a higher degree of disability. One consequence of the transition to low emissions may thus be increased compensation and the need for increased reservation for disability. 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 progress Storebrand’s cost of the guaranteed old-age pension obligation may increase if climate risk causes the return on investment over time to be lower than the return guarantee. However, stress tests show that the effect of climate risk is limited for investments. 96) Capital Investment included 97) Capital Investment that we acquired in 2021 has not yet reported to GRESB and is therefore not included in the data. 98) Capital Investment is only included in the database for certification in 2022. Therefore, target for 2025 has been adjusted downwards. 99) Carbon emissions targets currently only apply to properties in Norway and Sweden. Denmark is not included. 100) Share of direct real estate investments under operational control in Norway, Sweden and Denmark with environmental certification. The certification system is mainly BREEAM, but can also be LEED, Svanen or Miljöbyggnad. In 2022, we included Denmark for the first time. Certifications per country are the following: Norway (89%), Sweden (93%), Denmark (9%). 90 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixClimate risk Non-life 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. Such a development may pose a threat to Storebrand as a small player in insurance. Increased sharing of privately owned cars will also result in changed insurance needs. This, in combination with structural changes (car manufacturers are taking a greater role in the value chain), will in the longer term reduce the market for car insurance. Risk-reducing measures may include facilitating that ordinary insurance will also apply to private rentals. 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 analysing 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. Key indicators in insurance: • Share of insurance premiums from electric car insurance101: 25.6 per cent in 2022. • Our suppliers should have set targets for emissions cuts in the short and long term by 2025. All suppliers must be climate neutral by 2025.102 • Climate risk in asset management Storebrand Asset Management manages more than NOK 1,000 billion, both for Storebrand’s own companies and other institutional customers and private individuals. Storebrand has climate and other sustainability requirements for all investments. 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. For funds to be marketed as green or sustainable, according to the SFDR, they must either promote social or environmental characteristics (Article 8, light green) as part of their investment strategy or have sustainable investments as one of the investment objectives (Article 9, dark green). Based on the Group’s goal of being carbon neutral in our investments by 2050, we established a framework in 2021 with the goal of reducing the carbon footprint of Storebrand’s total investments in equities, corporate bonds and real estate, and shifting capital towards solution companies/solutions. In addition, we set goals to be an active owner and driving force, including through Climate Action 100+ and to hold meetings with the management of the 20 companies in which we had ownership interests, and which represented the largest emissions. In 2022, our climate targets were validated by the Science Based Target initiative (SBTi). Our obligations are as follows: • • • Storebrand ASA commits to reducing absolute scope 1 and 2 greenhouse gas emissions by 52 per cent by 2030, with 2018 as the base year. Storebrand ASA commits to continue purchasing 100 per cent renewable electricity annually until 2030. Storebrand ASA commits 42 per cent of its listed equity and corporate bond portfolio to set SBTi-validated targets by 2027. Storebrand ASA commits to reduce Scope 1 and 2 greenhouse gas emissions from its real estate portfolio by 64 per cent per square metre for residential buildings and by 71 per cent per square metre for commercial buildings (the management of direct real estate investments) by the target year 2030 from a 2019 base year. 101) Electric car insurance is defined as the share of private cars. 102) This objective allows suppliers to offset emissions they are unable to cut in the short term through the purchase of emission allowances. 91 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix For equities and corporate bonds, we have set a target for the proportion of investments that should have set science-based targets validated by SBTi by 2027, and for real estate we have used emission reductions using the Sectoral Decarbonization Approach (SDA) method. It is a risk to connect sustainability and climate to Storebrand’s brand and customer message if customers are more concerned about other factors when making purchases. Increased attention to 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. The high degree of sustainability-adapted investments entails a risk of somewhat lower returns than the market and competitors. Climate risk bank Storebrand Bank is a retail bank with daily banking services, deposit, and lending products. For small and medium-sized enterprises, the bank does not offer lending/credit products. Thus, the Bank has no direct exposure to companies in the fossil fuel sector, to energy- intensive companies or companies with directly or indirectly high greenhouse gas emissions (CO2). Climate risk for banking operations is considered to be low, both in terms of transition risk and physical risk, as well as specifically per risk. Transition risk The transition risk is greatest for the business through a rapid transition to low emissions. A rapid restructuring may lead to higher unemployment and reduced employment. This has a negative effect on wage growth and may affect customers’ ability to serve. With weaker labour market and wage developments, in addition to potential economic uncertainty, the housing and property markets may be adversely affected. 103 The transition risk may thus lead to a higher degree of default, weaker development of collateral values and thus higher losses given defaults that have a negative impact on the result. Growth may be lower, which may also result in weaker profitability. The transition risk is considered low for banking operations. Energy classification and energy consumption lending portfolio Energy consumption in homes accounts for a large part of total energy consumption in Europe. The homes have very varying degrees of energy efficiency. Energy classification of dwellings and properties shall provide an assessment of energy efficiency and energy classification is required for the sale of dwellings. With rapid transition to low emissions, homes with a weak energy classification may have weaker price developments than homes with a good energy classification. It poses a transition risk. The risk is shared between customers and the bank. Such a development will result in weaker security developments and higher losses given defaults for the bank than for the average house in terms of energy class. The Norwegian “Bygningsdirektiv” (Building directive) will have significance for homes in the weakest energy class “G”. The proposal from the European Commission is that such homes must be renovated and at least achieve energy class “F” from 2030. A large portfolio of Class “G” homes can then be challenging. According to the Building Directive, all new properties from 2030 must be zero- emission properties. This may also have restructuring effects in the housing market. Storebrand has an energy class for a larger share of its mortgage portfolio than the rest of the market. The reason is probably that large parts of the Bank’s portfolio are in Oslo and central parts of Eastern Norway where housing market liquidity is greatest. The bank’s primary lending product “Mortgage Future” presupposes the implementation of energy classification, which positively affects the share of energy-classified housing. The table below shows the bank’s lending portfolio based on energy labels. In addition, a separate row has been added for dwellings with the standards TEK 10 and TEK 17. It is assumed that these dwellings have at least an energy label of “B”. Lending volume in Storebrand bank Broken down by energy classes and technical standard at the end of the fourth quarter of 2022. Green share is volume in “A”, “B” or “TEK 10 / TEK 17” in relation to the lending volume. Energy label / technical standard Lending volume MNOK A B TEK 10 / TEK 17 C D E F G Missing data Green share 553 9,026 4,788 2,302 9,771 11,243 7,417 16,959 4,487 20.2% 103) Political uncertainty may arise due to rapid changes and transitions in the current unstable period of time. Investors and Business owners are more unsure of the regulatory framework condi- tions and that may affect macro image negatively. Seen in isolation, it gives a weaker macro image and higher required rate of return and lower prices. 92 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixGreen share 25.0 % 20.0 % 15.0 % 10.0 % 5.0 % 0.0 % 12.4 % 11.9 % 13.2 % 12.3 % 13.8 % 12.9 % 14.2 % 13.2 % 15.1 % 14.2 % 15.4 % 14.6 % 15.2 % 14.4 % 6.6 % 6.9 % 7.5 % 7.5 % 7.1 % 7.0 % 2.9 % 20.2 % 19.1 % 10.0 % Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Green mortgages % of assets Green asset ratio % Green assets % liquidity portfolio The green share of the lending portfolio is defined as mortgages secured on dwellings with an “A”, “B” or “TEK 10 / TEK 17” classification in relation to the lending portfolio. Storebrand’s green share is thus 20.2 per cent at the end of the fourth quarter of 2022. Physical risk lending portfolio Storebrand’s lending portfolio is to some extent exposed to physical risk. This applies to physical risk associated with the mortgaged objects. Property value collects different data on the property mortgages where the risk of different natural hazards is entered. The data are retrieved from the Norwegian Water Resources and Energy Directorate (NVE). The main natural hazards are quick clay, landslides in various forms and flood risk, both storm surges and flood zones. Mortgaged objects are exposed to these risks to varying degrees. There is a requirement that the mortgaged objects are insured, and the policyholder is insured against such natural damage. However, market value developments may be weaker for objects that have a greater risk of natural hazards than objects that are less exposed. Lending portfolio by various areas of caution104 Physical risk Flood Due Diligence Area Avalanche Due Diligence Area Flood Due Diligence Area Quick clay hazard level Not exposed Lending balance MNOK 4, 500 1, 357 297 917 59, 475 66, 546 104) Source: Eiendomsverdi (Norwegian property values service). Share 6.8 % 2.0 % 0.4 % 1.4 % Risk, storm surge, lending portfolio 2022, 2050 and 2090 Mean high tide Mean high tide storm surge - 20-year storm surge 20 - 200 years storm surge 200 - 1000 years storm surge 2022 146 172 62 86 2050 149 217 67 95 2090 243 227 1120 117 Not exposed Lending balance 66,079 66,546 66,017 66,546 65,387 66,546 Lending balance in relation to different areas of caution for flooding Flooding, areas of caution Areas of caution– flood zone 10 years Flood zone 10 years – 20 years Flood zone 20 years – 50 years Flood zone 50 years – 100 years Flood zone 100 years – 200 years Flood zone 200 years – 500 years Flood zone 500 years – 1000 years Not exposed Lending balance banking group MNOK 4,500 74 17 14 35 122 13 165 Share 6.76 % 0.11 % 0.02 % 0.02 % 0.05 % 0.18 % 0.02 % 0.25 % 61,606 66,546 92.58 % 100.00 % 89.4 % The bank’s physical climate risk is considered low because the share 100.0 % 93 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix of loans granted in areas where physical risk is limited. However, there is uncertainty associated with the risk of natural hazards. For the bank portfolio, it is difficult to determine the risk associated with damage caused by stormwater. This is especially true in urban areas, where stormwater measures and wastewater facilities can be undersized in relation to rainfall and intensity. can be valued by stakeholders in the short term, while increasing the risk of not achieving the goals. This applies in particular to an area where there are currently no credible plans from countries or companies that will ensure that it is possible to achieve the target of a maximum of 1.5 degrees of warming. 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. A customer base review shows that Storebrand has significant exposure to the fossil fuel sector. The risk of negative effects from transition risk may thus be great for customers in the fossil fuel sector. Reputational risk A high profile on sustainability and climate may entail a risk that customers or interest groups criticise Storebrand for not doing enough to adapt investments or reduce the climate impact of its own operations. In recent years, public attention to so-called “greenwashing” has increased. Greenwashing is a collective term for descriptions of something as more sustainable than it is, from a climate and environmental perspective. For Storebrand, sustainability is very much about indirect influence and indirect emissions through the companies we invest in. It may therefore be difficult to document specific effects achieved as a direct result of our role as a driving force or owner. In 2022, we reviewed internal policy documents on communication to reduce the risk of greenwashing. We also launched a mandatory training to increase employee awareness of what we mean by sustainability. Regular reporting progress on key parameters to reach our goal of net zero emissions by 2050 is important to maintaining trust among our stakeholders. We are constantly working on the collection of data to be able to carry out and report more accurate measurements. One risk in the longer term is that Storebrand’s goals are not considered sufficiently ambitious, or that we do not achieve them in line with the plans we have made. Our long-term goals are in line with the Paris Agreement, on a par with other investor communities such as the Net Zero Asset Owner Alliance. In Sweden, however, several of our competitors have communicated a more ambitious agenda to become climate neutral before 2050. Higher ambitions Regulatory risk New and expanded requirements for the management and reporting of climate and other sustainability-related issues are constantly emerging, especially from the EU. The most comprehensive new requirements are requirements in the So-called Disclosure Regulation (SFDR) for the categorisation of funds, requirements for reporting sustainability factors and sustainability risk, requirements to take sustainability preferences into account in investment advice and reporting in line with the taxonomy. These rules began to take effect in 2021, and entry into force has continued in 2022. Consideration of sustainability preferences in investment advice is the last to come into force, in August 2022. Also in 2023, updates and detailing of the regulations will continue to be implemented. Nature risk Loss of biodiversity can affect companies’ ability to create value for investors in the long term. Nature as a source of financial risk is now being reported together with the Sustainable Finance Disclosure Regulation (SFDR) and the Corporate Sustainability Reporting Directive (CSRD). Nature has already had an important place in the climate policy for investments, but in 2022 Storebrand launched a new and more detailed and separate policy for nature. Storebrand’s new105 industrial policy, with emphasis on the precautionary principle, sets significantly stricter requirements for companies with regard to nature than the Group’s climate policy does. The aim of the policy is to reduce our own exposure to natural hazards and encourage companies to reduce their negative impact. The policy is based on expectations that in the coming years there will gradually be more standardised company information on nature that will make it possible to shift capital flows away from companies with a high negative impact. 106 Nature risk is divided into physical risk because of changes in nature, transition risk, and regulatory risk because of changes in laws, regulations and framework conditions. In addition, there is reputational, or liability risk associated with lawsuits or complaints as a result of companies’ operational activities. We want our investment activities to contribute to the protection 105) Storebrand Policy on Nature: https://www.storebrand.no/en/asset-management/sustainable-investments/active-ownership/biodiversity-and-ecosystems/_/attachment/inline/42b9db43-4da4- 4333-a1cc-21680cf63260:6732fab29b23c226a80b1f117a10462748ff675b/86158%20-Storebrand-Policy-on-Nature.pdf 106) The policy includes new exclusion criteria that are further described in the chapter A driving force for sustainable investments. 94 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix of biodiversity. In 2022, we mapped sectors we are exposed in to get an overview of their dependence on natural resources. We also mapped how much impact we have on nature through our investments in companies, equities, and bonds. The analysis provided an overall and preliminary picture of our portfolio’s dependence on key ecosystem services and how the sectors/ companies we have invested in potentially affect nature. Further analyses will be conducted in the time ahead for addiction-related risks related to nature. 107 As an appendix to this report, we have prepared a TCFD table. This shows how we respond to different recommendations for reporting, and where in the report the information can be found. The index ensures transparency and makes it easier to find relevant information. The table is located on page 253. “More than half of the world’s total GDP depends on nature and the services it provides. Nevertheless, the value of nature is most often invisible when making decisions. Market prices capture only a small part of the value nature represents, despite the fact that ecosystem collapse poses a systemic risk to the world economy and society as a whole.” 107) Integrating Nature-Related Risk in the Finance Sector: Applying ENCORE to Storebrand Asset Management’s Activities. https://www.storebrand.no/en/asset-management/sustainable-investments/active-ownership/integrating-nature-related-risk-in-the-finance-sector/_/attachment/inline/5452d8d4-f3ae-403 d-8d39-391a846de5b7:7973967cc827e11b9604784abd671998087938f3/Storebrand%20ENCORE%20Analysis%20Report_FINAL.pdf 95 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixWorking environment and HSE Storebrand’s sick leave rate among employees has been at a stable low level for many years. Sick leave among employees was 3.2 per cent in Norway and 1.9 per cent in the Swedish business in 2022. 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. Managers are encouraged to discuss ethics, ethical dilemmas, information security, financial crime and HSE in departmental meetings. This is followed up and further measures are implemented as needed. Storebrand believes it is important that employees learn more about HSE to increase employee well-being and security. In 2022, Storebrand therefore chose to focus on HSE by consolidating several HSE-related activities into a separate HSE week. The week included several HSE activities where employees could sign up to increase knowledge and help create a safer workplace, such as defibrillator courses and first aid courses. In addition, all employees received a voluntary offer to take the free flu vaccine. Storebrand’s employees regularly respond to employee engagement surveys (so-called pulse measurements, which are conducted every two weeks or monthly). These heart rate measurements are extended with an HSE survey twice a year, one of which was sent out in connection with the HSE week. Storebrand had one accident that resulted in personal injury in 2022. No damage to property was reported. 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 233-246. A separate salary report has been defined by the Board of Storebrand ASA and is available on our website. Insurance for Board Directors and the company’s Group Executive 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 because of claims made against the insured for personal management responsibility during the insurance period. 96 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixProgress on our most material sustainability KPIs Carbon intensity from equity investments: tonnes of CO2e per NOK 1 million in sales income (against index) 12 (18) 14 (18) N/A108 Status 2021 Status 2022 Target 2025 Carbon intensity from bond investments: tonnes of CO2e per NOK 1 million in sales income (against index) 109 Carbon intensity property investments: kg CO2e/m2 9 /17) 6.0 9 (5) 5.6 Exposure to high emission sectors: NOK billion/share of equity investments 42.5 / 9 % 49.7 /11.3 % N/A107 6.5107 N/A Investments in solutions: NOK billion/ share of total AUM 123.1 / 11.2 % 126.8 / 12.4 % 15 % of AUM Property investments with green certificates: share of property investments 110 68 % 64.6 % 74 % Number of companies that have been contacted to discuss ESG through active ownership (share of invested capital) 111 601 / 12 % 645 (31.2 %) Number/share of women in Group Executive Management 3 / 33 % 5 / 56 % Number/share of women management level 3 22 / 37 % 27 / 42 % Number/share of women management level 1-4 83 / 39 % 86 / 37 % Gender balance management all levels: share of women 102 / 37 % 116 / 38 % N/A 50 % 50 % 50 % 50 % Engagement score all employees (Storebrand score/ industry average in Peakon, scale from 1-10) 8.4 (7.8) 8.4 (7.9) >8.0 s t n e m t s e v n I l e p o e P 108) Target to reduce the carbon footprint of the Storebrand Group’s total equity, corporate bond and real estate investments by at least 32 per cent by 2025 with a base year in 2018. 109) Previously, we have included government bonds (government, municipalities, etc.) together with corporate bonds, but now look exclusively at corporate bonds because it is best practice in both the industry and SFDR to look at the figures separately. 110) We have moved from reporting active ownership as part of the total investment universe to looking at it relative to our total investments to provide a better insight into the proportion of our investments we are in dialogue with. 111) In 2022, we included properties in Denmark for the first time. The share of environmentally certified real estate investments has therefore been somewhat reduced. Certifications per country are the following: Norway (89%), Sweden (93%), Denmark (9%). 97 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. AppendixLysaker, February 7, 2023 Board of Directors, Storebrand ASA Didrik Munch (sign.) 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 98 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s reportStrategy 2021-23 47Strategic highlights 2022 48The Group’s results 2022 53Official Financial Statements of Storebrand ASA 58Outlook 59A driving force for sustainable investments 64Risk 81Climate risk and opportunities 83Working environment and HSE 96Progress on our most material sustainability KPIs 976. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability Assurance10. Appendix6 Shareholder matters Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 2022 was NOK 2,360 million. The company has 471,974,890 shares with a nominal value of NOK 5. As of 31.12.2022, the company owned 7,764,226 own shares corresponding to 1.65 per cent of the shareholding. Of these, 6,477,024 shares were purchased as part of Storebrand’s share buyback program in 2022 with the intention of cancelling the shares. The company has not issued options that could lead to the dilution of existing shareholders. Foreign ownership At the end of 2022, the share of shares owned by foreign investors amounted to 50.1 per cent, compared with 50.1 per cent at the end of 2021. Trading volume for shares in Storeband In 2022, 313 million Storebrand shares were traded, up from 289 million shares in 2021. Turnover was NOK 25,181 million in 2022, up from NOK 22,931 million in 2021. Relative to the average number of shares, the turnover rate of the share was 66 per cent. 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 51 countries. Measured by market value, Storebrand was the 18th largest company on the Oslo Stock Exchange at the end of 2022. 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 2022, just over half of the Group’s employees subscribed for a total of 393,185 shares. Share-based remuneration for Group Executive Manage- ment Storebrand’s Group Executive Management shall to ensure that Storebrand 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 Group 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 2022 and actual equity exposure at the end of 2022. For more information, please refer to the Storebrand ASA Report on Salaries and Other Remuneration to Executive Personnel available on our website. Geographical distribution of shareholders 50 % - Norway 15 % - USA 8 % - Sweden 8 % - Germany 9 % - England 10 % - Other Name Odd Arild Grefstad Lars Aa. Løddesøl Vivi Måhede Gevelt Heidi Skaaret Jenny Rundbladh Jan Erik Saugestad Karin Greve-Isdahl Trygve Håkedal Tove Selnes Share-based remuneration as a share of gross salary Actual equity exposure 35 % 35 % 25 % 25 % 25 % 25 % 25 % 25 % 25 % 253 % 206 % 13 % 182 % 8 % 153 % 85 % 63 % 84 % 100 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 Date 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 7.8 per cent through 2022. In the corresponding period, the OSEBX index of the Oslo Stock Exchange ended at – 1.0 per cent, while the European insurance index Beinsur had a total return of 2.7 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 ambition of the Board of Director’s 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 175 per cent, the Board of Directors intends to propose special dividends or share buy backs. In 2022, NOK 3.50 per share was paid in ordinary dividend for the financial year of 2021. In addition, a share buyback program of NOK 500 million was conducted in the third quarter of 2022, corresponding to NOK 1.07 per share. Capital gains taxation Dividends for personal shareholders are taxable. Dividends after deduction for a shielding amount shall be multiplied by 1.72. This amount is taxed at the tax rate for capital income (22 per cent), which gives a real tax on dividends of 37.8 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) 2022 99.30 67.00 85.40 2021 92.08 62.30 88.52 2020 74.24 34.73 64.20 2019 73.98 50.86 69.02 2018 75.20 59.48 61.64 2017 47.10 28.45 45.92 Market cap 31/12 (NOK million) 40,307 41,779 30,034 32,289 28,836 20,660 Annual turnover (1000s of shares) 313,005 288,998 585,004 335,202 445,614 589,322 Average daily turnover (1000s of shares) Annual turnover (NOK million.) Rate of turnover (%) 1,237 25,819 66.32 1,147 22,931 61.60 2,321 30,552 125.10 1,346 21,348 71.70 3,094 30,477 95.30 2,780 21,249 131.00 Number of ordinary shares 31/12 (1000s of shares) 471,975 471,975 467,814 467,814 467,814 449,910 Earnings per ordinary share (NOK) Dividend per ordinary share (NOK) Total return (%) 5.07 3.70 7.75 6.68 3.50 42.90 5.02 3.25 -7.00 4.43 0.00 16.80 7.89 3.00 -4.70 4.73 1.55 31.40 101 2013201420152016201720182019202020212022102030405060708090100Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixAnnual General 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 Annual General Meeting must register with the company no later than 4 p.m. on the third business day before the meeting. Shareholders who have not registered their arrival before the deadline may attend in the Annual 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 prioritises extensive and effective communications with the financial market. Continuous dialogue with owners, investors and analysts is a high priority. The Group has its own investor relations department, which is responsible for establishing and coordinating the contact between the company and external connections such as stock exchanges, analysts, shareholders, and other investors. Quarterly reports and representations, as well as press releases, are posted on the Group’s website: http://www.storebrand.no/ir. The 20 largest shareholders Based on a screening of the shareholder list as of 31.12.2022. Fund Manager Folketrygdfondet Allianz Global Investors T Rowe Price Global Investments Vanguard Group EQT Fund Management KLP Alfred Berg BlackRock Storebrand Asset Management DNB Asset Management Handelsbanken Asset Management Nordea Asset Management Danske Bank Asset Management Storebrand ASA Solbakken AS OM Holding AS Eika Kapitalforvaltning Union Investment SSGA BNP arbitrage account Current rank Shares Ownership in % Change since 31.12.2021 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 46,533,752 32,427,101 27,896,744 17,199,843 14,900,000 14,093,381 12,775,215 10,578,279 10,484,540 9,658,063 9,525,608 9,288,690 8,960,545 7,764,226 6,770,000 6,465,577 5,891,665 5,762,251 4,797,339 4,777,778 9.86 6.87 5.91 3.64 3.16 2.99 2.71 2.24 2.22 2.05 2.02 1.97 1.90 1.65 1.43 1.37 1.25 1.22 1.02 1.01 -5,107,529 -441,210 -176,220 4,612,322 -3,602,130 -437,943 -3,757,654 2,186,073 1,010,282 -184,194 -326,454 1,737,478 -271,963 5,924,238 3,213 -2,359,626 2,169,330 4,572,114 312,343 4,738,238 102 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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 103 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 104 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 2022 48,870 -8 77 44 40 208 1,254 -20 -21,631 -2,107 -20,082 31 3,662 453 713 -314 4,913 16,101 -39,677 25,834 8,471 -6,142 -497 -1,374 -13,385 2,716 -596 2,120 270 2,390 2,376 14 2,390 5.07 468.4 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 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixSTOREBRAND GROUP Statement of total comprehensive income NOK million Profit/loss for the year Note 2022 2,390 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 Total -12 63 -63 -1 -13 -123 -15 -137 -150 2,240 2,226 14 2,240 2021 3,130 131 139 -139 8 140 -167 -52 -219 -79 3,051 3,042 9 3,051 105 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixSTOREBRAND GROUP Statement of Financial Position Note 31.12.22 31.12.21 27 28 29 30 1,289 7,339 1,174 442 10,31,32 11,741 10,31 109 10,31,33 52,546 31.35 14 7,720 8,13,31,36 453 8,10,13,31,37 23,516 10,13,31,38 33 10,31 317 319 4,573 55,005 166,554 1,104 6,667 1,266 387 12,955 67 38,503 32 11,024 543 27,706 903 489 3,543 54,912 160,101 30 8,469 7,141 10,31,32 110,299 104,974 10,31,32 10,31,33 0 7,402 18,679 311 8,13,34 33,481 13,34 31.35 1,689 800 8,13,31,36 8,10,13,31,37 10,13,31,38 33 10,31 270,079 132,699 14,026 6,757 9,938 614,629 781,184 8,441 23,051 13 33,376 1,659 638 277,783 140,810 4,012 7,443 6,443 615,784 775,885 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 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 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 106 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 31.12.22 31.12.21 0 0 0 9,31 39 13,163 24,445 327 37,935 10,585 23,952 13,192 24,291 226 37,709 11,441 33,693 39,40 575,051 575,457 22 27 9,13,31 9,13,31 9,13,31 10,13,31,38 10,13,31,38 29 9,31,41 162 1,363 403 19,478 32,791 713 11,994 1,120 10,630 55,005 743,249 781,184 181 832 502 17,239 24,924 208 2,935 1,210 14,643 54,912 738,177 775,885 Lysaker, 7 February 2023 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 107 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixSTOREBRAND GROUP Statement of changes in equity NOK million capital 1) shares premium equity differences equity 2) earnings capital 3) equity Share Own Share paid in translation Other retained Hybrid Total Equity at 31 December 2019 2,339 -2 10,521 12,858 1,208 21,631 22,839 226 35,923 Majority’s share of equity Total Currency Total 3,121 3,121 -167 -167 87 3 208 -79 3 042 9 9 3,130 -79 3 051 Profit for the period Total other comprehensive income elements Totalresultat for perioden Equity transactions with owners: Own shares Issues of shares Hybrid capital classified as equity Paid out interest hybrid capital Dividend paid Other Profit for the period Total other comprehensive income elements Total comprehensive income for the period Equity transactions with owners: Own shares Hybrid capital classified as equity Paid out interest hybrid capital Dividend paid Other Equity at 31 December 2021 2,360 -9 10,842 13,192 1,041 23,249 24,291 -7 21 320 -7 341 -97 -97 2 2 -1,513 -1,513 18 18 2,376 2,376 -123 -27 -150 -104 341 2 -9 -1,513 18 37,709 2,390 -150 -9 226 14 -123 2,348 2,226 14 2,240 -30 -30 -431 4 -431 4 -1,646 -1,646 2 2 100 -13 -460 104 -13 -1,646 2 Equity at 31 December 2022 2,360 -39 10,842 13,163 919 23,527 24,445 327 37,935 1) 471,974,890 shares with a nominal value of NOK 5. 2) Includes undistributable funds in the risk equalisation fund amounting to NOK 820 million and security reserves/natural perials capital amounting NOK 197 million. 3) Perpetual hybrid tier 1 capital classified as equity. 108 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 Receipts - loans from financial institutions Payments - repayments of loans from financial institutions Receipts - issuing of share capital / sale of shares to employees Payments - repayment of share capital Payments - dividends Receipts - hybrid capital Payments - interest on hybrid capital Net cash flow from financing activities 109 2022 2021 34,488 -24,218 -1,704 30,472 1,466 -152 -1,105 -6,542 7,912 40,616 -9,027 2,239 -30,148 1,447 610 -1,509 -3,567 -39,955 661 -2,405 -137 -632 -3,173 9,822 -1,932 -621 1,650 -2,708 -534 16,690 -16,789 45 -500 -1,646 100 -13 3,563 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 4,634 -5,784 44 -144 -1,513 -9 4,043 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixSTOREBRAND GROUP Statement of cash flow (continue) NOK million Net cash flow for the period 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 2022 1,051 3,611 20 4,681 109 4,573 4,681 2021 665 2,878 68 3,611 67 3,543 3,611 The cash flow analysis shows the Group’s cash flows for operating, investing and financing activities pursuant to the direct method. The cash flows show the overall change in means of payment over the year. Operating activities A substantial part of the activities in a financial group will be classified as operating. All receipts and payments from insurance activities are included from the insurance companies, and these cash flows are invested in financial assets that are also defined as operating activities. One subtotal is generated in the statement that shows the net cash flow from operations before financial assets and banking customers, and one subtotal that shows the cash flows from financial assets and banking customers. This shows that the composition of net cash flows from operational activities for a financial group includes cash flows from both operations and investments in financial assets. The life insurance companies’ balance sheets include substantial items linked to the insurance customers that are included on the individual lines in the cash flow analysis. Since the cash flow analysis is intended to show the change in cash flow for the company, the change in bank deposits for insurance customers is included on its own lines in operating activities to neutralise the cash flows associated with the customer portfolio in life insurance. Investing activities Includes cash flows for holdings in group companies and tangible fixed assets. Financing activities Financing activities include cash flows for equity, subordinated loans and other borrowing that helps fund the Group’s activities. Payments of interest on borrowing and payments of share dividends to shareholders are financial activities. Cash/cash equivalents Cash/cash equivalents are defined as claims on central banks and loans to and claims from financial institutions. The amount does not include claims on financial institutions linked to the insurance customers portfolio, since these are liquid assets that are not available for use by the Group. 110 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 Events after the balance sheet date 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 111 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNote 1: Selskapsinformasjon og regnskapsprinsipper 1. COMPANY INFORMATION Storebrand ASA is a Norwegian public limited company that is listed on the Oslo Stock Exchange. The consolidated financial statements for 2022 were approved by the Board of Directors of Storebrand ASA on 7 February 2023. 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 result 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 deferred until implementation of IFRS 17. The Storebrand Group qualifies for temporary deferral of IFRS 9 because over 90 per cent of the Group’s total liabilities as at 31 December 2015 were linked to the insurance businesses. For the Storebrand Group, IFRS 9 will be implemented together with IFRS 17 from 1 January 2023. The Storebrand Group has conducted a provisional analysis of the classification and measurement of financial instruments in accordance with the present IAS 39 for the transition to IFRS9, based on the 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 income upon transition to IFRS9, a SPPI (”Solely payment of principal and interest”) test is carried out. A significant majority of the financial assets are measured at fair value (the fair value option is used). The Ministry of Finance has stipulated regulatory provisions that permit pension providers to recognise investments that are measured at fair value through total comprehensive income in accordance with IFRS 9 at amortised cost in the customer and company accounts. For the consolidated financial statements, the financial assets will be measured at fair value through profit or loss, where the fair value option is used because the insurance liabilities are measured at fair value. 112 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix IFRS9 - FINANCIAL INSTRUMENTS TO AMORTISED COST AND FVOCI NOK million Financial assets Bank deposits Bonds and other fixed-income securities Loans to financial institutions Loans to customers Loans to customers Accounts receivable and other short-term receivables Total financial assets Financial liabilities Deposits from banking customers Liabilities to financial institutions Debt raised by issuance of securities Subordinatd loan capital Other current liabilities Total financial liabilities IAS 39 IFRS 9 after IAS 39 after IFRS 9 after IAS 39 after IFRS 9 classification classification 1.1.2022 1.1.2022 31.12.2022 31.12.2022 Booked value Fari value Booked value Fari value AC AC AC AC AC AC AC AC AC AC AC AC FVOCI AC FVOCI AC AC AC AC AC AC AC 9,986 12,955 67 9,986 12,981 67 14,511 11,741 109 14,510 11,189 109 38,086 38,086 49,146 49,146 416 416 452 452 11,661 73,172 11,661 73,199 8,519 84,477 8,519 83,924 17,239 17,239 19,478 19,478 502 24,924 11,441 14,643 68,749 502 25,000 11,441 14,643 68,824 403 32,791 10,585 10,630 73,887 403 32,777 10,556 10,629 73,842 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 1.1.2022 1.1.2022 31.12.2022 31.12.2022 Booked value Fari value Booked value Fari value Shares and fund units FVP&L (FVO) Bonds and other fixed-income securities FVP&L (FVO) Bonds and other fixed-income securities AC FVP&L FVP&L FVP&L FVP&L FVP&L 278,326 278,326 270,532 270,532 168,516 113,416 7,931 23,052 168,516 116,745 7,931 23,060 156,215 117,701 7,075 21,628 156,215 108,489 7,075 21,193 FVP&L (FVO) AC Loans to customers Loans to customers Derivatives Total financial assets Financial liabilities Derivatives Total financial liabilities FVP&L/ Hedge accounting FVP&L/ Hedge accounting 4,912 3,816 14,343 14,343 596,153 598,395 587,494 577,848 FVP&L/ Hedge FVP&L/ Hedge accounting accounting 3,144 3,144 2,048 2,048 12,708 12,708 12,708 12,708 An assessment of the effects for the Storebrand Group upon transition from IAS 39 to IFRS 9 shows that the most significant changes in the transition from IAS 39 to IFRS 9 will be linked to hedge accounting and new calculation of expected losses. According to IFRS 9, provisions for losses must be calculated based on expected credit losses when establishing a commitment and must be continuously assessed for impairment in subsequent periods. At year-end 2022, expected credit loss (ECL) was calculated at NOK 60.4 million for the Storebrand Group. The expected credit loss has not changed significantly when compared with the loss provision under IAS 39. The most important changes in hedge accounting for the Storebrand Group are that IFRS 9 sets different criteria than IAS 39 for being able to use hedge accounting. It is no longer a requirement under IFRS 9 that the hedging arrangement needs to be within a specific interval, and it is now possible to rebalance the hedge under existing hedging arrangements and it is also possible to use multiple hedging instruments for the same hedge item. The transition to IFRS 9 has no accounting effects for existing hedging. 113 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 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. Intangible assets are 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 No new accounting standards that have a significant impact on the consolidated financial statements were implemented in 2022. For changes in estimates, see Note 2 for further information. 5. New IFRS that have not entered into force New standards and changes in standards that have not come into effect: 5.1 New standards and changes to the accounting policies applied IFRS 17 replaces IFRS 4 Insurance Contracts effective from 1 January 2023. IFRS 17 Insurance Contracts introduces new requirements for the recognition, measurement, presentation and disclosure of issued insurance contracts and reinsurance contracts. The purpose of the new standard is to establish uniform practices for the accounting treatment of insurance contracts and greater transparency between insurance companies. Storebrand will only implement IFRS 17 in the statutory reporting for Storebrand Forsikring AS (P&C insurance business). For the remaining companies within the Storebrand Group, including the life insurance companies, the statutory reporting will remain unchanged in the company accounts from the present date. The Storebrand Livsforsikring Group and the Storebrand Group will implement IFRS 17 in the consolidated financial statements. 5.1.1 Scope: IFRS 17 establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts. An insurance contract pursuant to IFRS 17 is a contract in which Storebrand accepts significant insurance risk from a policyholder by consenting to pay compensation to the policyholder if an insured event adversely affects the policyholder. When classifying contracts under IFRS 17, the company takes into consideration its substantive rights and obligations, irrespective of whether these stem from a contract, a law, or a regulation. Contracts that have a legal form of an insurance contract, however that do not expose the company to significant insurance risk, are classified as investment contracts under IFRS 9. 114 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixStorebrand uses reinsurance to limit insurance risk. Reinsurance contracts are covered by IFRS 17, but since the reinsurance programme is relatively limited, it is not expected to have a major impact on the accounts. 5.1.2 Aggregation level for insurance contracts Under IFRS 17, insurance contracts are measured at group level. Groups of insurance contracts are determined by identifying portfolios of insurance contracts that include contracts that are subject to similar risk and are managed together. Storebrand identifies groups of insurance contracts by assessing the underlying insurance risk in the contracts and how changes in underlying assumptions influence the contracts. The insurance risks that are used in the assessment of the aggregation level are described in more detail in Note 7. Furthermore, joint management is assessed based on, among other things, how the business areas follow up the insurance contracts internally, the levels used when reporting to management and in risk management. Contracts within different product lines or that are issued by different group companies are expected to be included in different portfolios of contracts. Contracts within a portfolio must be divided into: a. A group of contracts that are onerous at initial recognition. b. A group of contracts that at initial recognition have no significant c. possibility of becoming onerous subsequently. d. A group of remaining contracts in the portfolio. In addition, the standard prohibits the grouping of contracts issued more than one year apart in the same group. This involves requirements for further division into annual cohorts based on the year of issue. In adopting IFRS 17, the EU has introduced an optional exemption from annual cohorts for contracts with direct participation features. This means that portfolios of contracts with direct participation features are grouped solely based on profitability, irrespective of the year of issue. Storebrand has chosen to make use of the EU exemption from annual cohorts for contracts with direct participation features. 5.1.3 Cash flows within the boundaries of a contract When measuring a group of insurance contracts under IFRS 17, all future cash flows within the boundaries of an existing insurance contract are included. For some product lines, Storebrand expects significant changes in the scope of cash flows that will be included when recognising and measuring the insurance contracts. Cash flows are within the boundary of an insurance contract if they arise from substantive rights and obligations that exist during the reporting period in which the entity can compel the policyholder to pay the premiums or in which the entity has a substantive obligation to provide the policyholder with insurance contract services. Such an obligation to provide insurance contract services ends when: - Storebrand has the practical ability to reassess the risks of the particular policyholder and, as a result, can set a price or level of benefits that fully reflects those risks; or Storebrand has the practical ability to set a price or level of benefits that fully reflects the risk in the portfolio until the date when the risks are reassessed and does not take into account the risks that relate to periods after the reassessment date. - For guaranteed products, the boundaries of the contract will generally include future premiums, as well as the associated fulfilment cash flows. This is because the Group is unable to reassess the policyholder’s risk and thus cannot set a new price or level of benefits that fully reflects these risks. This applies both to the individual contract and at portfolio level. The estimated cash flows for a group of contracts include all ingoing and outgoing payments that are directly related to the fulfilment of insurance contract services. This includes benefits and compensation to policyholders including, but not limited to: - - - - - - - Premiums and any additional cash flows resulting from these premiums. Claims and benefits to or on behalf of a policyholder. Costs associated with handling compensation claims. Costs associated with handling and maintaining policies. Transfer to and from the company. Transaction-based taxes and fees for SPP. An allocation of fixed and variable joint expenses that are directly attributable to fulfilling insurance contracts (for example, costs of accounting, HR and IT). Allocation takes place at group level using systematic and rational methods that are applied consistently. In addition, cash flows arising from expenses relating to the sale, subscription and establishment of a group of insurance contracts will be included in the measurement of an insurance contract. This applies to cash flows that are directly attributable to the portfolio of insurance contracts to which the group belongs. 115 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix5.1.4 Measurement IFRS 17 introduces a measurement model in which earnings are recognised through profit or loss over time as the entity provides insurance- related services. The model is based on the present value of expected future cash flows that are expected to arise when the entity fulfils contracts, an explicit risk adjustment for non-financial risk and a contractual service margin (CSM). Insurance contracts are subject to different requirements for the measurement method based on whether the insurance contracts are classified as contracts with direct participation features that are measured according to the variable fee approach or contracts without direct participation features that are measured according to the general method. Insurance contracts with direct participation features are contracts in which: - - - The contractual terms specify that the policyholder participates in a share of a clearly identified pool of underlying items. The entity expects to pay to the policyholder an amount equal to a substantial share of the fair value returns on the underlying items. The entity expects a substantial proportion of any change in the amounts to be paid to the policyholder to vary with the change in fair value of the underlying items Storebrand determines whether a contract meets the definition of a contract with direct participation features when entering into the contract. There is no new classification of the contracts unless the contract is modified by amending the contract terms in such a manner that they no longer meet the aforementioned conditions. Storebrand issues a number of insurance contracts which are essentially investment-related service contracts for which the company promises a return on investment based on underlying items. These satisfy the definition of insurance contracts with direct participation features and include a substantial proportion of the Group’s guaranteed products. Insurance contracts with direct participation features are covered by IFRS 17 and are measured using the variable fee approach (VFA). Other insurance contracts do not have elements of direct participation and are primarily measured according to the premium allocation approach (PAA), with the exception of group disability pensions, which follow the general measurement method (GMM) due to the long coverage period. The premium allocation approach (PAA) is an optional, simplified measurement model adapted to insurance and reinsurance contracts with a short coverage period that is a maximum of one year. The coverage period is defined as the period during which the entity provides insurance contract services, which includes the insurance contract services that apply to all premiums within the limits of the contract. The premium allocation approach simplifies the measurement by the liability for the remaining coverage period being based on premiums received, rather than the present value of expected future fulfilment cash flows. Storebrand expects to apply the premium allocation approach to all P&C insurance and personal risk products in the Norwegian and Swedish markets, as well as employee insurance and certain pension-related insurance policies. Unit link for Storebrand and unit link at SPP are not considered to satisfy the definition of an insurance contract pursuant to IFRS 17 due to the insurance risk being considered immaterial. The contracts are therefore recognised in accordance with IFRS 9. Company Product category Measurement model Storebrand Livsforsikring Group pension, paid-up policy and paid-up policy with investment choice (Private) Individual endowment and pension insurance Group pension (Public) Company pension Group pension related disability Individual personal and person risk SPP Pension & Försäkring Individual pension insurance Group pension (Private) Individual pension related Storebrand Forsikring Non-life VFA VFA VFA VFA GMM PAA VFA VFA PAA PAA 116 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix5.1.5 Measurement: contracts that are not measured according to the PAA. At initial recognition, the carrying value of the liability will be measured as the sum total of: 1. An explicit, unbiased and probability-weighted estimate of all cash flows within the contract’s limit. 2. An adjustment for the time value of money based on a risk-free yield curve that is adjusted to reflect the liquidity of the cash flows. 3. An explicit risk adjustment for non-financial risk. 4. Contractual service margin (CSM) which represents the unearned profit the entity will recognise as it provides insurance contract services in accordance with the insurance contracts in the group. An insurance contract is not onerous at initial recognition if the following cash flows are a net inflow: a. The fulfilment cash flows that are allocated in the contract. b. Any previously recognised contract flows upon acquisition, and c. Any cash flows that arise from the contract at initial recognition. The contractual service margin is the amount that does not provide a profit in the income statement at initial recognition and is included in the insurance liability for contracts that are not onerous. The contractual service margin is systematically recognised in the income statement over the coverage period based on the pattern of transferred insurance contract services. Determining the dissolution pattern is subject to significant exercising of discretion and is determined by: • Identifying the coverage units in the group based on the quantity of the insurance contract services that are provided under the contracts in the group and the expected coverage period. Allocating the contractual service margin equally to each coverage unit provided in the current period and expected to be provided in the future. Recognising in profit or loss the amount allocated to coverage units provided in the period. • • The coverage units are determined based on the expected duration linked to the group of insurance contracts. For the calculation of the coverage unit per group of insurance contracts, the policyholders’ reserves are used as a basis for the assessment for Storebrand’s insurance contracts. For SPP, policyholder funds, including the deferred capital contribution (DCC), are used as a basis for the assessment of coverage units. If the contractual service margin is negative, the entity shall recognise a loss in profit or loss equivalent to the net outflow for the group of onerous contracts. The determination of a loss component entails that the carrying value of the liability for the group is equal to the fulfilment cash flows, and that the group’s contractual service margin is equal to zero after the loss recognition. Upon subsequent measurement, the carrying value of a group of insurance contracts at the reporting date will correspond to the sum total of the liability for remaining coverage and the liability for incurred claims. The liability for the remaining coverage period corresponds to the present value of future fulfilment cash flows that relate to future services and the remaining contractual service margin (CSM). The liability for incurred claims includes fulfilment cash flows that relate to incurred claims, including events that have occurred but for which claims have not been reported, and other incurred insurance expenses. The present value of expected future cash flows is updated at the end of each period based on updated estimates of future cash flows, yield curve and risk adjustment for non-financial risk. The change in fulfilment cash flows is recognised as follows for contracts measured using the VFA: Changes that apply to future services, such as changes in assumptions relating to long life expectancy, disability and mortality. Adjusted in relation to contractual service margin Changes that apply to current or previous services, for example, estimate discrepancies and incidents related to long life expectancy, disability and death. Recognised in profit or loss from insurance services Effect as a result of time value of money, financial risk and the effect of these on the cash flows Adjusted in relation to contractual service margin In the subsequent measurement, the contractual service margin is only adjusted for changes that apply to future services. This entails that changes in cash flows for future services are recognised as profit or loss as the company provides services. At the end of each reporting period, the contractual service margin represents the profit that is not recognised in the income statement as profit or loss because it relates to future services. One of the primary differences between the VFA and GMM is that when using the VFA, the CSM must be adjusted for effects resulting from market variables and their effect on the cash flows. The purpose of the adjustment is to reduce mismatch and volatility by recognising the entity’s share of changes in the value of the underlying portfolio in the service margin. 117 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixWhen applying the general method, the entity is not permitted to make such an adjustment. The change in fulfilment cash flows is thereby recognised as follows for contracts measured using the general method: Changes that apply to future services, such as changes in assumptions relating to long life expectancy, disability and mortality. Adjusted in relation to contractual service margin Changes that apply to current or previous services, for example, estimate discrepancies and events that have occurred that relate to long life expectancy, disability and mortality. Recognised in profit or loss from insurance services Effect as a result of time value of money, financial risk and the effect of these on the cash flows Recognised as financial insurance income or expenses. CONSEQUENCES OF THE CHANGES IN THE INCOME STATEMENT: Change from IFRS 4 The present value of fulfilment cash flows increases as a result of a reduction in discounting, since IFRS 17 requires the use of updated assumptions. IFRS 17 requires the calculation of a risk adjustment for non-financial risk that increases the present value of fulfilment cash flows. The contractual service margin upon transition is determined using the fair value method. Reclassification of risk equalisation reserve from equity to liability. Under IFRS 4, the value-of-in-force (VIF) that arises in connection with acquisitions is classified as intangible assets and amortized on an ongoing basis. With the introduction of IFRS 17, VIF is included as part of CSM and thus the total intangible assets will be reduced upon the transition to IFRS 17. Effect on equity upon transition to IFRS 17 Reduction Reduction Reduction Reduction Reduction 5.1.6 Contracts measured according to the premium allocation approach Upon initial recognition of each group of insurance contracts, the carrying value of the liability for the remaining coverage period will be measured as the sum total of premiums received as of the recognition date. Storebrand has chosen to recognise cash flows for the acquisition of insurance costs in the income statement as these are incurred. In the subsequent measurement, the carrying value of the liability for the remaining coverage period will be increased by new premiums received and reduced by the share of premiums the company recognises during the period for services the company has provided. Insurance income for the period is equal to the amount of expected premium payments allocated to the period. The expected premium payments are allocated over each period based on the passage of time, unless the expected pattern for release of risk during the coverage period differs significantly from the passage of time. Since Storebrand provides insurance services within one year of receiving the premiums, there will be no need to adjust the liability for the remaining coverage period for the time value of money in accordance with IFRS 17. If, at any time during the coverage period, facts and circumstances indicate that a group of insurance contracts is onerous, Storebrand will recognise a loss in the income statement and correspondingly increase the liability for the remaining coverage period. Storebrand will recognise a liability for incurred claims for claims that are incurred as of the reporting date. The cash flows for incurred claims are adjusted for non-financial risk (risk adjustment) and discounted using the current yield curve if cash flows are expected to be paid out more than 12 months from the claim date. The premium allocation model applies correspondingly to reinsurance contracts, with some adjustments which reflect that the reinsurance contracts held by the company generally entail that the insured company has a net asset and that the risk adjustment is negative. Change from IFRS 4 The present value of cash flows for fulfilment related to claims incurred is discussed if the cash flows are paid more than 12 months from the date of the claim. IFRS 17 requires the calculation of a risk adjustment for non-financial risk that increases the present value of fulfilment cash flows. This is not a requirement under IFRS 4. Effect on equity upon transition to IFRS 17 Increase Reduction IFRS 17 requires adjustment of the income profile/liability for remaining coverage if the expected pattern of release of risk during the coverage period differs significantly from the passage of time. Increase/decrease 118 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix5.1.7 Significant use of discretion and estimates IFRS 17 requires significant use of discretion and estimates during the classification, recognition and measurement of insurance contracts. Areas requiring significant use of discretion and estimates include: • • • • Estimation of fulfilment cash flows. Determination of discount rate. Determination of risk adjustment for non-financial risk. Identifying the coverage units in a group of insurance contracts and determining the pattern for recognising CSM over the coverage period based on the services that are provided. 5.1.8 Risk adjustment The risk adjustment for non-financial risk relates to risks arising from insurance contracts other than financial risk. The following non-financial risks will be included in the risk adjustment: • mortality • • • • • • long life expectancy disability/reactivation P&C insurance risk loss expenses disaster The risk adjustment under IFRS 17 will be calculated based on cost of capital. This shares similarities with the risk margin under Solvency II, with some adjustments, primarily the exclusion of operational risk and counterparty risk. The confidence level will be calculated by the partial internal model, including a simplified approach for risks not included in the partial internal model. 5.1.9 Discount rate To calculate a present value of future expected cash flows, a discount rate must be defined that reflects the time value of money and the financial risks associated with those cash flows. The discount curve is determined for the first time at the transition date and then continuously at each reporting date. Storebrand has chosen to use a bottom-up approach for determining the discount rate, whereby a risk-free yield curve is used that is adjusted for liquidity premium to reflect the liquidity characteristics of insurance contracts. 5.1.10 Transition to IFRS 17 The entity must disclose information that enables users of the financial statements to identify the impact on the measurement of the insurance contracts at the transition date. As a starting point, the retrospective transition method must be applied for the opening balance sheet, however a modified retrospective transition method or application is permitted based on the fair value at the transition date if retrospective application is impracticable. Storebrand has decided to use the determination of fair value at the transition date when transitioning to IFRS 17, where the retrospective transition method is not considered to be practicable. This applies to large parts of contracts with a coverage period of more than one year. Storebrand uses the fair value hierarchy in accordance with IFRS 13, where fair value has to reflect the market price that two well-informed parties would agree on as a fair transaction price. For products for which there is an active transfer market, the transfer value is used as an estimate of fair value. For product categories in which there is no active market, Storebrand uses relevant transactions as a reference point to determine the market price. By using the fair value approach at the transition date of 1 January 2022, the difference between the fair value of a group of contracts and the fulfilment cash flows, with the addition of risk adjustment in accordance with IFRS 17, will form the basis for the contractual service margin (CSM). For all contracts measured under the fair value approach, Storebrand has used reasonable and documentable information available at the transition date of 1 January 2022 to make assessments related to the recognition and measurement of the contracts, including: - - Determining the level of aggregation based on portfolios and profitability groups. Determining risk adjustment. Determining measurement method, including assessment of criteria for the use of PAA for contracts with a short coverage period and VFA for contracts that satisfy the definition of contracts with direct participation features. How to identify discretionary cash flows for insurance contracts without direct participation features Upon transitioning to IFRS 17, preliminary calculations indicate a decrease in equity of approximately 20% when compared to the present standard. There is uncertainty associated with the estimate and there may be changes leading up to the adoption of the quarterly report for the 1st quarter of 2023. The decrease in equity will largely be offset by the establishment of CSM. Under IFRS 4, the value-of-in-force (VIF) that arises in connection with acquisitions is classified as intangible assets and amortized on an ongoing basis. With the introduction of IFRS 17, VIF is included as part of CSM and thus the total intangible assets will be reduced upon the transition to IFRS 17. 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. 119 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix6. Consolidation The consolidated financial statements include Storebrand ASA and companies controlled by Storebrand ASA. Minority interests are included in the Group’s equity, unless there are options or other conditions that entail 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 Storebrand Danica AS, and the Swedish holding company Storebrand Holding AB, which in turn owns SPP Pension & Försäkring AB (publ). On acquiring the Swedish operations in 2007, the authorities instructed Storebrand to make an application to maintain a group structure by the end of 2009. Storebrand has filed an application to maintain the existing group structure. 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 2023. An exemption has been granted to operate life insurance activities in Storebrand Livsforsikring AS and Storebrand Danica Pensjonsforsikring AS until the end of 2023. Investments in associated companies (normally investments of between 20 per cent and 50 per cent of the company’s equity) in which the Group exercises significant influence, and investments in joint ventures are recognised in accordance with the equity method. Investments in associated companies and joint ventures are initially recognised at acquisition cost. Storebrand consolidates certain funds in the Group’s balance sheet when the requirement for control has been met. This encompasses funds in which Storebrand has an ownership interest of approximately 40 per cent or more, which are managed by companies in the Storebrand Group. In the Group’s accounts, such funds are consolidated fully in the balance sheet, and the non-controlling interests are shown on a line for assets and on a corresponding line for liabilities. The non-controlling interests can demand redemption of their ownership interests and, as a result of this, they are classified as liabilities in the consolidated financial statements of Storebrand. Currencies and translation of foreign companies’ accounts The Group’s presentation currency is Norwegian kroner. Foreign companies that are part of the Group and have different functional currencies are converted to Norwegian kroner. Translation differences are included in the total comprehensive income. Elimination of internal transactions Internal receivables and payables, internal gains and losses, interest, dividends and similar between companies in the Group are eliminated in the consolidated financial statements. Transactions between the customer portfolios and the company portfolio in the life insurance business and between the customer portfolios in the life insurance business and other companies in the Group will not be eliminated in the consolidated financial statements. The reason for this is that the result in the customer portfolio is assigned to the customers each financial year and must not influence the result and equity of the company. Pursuant to the life insurance regulations, transactions with customer portfolios are carried out at fair value. 7. Business combinations The acquisition method is applied when accounting for acquisition of businesses. The consideration is measured at fair value. The direct acquisition expenses are expensed when they arise, with the exception of expenses related to raising debt or equity (new issues). When making investments 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 decision- 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 statement includes gross income and costs linked to both the insurance customers and owners (shareholders). The segment results only include result elements relating to owners (shareholders) which are the result elements that the Group has performance measures and follow-up for. 120 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixFinancial services provided between segments are priced at market terms. Services provided from joint functions and staff are charged to the different segments based on supply agreements and distribution keys. 9. Income recognition Premium income Net premium income includes the year’s premiums written (including savings elements, administration premium, fees for issuing Norwegian interest rate guarantees and profit element risk), premium reserves transferred and ceded reinsurance. Annual premiums are generally accrued on a straight-line basis over the coverage period. Income from properties and financial assets Income from properties and financial assets are described in Sections 12 and 13. Other income Fees are recognised when the income can be measured reliably and is earned. Return-based revenues and performance fees are recognised when the uncertainty associated with the income is no longer present. Fixed fees are recognised as income in line with delivery of the service. 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 depreciated, but is tested for impairment annually when assessing the recoverable amount or if there are indications that impairment has occurred. In the subsequent measurement, Goodwill is allocated to the relevant cash generating units where future cash flows are expected to flow. If the discounted cash flow for the cash-generating unit(s) that goodwill is allocated to is lower than the recognised value, goodwill will be written down. Reversal of an impairment loss for goodwill is prohibited even if information later comes to light showing that there is no longer a need for the write-down or the impairment loss has been reduced. Intangible assets with limited useful economic lives are measured at acquisition cost less accumulated amortisation and any write downs. The useful life and amortisation method are reassessed 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. 121 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix Financial assets are derecognised when the contractual right to the cash flow from the financial asset expires, or when the company transfers the financial asset to another party in a transaction by which all, or virtually all, the risk and reward associated with 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 carrying amount and the present value of the estimated future cash flows (excluding future credit losses that have not occurred) discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate calculated at initial recognition). The amount of the loss is recognised in the income statement. Losses expected as a result of future events, no matter how likely, are not recognised. 13-2. Classification and measurement of financial assets Financial assets are classified into one of the following categories: • • • • Financial assets held for trading Financial assets at fair value through profit or loss in accordance with the fair value option (FVO) Financial assets held to maturity Financial assets, loans and receivables Held for trading A financial asset is classified as held for trading if: • • it has been acquired principally for the purpose of selling or repurchasing it in the short term, is part of a portfolio of identified financial instruments that are managed together and there is evidence of a recent actual pattern of short-term profit-taking, or it is a derivative that is not designated and effective as a hedging instrument. • With the exception of derivatives, only a limited proportion of Storebrand’s financial assets fall into this category. Financial assets held for trading are measured at fair value at the reporting date, Changes in fair value are recognised in the income statement. Fair value through profit or loss in accordance with the fair value option (FVO). A significant proportion of Storebrand’s financial instruments are classified in the category of fair value through profit or loss because: • such classification reduces the mismatch in the measurement or recognition that would otherwise arise as a result of the different rules for measuring assets and liabilities, or the financial assets form part of a portfolio that is managed and reported on a fair value basis • The accounting is equivalent to that of the held for trading category (the instruments are measured at fair value and changes in value are recognised in the income statement). Investments held to maturity Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity and that a company has the intention and ability to hold to maturity, with the exception of: • • assets that are designated upon initial recognition as assets at fair value through profit or loss, or assets that are defined as loans and receivables. Assets held to maturity are recognised at amortised costs using the effective interest method. The category is used in the Norwegian life insurance business for assets linked to insurance contracts with interest rate guarantees. 122 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 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. Derivatives are recognised at fair value through profit or loss. Changes in the value of the hedged item that are attributable to the hedged risk adjust the carrying amount of the hedged item and are recognised through profit or loss. Cash flow hedging Some borrowing in foreign currency is hedged by means of hedging instruments (derivatives). Storebrand uses cash flow hedging of the foreign exchange risk on the principal amount and foreign exchange risk for the credit margin. The net ongoing changes in value in the hedging instrument that is considered effective hedging are recognised in total comprehensive income and the non-effective share 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- uniform principles for the treatment of insurance contracts in consolidated financial statements. In the consolidated financial statements, the insurance liabilities in the respective subsidiaries are included as these are calculated on the basis of the laws of the individual countries. This also applies to insurance contracts acquired via business combinations. In such cases, positive excess values are capitalised as assets. Pursuant to IFRS 4, provisions for insurance liabilities must be adequate. When assessing the adequacy associated with recognised acquired insurance contracts, reference must also be made to IAS 37 Provisions, Contingent Liabilities and Contingent Assets, and Solvency II calculations. An explanation of the accounting policies for the most important insurance liabilities can be found below. 123 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 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 companies, 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 contracts, i.e. assumptions about mortality and disability rates, interest rates and costs. Premium tariffs are based on the observed level of mortality and disability in the population with the addition of security margins that include expected future developments in this respect. The premium reserve includes reserve amounts for future administration costs for all lines of insurance including settlement costs (administration reserve). In the case of paid-up contracts, the present value of all future administration costs is allocated in full to the premium reserve. In the case of contracts with future premium payments, a deduction is made for the cash value of the proportion of future administration costs expected to be financed by future premium receipts. A substantial proportion of the Norwegian insurance contracts have a one-year interest rate guarantee, meaning that the guaranteed return must be achieved every year. In the Swedish business, there are no contracts with an annual interest rate guarantee, but there are insurance contracts with a terminal value guarantee. Insurance liabilities, special investments portfolio Insurance liabilities associated with the value of the special investments portfolio must always equal the value of the investments 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 historical information are also used to estimate the reserves. Transfers of premium reserves, etc. (transfers) Transfers of premium reserves resulting from transfers of policies between insurance companies are recorded in the 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, buffer fund, conditional bonus and the profit for the year. Transferred additional reserves and buffer funds 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 business, parts of the selling costs are recorded in the balance sheet and amortised over the expected duration of the contract. 124 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix14-2. 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 assigned to the contract as surplus. Premium fund, deposit reserve and pensioners’ surplus fund The premium fund contains premiums prepaid by policyholders as a result of taxation regulations for individual and group pension insurance and allocated profit shares. The contribution fund contains payments and deposits for employees who have been members for less than 12 months. Credits and withdrawals are not recognised through the income statement but are taken directly to the balance sheet. The pensioners’ surplus fund comprises surplus assigned to the premium reserve in respect of pensions in group payments. The fund is applied each year as a single premium payment to secure additional benefits for pensioners. Buffer funds Rules for a combined and customer-distributed buffer fund were introduced for municipal pension schemes effective from 1 January 2022. The buffer fund replaces the previous additional statutory reserves and market value adjustment reserves for municipal pension schemes. The buffer fund is divided among the contracts and can be used to cover a negative interest result up to the contract’s annual interest rate guarantee. In the event that the company does not achieve a return that equals the annual interest rate guarantee in any given year, the buffer fund can be reversed from the contract to enable the company to meet the annual interest rate guarantee. This means that the buffer fund is reduced and that there is a corresponding increase in the premium reserve for the contract. Market value adjustment reserve The current year’s net unrealised gains/losses on financial assets at fair value in the group portfolio are allocated to or reversed from the market value adjustment reserve in the balance sheet assuming the portfolio has a net unrealised excess value. The portion of the current year’s net unrealised gains/losses on financial current assets denominated in foreign currencies that can be attributed to fluctuations in exchange rates is not transferred to the market value adjustment reserve. The foreign exchange fluctuations associated with investments denominated in foreign currencies are largely hedged through foreign exchange contracts on a portfolio basis. Similarly, the change in the value of the hedging instrument is not transferred to the market value adjustment reserve, but is charged directly to the 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. 125 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixConditional bonus and deferred capital contribution The conditional bonus arises when the value of customer assets is higher than the present value of the liabilities, and thus covers the portion of the insurance capital that is not guaranteed. In the case of contracts where customer assets are lower than liabilities, the owners’ result is charged via deferred capital contribution allocations. The conditional bonus and deferred capital contribution are recognised on the same line in the balance sheet as part of the buffer capital. 14-4. P&C insurance Costs related to insurance claims are recognised when the claims occur. The following allocations have been made: Reserve for unearned premium 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 information to be able to estimate reliable accounting obligations and costs. In Sweden, SPP has agreed, in accordance with the Finance Companies’ Service Pension Plan (BTP Plan), to collective, defined-benefit pension plans for its employees. A group defined-benefit pension implies that an employee is guaranteed a certain pension based on the pay scale at the time of retirement on termination of the employment. 15-1. Defined-benefit scheme Pension costs and pension obligations for defined-benefit pension schemes are determined using a linear accrual formula and expected final salary as the basis for the entitlements, based on assumptions about the discount rate, future salary increases, pensions and National Insurance benefits, future returns on pension plan assets as well as actuarial estimates of mortality, disability and voluntary early leavers. The net pension cost for the period comprises the total of the accrued future pension entitlements during the period, the interest cost on the calculated pension liability and the calculated return on pension plan assets. Actuarial gains and losses and the impact of changes in assumptions are recognised in total comprehensive income during the period in which they arise. Employees who resign before reaching retirement age or leave the scheme will be issued ordinary paid-up policies. 15-2. Defined-contribution scheme A defined-contribution pension scheme involves the Group in paying an annual contribution to the employees’ collective pension savings. The future pension will depend upon the size of the contribution and the annual return on the pension savings. The Group does not have any further work-related obligations after the annual contribution has been paid. No provisions are made for ongoing pension liabilities for these types of schemes. Defined-contribution pension schemes are recognised directly in the financial statements. 16. Tangible fixed assets and intangible assets The Group’s tangible fixed assets comprise fixtures and fittings, IT systems and properties used by the Group for its own activities. Inventory and IT systems are valued at acquisition cost less accumulated depreciation and any write-downs. Properties used for the Group’s own activities are measured at appreciated value less accumulated depreciation and write-downs. The fair value of these properties is tested annually in the same way as described for investment properties. The increase in value for buildings used by the Group for its own activities is recognised through total comprehensive income. Any write-down of the value of such a property is recognised first in the revaluation reserve for increases in the value of the property in question. If the write-down exceeds the revaluation reserve for the property in question, the excess is expensed over the 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 useful economic life of the asset. The disposal value is similarly reviewed. Properties are split into components if different parts have different useful economic lives. The depreciation period and method of depreciation are measured then separately for each component. 126 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 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 income statement. Reference is made to Note 27 - Tax for further information. 18. Provision for dividends The proposed dividend is classified as equity until approved by the general meeting and presented as liabilities after this date. The proposed dividend is not included in the calculation of the solvency capital. 19. Leases Leases are recognised in the balance sheet. The present value of the combined lease payments shall be recognised on the balance sheet as debt and an asset that reflects the right of use of the asset during the lease period. Storebrand has chosen to classify the right to use the asset as tangible fixed assets and the lease liability as other debt. The recognised asset is amortised over the lease period and the depreciation expense is recognised as an operating expense on an ongoing basis. The interest expense on the lease liability is recognised as a financial expense. Leases with a duration of less than 12 months and leases that include assets valued at less than approximately NOK 50,000 will not be recognised in the balance sheet, but 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 statements were prepared. A description of the most important elements and assessments in which discretion is used and which may influence recognised amounts or key figures is provided below and in Note 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. 127 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix In the consolidated accounts, insurance liabilities with a guaranteed interest rate are included, but using different principles in the Norwegian and the Swedish activities. An immaterial asset (value of business in-force – VIF) linked to the insurance contracts in the Swedish activities is also included. This asset originated from Storebrand’s purchase of the insurance business. There are several factors that may have an impact on the size of the insurance liabilities including VIF, such as biometric factors relating to higher life expectancy, future returns and invalidity, as well as the development of future costs and legal aspects, such as amendments to legislation and judgments handed down in court cases, etc. In the long term, a low interest rate will represent a challenge for insurance contracts with a guaranteed interest rate and, together with a reduced customer buffer, may have an impact on the amount recorded that is linked to the insurance contracts. The Norwegian insurance contracts with guaranteed interest rates are discounted at the premium calculation rate (around 2.9 per cent). The Swedish insurance liabilities with guaranteed interest rates have been discounted by a yield curve that coincides with the Solvency II yield curve. In the Norwegian business, a significant share of the insurance contracts have annual interest rate guarantees. Changes in estimates and valuations may entail a change in the return on the customer portfolios. Depending on the size of any impairment in value, such impairment may be offset by a reduction in the market value adjustment reserve and additional statutory reserves, so that the effect on the owner’s result may be limited. Correspondingly, increases in values could, to a large extent, increase the size of such funds. In the Swedish business, there are no contracts with an annual interest rate guarantee, but there are insurance contracts with interest rate guarantees which enable them to receive a guaranteed terminal value. These contracts are discounted by a market-based calculated interest rate where parts of the yield curve used are not liquid. Changes in the discount rate may have a significant impact on the size of the insurance liabilities and impact the result. If the associated customer assets have a higher value than the recognised value of these insurance liabilities, then the difference will represent a conditional customer allocated fund – conditional bonus (buffer capital). Changes in the assumptions for future cost, mortality and other biometric assumptions may also have a significant impact on the recognised insurance liabilities. Changes in estimates and valuations may entail a change in the return on the customer portfolios. Depending on the size of any impairment in value, such impairment may be offset by a reduction in the conditional bonus, so that the effect on the owner’s result may be limited. If the value of the individual insurance contract is higher than the associated customer assets, the owner will have to cover the deficient capital. Further information about insurance liabilities is provided in Notes 7, 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 valuation during a 3 year period. Reference is also made to Notes 8 and 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 properties, and other financial instruments where theoretical models are used in pricing. Any changes to the assumptions could affect recognised amounts. The majority of such financial instruments are included in the customer portfolio. There is uncertainty linked to the valuation of fixed-rate loans recorded at fair value, due to variation in the interest rate terms offered by banks and since individual borrowers often have different credit risks. Reference is also made to note 13, in which the valuation of financial instruments at fair value is described in more detail. 128 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 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 managers of alternative investment funds. 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 review 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. The Ministry of Finance conducted an assessment of this issue in January 2023. In the view of the Ministry of Finance, the Insurance Activities Act does not adequately clarify that there is a requirement for using gross method accounting. In light of the fact that the legal status is considered unclear, and in order to ensure uniform practice in the industry, the Ministry is of the opinion that there is a need to clarify the rules by way of legislative or regulatory amendment. The Ministry of Finance has therefore asked the Financial Supervisory Authority of Norway to carry out an assessment of how management fees associated with the investment of customer funds into funds should be treated in accordance with the rules for price tariffs and profits, and that the Financial Supervisory Authority of Norway prepares a consultation memo with proposed statutory or regulatory provisions based on this assessment. Deferred tax and uncertain tax positions Calculation of deferred tax assets, deferred tax liabilities and the income tax expense is based on the interpretation of rules and estimates. The Group’s business activities may give rise to disputes, etc. related to tax positions with an uncertain outcome. The Group makes provisions for uncertain and disputed tax positions with best estimates of expected amounts, subject to decisions by the tax authorities in accordance with IAS 12 and IFRIC 23. The provisions are reversed if the disputed tax position is decided to the benefit of the Group and can no longer be appealed. Reference is made to further information in Note 27. Note 3: Acquisitions DANICA PENSJONSFORSIKRING NORGE Storebrand Livsforsikring AS has acquired Danica Pensjonsforsikring AS. Danica is the sixth largest provider of defined-contribution pensions in Norway, with a 5 per cent market share. In addition to managing NOK 22 billion in defined-contribution pensions for 14,000 companies and 98,000 active members, Danica manages NOK 6 billion of retail savings and a portfolio of guaranteed products of NOK 1 billion. Total assets under management amount to approximately NOK 30 billion. Danica also offers commercial and personal risk products, totalling approximately NOK 300 million in annual premiums for own account. The transaction was completed on 1 July 2022. The transaction was announced on 20 December 2021, and was approved by the Financial Supervisory Authority of Norway in June 2022. In connection with the acquisition, the company has changed its name to Storebrand Danica Pensjonsforsikring AS. A parent-subsidiary merger was completed on 2 January 2023. 129 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixACQUISITION ANALYSIS DANICA Book values in the Excess value upon company acquistion Book values Assets - Distribution - Customer relationships - IT systems Total intangible assets Financial assets Other assets Bank deposits Total assets Liabilities Insurance liabilities Current liabilities Deferred tax Net identifiable assets and liabilities Goodwill Fair value at acquisition date/cash payment INCOME STATEMENT Income 1) Profit 2) 21 21 28,479 309 362 29,170 27,724 282 24 1,140 260 809 -21 1,048 1,048 68 18 240 722 260 809 1,069 28,479 309 362 30,218 27,792 300 264 1,862 186 2,048 After acquisition Before acquisition 2,905 87 -782 29 1) According to the Group’s statement, income includes premium income, net financial result and other income. 2) According to the Group’s statement, profit includes premium income, claims, changes in insurance liabilities, financial result and other income and expenses. S:t Erik Livsförsäkring AB SPP Pension & Försäkring acquired S:t Erik Livsförsäkring AB on 8 July 2022. The company manages the City of Stockholm’s pension agreements through the employees of the Stockholm Stadshus Group. The company manages approximately SEK 2.3 billion, distributed among 5,000 members. The company was merged with SPP Pension & Försäkring from 1 November 2022. ACQUISITION ANALYSIS S:T ERIK Assets - Customer relationships Total intangible assets Financial assets Other assets Bank deposits Total assets Liabilities Insurance liabilities Deferred tax Net identifiable assets and liabilities Fair value at acquisition date/cash payment Book values in the Excess value upon company acquistion Book values 30 30 30 30 30 30 2,289 32 382 2,733 2,443 30 260 260 2,289 32 382 2,703 2,443 30 230 130 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixINCOME STATEMENT Income 1) Profit 2) Etter overtakelse 3) Før overtakelse -77 2 -160 -26 1) According to the Group’s statement, income includes premium income, net financial result and other income. 2) According to the Group’s statement, profit includes premium income, claims, changes in insurance liabilities, financial result and other income and expenses. 3) Following acquisition is from the date of purchase until 1 November 2022, when St:Erik was merged with SPP Pension og Försäkring AB QUANTFOLIO AS Storebrand Asset Management AS purchased 3,100,000 shares in Quantfolio AS on 11 January 2022 at a purchase price of NOK 65 million. This represents a 34.13% ownership interest in the company. Quantfolio is a fintech company that provides B2B(2C) advisory technology to banks and asset managers throughout the Nordic region. KRON AS Storebrand ASA entered into an agreement to acquire the Norwegian fintech company Kron AS (”Kron”), and the transaction was approved by the Financial Supervisory Authority of Norway in December 2022. The company has its office in Oslo. The transaction was completed on 3 January 2023. Kron offers its customers a wide selection of funds through engaging digital tools and digital consulting. The company was established in 2017 as a spin-off from the Nordic financial advisory firm, Formue. Approximately NOK 7 billion is managed on behalf of 67,000 retail market customers who have established an investment account on Kron’s platform. Kron has also assumed a position as a popular alternative for people who want to manage their pension account with a provider of their choice. The purchase price (equity value) was NOK 399 million. Additional consideration will be contingent on future business development at Kron. Kron’s annual financial statements were not completed as of 31 December 2022, and an acquisition analysis will be presented in the quarterly accounts for the first quarter of 2023. Note 4: Resultat per segment Storebrand’s business activities are divided into the following result areas: Savings, Insurance, Guaranteed Pension and Other. Savings Consists of products that include long-term saving for retirement with no interest rate guarantees. The business area consists of defined contribution pensions in Norway and Sweden, asset management and retail banking products. In addition, certain other subsidiaries are part of Storebrand Livsforsikring and SPP. 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 insurances. Other The result for the holding company Storebrand ASA is reported under Other, as well as the result for the company portfolios 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. 131 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix Reconciliation between the profit and loss statement and alternative statement of the result (segment) The results in the segments are reconciled against the Group result before amortisation and write-downs of intangible assets. The Group’s income statement includes gross income and costs linked to both the insurance customers and owners (shareholders). The alternative statement of the result only includes result elements relating to owners (shareholders) which are the result elements that the Group has performance measures and follow-up for. The result lines that are used in segment reporting will therefore not be identical with the result lines in the corporate profit and loss account. Below is an overall description of the most important differences. Fee and administration income consists of fees and fixed administrative income. In the Group’s income statement, the item is classified as premium income, net interest income from bank or other income depending on the type of activity. The Group’s income statement also includes savings elements for insurance contracts and possibly transferred reserve. Price of return guarantee and profit risk (fee incomes) – Storebrand Life Insurance AS The return guarantees in group pension insurance with a return guarantee must be priced upfront. The level of the return guarantee, the size of the buffer capital (additional statutory reserves and unrealised gains), and the investment risk of the portfolio in which the pensions assets are invested determine the price that the customer pays for his or her return guarantee. Return guarantees are priced on the basis of the risk to which the equity is exposed. The insurance company bears all the downside risk and must carry reserves against the policy if the buffer reserves are insufficient or unavailable. The insurance result consists of insurance premiums and claims Insurance premiums consist of premium income relating to risk products (insurance segment) that are classified as premium income in the Group’s income statement. Claims consist of paid-out claims and changes in provisions for claims incurred but not reported (IBNR) and claims reported but not settled (RBNS) relating to risk products that are classified as claims in the Group’s income statement. Administration costs consist of the Group’s operating costs in the Group’s income statement minus operating costs allocated to traditional individual products with profit sharing. Financial items and risk result life and pensions include risk result life and pensions and financial result includes net profit sharing and Loan Losses. Risk result life and pensions consists of the difference between risk premium and claims for products relating to defined-contribution pension, unit linked insurance contracts (savings segment) and defined-benefit pension (guaranteed pension segment). Risk premium is classified as premium income in the Group’s income statement. The financial result consists of the return for the company portfolios of Storebrand ASA, Storebrand Livsforsikring AS and SPP Pension & Försäkring AB (Other segment), while returns for the other company portfolios in the Group are a financial result within the segment which the business is associated with. Returns on company portfolios are classified as net income from financial assets and property for companies in the Group’s income statement. The financial result also includes returns on customer assets relating to products within the insurance segment, and in the Group’s income statement this item will be entered under net income from financial assets and property for customers. 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’ interest profit before sharing, if it is not covered by the risk equalisation fund. Individual endowment insurance and pensions written by the Group prior to 1 January 2008 will continue to apply the profit rules effective prior to 2008. New contracts may not be established in this portfolio. The Group can retain up to 35 per cent of the total result after allocations to additional statutory reserves. Any negative returns on customer portfolios and returns lower than the interest guarantee that cannot be covered by additional statutory reserves/buffer reserves must be covered by the company’s equity and will be included in the net profit-sharing and losses line. 132 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 indexing of the insurance. Indexing is allowed up to a maximum equalling the change in the consumer price index (CPI) between the previous two Septembers. Pensions that are paid out are indexed if the 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 guaranteed 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 RESULT BY RESULT AREA NOK million Savings Insurance Guaranteed pension Other Group profit before amortisation Amortisation of intangible assets Group pre-tax profit 2022 1,653 580 903 -420 2,716 -596 2,120 2021 2,355 423 1,432 293 4,503 -527 3,976 133 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNOK million Fee and administation income Insurance result - Insurance premiums f.o.a. - Claims f.o.a. Operating cost Operating profit Financial items and risk result life & pension Group profit before amortisation Amortisation of intangible assets 1) Group pre-tax profit NOK million Fee and administation income Insurance result - Insurance premiums f.o.a. - Claims f.o.a. Operating cost Operating profit Financial items and risk result life & pension Group profit before amortisation Amortisation of intangible assets 1) Group pre-tax profit Savings 2022 4,733 2021 5,215 Insurance Guarranteed pension 2022 2021 2022 1,597 2021 1,631 1,670 6,088 -4,419 -1,112 558 22 580 1,201 5,175 -3,974 -875 326 97 423 -850 747 157 903 -3,031 1,701 -49 1,653 -2,927 2,288 67 2,355 Other 2) Storebrand Group 2022 -267 2021 -239 -15 -282 -138 -420 14 -225 518 293 2022 6,062 1,670 6,088 -4,419 -5,008 2,724 -8 2,716 -596 2,120 -890 741 691 1,432 2021 6,607 1,201 5,175 -3,974 -4,678 3,130 1,372 4,503 -527 3,976 1) Amortisation of intangible assets are included in Storebrand Group 2) Includes eliminations of group transactions GEOGRAPHICAL DISTRIBUTION The Storebrand Group are represented in the following countries: Segment/Land Norway Sweden Savings Insurance Guaranteed pension Other X X X X X X X X UK X Finland Denmark Germany Luxemburg Ireland X X X X X 134 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixSAVINGS IS THE PRIMARY ACTIVITY IN ALL JURISDICTIONS 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 2022 2021 5.07 37,935 23,483 314,992 1,019,988 67,061 7,822 73 % 18 % 91 % 273,465 46.5 % -2,892 6.3 % 19.6 % 184 % 49,570 21.3 % 17.2 % 6.68 37,709 21,212 308,351 1,096,556 57,033 6,445 77 % 17 % 94 % 290,862 48.5 % -2,591 11.2 % 17.8 % 175 % 74,074 20.3 % 16.8 % 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. 135 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 populations. Certain internal operational factors can also result in losses, e.g. errors linked to the management of the customers’ assets or payment of pension. Continuous monitoring and active risk management are core areas of the Group’s activities and organisation. 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. Styret Konsernsjef Konsernledelsen CRO Konsern Uavhengige kontrollfunksjoner Internrevisjon Risiko- styring Aktuar- funksjoner Compliance Anti-hvit-vasking (AML) Personvern (DPO) The boards of directors of both Storebrand ASA and the group companies have the overall responsibility for limiting and following up the risks associated with the activities. The boards set annual limits and guidelines for risk-taking in the company, receive reports on the actual risk levels, and perform a forward-looking assessment of the risk situation. The Board of Storebrand ASA has established a Risk Committee consisting of 3 Board members. The main task of the Risk Committee is to prepare matters to be considered by the Board in the area of risk, with a special focus on the Group’s appetite for risk, risk strategy and investment strategy. The Committee should contribute forward-looking, decision-making support related to the Board’s discussion of risk taking, financial forecasts and the treatment of risk reporting. Managers at all levels in the company are responsible for risk management within their own area of responsibility. Good risk management requires targeted work on objectives, strategies and action plans, identification and assessment of risks, documentation of processes and routines, prioritisation and implementation of improvement measures, and good communication, information and reporting. Independent control functions Independent control functions have been established for risk management for the business (Risk Management Function/Chief Risk Officer), for compliance with the regulations (Compliance Function), for ensuring the insurance liabilities are calculated correctly (Actuary Function), for data protection (Data Protection Officer), for money laundering (Anti Money Laundering) and for the bank’s lending. Relevant functions have been established for both the Storebrand Group (the Group) and all of the companies requiring a licence. The independent control functions are organised directly under the companies’ managing directors and report to the respective company’s board. In terms of function, the independent control functions are affiliated with Governance Risk & Compliance (GRC). GRC is a knowledge community headed 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. 136 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNote 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 purpose of operational risk management is to avoid operational incidents that impact customers, result in serious operational disruptions, violations of regulations and/or direct financial loss. The Group seeks to reduce operational risk through an effective system for internal control. Risks are followed up through the management’s risk reviews, with documentation of risks, measures and the follow-up of incidents. In addition, Internal Audit carries out independent checks through audit projects adopted by the Board. Contingency and continuity plans have been prepared to deal with serious incidents in business-critical processes. Cyber risk is becoming an increasingly more important operational risk. The threat landscape for cybercrime broadened in 2022 due to, among other things, organized crime and heightened geopolitical tensions. As a result of this situation, Storebrand had an elevated level of preparedness during parts of 2022. 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. Stable and secure technology and infrastructure are vital to the business and for reliable financial reporting. Errors and disruptions may impact both customer and shareholder trust. In a phase of the transition to cloud-based technology services, greater attention is being paid to the complexity and integrations in existing solutions. Cloud-based services and infrastructure have good inbuilt security solutions and reduce the risk associated with self-developed systems and, in the long term, outdated infrastructure. For those parts of the technology services that have been outsourced, risk-based follow-up of providers has been established with the aim of managing the risk associated with the IT systems’ development, management, operation and information security. Note 7: Insurance risk Storebrand offers traditional life and pension insurance as both group and individual contracts. Contracts are also offered in which the customer has the choice of investment. The insurance risk in Norway is largely standardised for contracts within the same product category as a result of detailed regulation from the authorities. In Sweden, the framework conditions for insurance contracts entail major differences between the contracts within the same product category. The insurance risk associated with an increase in life expectancy and thereby an increase in future pension payments (long life expectancy) 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. 137 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 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. Own pension account is also included in the Savings segment. Storebrand has no insurance risks related to own pension accounts. Occupational pension agreements (hybrid) are reported in the Savings segment when a customer has an agreement with a choice for investment of the pension assets. This is a small portfolio with limited insurance risk. In the Insurance segment, the Group has an insurance risk associated with disability and death. In addition, there are insurance risks associated with occupational injury, critical illness, cancer insurance, child insurance, 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 insurance 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 associated with the effect of the outbreak of Covid-19 on the insurance risk at Storebrand Livsforsikring. On the whole, it has been found that there is a need for the extraordinary provisions related to Covid-19, because there is considered to be an increased risk of disability among cohorts in connection with society having been locked down. This is linked to the effect in industries directly impacted by lockdowns among people who were able to remain in full-time employment despite reduced work capacity. It is also linked to greater pressure on industries in which employees are/were exposed to stress as a result of being required to travel to work while being exposed to the risk of contracting a virus that the authorities wanted to protect the population from. Some choose to leave their jobs. Others who have underlying illnesses, injuries or the like who qualify for sick leave with subsequent work assessment allowance use this rather than resigning or continuing to work. As an example, during the pandemic, there was a great deal of media attention around kindergarten employees who wanted to be prioritized for vaccination, precisely because of this same factor. The pandemic started almost three years ago and the effect of increased disability has still not fully materialized in the company’s standard provision models. The provisions as at 31 December 2022 are the company’s best estimate and these provisions are considered adequate. Rules for pensions from the first krone and day entered into force The rules for pensions from the first krone and day entered into force on 1 January 2022. The companies were given until 30 June 2022 to adjust their pension schemes to the new rules. Among other things, the new rules entail that there are 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) has been removed. Furthermore, the minimum requirement of having 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 are no longer be separate exemption rules for seasonal workers. The overall annual increased savings for Storebrand Livsforsikring are estimated at NOK 600 million. Increased savings also depend on how companies with savings rates that are higher than the minimum rate will potentially adapt the pension scheme. 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). 138 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixDescription of products Risk premiums and tariffs Guaranteed Pension Group pension insurance schemes in Norway follow the premiums for traditional retirement and survivor coverage in the industry tariff K2013. The premiums for disability pensions are based on the company’s own experience. Expense premiums are determined annually with a view to securing full cover for the next year’s expected costs. For individual insurance in Norway, the premiums for death risk and long life expectancy risk are based on tariffs produced by insurance companies on the basis of their shared experience. This applies to both endowment and pension insurance. Disability premiums are based on the company’s own experience. The risk premium for group insurance in Sweden is calculated as an equalised premium within the insurance group, based on the group distribution of age and gender, as well as the requirement for coverage of next of kin. The risk premium for individual insurance is determined individually 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. Management of insurance risk Insurance risk is monitored separately for every line of insurance in the current insurance portfolio. The development of the risk results is followed throughout the year. For each type of risk, the ordinary risk result for a period represents the difference between the risk premiums the company has collected for the period and the sum of provisions and payments that must be made for insured 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 disability cases. This cover is also subject to an upper limit. A reinsurance agreement for life policies covers death and disability risk that exceeds the maximum risk amount for own account the company practises. The company’s maximum risk amount for own account is relatively high, and the risk reinsured is therefore relatively modest. 139 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixThe 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 2022 2021 2022 2021 192 250 475 23 -8 1 933 26 281 180 -1 -38 -2 447 39 -16 98 -2 -17 22 123 83 3 48 -1 -22 30 139 Storebrand Danica Pensjons- forsikring 1) 2022 4 74 -14 -1 63 1) Figures for the entire year 2022, are included in the consolidated accounts from 1st July 2022. 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 2022, and these therefore had no impact on the results in the financial statements for 2022. 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 long life expectancy 140 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix GUARANTEED PENSION - NORWEGIAN BUSINESS (STOREBRAND LIVSFORSIKRING AND STOREBRAND DANICA PENSJONSFORSIKRING) Guaranteed pension NOK million private sector public sector pension Paid-up policies guarantee Total Group pension Group pension Occupational Individual with Mortality Longevity Disability Recovering to work after disability -3 -6 -3 -1 -2 -1 NA -3 NA -16 -19 -74 -10 -4 -4 -8 -3 NA -25 -93 -17 -23 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. The table below shows the estimated increase in the premium reserve. Effect on result before tax private sector public sector Paid-up policies guarantee Group pension Group pension Individual with Mortality Disability/recovering 243 44 154 27 1,118 206 69 Total 1,584 277 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. GUARANTEED PENSION AND SAVING - SWEDISH BUSINESS (SPP PENSION & FÖRSÄKRING) SEK million Mortality Longevity Disability Recovering to work after disability Guaranteed pension Savings Individual pension and occupational pension insurance Group pension Unit Linked | 3 43 17 -5 5 14 24 1 Total -23 9 57 41 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 long life expectancy and mortality have their full impact in SPP’s result. Furthermore, the need for increased provisions has been estimated as a result of a permanent change in the assumptions. The table below shows the estimated increase in the premium reserve. Disability cover for IF also includes risk insurance that is linked to Funds. SEK million Mortality Disability/recovering Individual pension and occupational pension insurance Group pension 259 41 556 11 Total 814 53 141 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixInsurance Effect on profit before tax 5 per cent change in premium income 5 percentage point change in combined ratio NOK million 304 277 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 percentage 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. 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. Nevertheless, changes in value do affect Storebrand’s profit indirectly. Income is based largely on the size of the reserves, while the costs tend to be fixed. Lower returns on the financial market than expected will therefore have a negative effect on Storebrand’s future income and profit. For customer portfolios with a guarantee, the net risk for Storebrand will be lower than the gross market risk. The extent of measures to reduce risk depends on several factors, the most important being the size and flexibility of the customer buffers and level and duration of the return guarantee. If the investment return is not sufficient to meet the guaranteed interest rate, the shortfall may be met by using customer buffers built up from previous years’ surpluses. For guaranteed customer portfolios, the risk is affected by changes in the interest rate level. Rising interest rates are a negative factor for the investment return in the short term because falling prices for bonds and interest rate swaps reduce investment returns and customer buffers. However, they are positive in the long term because this increases the likelihood of a return higher than the guarantee. Both short- term money market rates and long-term interest rates increased significantly in Norway and Sweden in 2022. The composition of the assets within each sub-portfolio is determined by the company’s investment strategy. The investment strategy also establishes guidelines and limits for the company’s risk management, credit exposure, counterparty exposure, currency risk, use of derivatives, and requirements regarding liquidity. ASSET ALLOCATION Properties at fair value Bonds at amortised cost Money market Bonds at fair value Equities at fair value Loans at amortised cost Other Total Customer portfolios Customer portfolios with guarantee without guarantee Company portfolios 13 % 40 % 7 % 15 % 8 % 17 % 0 % 2 % 0 % 1 % 16 % 79 % 2 % 0 % 1 % 27 % 15 % 37 % 0 % 19 % 1 % 100 % 100 % 100 % 142 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixStorebrand 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 share allocation and interest rate sensitivity of the investments were reduced during 2022. 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. Inflation and economic uncertainty continued to increase during 2022 and global GDP growth expectations were sharply revised downwards throughout the year. Inflation driven by supply chain bottlenecks, possible energy crisis and risk of recession, together with Russia’s invasion of Ukraine, impacted both the news situation and economic uncertainty. Central banks have commenced a series of resolute interest rate increases in an attempt to avoid further rising and/or continued inflation. The equity markets have been volatile and experienced a sharp decline since peaking around the New Year. Recession in the Eurozone has, in many ways, become the consensus, and the question now is to what extent future bailouts in the form of energy subsidies or for the labour market will curb the recession that was partly triggered by the war and subsequent energy crisis. Norges Bank has raised the key policy rate by 2.25 percentage points to 2.75 per cent and is signalling a further increase to about 3 per cent in 2023. Sveriges Riksbank (central bank of Sweden) has raised its key policy rate to 2.25 per cent from zero and is signalling that the interest rate will increase to just below 3 per cent in early 2023. The aforementioned economic uncertainty means that there is an elevated risk associated with the valuation of financial instruments. Storebrand has established risk management through guidelines and principles that mitigate the effect of volatile financial markets, however investment results are impact by the market downturn. There is thus greater uncertainty related to pricing of financial instruments that are priced on the basis of models, and it has to be assumed that, when concerning illiquid assets, there is a difference between the estimated value and the price achieved when sold in the market. Valuations related to investment properties are considered to have particularly increased uncertainty as a result of macroeconomic developments, and the total transaction volume for investment properties was significantly lower in 2022 when compared to 2021. Furthermore, the valuation of investment properties is sensitive to changes in input factors such as inflation and interest rates. There is a wide spectrum of possible outcomes for these input factors and thus for the modelled valuations. The values therefore reflect management’s best estimate, however contain greater uncertainty than what would be the case in a normal year. 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 currency are hedged. This limits the currency risk from the investment portfolios. Foreign exchange risk primarily arises as a result of investments in international securities, including as a result of ownership in SPP. In the consolidated financial statements, the value of assets and results from the Swedish operations are affected by changes in the value of the Swedish krone. Storebrand Livsforsikring AS has hedged parts of the value of SPP through forward foreign exchange contracts and borrowings in Swedish kroner. 143 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixFINANCIAL ASSETS AND LIABILITIES IN FOREIGN CORRENCIES Balance sheet items excluding currency NOK million Net in balance sheet Net sales in currency in NOK in NOK derivatives Forwad contracts Net position 2021 Net position 2020 DKK CHF HKD CAD EUR GBP JPY SEK USD NOK1) Other currency types Insurance liabilities in SEK Total net currency positions 124 68 163 173 1,817 98 26,843 235,965 3,373 65,664 -246 -106 -582 -425 -1,578 -306 -60,172 -14,314 -6,131 -582 -122 -37 -419 -252 239 -208 -33,329 221,651 -2,758 65,082 -227,393 -227,393 -172 -399 -528 -1,831 2,513 -2,470 -2,493 209,557 -27,170 65,082 -407 -214,985 26,695 -102 -178 -682 -1,203 -807 -1,668 -1,567 244,595 -16,320 61,158 -312 -244,602 38,313 1) Equity and bond funds denominated in NOK with foreign currency exposurein i.a. EUR and USD NOK 62 billion. The table above shows the currency positions as at 31 December 2022. The currency exposure is primarily related to investments in the Norwegian and Swedish insurance business. Storebrand Life Insurance: The company hedges most of the foreign exchange risk in the customer portfolios on an ongoing basis. Foreign exchange risk exists primarily as a result of investments in international securities, as well as subordinated loans in a foreign currency to a certain extent. Hedging is performed by means of forward foreign exchange contracts at the portfolio level, and the currency positions are monitored 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 uses a principle for currency hedging called block hedging, which strealines the implementation of currency hedging. SPP: SPP uses currency hedging for its investments to a certain degree. Currency exposure may be between 0 and 30 per cent in accordance with the investment strategy. Storebrand Danica Pensjonsforsikring: The company hedges net items on the balance sheet with forward contracts and there is virtually no foreign exchange risk in the company and guaranteed customer portfolios. For non-guaranteed customer portfolios, there is partial hedging with foreign exchange contracts in the funds, however this will also involve a significant foreign exchange risk. 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 0.30 per cent of primary capital, which is approximately 13 million at present. Guaranteed customer portfolios in more detail Storebrand Livsforsikring The annual guaranteed return to the customers follows the basic interest rate. New premiums were taken in with a basic interest rate of 2.0 per cent, and pensions were adjusted upwards with a basic interest rate of 0.5 per cent. The percentage distribution of the insurance reserves by the various basic annual interest rates as at 31 December is as follows: 144 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixInterest rate 6.00 % 5.00 % 4.00 % 3.40 % 3.00 % 2.75 % 2.50 % 2.00 % 1.50 % 0.50 % 0.00% The table includes premium reserve including IBNS. Average interest rate guarantee in per cent Individual endowment insurance Individual pension insurance Group pension insurance Paid-up policy Group life insurance Total Tabell inkluderer premiereserve inklusive IBNS. 2022 0.2 % 0.2 % 36.9 % 0.4 % 28.1 % 1.6 % 10.1 % 16.5 % 2.6 % 2.2 % 1.2 % 2022 2.4 % 3.8 % 2.2 % 3.2 % 0.1 % 2.9 % 2021 0.2 % 0.2 % 39.4 % 0.4 % 28.6 % 1.7 % 10.4 % 14.2 % 2.2 % 1.8 % 0.9 % 2021 2.5 % 3.8 % 2.3 % 3.2 % 0.1 % 3.0 % There is a 0 per cent interest rate guarantee for premium funds, defined-contribution funds, pensioners’ surplus funds and additional statutory reserves. The interest rate guarantee must be fulfilled on an annual basis. If the company’s investment return in any given year is lower than the guaranteed interest rate, the equivalent of up to one year’s guaranteed return for the individual policy can be covered by transfers from the policy’s additional statutory reserves. To achieve good, risk-adjusted returns, it is desirable to take an investment risk. This is primarily done by investing in shares, property and corporate bonds. Interest rate risk is in a special position because changes in interest rates also affect the fair value of the insurance liability for the solvency calculation. Since pension disbursements may be many years in the future, the insurance liability is particularly sensitive to changes in interest rates. In the Norwegian business, greater interest rate sensitivity from the investments will entail increased risk that the return is below the guaranteed level. The risk management must therefore balance the risk of the profit for the year (interest rate increase) with the reinvestment risk if interest rates fall below the guarantee in the future. Bonds at amortised cost are an important risk management tool. 145 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix Storebrand Danica Pensjonsforsikring Interest rate 2.75 % 2.50 % 2.00 % The table includes premium reserve excluding IBNS Average interest rate guarantee in per cent Individual pension insurance Group pension insurance Total The table includes premium reserve including IBNS 2022 11.0 % 15.0 % 74.0 % 2022 2.0 % 2.1 % 2.1 % SPP Pension & Försäkring The guaranteed interest rate is determined by the insurance company and is used when calculating the premium and the guaranteed benefit. The guaranteed interest rate does not entail that there is an annual minimum guarantee for the return as is the case in Norway. New premiums in individual defined-contribution pensions (IF) have a guarantee of 1.25% for 85% of the premium. Group defined- benefit pension (KF) is closed to new members. SPP bears the risk of achieving a return equal to the guaranteed interest on the policyholders’ assets over time and that the level of the contracts’ assets is greater than the present value of the insurance liabilities. For IF, profit sharing becomes relevant in SPP if the return exceeds the guaranteed yield. The contracts’ buffer capital must be intact in order for profit sharing to represent a net income for SPP. In the case of KF, a certain degree of consolidation, i.e. that the assets are greater than the present value of the liabilities by a certain percentage, is required in order for the owner to receive profit-sharing income (indexing fee). If the assets in an insurance contract in the company are less than the market value of the liability, an equity contribution is allocated that reflects this 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 146 2022 9.3 % 0.0 % 4.9 % 48.5 % 4.8 % 0.0 % 5.1 % 0.0 % 2.3 % 6.3 % 12.1 % 1.8 % 4.8 % 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 % Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix Average interest rate guarantee in per cent Individual pension insurance Group pension insurance Individual occupational pension insurance Total 2.8 % 2.8 % 3.1 % 3.0 % 2021 3.0 % 2.9 % 3.1 % 3.1 % In the Swedish operations management of interest rate risk is based on the principle that the interest rate risk from assets shall approximately correspond to the interest rate risk from the insurance liabilities. Sensitivity analyses The tables show the fall in value for Storebrand Life Insurance and SPP’s investment portfolios as a result of immediate changes in value related to financial market risk. The calculation is model-based and the result is dependent on the choice of stress level for each category of asset. The stresses have been applied to the company portfolio and guaranteed customer portfolios as at 31 December 2022. The effect of each stress changes the return in each profile. Unit linked insurance without a guaranteed annual return is not included in the analysis. For these products, the customers bear the market risk and the effect of a falling market will not directly affect the result or buffer capital. The amount of stress is the same that is used for the company’s risk management. Two stress tests have been defined. Stress test 1 is a fall in the value of shares, corporate bonds and property in combination with lower interest rates. Stress test 2 is a somewhat smaller fall in the value of shares, corporate bonds and property in combination with higher interest rates. LEVEL OF STRESS Interest level (parallel shiftt) Equity Property Credit spread (share of Solvency II) Stresstest 1 Stresstest 2 -100bp -20 % - 12 % 50 % +100bp - 12 % - 7 % 30 % Because it is the immediate market changes that are calculated, dynamic risk management will not affect the outcome. If it is assumed that the market changes occur over a period of time, then dynamic risk management would reduce the effect of the negative outcomes and reinforce the positive to some extent. As a result of customer buffers, the effect of the stresses on the result will be lower than the combined change in value in the table. As at 31 December 2022, 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 1,452 -1,914 -2,884 -864 -4,210 0.6% -0.9 % -1.3 % -0.4 % -1.9 % -171 -2,353 -1,490 -712 -4,725 -0.2% -2.6 % -1.7 % -0.8 % -5.3 % Storebrand Life Insurance SPP Pension & Försäkring NOK Million Share of portfolio NOK Million Share of portfolio -1,452 -1,149 -1,682 -518 -4,801 147 -0.6 % -0.5 % -0.8 % -0.2 % -2.1 % 171 -1,412 -869 -427 -2,537 0.2 % -1.6 % -1.0 % -0.5 % -2.8 % Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix Storebrand Livsforsikring For Storebrand Livsforsikring it is stress test 2, which includes an increase in interest rates, that makes the greatest impact. The overall market risk is NOK 4.8 billion, which is equivalent to 2.1 per cent of the investment portfolio. If the stress causes the return to fall below the guarantee, it will have a negative impact on the result if the customer buffer is not adequate. Other negative effects on the result are a lower return from the company portfolio and that there is no profit sharing from paid-up policies and individual contracts. SPP Pension & Insurance For SPP it is stress test 1, which includes a fall in interest rates, that creates the greatest impact. The overall market risk is SEK 4.7 billion, which is equivalent to 5.3 per cent of the investment portfolio. The buffer situation for the individual contracts will determine if all or portions of the fall in value will affect the financial result. Only the portion of the fall in value that cannot be settled against the customer buffer will be charged to the result. In addition, the reduced profit sharing or loss of the indexing fees may affect the financial result. Other operations The other companies in the Storebrand Group are not included in the sensitivity analysis, as there is little market risk in these areas. The equity of these companies is invested with little or no allocation to high-risk assets, and the products do not entail a direct risk for the company as a result of price fluctuations in the financial market. Note 9: Liquidity risk Liquidity risk is the risk that the company is unable to fulfil its obligations without incurring substantial additional expenses in the form of reduced prices for assets that must be realised, or in the form of especially expensive financing. For the insurance companies, the life insurance companies in particular, the insurance liabilities are long-term and the cash flows are generally known long before they fall due. In addition, liquidity is required to handle payments related to operations, and there are liquidity needs related to derivative contracts. The liquidity risk is handled by liquidity forecasts and the fact that portions of the investments are in very liquid securities, such as government bonds. The liquidity risk is considered low based on these measures. Liquidity risk is one of the largest risk factors for the banking business, and the regulations stipulate requirements for liquidity management and liquidity indicators. The Bank’s risk strategy stipulates that the liquidity risk must be low to moderate. 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. 148 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixUNDISCOUNTED 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 291 605 403 2-3 years 4,556 4-5 Total Total booked Total booked years > 5 years cashflows value 2022 value 2021 5,147 4,790 15,389 10,585 11,441 403 403 502 19,165 7 61 88 157 19,478 19,478 17,239 4,724 10,511 4,087 15,975 3,246 58,717 -137 1,141 15,958 13,498 780 2 109 9 32,791 10,630 24,924 14,643 36,101 10,630 4,087 15,975 3,246 1,441 20,684 18,741 5,727 105,310 73,887 71 2,276 147 -72 17,127 12,862 -13 4,313 -5 94,297 29 68,749 4 Total financial liabilities 2021 57,719 Derivatives related to funding 2021 -118 87 -96 61 -88 -154 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. 149 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 Storebrand Livsforsikring AS 5) Storebrand Livsforsikring AS 3) 5) Storebrand Livsforsikring AS 3) 5) Storebrand Livsforsikring AS 3) 6) Storebrand Livsforsikring AS 3) 5) Storebrand Bank ASA Storebrand Bank ASA Storebrand Bank ASA Storebrand Bank ASA Nominal value Currency Interest Maturity 2022 2021 Book value Book value 1,100 900 899 900 1,000 500 650 750 1,250 38 300 150 125 300 400 NOK SEK SEK SEK SEK NOK NOK NOK NOK EUR EUR NOK NOK NOK NOK Variable Variable Variable Variable Variable Variable Variable Fixed Variable Fixed Fixed Variable Variable Variable Variable 2,024 2,026 2,022 2,025 2,024 2,025 2,027 2,027 2,027 2,023 2,031 2,022 2,025 2,026 2,027 1,101 856 1,100 876 976 877 976 499 2,685 2,876 150 125 300 851 947 500 651 773 1,261 421 2,397 126 300 402 Total subordinated loans and hybrid tier 1 capital 10,585 11,441 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 Novmeber 2022 5) Green bonds 6) The loan has partly been repaid 2021 and December 2022 SPECIFICATION OF LOANS AND DEPOSITS FROM CREDIT INSTITUTIONS NOK million Call date 2022 2023 Total loans and deposits from credit institutions SPESIFICATION OF SECURITIES ISSUED NOK million Call date 2022 2023 2024 2025 2026 2027 2031 Total securities issued 150 Book value 2022 403 403 Book value 2022 4,321 6,110 8,326 7,375 5,907 752 32,791 2021 502 502 2021 5,532 3,282 6,100 6,139 3,075 795 24,924 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixThe concluded loan agreements contain standard loan agreement terms. Covered bonds Covered bonds are issued by Storebrand Boligkreditt. There is a regulatory requirement for minimum overcollateralisation of 5 per cent. Credit facilities Storebrand ASA has an unused credit facility of EUR 200 million which will run until December 2025. FINANCING ACTIVITIES - MOVEMENTS DURING THE YEAR Subordinated Liabilities to financial Securities NOK million Book value 1.1.22 Admission of new loans/liabilities Repayment of loans/liabilities Change in accrued interest Exchange rate adjustments Change in value/amortisation Book value 31.12.22 Note 10: Credit risk loan capital institutions 502 16,690 -16,789 11,441 3,048 -2,708 -82 -496 -618 10,585 issued 24,924 9,822 -1,932 62 9 -94 403 32,791 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. 151 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 securities Total interest bearing securities stated by rating Bond funds not managed by Storebrand Non-interest bearing securities managed by Storebrand Total Total 2021 AAA Fair value 20,780 15,482 AA Fair value 6,919 5,019 5,021 106 A Fair value BBB Fair value NIG Fair value Not rated Total Total Fair Fair value Fair value value 2022 2021 290 3 29,661 30,403 2,222 1,683 43 50 45 27,992 84,469 93 34,068 100,233 43 5,173 6,405 41,283 12,043 29,995 30,501 2,222 1,683 117,727 140,749 41,283 48,000 12,043 17,056 29,995 34,613 30,501 34,962 2,222 4,513 1,683 1,604 36,592 24,224 1,897 156,215 3,543 168,516 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 2021 AAA Fair value AA Fair value A Fair value BBB Fair value NIG Fair value Not rated Total Total Fair Fair value Fair value value 2022 2021 15,708 5,982 958 22,648 24,886 14,562 8,642 1,843 20,048 18,396 128 18,529 14,868 32,112 71,725 14,868 958 23,204 21,966 21,890 26,135 18,396 15,558 128 41,181 33,397 119,664 29,574 81,451 17,788 913 129,726 152 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 excluding derivatives in bond funds 2021 Bank deposits 1) Of which bank deposits in bond funds, managed by Storebrand Total bank deposits excluding bank deposits in bond funds Total bank deposits excluding bank deposits in bond funds 2021 Loans to financial institutions 1) of which tied-up bank deposit (tax deduction account) AAA Fair value 175 AA Fair value 1,513 A Fair value 10,330 BBB Fair value NIG Fair value Not rated Total Total Fair Fair value Fair value value 2,666 2022 14,684 2021 5,208 138 201 2 341 293 175 1,375 10,129 2,664 14,343 31 8 1,611 4,281 2,985 11,200 52 256 22 213 210 15,955 4,915 11,690 1,189 256 1,445 1,704 8 4,281 10,012 210 14,510 318 3,769 5,900 39 356 69 3 9,987 109 67 358 324 Rating classes based on Standard & Poor’s. NIG = Non-investment grade. 153 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix LOAN PORTFOLIO CREDIT RISK FOR THE LOAN PORTFOLIO COMMITMENTS BY CUSTOMER GOUPS Lending to and NOK million customers credit-lines commitments commitments commitments write- downs commitments receivables 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 receivables from customers 2021 1) Total loans to and receivables from customers 2020 2) 1) 2022: - Of which Storebrand Bank - Of which 10,268 4 66,659 1,761 78,693 -332 -60 3,875 23 3,898 10,268 4 70,534 1,784 82,591 -332 -60 78,300 3,898 82,198 69,486 3,384 72,870 49,917 3,737 53,654 Storebrand Livsforsikring 28,385 161 28,546 16 9 25 25 29 25 13 4 17 17 18 17 77 1 78 78 48 73 5 29 91 1 86 86 59 81 5 2) 2021: - Of whcih Storebrand Bank - Of which Storebrand Livsforsikring 38,992 3,322 42,314 48 29 18 59 30,495 62 30,556 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 administered by Storebrand Bank, but a significant share of the loans have been transferred to Storebrand Livsforsikring as a part of the investment portfolio. Storebrand Livsforsikring and SPP also have loans to companies as part of the investment portfolio. Storebrand Bank’s corporate market segment has largely been discontinued. As at 31 December 2022, Storebrand had net loans to customers totalling NOK 78.7 billion before provisions for losses of NOK 0.4 billion. Of this, NOK 12.0 billion was to the corporate market and NOK 66.7 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. There is a low level of non-performing loans in the retail market portfolio. The weighted average loan-to-value ratio for home loans is approximately 57 per cent. Approximately 57 per cent of home loans have a loan-to-value ratio within 60 per cent, 97 per cent are within a 85 per cent loan-to-value ratio, and 99 per cent are within a 100 per cent loan-to-value ratio. The portfolio is considered to have a low credit risk. 154 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixTOTAL COMMITTMENTS BY REMAINING TERM NOK million Up to one month 1 - 3 months 4 months - 1 year 2 -5 years More than 5 years Total gross commitments 2022 2021 Loans to and receivables Loans to and receivables from Unused Total from Unused Total customers credit line commitments customers credit line commitments 47 386 2,683 11,314 64,264 78,694 99 144 422 3,233 3,898 47 485 2,827 11,736 67,496 82,592 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 Default occurs after 90 days with arrears/overdrafts above both absolute and relative thresholds. All debtor commitments are considered 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 Sale and operation of real estate Other service providers Wage-earners and others Others Total 2022 Total 2021 Gross non- Net non- Total recognised performing commit- Individual performing commit- value changes ments write-downs ments during the period 16 82 1 98 77 13 4 -315 -298 -66 2 -2 82 81 59 9 8 -85 In the case of default, Storebrand Bank ASA will sell the securities or repossess the properties if this is most suitable. TOTAL ENGAGEMENT AMOUNT BY REMAINING TERM TO MATURITY NOK million Overdue 1-30 days Overdue 31-60 days Overdue 61-90 days Overdue more than 90 days Total 2022 Loans to and receivables 2021 Loans to and receivables from Unused Total from Unused Total customers credit line commitments customers credit line commitments 132 44 35 78 289 76 14 5 48 142 1 1 77 14 5 48 143 131 42 35 78 285 1 2 4 155 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix INVESTMENTS SUBJECT TO NETTING AGREEMENTS/CSA NOK million fin. assets fin. liabilites liabilities (+/-) Securities (+/-) exposure Booked value Booked value fin. assets/ Cash Net Net booked Collateral Investments subject to netting a greements Investments not subject to netting agreements Total 2022 Total 2021 14,319 12,708 1,612 301 -150 1,461 24 14,343 4,915 12,708 3,143 24 1,636 1,772 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. 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. Note 11: Concentrations of risk 2022 163,291 163,291 -1,019 -1,023 2021 176,448 176,448 666 125 Most of the risk for the Storebrand Group relates to the guaranteed pension products in the life insurance companies. These risks are consolidated in the Storebrand Livsforsikring Group, which includes Storebrand Livsforsikring AS, SPP Pension & Försäkring AB and Storebrand Danica AS. Other companies directly owned by Storebrand ASA that are exposed to significant risks are Storebrand Forsikring AS, Storebrand Helseforsikring AS, Storebrand Asset Management Group and Storebrand Bank Group. For the life insurance businesses, the greatest risks are largely the same in Norway and Sweden. The financial market risk will depend significantly on global circumstances that influence the investment portfolios in all businesses. The insurance risk may be different for the various companies, and risk of long life expectancy in particular can be influenced by universal trends. Both the insurance business and the banking business are exposed to credit risk. The insurance business primarily has a credit risk relating to bonds with significant geographical and industry-related diversification, while the bank is mostly exposed to direct loans for residential property in Norway. There is no significant concentration risk across bonds and loans. The financial market and investment risks are largely related to the customer portfolios in the life insurance business. The risk associated with a negative outcome in the financial market is described and quantified in Note 8, financial market risk. The banking business has little direct exposure to types of risk other than credit. In the short term, an interest rate increase will negatively impact on the returns for the life insurance companies. An interest rate increase can also result in bank customers having lower debt-servicing capacity and increased losses for the banking business. The risk from the P&C insurance and health insurance risk in Storebrand Skadeforsikring AS and Storebrand Helseforsikring AS has a low correlation with the risk from the rest of the businesses in the Group. In the asset management business, the principal risk is operational risk in the form of behaviour that can trigger claims and/or impact on reputation. Since the asset management business is the principal manager of the insurance businesses, errors in asset management could result in errors in the insurance businesses. 156 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNote 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. The greatest risk is from the investments. The value of stocks and bonds in companies with high greenhouse gas emissions may decrease in the event of a rapid transition to low emissions. Storebrand has a climate strategy which entails that there is limited exposure to stocks and bonds in fossil fuel companies. Emissions of greenhouse gases in relation to turnover for the overall investment portfolio are lower than the general market. The risk can be counteracted somewhat by Storebrand’s investments in solution companies that will benefit from a rapid transition to low emissions. However, these companies are also at risk of losing value, particularly if the transition to low emissions is slower than expected. Physical climate change can also impact the value of investments. Storebrand has a well-diversified portfolio of stocks and bonds. This diversification applies to geographical areas, industries and individual companies. This limits the risk that some parts of the world, some industries and some companies are experiencing major losses in value as a consequence of climate change. However, climate change can also result in lower economic growth and lower investment returns for the broader market, particularly in the long term. For investments priced in an active market, Storebrand’s valuation is based on climate risk being taken into consideration in market pricing. Storebrand has climate risk in connection with property investments. There is a transition risk from the potential high costs of adapting buildings to reduce greenhouse gas emissions. There is also physical risk, particularly from increased incidence of extreme rainfall and flooding. The valuation of property is based on information that is not observable, level 3, ref. Note 13. Climate risk can impact the valuation through both calculated cash flows and the required rate of return for the property. For example, the cash flow may be impacted because climate change creates a need to upgrade or because the costs of ownership are affected by the building’s energy efficiency. The property’s environmental standard is one of the factors that is considered when setting the required rate of return. In commercial terms, Storebrand has a risk that there may be lower demand for our products if customers are adversely affected by climate risk. A rapid transition to low emissions could impact the Norwegian economy in general and the fossil fuel sector in particular. In Norway, there is usually a correlation between unemployment and disability. The adverse effects for the Norwegian economy from a rapid transition to low emissions may therefore result in more incidents of disability. For P&C insurance, there may be more claims and higher claims payouts as a consequence of climate change. The greatest risk is damage from extreme rainfall or flooding, particularly for properties that are below ground level. Storebrand’s risk is limited by the fact that losses from natural disasters are covered under the Norwegian Natural Perils Pool. 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 for which reliable prices are not regularly quoted are theoretically valued based on the discount cash flow. The discount rate consists of swap rates assigned to a credit spread that is specific to the individual bond. Unlisted derivatives, such as forward exchange contracts and interest rate and foreign exchange swaps, are also valued theoretically. Swap rates and exchange rates that form the basis for the valuation are supplied by Reuters and Bloomberg. The valuations of currency options and swaptions are provided by Markit. 157 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 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 valuation 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 for the most recent quarter 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 observable or indirectly observable. Market information that is indirectly observable means that the prices can be derived from observable related markets. Level 2 includes shares or equivalent equity instruments for which market prices are available, but where the volume of transactions is too limited to fulfil the criteria in level 1. Shares at this level will normally have been traded during the final quarter. Bonds and equivalent instruments are generally classified at 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. Equities The Group’s internal companies are classified at level 3 and are valued at book value. Alternative investments organised as limited liability companies make up the majority of external companies. These are valued based on the value-adjusted equity reported by external sources when available. Units Of the fund units, it is private equity funds that represent the majority at level 3. Moreover, there are also some other types of funds, such as infrastructure funds, microfinance funds, loan funds and property funds here. 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. The reporting takes place with a one-month delay for the Group’s own private equity funds in funds and up to three-months’ delay for other funds. The most recently received valuations are used as a basis, adjusted for cash flows and estimated market effects in the period from the most recent valuation until the reporting date when relevant. The market effect is calculated for the company’s own vintage private equity fund in fund 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 discount rate adjusted for market spread. The discount rate that is used is based on a swap interest rate (mid swap) with a maturity that corresponds to the remaining lock-in period for the underlying loans. The market spread that is used on the balance sheet date is determined by assessing the market conditions, market price and the associated swap interest rate. However, the fair value of loans to corporate customers with margin loans is lower than the amortised cost because certain loans run with lower margins than they would have done if they had been taken up as of the end of 2022. The value shortfall is calculated by discounting the difference between the agreed margin and the current market price over the remaining duration. Corporate bonds There are not normally bonds at level 3, however non-performing bonds are categorised here and valued based on expected payment. As at 31 December 2022, this was not a significant amount for Storebrand’s financial statements. Investment properties The investment properties primarily consist of office buildings located in Oslo and Stockholm and shopping centres in Southern Norway. 158 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 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. The required rate of return is divided into the following elements: • • Risk-free interest Risk premium, adjusted for: Type of property • Location • Structural standard • Environmental standard • • Duration of the contract • Quality of tenant • Other factors such as transactions and perception in the market, vacancy and general knowledge about the market and the individual property. When calculating fair value, Storebrand uses internal cash flow models. Net cash flows for the individual property are discounted by an individual required rate of return. A future income and expense picture for the first 10 years has been estimated for the office properties and a final value has been calculated for the end of the 10th year based on market rent and normal operating costs for the property. A future income and expense picture for the first 6 years has been estimated for the shopping centre properties and a final value has been calculated for the end of the 6th year based on market rent and normal operating costs for the property. In both models, the net income stream has been taken into consideration for existing and future loss of income due to vacancy, necessary investments and an assessment of the future development in the market rent. The majority of new contracts that are entered into have a duration of five or ten years for offices (three to five years for trading). The cash flows from the lease agreements (contractual rent) are included in the valuations. To estimate the long-term, future non-contractual rental incomes, a forecasting model has been developed. The office model is based on the rental price overview from 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. External valuation: For properties in the Norwegian business, a methodical approach is taken to a selection of properties that are to be externally valued each quarter so that all properties have had an external valuation at least every three years. In 2022, external valuations were obtained for properties worth NOK 22.7 billion (92 per cent of the portfolio’s value as at 31 December 2022). 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. The assumptions for the external valuation are critically reviewed and there is an assessment of reasonableness in relation to internal assumptions. 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 discretionarily considered to be best practice in the market. If there is a discrepancy of more than 5% between the internal and external valuation, 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 annually, while other wholly-owned property investments are valued on a quarterly basis. 159 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixVALUATION 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 31.12.2022 Total financial assets 31.12.2021 Financial liabilities Debt raised by issuance of securities Loans and deposits from credit institutions Deposits from banking customers Subordinated loan capital Total financial liabilities 31.12.2022 Total financial liabilities 31.12.2021 Level 1 Level 1 Level 1 Non- Total Quoted Observable observable fair value Book value prices assumptions assumptions 31.12.22 31.12.22 Total fair value 31.12.21 Book value 31.12.21 621 621 109 49,595 7,474 111,569 168,746 168,296 32,777 403 19,478 10,513 63,171 54,324 4,392 16,800 21,192 23,077 109 4,391 66,395 7,474 109 4,541 66,683 7,402 67 5,057 56,521 9,103 67 5,046 56,507 8,441 112,190 190,558 122,039 200,774 120,623 117,929 191,371 187,991 32,777 32,791 25,000 24,924 403 19,478 10,513 63,171 403 19,478 10,585 63,256 502 17,239 11,584 502 17,239 11,441 54,324 54,106 160 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 31.12.22 Total equities and fund units 31.12.21 Loans to customers - Loans to customers - corporate - Loans to customers - retail Loans to customers 31.12.22 Loans to customers 31.12.21 Bonds and other fixed-income securities - Government bonds - Corporate bonds - Structured notes - Collateralised securities - Bond funds Total bonds and other fixed-income securities 31.12.22 Total bonds and other fixed-income securities 31.12.21 Derivatives: - Interest derivatives - Currency derivatives Total derivatives 31.12.22 - of which derivatives with a positive market value - of which derivatives with a negative market value Total derivatives 31.12.21 Properties: Investment properties Properties for own use Total properties 31.12.22 Total properties 31.12.21 Level 1 Level 2 Level 3 Quoted prices Observable assumptions Non- observable assumptions 31.12.22 31.12.21 402 18,105 18,507 15,054 6,757 319 7,076 7,932 8 13,810 13,818 12,670 33,481 1,689 35,171 35,035 47,728 222,804 270,532 6,757 319 7,076 24,762 43,066 43 4,506 83,839 156,215 -759 2,394 1,636 14,343 -12,708 33,481 1,689 35,171 40,707 237,619 278,326 7,443 489 7,932 31,148 55,354 5,550 76,464 168,516 2,292 -519 4,915 -3,143 1,772 33,376 1,659 35,035 30,690 30,690 40,071 16,635 204,699 221,334 223,201 8,559 43,058 43 4,506 70,029 126,195 139,124 -8,519 2,394 -6,125 6,583 -12,708 1,772 16,203 16,203 16,722 7,761 7,761 7,761 161 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 19 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 01.01.22 Net gains/losses on financial instruments Supply Sales Exchange rate adjustments Other Equities Fund units Loans to Corporrate Bond Investment Properties customers bonds funds properties for own use 376 14,678 7,932 8 12,663 33,376 1,659 -268 250 44 1,318 762 1,432 -85 -204 367 -802 -214 -2 233 1,501 -258 -329 -380 1,448 -610 -364 10 51 61 -86 4 Book value 31.12.22 402 18,105 7,076 8 13,810 33,482 1,689 As of 31.12.22, Storebrand Livsforisikring had NOK 8.211 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. The sensitivity of financial instruments and property at fair value Equities Level 3 equity investments primarily consist of funds organised as limited liability companies and privately owned limited liability companies. These have a similar sensitivity assessment to fund units in which private equity funds dominate. NOK million Change in fair value per 31.12.22 Change in fair value per 31.12.21 Change in value at change in discount rate Increase + 25 bp Decrease - 25 bp 1 -11 -1 10 Units The majority of these investments are private equity funds invested in companies that are priced in relation to comparable listed companies. The valuation will therefore be sensitive to fluctuations in global equity markets. The private equity portfolio has an estimated beta relative to MSCI World (Net – currency hedged to NOK) of around 0.5. NOK million Change in fair value per 31.12.22 Change in fair value per 31.12.21 Change MSCI World Increase + 10 % Decrease - 10 % 835 861 -835 -861 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 real estate investments are no longer leveraged 162 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNOK million Change in fair value per 31.12.22 Change in fair value per 31.12.21 Change in value underlying real estate Increase + 10 % Decrease - 10 % 1 1 -1 -1 Loans to customers Loans are valued at fair value. The value of these loans is determined by future cash flows being discounted by an associated swap curve adjusted for a credit spread specific to the issuer. 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 31.12.22 Change in fair value per 31.12.21 Change in marketspread + 10 bp -25 -31 - 10 bp 25 31 Corporate bonds Securities 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 31.12.22 Change in fair value per 31.12.21 Properties The sensitivity assessment of properties applies to investment properties. Change MSCI World Increase + 10 % Decrease - 10 % 0 0 0 0 The valuation of property is particularly sensitive to a change in the required rate of return and the expected future cash flow. Higher interest rates have a negative impact in the form of yield increases and more demanding conditions for loan financing in connection with transactions. At the same time, property investments have historically provided protection from inflation through adjustments in market rent and increased cash flows. A change of 0.25 per cent in the required rate of return when everything else remains unchanged will result in a change in the value of Storebrand’s property portfolio of approximately 6 per cent. About 25 per cent of the property’s cash flow is linked to lease contracts that have been entered into. This entails that the changes in the uncertain parts of the cash flow of 1 per cent will mean a change in value of 0.70 to 0.75 per cent. The property’s cash flows will also be impacted by expectations of inflation and the vacancy rate in the portfolio. Storebrand’s property portfolio largely consists of office properties with attractive locations in central business districts (CBD). These locations mean that the properties have historically been less exposed to market fluctuations than properties located on the outskirts of a town or city, however there is uncertainty associated with calculating the values when taking into consideration the volatility in the market. See Note 8 for further reference to uncertainty. NOK million Change in fair value per 31.12.22 Change in fair value per 31.12.21 Change in required rate of return 0.25 % -2,251 -2,128 -0.25 % 2,555 2,401 Infrastructure The valuation of the underlying infrastructure investments will be impacted by changes in the required rate of return and assumptions relating to future cash flow. NOK million Change in fair value per 31.12.22 Change in fair value per 31.12.21 Change in value underlying real estate Increase + 5 % Decrese - 5 % 136 66 -136 -66 163 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix Note 14: Capital adequacy and capital management The Storebrand Group is an insurance-dominated, cross-sectoral financial group with capital requirements in accordance with Solvency II. Storebrand calculates Solvency II according to the standard method as defined in the Solvency II Regulations. Consolidation is carried out in accordance with Section 18-2 of the Norwegian Act relating to Financial Undertakings and Financial Groups. The solvency capital requirement and the minimum capital requirement for the Group are calculated in accordance with Section 46 (1)-(3) of the Solvency II Regulations in accordance with the standard method. Capital management Storebrand pays particular attention to the levels of equity in the Group, which are continually and systematically optimised. The level is adapted to the financial risk and capital requirement in the business, where the growth and composition of business segments will be important motivating factors for the need for capital. The purpose of capital management is to ensure an efficient capital structure and provide for an appropriate balance between in-house goals and regulatory and rating agency requirements. If there is a need for new equity, this is obtained by the holding company Storebrand ASA, which is listed and 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 business has capital requirements that are 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’s ambition is to ensure that the ordinary dividend per share shall at least be at the same nominal level as the previous year. The normal dividend is paid out at a sustainable solvency margin of over 150 per cent. If the solvency margin is over 175 per cent, the Board’s intention is to propose an extraordinary dividend or buyback of shares. In general, equity in the Group can be controlled without material limitations if the capital requirement is met and the respective legal units 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 Not- counting tier 3 capital 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 Group 1 unlimited 2,360 10,842 25,877 -4,804 -1,718 32,557 Total 2,360 10,842 25,877 9,661 540 -231 905 -4,804 -1,718 43,431 4,804 48,236 31.12.22 Group 1 limited Group 2 Group 3 1,894 7,766 905 0 540 -231 31.12.21 Total 2,360 10,842 28,711 10,860 356 616 -3,728 -1,645 1,894 8,671 309 48,369 3,728 52,098 40,688 36,381 32,557 1,894 1,929 164 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 31.12.22 21,267 1,119 9,004 971 620 1,485 -7,075 -4,954 22,438 3,837 26,276 184% 9,647 377% 31.12.21 25,258 720 10,829 931 590 1,550 -7,804 -5,218 26,856 2,944 29,800 175% 10,738 379% The Storebrand Group also has 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 REQUIREMENTS 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 31.12.22 31.12.21 4,079 22,438 26,517 4,804 43,431 48,236 21,719 3,125 26,856 29,982 3,728 48,369 52,098 22,116 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 CRD IV 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 2022, the difference amounted to NOK 242 million. 165 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNote 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 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 2022 21,020 12,290 33,310 9,799 3,793 812 1,375 260 6,240 35 7,018 656 218 1,428 9,320 4,413 48,870 14,247 2021 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 22,064 166 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNote 16: Net income analysed by class of financial instrument NOK million income etc. nancial assets investments Dividend/ Net gains and Net reva- interest losses on fi- luation on Total 2022 Of which Company Customer Total 2021 Profit on equities and fund units 1,048 11,594 -34,281 -21,639 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 2,714 949 71 4,782 3,770 2,564 3,805 1,707 5,511 -592 -11,445 -4,152 -9,543 -2,030 -20,039 71 -47,975 -43,637 -11 3,729 2,564 3,870 1,707 -443 -30 65 65 Write-downs/income recognition for loans and guarantees for the period Change in individual loan write-downs for the period Change in grouped loan write-downs for the period Other corrections to write-downs Realised losses on loans where provisions have previously been made Realised losses on loans where no provisions have previously been made Recovery of loan losses realised previously Write-downs/income recognition for loans and guarantees for the period Note 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 167 -21,631 53,813 -2,107 -20,082 31 1,000 -2,740 28 -43,789 52,102 -8 77 44 40 152 26 43 4,321 995 208 1,254 3,662 453 5,576 1,461 4,115 5,316 2022 2021 -1 21 12 -18 14 2022 1,586 -408 -128 1,050 42 -379 713 96 -45 713 713 -1 -12 -1 -2 -5 1 -20 2021 1,589 -381 -183 1,025 206 933 2,164 104 -42 2,164 2,164 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNote 18: Other income NOK million Fee and commission income, banking Net fee and commission income, banking Management fees, asset management Interest inome Return commissions/Kick-back Insurance related income Revenue from companies other than banking and insurance Profit sale of subsidaries Other income Total other income Note 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 Total insurance claims Of which premium reserve transferred to company 1) Individual life and disability, property and caualty insurance 2) Group life, workers comp. And health insurance The table below shows the anticipated compensation payments 168 2022 107 107 2,632 164 1,264 295 273 1 177 4,913 2022 -13,736 -6,773 -20,509 -13,937 -2,441 -601 -221 -3,263 -53 -1,995 -6,934 -1,154 -5,821 -15,905 -518 -39,677 -14,508 2021 96 96 3,128 1 1,321 324 235 591 5,698 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 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixDEVELOPMENT IN EXPECTED INSURANCE CLAIM PAYMENTS - LIFE INSURANCE NOK mrd. 0-1 year 1-3 years > 3 years Total Storebrand Life Insurance 15 31 296 342 SPP 7 16 179 202 Storebrand Danica 4 1 23 28 DEVELOPMENT IN INSURANCE CLAIM PAYMENT - P&C INSURANCE, EXLUSIVE RUN-OFF NOK million 2017 2018 2019 2020 2021 2022 Sum 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 31.12.22 Total disbursed to present Claims reserve Claims reserve for previous years (before 2017) Total claims reserve 797 764 756 745 738 725 709 16 760 749 744 734 731 704 27 998 1,026 1,026 825 814 805 795 1,457 1,425 1,828 743 52 966 60 1,299 127 1,209 618 5,630 900 19 918 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 buffer fund 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 169 2022 5,193 3,189 356 -268 8,471 2022 -2,871 -360 -2,910 -6,142 2021 861 -1,566 -4,122 -4,827 2021 -2,725 -329 -2,731 -5,784 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixSPECIFICATION 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) NUMBER OF EMPLOYEES 1) Number of employees 31.12 Average number of employees Number of person-years 31.12 Average number of person-years 1) Including Storebrand Helseforsikring with 100 per cent. 2022 -12 -142 -205 -2 -360 2022 2,138 2,069 2,125 2,054 2021 -7 -136 -185 -1 -329 2021 1,901 1,862 1,886 1,845 Note 22: Pension expenses and pension liabilities Storebrand’s employees in Norway have a defined-contribution pension scheme. In a defined-contribution scheme, the company allocates an agreed contribution to a pension account. The future pension depends upon the amount of the contributions and the return on the pension account. When the contributions have been paid, the company has no further payment obligations relating to the defined- contribution pension and the payment to the pension account is charged as an expense on an ongoing basis. For regulatory reasons, there can be no savings in the defined-contribution pension for salaries that exceed 12G (G = National Insurance Scheme basic amount). Storebrand has pension savings in the savings product Extra Pension for employees with salaries exceeding 12G. The premiums and content of the defined-contribution pension scheme are as follows: - - - - Saving starts from the first krone of salary. Savings rate of 7 per cent of salary from 0 to 12 G (the National Insurance basic amount ”G” was NOK 111,477 at 31 December 2022) 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 2.6 % in 2022. There are also pension liabilities for the defined-benefit scheme related to direct pensions for certain former employees and former board members. The pension plan for employees at SPP in Sweden follows the plan for bank employees in Sweden (BTP). SPP has a defined-contribution occupational pension known as BTP1. All new employees were enrolled in this pension agreement from and including 1 January 2014. In BTP1, the employer pays a premium for pension savings that is calculated based on pensionable salary up to 30 times the ”basic income amount” (inkomstbasbelopp). The insurance includes retirement pension with or without 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”. 170 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixThe 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 71,000 in 2022 and will be SEK 77.300 in 2023), 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 pension scheme. In addition to the defined-benefit part, the BTP plan has a smaller defined-contribution component. Here the employees can decide themselves how assets are to be invested (traditional insurance or unit-linked insurance). The defined-contribution part is 4 per cent of the annual salary for employees born in 1967 and later, while the rate is 2 per cent for employees born in 1966 and earlier. The retirement age for SPP’s CEO is 65 years. The CEO is covered by BTP1. In addition, the CEO has a defined-contribution based additional pension with SPP. The premium for this insurance is 20 per cent of salary that exceeds 30 times the “basic income amount”. 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 Interest expenses on pension liability Estimate deviations Pensions paid Changes to pension scheme Pension liabilities additions/disposals and currency adjustments Net pension liabilities 31.12 2022 709 -867 -158 168 152 162 2022 162 2022 1,185 11 21 -287 -45 -2 -21 861 2021 1,009 -1,035 -26 31 175 181 2021 181 2021 1,433 13 16 -155 -49 -74 1,185 171 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixCHANGES IN THE FAIR VALUE OF PENSION ASSETS NOK million Pension assets at fair value 01.01 Expected return Estimate deviation Premiums paid Pensions paid Changes to pension scheme Pension liabilities additions/disposals and currency adjustments Net pension assets 31.12 Expected premium payments (pension assets) in 2023 Expected premium payments (contributions) in 2023 Expected AFP early retirement scheme payments in 2023 Expected payments from operations (uninsured scheme) in 2023 2021 1,082 12 7 29 -27 -67 1,035 2022 1,035 18 -161 33 -28 -2 -28 866 17 214 23 44 PENSION ASSETS ARE BASED ON THE FINANCIAL ASSETS HELD BY STOREBRAND LIFE INSURANCE/SPP COMPOSED AT 31.12: NOK million Real estate at fair value Bonds at amortised cost Loans at amortised cost Equities and units at fair value Bonds at fair value Loans at fair value Other short-term financial assets Total Storebrand Life Insurance 2022 14 % 43 % 16 % 5 % 20 % 1 % 100 % 2021 13 % 39 % 15 % 13 % 19 % 1 % 100 % SPP 2022 15 % 17 % 44 % 24 % 2021 13 % 13 % 53 % 21 % 100 % 100 % The table shows the percentage asset allocation of pension assets at year-end managed by Storebrand Life Insurance. Realised return on assets 0.5 % 4.5 % -12.8 % 1.9 % 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 2022 10 3 13 286 22 321 2021 13 4 18 243 24 285 172 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixOTHER COMPREHENSIVE INCOME (OCI) IN THE PERIOD NOK million Actuarial loss (gain) - change in discount rate Actuarial loss (gain) - change in other financial assumptions Actuarial loss (gain) - experience DBO Loss (gain) - experience Assets Investment management cost Asset ceiling - asset adjustment Remeasurements loss (gain) in the period MAIN ASSUMPTIONS USED WHEN CALCULATING NET PENSION LIABILITY 31.12 NOK million Discount rate Expected earnings growth Expected annual increase in social security pensions Expected annual increase in pensions payment Disability table Mortality table Storebrand Livsforsikring 2022 3.8 % 3.5 % 3.5 % 0.0 % KU 2021 2.0 % 2,25 % 2,25 % 0.0 % KU 2022 -287 5 -3 159 137 12 SPP 2022 3.7 % 3.5 % 2021 -117 -33 -16 5 31 -131 2021 1.8 % 3.5 % 2.0 % 2.0 % K2013BE K2013BE DUS14 DUS14 Financial assumptions: The financial assumptions have been determined on the basis of the regulations in IAS 19. Long-term assumptions such as future inflation, real interest rates, real wage growth and adjustment of the basic amount are subject to a particularly high degree of uncertainty. In Norway, a discount rate based on covered bonds is used. Based on the market and volume trends observed, the Norwegian covered bond market must be perceived as a deep market. Specific company conditions including expected direct wage growth are taken into account when determining the financial assumptions. Actuarial assumptions: In Norway standardised assumptions on rates of mortality and disability as well as other demographic factors are prepared by Finance Norway. With effect from 2014 a new mortality basis, K2013, has been introduced for group pension insurance in life insurance companies and pension funds. Storebrand has used the mortality table K2013BE (best estimate) in the actuarial calculations at 31 December 2022. 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 2022 and are calculated for each individual when all other assumptions are kept constant. 173 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixSVERIGE Percentage change in pension: - Pension liabilities - The period's net pension costs Discount rate Expected earnings growth life expectancy 1.0 % -1.0 % 1.0 % -1.0 % + 1 year - 1 year Mortality - change in expected -8 % -11 % 9 % 12 % -5 % 4 % -7 % -3 % 3 % 1 % -3 % -1 % Note 23: Remuneration to senior employees and elected officers of the company NOK thousand Senior employees Odd Arild Grefstad Lars Aa. Løddesøl Geir Holmgren 5) Heidi Skaaret Staffan Hansén 6) Jan Erik Saugestad Karin Greve-Isdahl Trygve Håkedal Tove Selnes Vivi Måhede Gevelt 7) Jenny Rundbladh 8) Total 2022 Total 2021 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) 7,952 6,451 5,271 5,341 5,506 7,052 3,450 4,311 3,507 1,556 1,457 169 184 186 168 23 149 22 22 140 8 6 8,122 6,635 5,457 5,510 5,529 7,201 3,473 4,333 3,648 1,564 1,463 51,854 50,154 1,080 1,354 52,934 51,507 1,549 1,191 991 1,011 1,469 1,361 611 781 621 150 200 9,933 9,842 18 18 12 12 12 12 12 12 12 12 12 5,938 7,976 5,675 2,891 247,520 156,271 110,558 119,115 107,196 1,200 131,305 18,596 8,786 11,003 35,705 32,412 35,772 7,413 4,424 62,065 71,284 987,691 900,666 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) Geir Holmgren resigned from his position as Executive Vice President for Corporate Market on 3 June 2022, however remained employed until 31 December 2022. The number of shares is at the date of resignation 6) Staffan Hansén resigned from his position as Executive Vice President for SPP on 31 August 2022, however remained employed until 31 October 2022. The number of shares is at the date of resignation. 7) Vivi Måhede Gevelt assumed the role of Executive Vice President for Corporate Market on 1 September 2022. Total remuneration relates to the period after assuming the position. 8) Jenny Rundbladh assumed the role of Executive Vice President for SPP on 1 September 2022. Total remuneration relates to the period after assuming the position. 174 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNOK thousand Board of Directors Didrik Munch Martin Skancke Karin Bing Orgland Christel Elise Borge Karl Sandlund Marianne Bergmann Røren Fredrik Åtting Bodil Catherine Valvik Hans-Petter Salvesen Hanne Seim Grave Total 2022 Total 2021 Remuneration Loan 1) No. of shares owned 2) 873 702 587 444 494 435 636 489 418 489 5,568 5,468 2,304 255,000 32,500 27,000 11,000 7,000 7,000 15,300,000 1,910 650 15,642,060 18,841,540 4,904 5,451 1,830 14,489 18,662 1) Loans up to NOK 7 million follow ordinary employee- term while 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. Loans to Group employees totalled NOK 3.721 million. Note 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 Exchange rate insurance reserves 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 175 2022 -12 -2 -1 -16 2022 -149 -166 -108 -75 -497 2022 -578 -628 -126 -1 -41 -1,374 2021 -12 -2 -1 -15 2021 -463 -91 -283 -836 2021 -413 -193 -41 -12 -27 -686 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNote 27: Tax TAX EXPENSES ON ORDINARY PRE-TAX PROFIT NOK million Tax payable Change in deferred tax Total tax expenses on ordinary profit RECONCILIATION OF TAX EXPENSES AGAINST ORDINARY PRE-TAX PROFIT NOK million Ordinary pre-tax profit Expected income tax at nominal rate Tax effect of shares ("Fritaksmetoden") share dividends received associated companies 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) 2022 -59 328 270 2022 2,120 -522 -28 3 37 4 -331 331 6 771 270 -13% 2021 -90 -755 -846 2021 3,976 -986 38 2 4 161 -26 -582 582 -25 -14 -846 21% 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 and differences from currency hedging of the Swedish subsidiary SPP. The tax rate for companies’ subject to the financial tax is 25 per cent. The Storebrand Group includes companies that are both subject to and not subject to the financial tax. Therefore, when capitalising deferred tax/deferred tax assets in the consolidated financial statements, the company tax rate that applies for the individual companies is used (22 or 25 per cent). The tax rate for companies in Sweden is 20.6 per cent. TAX EXPENSES ON OTHER COMPREHENSIVE INCOME ELEMENTS NOK million Tax on other comprehensive income elements not to be reclassified to profit/loss Total tax expenses on other comprehensive income elements 2022 -1 -1 2021 8 8 176 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 2022 82 4,265 47 70 1,009 5,473 -599 -18 -26 -122 -1 -765 -4,539 169 7 175 74 1,289 1,363 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 The tax rules for the insurance industry have undergone changes in recent years. In some cases, Storebrand and the Norwegian Tax Administration have had different interpretations of the tax rules and associated transitional rules. As a result of this, uncertain tax positions arise in connection with the recognised tax expenses. Whether or not the uncertain tax positions have to be recognised in the financial statements is assessed in accordance with IAS 12 and IFRIC 23. Uncertain tax positions will only be recognised in the financial statements if the company considers it to be probable that the Norwegian Tax Administration’s interpretation will be accepted in a court of law. Any paid tax related to the uncertain tax positions is not recognized in the financial statements and is classified as receivables. 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 will challenge the decision. The company considers it to be probable that Storebrand’s understanding of the tax legislation will be accepted by 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. 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, 177 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 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. In April 2022 and January 2023 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 and has challenged the decision to the Norwegian Tax Appeals Committee. The uncertain tax position has therefore been recognised in the financial statements. Based on our revised best estimate, the difference between Storebrand’s interpretation and the Norwegian Tax Administration’s interpretation is approximately NOK 6.4 billion in an uncertain tax position. If Storebrand’s interpretation is accepted, a deferred tax expense of approximately NOK 1.6 billion will be derecognised from the financial statements. C. The outcome of the interpretation of tax rules for group contributions referred to above under (A) will have an impact when calculating the effect from the transitional rules for the new tax rules referred to under point (B). An equivalent interpretation to that described under (A) has been used as a basis in the financial statements when calculating tax input values on property shares owned by customer assets for 2016 and 2017. There is thus an uncertain tax position relating to the effect from the transitional rules described in (B). The decisions that Storebrand received in April 2022 and in January 2023 (described under point B) have reduced the uncertain tax position and have resulted in tax revenues of NOK 0.6 billion in the first quarter and NOK 0.2 billion in the fourth quarter. The effect as mentioned in point B depends on the interpretation and outcome of point A. If Storebrand’s view prevails under item A, Storebrand will account for additional tax revenues of approximately NOK 0.044 billion if the company’s view also prevails under item B. If the Norwegian Tax Administration prevails with its argument under point (A), Storebrand will recognise a tax expense of approximately NOK 0.5 billion. Storebrand has reviewed the uncertain tax positions as part of the reporting process. The review has not reduced the company’s assessment of the probability that Storebrand’s interpretation 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 Other changes Acquisition cost 31.12 Accumulated depreciation and write- downs 01.01 Write-downs in the period Amortisation in the period Disposals in the period Exchange rate adjustments Other changes Acc. depreciation and write-downs 31.12 Book value 31.12 Intangible assets IT systems 1,693 VIF 1) 9,923 Other intangible assets 2,227 Goodwill 3,069 82 232 9 -87 -11 -7 28 -283 12 1,067 -8 -9 186 3 2022 16,912 82 245 1,291 -94 -300 -7 2021 16,419 60 191 1,067 -8 -817 1,912 9,669 3,290 3,258 18,129 16,912 -7,792 -1,264 -305 -10,245 -10,116 -884 -9 -196 1 2 6 -349 227 -1,079 833 -7,914 1,755 -247 19 -1 -1,493 1,797 1 -304 2,954 -9 -792 1 248 6 -23 -689 5 577 -10,790 7,339 -10,245 6,667 1) Value of business-in-force, the difference between market value and book value of the insurance liabilities in SPP and Silver 178 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 NOK million IT systems Value of business in force SPP Value of business in force Silver Useful economic life 5 years 20 years 10 years Depr. rate 20 % 5 % 10 % Depr. method Straight line Straight line Straight line Customer contracts Danica 8 to 15 years 7 % - 13 % Straight line Distribusion Danica Customer lists Skagen Customer lists Cubera Customer lists Insr Customer contracts Cubera Brand name Skagen Database Cubera Customer relations Capital Investment Other intangible assets Total 15 years 10 years 7 years 5 years 5 years 10 years 3 years 7 years 7 years 7 % 10 % 14 % 20 % 20 % 10 % 33 % 14 % 14 % Straight line Straight line Straight line Straight line Straight line Straight line Straight line Straight line Straight line GOODWILL DISTRIBUTED BY BUSINESS ACQUISITION 2022 -349 -247 -596 2021 -366 -161 -527 Book Book value 2022 value 2021 833 1,614 141 774 251 198 107 149 35 71 206 6 809 1,963 168 238 138 205 63 86 2 232 4,384 3,903 Accumulated Supply/ disposals/ Acquisition write-downs Book value currency Book value Book value NOK million Business area cost 01.01 Delphi Fondsforvaltning Storebrand Bank ASA SPP SPP Fonder Danica Skagen Cubera Capital Investment Total Savings Other Guarant. pension/ Savings Savings Guarant. pension/ Savings/ Insurance Savings Savings Savings 35 422 778 47 1,007 206 572 3,068 Goodwill is not amortised, but is tested annually for impairment. 01.01 -4 -300 -304 179 01.01 32 122 778 47 1,007 206 572 2,764 effect 31.12.22 31.12.21 32 122 756 45 186 1,007 206 600 2,954 32 122 778 47 1,007 206 572 2,764 -22 -1 186 28 190 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixIntangible 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. 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 2026 to 2032, 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 2 per cent is used. This is in line with the Riksbanken’s inflation target. The primary drivers of improved long-term results will be the return on total assets, underlying inflation and wage growth in the market (which drive premium growth). In addition to cash flows from the forecasted result, the change in expected regulatory tying-up of capital is also used in the valuation. The utility value is calculated using a required rate of return of 9.0 per cent. The required rate of return is calculated based on the risk-free interest rate and added to a premium that reflects the risk of the business. Calculations related to the future are uncertain. The value will be impacted by various growth parameters, expected return and the required rate of return used as a basis, etc. The aim of the calculations is to achieve a satisfactory level of certainty that the recoverable amount, cf. IAS 36, is not lower than the value recognised in the accounts. 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 assessments for the period from 2026 to 2032, and the annual growth has been determined in the income statement. A growth rate of 2.0 per cent is used when calculating the terminal value. This is in line with Norges Bank’s inflation target. 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. There will be uncertainty related to the assumptions that have been made in the valuation. The value will be affected by the assumptions for the interest rate margin, expected losses on lending, growth parameters and capital requirements, 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 assumptions 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 2026 to 2032, 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 2.0 per cent is used when calculating the terminal value. This is in line with Norges Bank’s inflation target. The utility value is calculated using a required rate of return of 8.2 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 2026 to 2032, a projected forecast has been used that is based on the expected development in the private equity market. A growth rate of 2.0 per cent is used when calculating the terminal value. This is in line with Norges Bank’s inflation target. The utility value is calculated using a required rate of return after tax of 8.2 per cent. 180 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix There are uncertainty related to the assumptions that have been made in the valuation. The value will be influenced by changes in the assumptions regarding expected returns of the financial markets, costs, management fees, growth parameters, and the required rate of return that is used as the discount rate. The aim of the calculations is to achieve a satisfactory level of certainty that the entity specific value, cf. IAS 36, is not lower than the value recognised in the accounts. Simulations with reasonable and also conservative assumptions indicate a value that justifies the book value. Intangible assets linked to the acquisition of Silver Storebrand Livsforsikring AS acquired Silver Pensjonsforsikring AS (Silver) in 2018 and the company was merged with Storebrand Livsforsikring AS the same year. The intangible assets linked to the acquisition of Silver include the value of business in force (VIF), which is included in Storebrand Livsforsikring’s liability adequacy test in accordance with the requirements in IFRS 4. 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 contracts 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 comparison 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 development and the discount rate. Simulations with reasonable and also conservative assumptions indicate a value that justifies the book value, cf. IAS 36. Intangible 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 Insurance 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 A/S (Capital Investment) in 2021. The intangible assets associated with Capital Investment are customer relations 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 2026 to 2032, a projected forecast has been used that is based on the expected development. A growth rate of 2.0 per cent is used when calculating the terminal value. This is in line with Danmarks Nationalbank’s (central bank of Denmark) inflation target. The utility value is calculated using a required rate of return after tax of 8.2 per cent. There will be uncertainty related to the assumptions that have been made in the valuation. The value will be influenced by the assumptions regarding expected returns in the financial markets, costs, management fees, growth parameters, and the required rate of return that is used as a basis. 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 financial statements. Simulations with reasonable and also conservative assumptions indicate a value that justifies the book value. Intangible assets linked to the acquisition of Danica Storebrand Livsforsikring AS acquired Danica Pensjon AS (Danica) in 2022. Intangible assets related to the acquisition of Danica are customer relations, distribution agreements and goodwill. Budgets and forecasts approved by the Board for the next three years are used as the basis for the valuation. See further reference to the acquisition in Note 3. The utility value will be influenced by the assumptions regarding expected returns in the financial markets, costs, customer loss, income development and the required rate of return that is used as a basis. Simulations with reasonable and also conservative assumptions indicate a value that justifies the book value, cf. IAS 36. 181 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix Sensitivities in the valuations Calculations related to the future will be uncertain. The utility value will be influenced by the assumptions regarding expected returns in the financial markets, costs, customer loss, income development and the required rate of return that is used as a basis. Simulations with reasonable and also conservative assumptions indicate that all cash generating units have a value that justifies the book value, cf. IAS 36. The sensitivity analyses indicate that the utility value for all units exceeds the book value even with a minimum increase in the required rate of return of 2.5 percentage points or with a growth rate of 0 per cent in the terminal value. Note 29: Tangible fixed assets and lease agreements NOK million Book value 01.01 Additions Disposals Depreciation Exchange rate adjustments Book value 31.12 Vehicles/ equipment Real estate 2022 2021 73 12 -11 -1 73 2 2 75 12 -12 -1 75 60 24 -2 -7 75 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 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 Total 2022 Total 2021 75 1,099 1,173 1173 1,173 75 1,191 1,266 1266 1,266 182 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixLEASE AGREEMENTS 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 1,510 50 -18 1,543 -338 -125 -462 1,080 78 16 -2 92 -60 -17 1 -75 17 2 1 -0 3 -1 -1 1 2022 1,590 67 -20 1,638 -399 -142 2 -539 1,099 2021 1,604 41 -7 -47 1,591 -267 -135 3 -400 1,191 Applied practical solutions The Group also leases PCs, IT equipment and machinery with contract terms from 1 to 3 years. The Group has decided not to recognise leases when the underlying asset has a low value and therefore does not recognise lease liabilities and right-of-use assets for any of these leases. Instead, the lease payments are expensed as they are incurred. The Group also does not recognise lease liabilities and right-of-use assets for short-term leases of less than 12 months. 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. CHANGES IN LEASE LIABILITIES NOK million Upon initial adoption 01.01 New/changed lease liabilities recognised during the period Payment of principal Accrued interest Exchange rate adjustments Total lease liabilities 31. 12 183 2022 154 127 123 122 63 578 1,166 2022 1,210 55 -150 11 -18 1,109 2021 144 126 114 113 113 651 1,260 2021 1,355 34 -145 11 -44 1,210 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixOTHER LEASE EXPENSES INCLUDED IN THE INCOME STATEMENT NOK million Lease expenses for assets with low value Total lease expenses included in operating expenses 2022 -17 -17 2021 -17 -17 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 financial 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 2022 2021 Equity-method Insurance Joint venture Equity-method Insurance Joint venture 780 101 58 514 28 1,059 -2 -2 748 120 89 451 26 937 35 35 184 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix PROFIT AND OWNERSHIP INTERESTS IN ASSOCIATED COMPANIES AND JOINT VENTURES NOK million Associated companies Storebrand Eiendomsfond Norge KS Quantfolio AS Other associated companies Joint ventures Försäkringsgirot AB VIA Storebrand Helseforsikring AS Total Booked in the statement of financial position Investments in associated companies - company Investments in associated companies - customers Total Business Book value Book value location Ownership share Profit 31.12 31.12.22 31.12.21 Bærum Oslo Stockholm Oslo Lysaker 33.8 % 34.0 % 16.7 % 50.0 % 50.0 % -183 -7 1 -145 -1 -335 -20 -314 -335 5,290 4,089 59 12 9 3,386 155 8,910 442 8,469 8,910 8 8 3,259 164 7,528 387 7,141 7,528 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 2021 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 2021 Investments, Liabilities at Loans and held to Fair value, Fair value, amortised receivables maturity held for sale FVO cost Total 2022 Total 2021 14,511 122,039 109 71,225 8,519 216,403 201,199 7,402 7,402 8,441 270,532 156,215 7,075 54 433,876 454,833 14,511 9,986 270,532 278,326 285,657 294,887 109 78,301 8,519 14,343 671,970 67 69,486 11,661 4,915 669,328 10,585 10,585 11,441 403 19,478 32,791 10,630 73,887 68,749 68 68 51 403 19,478 32,791 12,708 10,630 86,595 502 17,239 24,924 3,143 14,643 71,892 14,289 14,289 4,855 12,640 12,640 3,092 185 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 Life Insurance Modified duration Average effective yield Distribution beween company and customers Loans and receivables company Loans and receivables customers with guarantee Loans and receivables customers without 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 2022 2021 Book value Fair value Book value Fair value 34,025 69,463 17,591 961 32,112 64,251 14,868 958 28,171 70,854 17,993 911 29,574 71,189 17,581 913 122,039 112,190 117,929 119,257 0.1 0.9 % 8.0 2.5% 0.1 3.3 % 7.9 4.2% 3.0% 12,955 104,975 117,929 2.9% 11,741 110,220 79 122,039 2022 2021 Book value Fair value Book value Fair value 7,474 7,474 3.0 4.1% 7,402 7,402 4.2% 7,402 7,402 8,441 8,441 4.3% 8,441 8,441 9,103 9,103 3.5 2.0% 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 security’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. 186 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 Net loans to customers - customers without 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. 2022 11,342 67,066 78,408 -108 78,301 49,917 28,384 52,865 24,420 1,016 78,301 2022 73 25 98 -17 82 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 59 187 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNote 34: Properties NOK million 31.12.22 31.12.21 of return % 1) lease (years) 3) KVM 31.12.22 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: Housing properties Sweden 2) Hotel Sweden 2) Service properties Sverige 2) Properties under development Norway Total investment properties Properties for own use Total properties Allocation by company and customers: Properties - customers with guarantee Properties - customers without guarantee Total 6.1 3.6 6.4 3.0 5.4 5.5 0.6 10.4 9.9 6.6 96,607 86,619 1,573 181,009 112,247 27,393 91,788 35,872 58,971 38,820 730,899 18,894 749,793 3.75 - 4.90 4.03 - 5.83 3.75 4.86 - 6.72 5.61 4.65 3.55 4.36 3.93 7.50 8,854 4,760 73 5,725 2,829 8,715 4,988 724 5,611 2,807 944 933 3,574 2,720 3,008 995 33,482 1,689 35,171 30,994 4,177 35,171 3,905 2,550 2,434 709 33,376 1,659 35,035 30,202 4,833 35,035 1) The properties are valued on the basis of the following effective required rate of return (inluded 2 per cent inflation). For 2023, rents have been adjusted by the CPI of 7.5 per cent, however the model uses Norges Bank’s inflation target of 2 per cent as a basis for other years. 2) All of the properties in Sweden are appraised externally. The appraisal is based on the required rates of return in the market (including 2 per cent inflation, for 2023, 4.75 per cent is assumed) 3) The average duration of the leases is weighted based on the value of the individulal properties. As of 31.12.22, Storebrand Life Insurance had NOK 8 211 million invested in Storebrand Eiendomsfond Norge KS and VIA, Oslo. The investments are classified as “Investment in associated Ccmpanies and joint ventures” in the Consolidated Financial Statements. Storebrand Eiendomsfond Norge KS and VIA, Oslo invest exclusively in real estate at fair value. Vacancy Norway The vacancy rate for lettable areas was 5,6 per cent (7.7 per cent) at the end of 2022 The vacancy rate is decreasing largely due to Filipstad Brygge having been transferred to the development portfolio. At the end of 2022, a total of 13.9 per cent (10.7 per cent) of the floor space in the investment properties was vacant Sweden At the end of 2022, the vacancy for investment properties was 0,4 per cent Transactions: Purchases: No further property acquistions has been agreed in SPP in addtition to the figures that have been finalised and included in the finacial statements as of 31 December 2022. 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 2022 188 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 2022 1,659 24 51 -14 12 -49 6 1,690 586 610 -705 -719 1,690 1,690 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 Collateral Tax receivable Activated sales costs (Swedish business) Paid tax uncertain tax positions 1) 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 1) Paid tax related to uncertain tax positions, see note 27 Tax 189 2022 1,410 573 270 387 2,712 1,036 318 722 774 317 8,519 7,720 800 8,519 2021 1,609 27 124 -13 12 -106 6 1,659 559 586 -692 -705 1,659 1,659 Straight line 50 years 2021 1,078 498 272 886 5,350 2,335 284 699 259 11,661 11,024 638 11,661 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 Past due > 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 190 2022 1,369 31 1 6 9 1,416 -6 -6 2022 Fair value 47,517 15,277 78,592 129,146 270,532 453 25,598 244,481 270,532 2022 Fair value 24,762 43,066 43 4,506 83,839 156,215 23,516 73,649 59,050 156,215 2021 1,061 18 1 1,081 -3 -3 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 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixFair value Storebrand Danica Modified duration Average effective yield Storebrand SPP Pension Pensjons- Storebrand Storebrand Storebrand Life Insurance & Insurance forsikring 3.0 3.7 % 8.1 4.6 % 2.2 2.8 % Bank 0.2 3.5 % Insurance 0.6 4.1 % ASA 0.6 4.1 % 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 position produces a gain if interest rates fall, as is the case for bonds. For currency derivatives, a long position results in a positive change in value if the relevant exchange rate strengthens against the NOK. Average gross nominal volume are based on daily calculations of gross nominal volume. NOK million Interest derivatives 2) Currency derivatives Total derivater 31.12. Total derivater 31.12.21 Gross nominal Gross booked volume 1) value fin. assets 176,041 176,974 11,122 3,221 14,343 4,915 Gross booked value fin. liabilities 11,881 827 12,708 3,143 Distribution between company and customers: Derivatives - company Derivatives - customers with guarantee Derivatives - customers without guarantee Total 1) Values 31.12. 2) See note 43 collateral for derivative trading classified as derivatives Net amount Net amount 2022 -759 2,394 1,636 -396 459 1,573 1,636 2021 2,317 -545 1,772 695 1,514 -437 1,772 191 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNote 39: Technical insurance reserves - life insurance SPECIFICATION OF BUFFER CAPITAL ITEMS CONSERNING LIFE INSURANCE NOK million Additional statutory reserves Buffer fund Conditional bonus Market value adjustment reserve Total buffer capital Guaranteed Total Total Storebrand Storebrand pension Savings Insurance *) Group 2022 Group 2021 9,643 1,137 12,540 693 24,013 9,643 1,137 12,540 632 23,952 13,602 13,781 6,309 33,693 -61 -61 SPECIFICATION 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 Supplerende avsetning Guaranteed pension 246,874 4,753 7 2,943 Savings Insurance *) Group 2022 Group 2021 Total Total Storebrand Storebrand 314,918 64 9 6,660 1,595 599 779 664 568,452 569,376 6,348 7 3,606 779 664 9 4,180 1 3,500 661 573 Total insurance liabilities - life insurance 249,824 314,992 8,037 572,853 573,539 *) 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 2022 2,047 -1,415 632 2021 5,195 1,115 6,309 192 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNOK million Total insurance liabilities - life insurance 01.01 Purchase of business 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 Longevity swap Surplus allocated to additional statutory reserves Allocated risk equalisation fund Transfer to/from owner Other changes Total change in insurance liabilities in income statement Transfer between products Yield tax Longevity swap Fair value adjustment of properties for own use in Other comprehensive income Change in reinsurance share Change in premium fund Latent capital contribution Other Acquisition of insurance portfolio Exchange rate adjustments Total insurance liabiliteis - life insurance 31.12. *) Including personal risk and employee insurance of the Insurance segment. See note 40 for insurance liabilities - P&C. Guaranteed pension 258,263 768 9,595 -12,258 5,002 -16,161 -595 -52 -1,508 7 3,506 1 90 -12,373 1,124 -73 -7 52 50 323 800 3,192 -2,295 249,824 Note 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. 193 -117 -411 -15,067 16 -127 2 48 -201 -4,353 314,992 Savings Insurance *) Total 2022 Total 2021 308,351 26,322 33,310 -26,992 -20,457 6,925 611 3,318 -26 191 -1,137 -400 -148 573,539 534,683 27,701 46,223 -39,275 5,193 -37,755 -595 -52 -2,056 7 3,506 1 -405 -626 0 51,512 58,831 861 -50,945 -4,504 -127 -2,557 -1,653 -109 -425 -268 -25,834 50,615 -288 -305 1,606 -1,075 2 -20 -11 65 -200 -7 52 2 32 323 837 2,991 -6,648 8,037 572,853 2022 14 14 1,132 1,066 1,017 49 2,198 -31 -186 127 -11 796 299 2,551 -15,306 573,538 2021 32 32 985 933 893 41 1,918 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNote 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 Note 42 Hedge accounting 2022 288 891 31 19 335 394 1,339 1,071 2,833 284 2,614 52 479 2021 286 990 36 231 50 358 2,756 1,449 5,096 320 2,411 205 454 10,630 14,643 2022 36 11 -15 -1 31 2021 54 7 -22 -3 36 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 103per cent per 31.12.22. 194 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix HEDGING INSTRUMENT/HEDGED ITEM 2022 Book value 1) 2021 Book value 1) Contract/ nominal value Recognised of comprehensive Conract/ nominal Recognised of comprehensive NOK million (Euro) Assets Liabilities income value (Euro) Assets Liabilities Booked income 112 38 -38 421 -590 578 703 250 -250 2,685 -1 -391 335 Interest rate swaps Subordinated loans Debt raised through issuance of securities 1) Book values as at 31.12. HEDGING INSTRUMENT/HEDGED ITEM 2022 Book value 1) 2021 Book value 1) Contract/ nominal Conract/ nominal NOK million value (NOK) Assets Liabilities Booked value (NOK) Assets Liabilities Booked Interest rate swaps Subordinated loans Debt raised through issuance of securities 730 730 1) Book values as at 31.12. 49 -46 480 680 44 480 3 475 -4 5 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 attributable to the hedged risk adjust the carrying amount of the hedged item and are recognised through profit or loss. Hedging loans in Euro also includes hedging foreign exchange risk. Hedge effectiveness is monitored at an individual security level. Hedge effectiveness was 88 and 100 per cent as at 31 December 2022. HEDGING INSTRUMENT/HEDGED ITEM 2022 Book value 1) 2021 Book value 1) Contract/ nominal Contract/ nominal NOK million value (Euro) Assets Liabilities Booked value (Euro) Assets Liabilities Booked 300 -300 648 2,397 28 300 -300 158 2,876 2 Interest rate swaps Subordinated loans Debt raised through issuance of securities 1) Book values as at 31.12. 195 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix HEDGING INSTRUMENT/HEDGED ITEM 2022 Book value 1) Contract/ nominal value (NOK) Assets Liabilities 750 -750 16 773 NOK million Interest rate swaps Subordinated loans Debt raised through issuance of securities 1) Balanseførte verdier per 31.12. Hedging of net investment in Storebrand Holding AB In 2022, 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. . As of 31 December 2022, three loans have been taken out that are used as hedging instruments. 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 226 million were recognised in total comprehensive income in connection with the hedging of Storebrand Holding AB, compared with a revenue of NOK 577 million in 2021. HEDGING INSTRUMENT/HEDGED ITEM 2022 Book value 1) 2021 Book value 1) Contract/ nominal value (SEK) -9,691 -2,800 Assets Liabilities -111 2,654 Conract/ nominal value (SEK) -4,696 -3,800 Assets Liabilities -18 3,704 11,823 9,538 NOK million Currency derivatives Loan used as hedging instrument Underlying items 1) Balanseførte verdier per 31.12. The phasing out of LIBOR as a reference rate for various currencies had a slightly less attention in 2022 than in 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 was replaced by new “overnight rates”, SOFR, SONIA, EURSTR, SARON and TONA. The value of some of the LIBOR rates has still been quoted in 2022, however this will only be synthetic for GBP and JPY. The transition to and use of the new official “overnight rates” has continued 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 338 million. 196 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix Note 43: Collateral NOK million Collateral provided in cash in connection with derivatives trading Collateral provided in bonds Cash collateral received in connection with derivatives trading. Collateral received in bonds Collateral received in connection with Derivatives trading Total received and pledged collateral 2022 8,765 3,596 -1,337 -93 21 10,953 2021 1,200 -3,445 -322 -2,568 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 calculated based on the NOWA and EONIA rates respectively. Security provided for futures and options is adjusted daily on the basis of a daily margin settlement for each contract. Security is received and provided in the form of both cash and securities. Security in the form of cash is recognised in the balance 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 2022 1,590 151 1,741 2021 651 151 802 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 two F-loan in Norges Bank as per 31.12.2022. Of the total lending of NOK 49.5 billion in the Bank Group, NOK 37.5 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 32,2 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 10.11 per cent at the end of 2022. The statutory OC is 5 per cent. Storebrand Boligkreditt AS has security that is NOK 5,7 billion more than what the present rating requires. Storebrand Bank ASA therefore considers the security to be adequate. 197 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 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 2022 3,737 3,246 4,087 12,238 23,309 2021 3,322 3,516 4,870 10,093 21,801 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 NOK million Lending of shares Collateral received for lent securities 2022 1,274 -1,411 2021 207 -227 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%. Note 46: Information related parties Companies in the Storebrand Group have transactions with related parties who are shareholders in Storebrand ASA and senior employees. These are transactions that are part of the products and services offered by the Group‘s companies to their customers. The transactions are entered into on commercial terms and include occupational pensions, private pensions savings, P&C insurance, leasing of premises, bank deposits, lending, asset management and fund saving. See note 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 48: Events after the balance sheet date Storebrand ASA has acquired the Norwegian Fintech company Kron AS, and the transaction was completed on January 3 2023. See further information in note 3. 198 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixSTOREBRAND ASA Income statement NOK million Operating income Income from investments in subsidiaries Net income and gains from financial instruments: - equities and other units - bonds and other fixed-income securities Other financial income Operating income Interest expenses Other financial expenses Operating expenses Personnel expenses Other operating expenses Total operating expenses Total expenses Pre-tax profit Tax Profit for year Note 2022 2 3 3 4,5,6 6 3,187 -25 51 2 3,215 -23 110 -50 -170 -220 -133 3,082 7 -143 2,939 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 2022 2,939 5 14 -3 10 2021 4,542 -2 39 204 4,783 -18 -79 -44 -136 -180 -277 4,505 -258 4,248 2021 4,248 6 -1 4 Total comprehensive income 2,949 4,252 199 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 31.12.22 31.12.21 7 12 8 36 28 24,100 24,164 15 3,178 9 10,11 11 5 11,13 15 14 40 4,629 433 8,294 32,458 2,360 -39 10,842 13,163 15,932 29,095 118 501 618 1,002 1,718 25 2,745 32,458 46 27 23,006 23,079 4,542 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 Lysaker, 7 February 2023 Board of Directors of Storebrand ASA Didrik Munch (sign.) Chairman of the board Karin Bing Orgland (sign.) Martin Skancke (sign.) Marianne Bergmann Røren (sign.) Christel Elise Borge (sign.) Karl Sandlund (sign.) Fredrik Åtting (sign.) Martin Skancke (sign.) Hanne Seim Grave (sign.) Hans Petter Salvesen (sign.) Bodil Chaterine Valvik (sign.) Odd Arild Grefstad (sign.) Chief Executive Officer 200 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix STOREBRAND ASA Statement of changes in equity NOK million Share capital 1) Own shares Share premium Other equity Total equity Equity at 31. December 2020 2,339 -2 10,521 21 320 10,842 Profit for the period Total other result elements Total comprehensive income Issues of shares Provision for dividend Own shares sold 2) Employee share 2) Equity at 31. December 2021 2,360 Profit for the period Total other result elements Total comprehensive income Provision for dividend Own shares bought back 2) Own shares sold 2) Employee share 2) Equity at 31. December 2022 2,360 1) 471 974 890 shares with a nominal value of NOK 5. -7 -9 -32 3 -39 12,609 4,248 4 4,252 -1,640 -97 4 15,128 2,939 10 2,949 -1,718 -468 37 4 25,467 4,248 4 4,252 341 -1,640 -104 4 28,321 2,939 10 2,949 -1,718 -500 40 4 10,842 15,932 29,095 2) In 2022, Storebrand ASA has bought 6.477.024 own shares. In 2022, 552.574 shares were sold to our own employees. Holding of own shares 31. December 2022 was 7.764.226. 201 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 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 2022 224 -233 4,551 4,541 -1,511 -1,512 -500 -23 45 -500 -1,646 -2,624 405 405 28 433 2021 130 -184 3,126 3,071 202 -1,675 -1 -1,473 -18 44 -144 -1,513 -1,631 -33 -33 61 28 202 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixSTOREBRAND ASA Innhold noter 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 203 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 accordingly been prepared in accordance with the Norwegian Accounting Act, generally accepted accounting policies in Norway, and the Norwegian Regulations relating to annual accounts for nonlife insurance companies. Storebrand ASA has used the simplified IFRS provisions in the regulations for recognition and measurement. Use of estimates and discretionary assumptions In preparing the annual financial statements, Storebrand has made assumptions and used estimates that affect the reported value of assets, liabilities, revenues, costs, as well as the information provided on contingent liabilities. Future events may cause these estimates to change. Such changes will be recognised in the financial statements when there is a sufficient basis for using new estimates. The most important estimates and assessments are related to the valuation of the company’s subsidiaries and the assumptions used for pension calculations. Classification and valuation policies Assets intended for permanent ownership and use are classified as fixed assets, and assets and receivables due for payment within one year are classified as current assets. Equivalent policies have been applied to liability items. Profit and loss account and statement of financial position Storebrand ASA is a holding company with subsidiaries in the fields of insurance, banking and asset management. The layout plan in the Regulations relating to annual financial statements for nonlife insurance companies has not been used, a custom layout plan has been used. Investments in subsidiaries, dividends and group contributions In the company’s accounts, investments in subsidiaries and associated companies are valued at the acquisition cost less any write- downs. The need to write down is assessed at the end of each accounting period. Storebrand ASA’s primary income is the return on capital invested in subsidiaries. Group contributions and dividends received in respect of these investments are therefore recorded as ordinary operating income. Proposed and approved dividends and group contributions from subsidiaries at the end of the year are recognised in the financial statements of Storebrand ASA as income in that financial year. A prerequisite for recognition is that this is earned equity by a subsidiary. Otherwise, this is recognised as an equity transaction, which means that the ownership interest in the subsidiary is reduced by dividends or group contributions. Tangible fixed assets Tangible fixed assets for own use are recognised at acquisition cost less accumulated depreciation. Write-downs are made if the book value exceeds the recoverable amount of the asset. Pension liabilities for company’s own employees Storebrand ASA have defined-contribution pension but have some pension obligation that are recorded as defined-benefit pension. The defined-contribution pension scheme involves the company paying an annual contribution to the employees’ collective pension savings. The future pension will depend upon the size of the contribution and the annual return on the pension savings. The company does not have any further work-related obligations after the annual contribution has been paid. No provisions are made for ongoing pension liabilities for these types of schemes. Defined-contribution pension schemes are recognised directly in the financial statements. Tax The tax cost in the profit and loss account consists of tax payable and changes in deferred tax. Deferred tax and deferred tax assets are calculated on the differences between accounting and tax values of assets and liabilities. Deferred tax assets are recorded on the balance sheet to the extent it is considered likely that the company will have sufficient taxable profit in the future to make use of the tax asset. Deferred tax is applied directly against equity to the extent that it relates to items that are themselves directly applied against equity. Currency Current assets and liabilities are translated at the exchange rate on the balance sheet date. Shares held as fixed assets are translated at the exchange rate on the date of acquisition. 204 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixFinancial instruments Equities and units Equities and units are valued at fair value. For securities listed on an exchange or other regulated market, fair value is determined as the bid price on the last trading day immediately prior to or on the balance sheet date. Any repurchase of own shares is dealt with as an equity transaction, and own shares (treasury stock) are presented as a reduction in equity. Bonds and other fixed income securities Bonds and other fixed income securities are included i the statement of financial position from such time the company becomes party to the instrument’s contractual terms and conditions. Ordinary purchases and sales of financial instruments are recognised on the transaction date. When a financial asset or a financial liability is initially recognised in the financial statements, it is valued at fair value. Initial recognition includes transaction costs directly related to the acquisition or issue of the financial asset/liability. Financial assets are derecognised when the contractual right to the cash flows from the financial asset expires, or when the company transfers the financial asset to another party in a transaction by which all, or virtually all, the risk and reward associated with ownership of the asset is transferred. Bonds and other fixed income securities are recognised at fair value. Fair value is the amount for which an asset could be sold for, or a liability settled with, between knowledgeable, willing parties in an arm’s length transaction. For financial assets that are listed on an exchange or other regulated market place, fair value is determined as the bid price on the last trading day up to and including the balance sheet date, and in the case of an asset that is to be acquired or a liability that is held, the offer price. Financial derivatives Financial derivatives are recognised at fair value. The fair value of such derivatives is classified as either an asset or a liability with changes in fair value through profit or loss. Bond funding Bond loans are recorded at amortised cost using the effective interest rate method. The amortised cost includes the transaction costs on the date of issue. Note 2: Income from investments in subsidiaries NOK million Storebrand Livsforsikring AS Storebrand Bank ASA Storebrand Asset Management AS Storebrand Forsikring AS Storebrand Facilities AS Storebrand Helseforsikring AS Total Group contribution from Storebrand ASA, see note 8. 2022 2,325 208 510 134 1 9 3,187 2021 3,210 238 948 146 4,542 205 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNote 3: Net income for various classes of financial instruments NOK million income on realisation gain/loss 2022 2021 Dividend/ Net interest Net gain/loss unrealised Net income from equities and units Net income from bonds and other fixed income securities Net income and gains from financial assets at fair value – of which FVO (Fair Value Option) 67 67 67 -30 -30 -30 -25 14 -11 -11 -25 51 26 26 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. 2022 -25 -7 -8 -11 -50 -2 39 37 37 2021 -24 -6 -7 -7 -44 Note 5 : Pensions costs and pension liabilities Storebrand Group has country-specific pension schemes. Storebrand’s employees in Norway have a defined-contribution pension scheme. In a defined-contribution scheme, the company allocates an agreed contribution to a pension account. The future pension depends upon the amount of the contributions and the return on the pension account. When the contributions have been paid, the company has no further payment obligations relating to the defined-contribution pension and the payment to the pension account is charged as an expense on an ongoing basis. For regulatory reasons, there can be no savings in the defined-contribution pension for salaries that exceed 12G (G = National Insurance Scheme basic amount). Storebrand has pension savings in the savings product Extra Pension for employees with salaries exceeding 12G. The premiums and content of the defined-contribution pension scheme are as follows: – Saving starts from the first krone of salary – Savings rate of 7 per cent of salary from 0 to 12 G (the National Insurance basic amount ”G” was NOK 111,477 as at 31 December 2022) – 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 2.6 % in 2022 while it was 2.5 % in 2021. 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 206 2022 1 -7 -6 123 118 2021 2 -7 -6 147 142 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 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 2022 149 3 -14 -13 125 2022 7 7 2021 165 2 -6 -12 149 2021 7 7 Expected premium payments are estimated to be NOK 2 million and the payments from operations are estimated to be NOK 15 million in 2023. 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: NET PENSION COST BOOKED TO PROFIT AND LOSS ACCOUNTS IN THE PERIOD NOK million Net interest/expected return Total for defined benefit schemes The period's payment to contribution scheme Net pension cost booked to profit and loss accounts in the period OTHER COMPREHENSIVE INCOME (OCI) IN THE PERIOD NOK million Actuarial loss (gain) - change in discount rate Actuarial loss (gain) - experience DBO Remeasurements loss (gain) in the period 2022 14 % 43 % 16 % 5 % 20 % 1 % 100 % 0.5 % 2021 13 % 39 % 15 % 13 % 19 % 1 % 100 % 4.5 % 2022 2021 3 3 5 8 2022 -13 -1 -14 2 2 5 7 2021 -6 -6 207 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixMAIN 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 2022 3.80 % 3.50 % 3.50 % 0.00 % KU 2021 2.00 % 2.25 % 2.25 % 0.00 % KU K2013BE K2013BE Financial assumptions: The financial assumptions have been determined on the basis of the regulations in IAS 19. Long-term assumptions such as future inflation, real interest rates, real wage growth and adjustment of the basic amount are subject to a particularly high degree of uncertainty. In Norway, a discount rate based on covered bonds is used. Based on the market and volume trends observed, the Norwegian covered bond market must be perceived as a deep market. Specific company conditions including expected direct wage growth are taken into account when determining the financial assumptions. Actuarial assumptions: In Norway standardised assumptions on rates of mortality and disability as well as other demographic factors are prepared by Finance Norway. With effect from 2014 a new mortality basis, K2013, has been introduced for group pension insurance in life insurance companies and pension funds. Storebrand has used the mortality table K2013BE (best estimate) in the actuarial calculations at 31 December 2022. Note 6: Remuneration of the CEO and elected officers of the company Tusen kroner Chief Executive Officer 1) Salary 2 Other taxable benefits Total remuneration Pension costs 3) Chairman of the Board Board of Directors including the Chairman Remuneration paid to auditors 4) Statutory audit Other reporting duties Other non-audit services 2022 7,952 169 8,122 1,549 873 5,568 3,417 436 31 2021 7,638 185 7,823 1,493 874 5,468 2,415 246 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. 208 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 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 2022 3,082 -94 -2,331 -70 -39 549 2022 -137 -6 -143 2021 4,505 -135 -203 -3,214 83 6 1,042 2021 -260 2 -258 CALCULATION 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 Tax cost Effective tax rate 209 2022 2021 -26 -118 -1 -144 -144 36 2022 3,082 -770 24 604 -143 5 % -40 -142 -1 -183 -183 46 2021 4,505 -1,126 34 51 784 -258 6 % Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNote 8: Parent company’s shares in subsidiaries and associated companies Business office Interest/ votes in % Carrying amount 2022 2021 Oslo Oslo Oslo Oslo Oslo Oslo 100% 100% 100% 100% 100% 50% NOK million Subsidiaries Storebrand Livsforsikring AS 1) Storebrand Bank ASA 2) Storebrand Asset Management AS Storebrand Forsikring AS 3) Storebrand Facilities AS Jointly controlled/associated companies Storebrand Helseforsikring AS Sum 1) Group contribution in 2022 of NOK 428 million as capital contribution. 2) Group contribution in 2022 of NOK 407 million as capital contribution. 3) Group contribution in 2022 of NOK 30 million as capital contribution. 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 16,030 3,455 3,430 1,083 25 78 24,100 Fair value 2022 40 40 Fair value 2022 4,629 4,629 0.6 4.12 % 15,603 2,823 3,425 1,053 25 78 23,006 2021 55 55 2021 4,811 4,811 0.6 1.25 % 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. 210 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 1,369 Supranational organisations 268 1,637 1,506 Other Total 2022 Total 2021 COUNTERPARTIES NOK million Bank deposits 71 433 503 573 5 1,732 1,736 2,199 665 20 24 710 530 42 42 2 AA A Virkelig verdi Virkelig verdi 4 428 Total Total Fair value Fair value 2022 75 4,199 20 292 42 4,629 2021 194 4,171 5 439 2 4,811 4,811 Total Virkelig verdi 433 The rating classes are based on Standard & Poors’s Interest rate risk Storebrand ASA has both interest-bearing securities and interest-bearing debt. A change in interest rates will have a limited effect on the company’s equity. Liquidity risk UNDISCOUNTED CASH FLOWS FOR FINANCIAL LIABILITIES NOK million 0-6 months 7-12 months 2-3 years 4-5 years Total value Securities issued/bank loans Total financial liabilities 2022 Total financial liabilities 2021 3 3 508 3 3 4 512 512 14 519 519 1,031 505 Carrying amount 501 501 1,001 Storebrand ASA had as per 31 December 2022 liquid assets of NOK 5,1 billion. Currency risk Storebrand ASA has investments of SEK 36 million. 211 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. 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 Carrying amount 31.12 Property, plant and equipment mainly includes art that is not depreciated. Note 13: Securities issued 2022 2021 35 -7 27 0 28 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 2022 501 501 2021 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. 212 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix Note 14: Shareholders THE 20 LARGEST SHAREHOLDERS Folketrygdfondet Allianz Global Investors T Rowe Price Global Investments Vanguard Group EQT Fund Management KLP Alfred Berg BlackRock Storebrand Asset Management DNB Asset Management Handelsbanken Asset Management Nordea Asset Management Danske Bank Asset Management Storebrand ASA Solbakken AS OM Holding AS Eika Kapitalforvaltning Union Investment SSGA BNP arbitrage account Foreign ownership of total shares Ownership interest in % 9.9 6.9 5.9 3.6 3.2 3.0 2.7 2.2 2.2 2.0 2.0 2.0 1.9 1.6 1.4 1.4 1.2 1.2 1.0 1.0 50 % 213 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. AppendixNote 15: Information about close associates Senior employees Odd Arild Grefstad Lars Aa. Løddesøl Heidi Skaaret Jan Erik Saugestad Karin Greve-Isdahl Trygve Håkedal Tove Selnes Vivi Måhede Gevelt Jenny Rundbladh Board of Directors Didrik Munch Martin Skancke Karin Bing Orgland Christel Elise Borge Karl Sandlund Marianne Bergmann Røren Fredrik Åtting Bodil Catherine Valvik Hans-Petter Salvesen Hanne Seim Grave Number of shares 1) 247,520 156,271 119,115 131,305 35,705 32,412 35,772 7,413 4,424 255,000 32,500 27,000 11,000 7,000 7,000 15,300,000 1,910 0 650 1) The summary shows the number of shares owned by the individual, as well as his or her immediate family and companies where the individual exercises significant influence, confer the Accounting Act, Section 7-26. TRANSACTIONS BETWEEN GROUP COMPANIES NOK million Profit and loss account items: Group contributions and dividends from subsidiaries Purchase and sale of services (net) Statement of financial position items: Due from group companies Payable to group companies Note 16: Number of employees/person-years Number of employees Number of full time equivalent positions Average number of employees 214 2022 3,187 -141 3,178 1,002 2022 8 8 8 2021 4,542 -108 4,542 1,193 2021 8 8 8 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix - 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 2022 financial year and as at 31 December 2022 (2022 Annual Report). The consolidated financial statements have been prepared in accordance with the EU-approved International Financial Reporting Standards (IFRS) and the associated interpretations, as well as the other disclosure obligations stipulated in the Norwegian Accounting Act that must be applied as at 31 December 2022. The annual financial statements for the parent company have been prepared in accordance with the Norwegian Regulations relating to annual accounts, the Norwegian Regulations relating to annual accounts for nonlife 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 2022. In the best judgment of the Board and the CEO, the annual financial statements for 2022 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 2022. 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, 7 February 2023 Board of Directors of Storebrand ASA Didrik Munch (sign.) Chairman of the Board 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 215 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix Independent auditor’s report To the General Meeting of Storebrand ASA Independent Auditor’s Report Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Storebrand ASA, which comprise: • • the financial statements of the parent company Storebrand ASA (the Company), which comprise the statement of financial position as at 31 December 2022, the income statement, statement of total comprehensive income, the statement of changes in equity and statement of cash flow for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the consolidated financial statements of Storebrand ASA and its subsidiaries (the Group), which comprise the statement of financial position as at 31 December 2022, the income statement, statement of total comprehensive income, statement of changes in equity and statement of cash flow for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. 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 2022, and its financial performance and its cash flows for the year then ended in accordance with Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and the consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2022, 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 relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International 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. 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 216 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix We have been the auditor of the Company for 5 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 2022 financial statements. Key Audit Matters 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. We also considered and found that the information regarding the insurance liabilities in notes to the financial statements is sufficient and adequate, and that the information satisfies the requirements of the accounting rules. 2 / 7 217 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 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. Through our audit we have assessed and tested design and effectiveness of established controls for review of applied assumptions and calculation methods, including the company’s internal valuation of investment properties. We particularly examined whether management had established controls to ensure assessment of market rent and discount rate. We found that routines to ensure that these elements regularly were checked against both external valuations and marked data was established. Those controls that we elected to base our audit on, was in our view working efficiently. We obtained, read through and understood the internal valuation model. We concluded that the model contains the elements required by the financial reporting framework and therefore is appropriate as a basis for determining fair value on the Group’s investment properties. We tested whether, and concluded that the model made mathematically correct calculations. In our assessment of the valuation, we challenged the assumptions for expected future cash flows and discount rate by comparing a sample of properties against information from relevant external sources. Substantial changes in value from previous periods was subject to discussions with management. We concluded that assumptions were consistent with information from relevant sources and that explanations regarding substantial changes in value were based on changes in the information from relevant sources. We also assessed the qualifications, competence and objectivity of the external valuers. We reviewed the engagement letters with the valuers to assess whether there were any clauses or fee provisions that may have affected their objectivity or in any other way limited their engagement. We did not find any indications of such circumstances. We compared the internal valuations against the valuers estimates on values for a sample of properties. We challenged management on substantial deviations and obtained explanations on deviations. We challenged the management and external valuers on the possible 3 / 7 218 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix effects from climate risk in setting fair value. We assessed the explanations 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. 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. 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. 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 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 sources. We considered the reliability of the sources of information, when relevant. Our tests did not reveal substantial deviations. We also assessed and found that the information in the notes regarding the Group’s valuation principles and fair value determination were sufficient and adequate. We have reviewed and challenged management assessment of the uncertain tax positions. Management obtained external legal opinions as a basis for their conclusions. We evaluated the competence, integrity and objectivity of the external legal advisors. We 4 / 7 219 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix uncertain tax positions have occurred as part of the group’s activities related to liquidation of a subsidiary in 2015 and new tax rules for life insurance companies in 2018. Management applied significant judgment in their assessment of whether the uncertain tax positions should be recognized in the financial statements and have therefore been a focus area. evaluated the external legal opinions, and whether the arguments used by the legal advisors are reasonable and that the considerations were neutral. We also assessed the information regarding the uncertain tax positions in the financial statements. We found that the information meets the requirements in the accounting standards. Other Information The Board of Directors and the Managing Director (management) are responsible for the information in the Board of Directors’ report and the other information accompanying the financial statements. 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 nor the other information accompanying the financial statements. In connection with our audit of the financial statements, our responsibility is to read the Board of Directors’ report and the other information accompanying the financial statements. The purpose is to consider if there is material inconsistency between the Board of Directors’ report and the other information accompanying the financial statements and the financial statements or our knowledge obtained in the audit, or whether the Board of Directors’ report and the other information accompanying the financial statements otherwise appear to be materially misstated. We are required to report if there is a material misstatement in the Board of Directors’ report or the other information accompanying the financial statements. 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 statutory 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. The financial statements of the Company use the going concern basis of accounting insofar as it is not likely that the enterprise will cease operations. The consolidated financial statements of the Group use the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. 5 / 7 220 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 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 and 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's 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 / 7 221 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 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 Requirement on European Single Electronic Format (ESEF) Opinion As part of the audit of the financial statements of Storebrand ASA, we have performed an assurance engagement to obtain reasonable assurance about whether the financial statements included in the annual report, with the file name storebrandasa-2022-12-31-nb.zip, have been prepared, in all material respects, in compliance with the requirements of the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report in XHTML format, and iXBRL tagging of the consolidated financial statements. In our opinion, the financial statements, included in the annual report, have been prepared, in all material respects, in compliance with the ESEF regulation. Management’s Responsibilities Management is responsible for the preparation of the annual report in compliance with the ESEF regulation. This responsibility comprises an adequate process and such internal control as management determines is necessary. 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, 7 February 2023 PricewaterhouseCoopers AS Thomas Steffensen State Authorised Public Accountant Note: This translation from Norwegian has been prepared for information purposes only. 7 / 7 222 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and NotesStorebrand GroupIncome statement 104Statement of total comprehensive income 105Statement of Financial Position 106Statement of changes in equity 108Statement of cash flow 109Notes 112Storebrand ASAIncome statement 198Statement of total comprehensive income 198Statement of Financial Position 199Statement of changes in equity 200Statement of cash flow 201Notes 203Declaration by members of the Board and the CEO 215Independent auditor’s report 2168. Corporate governance9. Sustainability Assurance10. Appendix 8 Corporate governance 225 Corporate governance 231 Companies in the Storebrand Group Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 225Companies in the Storebrand Group 2319. Sustainability Assurance10. AppendixCorporate governance Good corporate governance is a prerequisite for companies to achieve their objectives, including the best possible use of resources and optimal value creation. Storebrand’s Board of Directors and Group Executive Management work to continuously improve 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 and management conduct an annual review of Storebrand’s corporate governance policies and compliance. 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 18. Storebrand complies with the Code of Practice without significant deviations, except regarding Board for minor deviations authorisations to make capital increases and to purchase own shares, in section 3 below. The discrepancy relates to the fact that it was not facilitated for the Annual 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. Storebrand’s strategy and values are described in the framework “Our driving force”, which forms a common direction for how Storebrand will create value for customers, owners and society in general. Storebrand’s goal is to deliver profitable growth within the established focus areas through simple and sustainable solutions. The board conducts continuous evaluations of goals, strategy and risk profile. More information about “Our driving force” and focus areas can be found on page 10. Storebrand has worked with sustainable investments for almost 30 years and has taken an active position on how both customers’ and own assets are invested. Storebrand believes that companies that integrate environmental, social and corporate governance considerations into their business activities reduce risk and create new opportunities for the business and its owners. See chapter A driving force for sustainable investments in the annual report. Storebrand’s principles for sustainability summarise how the work is an integral part of the Group’s overall objectives and management and control processes. The principles were updated in 2022 and cover all parts of the business, including investments, product development, sourcing, employee management and facility operations. Storebrand shall take sustainability into account, both through our products, services and through our cooperation with suppliers and partners. This is a key part of the Group’s strategy and trademark. The following principles form the basis for the work within sustainability: • We base our business activities on the UN Sustainable Development Goals (SDGs). 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. • We help our customers make more sustainable choices, through the products and services we offer. • We are a responsible employer. • We consider sustainability in all processes and decisions – from the Board and Group Executive Management, who have the ultimate responsibility, to each manager and employee. • We cooperate with our customers, suppliers, authorities, and 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 updated on Storebrand’s goals, strategies and creation of value through quarterly performance presentations and other thematic presentations. Read more about the Group’s goals and main strategies in the Directors’ Report on page 46. 224 partners in our work with sustainability. • We are transparent about our work on sustainability and the results we achieve. The Board of Directors of Storebrand ASA determines Storebrand’s overall ambitions and principles for the Group’s work in sustainable finance and sustainable investments. The latter includes the “Policy of sustainable investments” with principles for exclusion and active ownership (company dialogue and voting). An overarching strategic goal in recent years has been to strengthen sustainability as a competitive advantage. This goal affects Storebrand’s internal Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 225Companies in the Storebrand Group 2319. Sustainability Assurance10. Appendixoperations, products, and external communications. The goals are reviewed by the Group Executive Management at least three times a year and twice a year by the Board of Directors. The Board has the overall responsibility for ensuring that the Group works with and reports on sustainability in compliance with national laws, regulations, and regulations of the European Union. It also is responsible for overseeing that the Group meets self-imposed obligations and aspirations. The Board determines the responsibilities and tasks of the CEO within sustainability and approves the organisation of responsibilities and tasks of Group Executive Management. The Board follows up on the company’s work with sustainability through business area reports, as well as status, risk and compliance reporting from independent control functions and internal audit. 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. Storebrand’s integrated report presents detailed goals and results for the above areas on pages 25, 33, 45 and 80. The materiality analysis will be updated in 2023. Storebrand has its own Code of Conduct. In addition, guidelines have been established for events, whistleblowing and combating corruption. The board is informed of the reports received in accordance with the adopted guidelines for whistleblowing. These guidelines are published on Storebrand’s website. 3. Equity and dividends (deviations from the code of practice). The Board of Storebrand ASA continuously monitors Storebrand’s capital adequacy in light of the Group’s goals, strategy and risk profile. Read more about Storebrand’s capital situation and solvency on page 57 in the Director’s Report. The Board of Directors has adopted and communicated a dividend policy whereby Storebrand aims to pay a dividend of more than 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 ratio of more than 150 per cent. With a solvency ratio above 175 per cent, the Board’s intention is to propose extraordinary dividends or the buyback of shares. The dividend is adopted by the Annual General Meeting, based on a proposal put forward by the Board. The Annual General Meeting may, by simple majority, authorise the Board 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 Annual 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 Annual General Meeting was not requested to provide such authorisation in 2022. Read more about Storebrands dividend policy on page 57. Storebrand ASA would like to have various tools available for its to maintain an optimal capital structure for Storebrand to be able to offer good shareholder returns and retain financial resilience. At the 2022 Annual General Meeting, the Board was granted authorisation to increase the share capital through issuing new shares for a total maximum value of NOK 235,987,445. This authorisation may be used for the acquisition of businesses in consideration for new shares or for increasing the share capital by other means. The Board of Directors may decide to waive the shareholders’ preferential rights to subscribe for new shares in accordance with the authorisation. This authorisation may be used for one or more new issues. This authorisation is valid until the next Annual General Meeting. At the same Annual General Meeting, the Board was authorised to buy back shares for a maximum value of NOK 235,987,445. The total holding 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 ordinary dividends. In addition, Storebrand ASA each year sells shares to employees from its own holdings in connection with the share purchase scheme and long-term incentive schemes for employees. Accordingly, it is appropriate to authorise the Board to buy shares in the market. 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 Annual General Meeting to vote on each individual purpose to be covered by the authorisation. 4. Equal treatment of shareholders and transactions with close associatess (no deviation from the code of practice) Storebrand ASA has only one class of shares. There are no special ownership and voting restrictions beyond the restrictions imposed by the Act on Financial Undertakings and Financial Groups. The Board and Group Executive Management of Storebrand place great emphasis on equal treatment of the shareholders. The general competence rules for Board Directors 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 Directors must inform the Group 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 Director 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 Director is responsible for continuously assessing whether or not such a situation exists. 225 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 225Companies in the Storebrand Group 2319. Sustainability Assurance10. Appendixclose associates Transactions with involving Storebrand’s employees or employee representatives of the Group are regulated by Storebrand’s Code of Conduct. Employees shall report to their immediate supervisor any conflicts of interest that may arise, as soon as they become aware of such a situation. In general, an employee is defined as disqualified if circumstances lead to other persons question his or her impartiality in matters related to 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 chapter Shareholder matters. 5. Freely negotiable shares (no deviation from the code of practice) Shares in Storebrand ASA are listed on Oslo Børs (Oslo Stock Exchange). The Articles of Association do 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 Annual General Meeting was held on 6th April 2022. All shareholders with a known address will receive notice of the meeting, which will be sent out no later than 21 days prior to the Annual 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 Annual 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 Annual General. 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 on the agenda, including elections to board positions. Further information about voting in advance, use of proxies and the shareholders’ rights to have matters discussed at the Annual General Meeting is available both in the notice of Meeting and on Storebrand’ s website. The access to electronic voting and the use of proxy allows shareholders to cast their votes without attending the Annual General Meeting in person. All shareholders are thus given an opportunity to exert influence on Storebrand using the right to vote. The Board Chair, at least one representative from the Nomination Committee and the external auditor must attend the Annual General Meeting. Board Directors’ are encouraged to attend, but they are not obligated to attend. Management representation comprises the CEO, members of the Executive Management Team as well as the Chief Legal Officer. The minutes of the Annual General Meeting are available on Storebrand’s website in both Norwegian and English. The Annual General Meeting is opened by the Chair. The Board endorses an independent meeting chair elected by the Annual General Meeting. The Annual 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, including its leader, as well as members to the Board, including 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 Decisions are generally made based on an ordinary majority. Pursuant to Norwegian law, however, a special majority is required for certain decisions, including decisions about setting aside pre-emptive rights in connection with any share issues, mergers, spin-offs, amendments to the Articles of Association, or authorizations to increase or reduce the share capital. Such decisions require approval by at least two- thirds of both the votes cast and the share capital represented at the Annual 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 three and a maximum of five members. For the election period 2022-2023, the Nomination Committee has consisted of five members. The leader and members of the Nomination Committee are elected annually by the Annual General Meeting. A majority of the Nomination Committee members are independent of the Board and the administration. The committee is composed with a view to safeguarding the interests of the shareholder community. The Annual General Meeting’s instructions to the Nomination Committee include provisions on rotation for members of the committee. 226 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 225Companies in the Storebrand Group 2319. Sustainability Assurance10. AppendixThe Articles of Association stipulate that the Nomination Committee shall follow instructions laid down by the Annual General Meeting in its work. The committee’s instructions were most recently revised at the Annual General Meeting in the spring of 2022. In accordance with the instructions, the committee shall pay attention to, among other things, the following traits when considering candidates for Board positions: Competence, experience, capacity, gender distribution, independence and consideration for the interests of the shareholder community. More information about Storebrand’s Board members is posted on our website. The Nomination Committee annually asks our 30 largest shareholders propose candidates for the Board 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 proposals to the Annual 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 eight meetings in 2022. 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 Directors are elected by the Annual General Meeting at the recommendation of the Nomination Committee. The Board Chair is elected separately by the Annual General Meeting. Two members, or three members if the Annual General Meeting elects six or seven Board Directors, are elected by and among the employees. Board Directors 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 2022, the Board consisted of 10 members (five men and five women). None of the Board Directors elected by the Annual General Meeting has had any form of employment, nor professional or consultancy relationship with Storebrand, beyond his or her appointment to the Board. The backgrounds of the individual Board Directors are described in the annual report on page 275 and on Storebrand’s website. The composition of the Board of Directors satisfies the independence requirements set forth in the Code of Practice. There have been no cases of partiality during the Board’s deliberations during 2022. An overview of the number of shares in Storebrand ASA owned by members of governing bodies as of 31 December 2022 is included in the notes to the financial statements for Storebrand ASA (Note 15: Information on related parties) on page 213. None of the Board Directors 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 2022, 12 Board meetings were held. Storebrand’s future strategic direction was 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 Group’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 stating that Board Directors and senior employees have a responsibility to proactively address essential interests they may have in matters being considered by the Board. 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. One Board Director reported valid absence for one Board meeting in 2022. Otherwise, all Board Directors participated in all Board meetings. The work of the Board is regulated by special rules of procedure, which are reviewed annually. To ensure sound decisions, it is important to prepare Board meetings so that all 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 decided in consultation with the Board Chair. Time is set aside at each Board meeting to evaluate the meeting without (the CEO or members of) the Executive Group Management present. The Board is entitled to appoint external advisers to help it with its work whenever it deems this necessary. The Board has also drawn up instructions for the CEO. The Board annually carries out an evaluation of its work and working method. The evaluation provides the basis for changes and measures. The report from the Board’s evaluation, or relevant excerpts, is made available to the Nomination Committee. Board Committees The Board has established four subcommittees in the form of the Compensation Committee, Audit Committee, Risk Committee and Strategy Committee. The composition helps ensure a thorough and independent consideration of matters that concern internal control, financial reporting, risk assessment and remuneration of executive personnel. The committees are preparatory and advisory working committees and assist the Board with the preparation of items for consideration. Decisions are made, however, by the full Board. The committees can hold meetings and consider matters at their own initiative and without the participation of Group management. 227 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 225Companies in the Storebrand Group 2319. Sustainability Assurance10. Appendix The Compensation Committee assists the Board on matters concerning the Chief Executive Officer’s remuneration. The Committee monitors the remuneration of Storebrand’s executive personnel and proposes guidelines for executive personnel remuneration and the Board’s statement on the fixing of executive personnel remuneration, which is presented to the Annual 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 2022. 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 eight meetings in 2022. The external and internal auditors participate in the meetings. The external auditor attends the meetings. The majority of the Committee members are independent of the company. The main task of the Risk Committee is to prepare matters to be considered by the Board in the area of risk, with a special focus on Storebrand’s risk appetite and risk strategy, including the investment strategy. The Committee contributes forward-looking support related to the Board’s discussions and decisions related to risk taking, financial forecasts and the treatment of risk reporting. The Risk Committee held six meetings in 2022. The main task of the Strategy Committee is to prepare the Board on topics related to the Group’s work on strategy, including mergers and acquisitions. The Committee provides forward-looking support related to the Board’s discussions and decisions regarding the Group’s strategic choices and targets. The Strategy Committee held three meetings during 2022. 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 CEO’s areas of responsibility are defined in the rules of procedure for the Board and the instructions for the CEO, respectively. The Board 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, financial instituttions and other stakeholders in the securities market. 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. Risk management and internal control The assessment and management of risk are integrated into Storebrand’s corporate governance. This management system shall ensure that there is a correlation between goals and actions at all levels of Storebrand as well as the overall policy of creating value for Storebrand’s shareholders. Storebrand’s financial and operational goals are defined annually in a business plan approved by the Board. 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 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 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., as well as the risk of incurring losses due to inadequate or failing internal processes, systems, human error or external events. Developments in the financial markets are important risk factors in relation to Storebrand’s earnings and solvency position. In addition to assessing the effects of sudden shifts in the equity markets or interest rate levels (stress tests), scenario analysis is used to estimate the effect of various sequences of events in the financial markets on Storebrand’s financial performance and solvency. This provides important premises for the Board’s general discussion of risk appetite, risk allocation and capital adequacy. The responsibility for Storebrand’s independent control functions for risk management and compliance is gathered in Governance Risk & Compliance, led by the Group Chief Risk Officer (CRO). The CRO reports directly to the CEO and the Board. The CRO function is responsible for supporting the Board and Group Executive Management with respect to the establishment of a risk strategy , implementation of agreed limits and monitoring of risk raking across Storebrand’s business areas. As an extension of the general policies and guidelines, a Code of Conduct has been drawn up that applies to all employees and representatives of Storebrand, in addition to corporate rules for Storebrand’s internal audit function 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 228 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 225Companies in the Storebrand Group 2319. Sustainability Assurance10. Appendix pursuant to the current legislation, regulations and international standards. The internal audit function produces quarterly reports for the boards of the respective Storebrand companies. loans and shareholdings of Board Directors and Employee Representatives can be found in Note 23 (Group) and Note 15 (ASA). Board Directors are encouraged to hold shares in Storebrand ASA. 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 CRO and employees in control functions within risk management, internal control and compliance have fixed remuneration. 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. The statements are 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 for 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 particularly on the discretionary valuations and estimates 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 Director’s (no deviation from the code of practice) The Annual General Meeting determines 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 carries out any duties for Storebrand beyond his or her role as a Board Director. More detailed information on the remuneration, 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. Guidelines on the remuneration (previously the executive remuneration statement) are presented to the Annual 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 optimalisation. The Board’s stance is that the total remuneration should be competitive, but not leading within the industry. The salary of the Group Executive Management is determined based on the level of responsibility and complexity of the position. To ensure a competitive salary level, regular comparisons are made with similar roles in other companies in the financial services industry. Storebrand’s guidelines for financial remuneration are adapted to the company’s business strategy. To safeguard customers and shareholders in the best possible way, Storebrand believes it is appropriate to primarily emphasise fixed wages as an instrument in total financial compensation, and to a limited extent make use of variable remuneration. Group Executive Management has a fixed salary only. To ensure that senior executives have incentive schemes that coincide with the long-term interests of Storebrand’s shareholders, a significant proportion of gross fixed salary is tied to the purchase of physical Storebrand shares with a three-year lock-in period. Senior executives are encouraged to own shares in Storebrand ASA also beyond the lock-in period. Execution of Storebrand’s strategy and achievements of operational objectives are taken into account when making annual individual assessments of the remuneration of employees. This strengthens the alignment of interests between owners and the administration further. Sustainable solutions are a key part of Storebrand’s business strategy and, as such, are 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). In addition, further information can be found in the Board’s guidelines on remuneration, which is included in the notice of the Annual General Meeting, and the report on Salary and remuneration of senior executives, which is available on Storebrand’s website. 13. Information and communication (no deviation from the code of practice) The Board has issued guidelines for the company’s reporting of financial and other information and for contact with shareholders other than through the Annual General Meeting. Storebrand’s reporting on sustainable investments exceeds the statutory requirements. Storebrand’s financial calendar is published on the website and in the annual report. Financial information is published 229 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 225Companies in the Storebrand Group 2319. Sustainability Assurance10. Appendixin 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 guidelines for inside information, see also section 10 - Overall management and control, above. Storebrand Asset Management AS has had 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. The guidelines regulate, for example, the number of external Board positions. 14. Corporate takeover (no deviation from the recommen- dation) 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 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 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 will, in the event of a 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 Annual 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, with the exception of Storebrand Danica Pensjonsforsikring AS, which has continued its engagement with the existing auditor (Deloitte) for the current year pending a merger with Storebrand Livsforsikring AS. Other 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 the Group. 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. 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. 3. Any deviations from the Code of Practice are commented on under each section in the statement above, see the deviations discussed in Item 3. 4. A description of the main elements of Storebrand’s systems for internal control and risk management related to the financial reporting process is discussed in Section 10 above. 5. Provisions in the Articles of Association that refer to the provisions in Section 5 of the Norwegian Public Limited Companies Act with regard to the General Meeting are discussed in Item 6 above. 6. 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. 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 is discussed in the People chapter of the annual report. 230 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 225Companies in the Storebrand Group 2319. 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 Danica Pensjonsforsikring AS Storebrand Bank ASA Storebrand Boligkreditt AS Storebrand Asset Management AS Storebrand Fonder AB Storebrand Fastigheter AB SKAGEN AS Cubera Private Equity AS Cubera Private Equity AB Institutional Holding P/S Capital Investment A/S 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 995 871 424 876 734 702 916 268 416 990 653 402 931 936 492 991 853 545 890 050 212 977 465 478 953 299 216 990 645 515 930 208 868 556397-8922 556801-1802 867 462 732 989 580 353 556812-8184 39504251 32343775 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 % 25.0 % 100 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 20.0 % 100.0% 100.0 % 100.0 % 50,0 % 231 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governanceCorporate governance 225Companies in the Storebrand Group 2319. Sustainability Assurance10. Appendix9 Sustainability assurance 233 Sustainability indicators and definitions 247 Financed emissions 252 Carbon accounting summary 253 TCFD-index 257 GRI-index 263 Auditor’s statement Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixSustainability 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. Customer relations Categories and indicators 2019 2020 2021 2022 2023 2025 Results Results Results Results Targets Targets Brand Brand awareness: Norwegians who answer that Storebrand is one of the first three companies they think of in a broad financial category (position / share) Recognised for sustainable value creation (Retail market, Norway) Recognised for sustainable value creation (Corporate market, Norway) Customer satisfaction Customer Satisfaction (Net Promoter System, retail market) Customer Satisfaction (EPSI): Insurance, retail market, Norway Customer Satisfaction (EPSI): Banking, retail market, Norway 112 Customer Satisfaction (EPSI): Savings and investments, retail market, Norway 113 Customer Satisfaction (ESPI): Pension, corporate market, Norway Customer Satisfaction (EPSI): Insurance, corporate market, Norway Customer Satisfaction: Corporate market, Sweden Market share Market share: Mutual funds, Asset Management, Sweden Market share: Mutual funds, Asset Management, Norway 114 Markets share: Savings, retail market Norway 115 Market share: Banking, retail market, Norway Market share: Insurance, retail market, Norway Market share: Pension, corporate market, Sweden Market share: Pension, corporate market, Norway 116 Market share: Insurance, corporate market, Norway Market position Market positions: Savings, retail market, Norway Market position: Insurance, retail market, Norway Market position: Insurance, corporate market, Norway Market position: Pension, corporate market, Norway Savings women New New New No. 5 / 21.1 % Top 3 Top 3 No. 3 No. 5 No. 3 No. 5 Top 3 No. 1 No. 1 No. 4 No. 3 No. 3 No. 1 No. 1 No. 4 New New No. 6 68.6 New No. 5 68.9 70.9 No. 5 69.5 69.3 Top 3 Top 3 Increase Increase Increase Increase New New 65.4 63.9 Increase Increase No. 1 No. 2 No. 1 No. 1 No. 1 No. 1 New No. 3 4.7 % 16.1 % 20 % 1.7 % 3.6 % 14.1 % 29.1 % 2.0 % No. 2 No. 7 No. 10 No. 1 New No. 3 4.9 % 16.1 % 21.7 % 1.6 % 4.1 % 15.1 % 29.4 % 2.1 % No. 2 No. 7 No. 10 No. 1 65.7 No. 4 4.9 % 15.4 % 19.6 % 1.8 % 5.9 % 14.3 % 27.0 % 2.5 % No. 2 No. 5 No. 10 No. 2 65.7 No. 2 5.3 % 16.2 % 21.0 % 2.0 % 6.4 % 14.6 % 30.8 % 2.8 % No. 2 No. 5 No. 9 No. 1 Increase Increase Top 3 Top 3 Increase Increase Increase Increase Increase Increase Increase Increase Increase Increase Increase Increase Increase Increase Increase Increase N/A N/A N/A N/A N/A N/A No. 1 No. 1 Savings Mutual Funds: Share of women 42.3 % 42.7 % 43.3 % 43.8 % N/A N/A 112) The decline is mainly driven by weakened relationship/service quality and dissatisfaction with communication around increased interest rates.. 113) We fall less than the industry (-1.5 vs. -2.8 points), and thus end up stronger relative to our competitors. We maintain scores on all key underlying drivers. The decline is mainly due to market turmoil and negative returns. 114) Market share includes total market (including institutional customers) for Storebrand and Skagen 115) Market share for savings retail market includes in 2022 Danica which we acquired in 2022. 116) Pension, corporate market share in 2022 includes Danica that we acquired in 2022. 233 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixDefinitions for indicators about Customer relations Market share: Mutual funds, Asset Management, Sweden: Total assets under management for Storebrand Fonder per Q4. Brand Brand awareness: Norwegians who answer that Storebrand is one of the first three companies they think of in a broad financial category (position / share): Share of Norway’s population who mention Storebrand as one of the first three companies they think of when they are asked the following question: “Which companies within banking, insurance, savings and pensions do you know?” (average share Q4). Recognised for sustainable value creation: Proportion that associates Storebrand with the statements “Invests 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” (average across the statements and average proportion Q4). Customer satisfaction Customer satisfaction, NPS: Score 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 being the best result. Customer satisfaction, EPSI: Scores are based on a customer satisfaction index from EPSI Norway, which range from 0 to 100 (where 100 is the best). The index consists of 3 questions: “How satisfied are you overall”, “To what extent do you feel that Storebrand meets your expectations” and “How close or far away is Storebrand from being the perfect supplier”. Customer satisfaction, Sweden: Score from 1-10 (10 being the best) based on the question: “Overall, how satisfied are you?” Market share/Market position We calculate market share mainly based on volume figures and premium figures from publicly available sources and some internal statistics. Our market position is determined on the same basis. Market share: Mutual funds, Asset Management, Norway: Total assets under management for Storebrand and Skagen per Q4. Market share: Savings, retail market, Norway: Total assets under management for respectively free funds retail market (incl. nominee) and Unit Linked products retail market including Pension Capital Certificates and Paid-up Policy with investment choice. Based on Q3 figures from Finans Norge and VFF (Verdipapirfondenes forening). Market share: Banking, retail market, Norway: Market share lending retail market Norway. Figures are based on Statistics Norway and the banks’ own accounting figures. Market share: Insurance, retail market, Norway: Market share makes up land-based insurance in total. Figures are taken from Finans Norge and are based on Q3. Market share: Pension, corporate market, Sweden: Figures are based on relevant product areas within occupational pensions and are obtained from Svensk Försäkring. Gross contributions Q3. Market share: Pension, corporate market, Norway: Market share is calculated based on private collective pension insurance, gross contributions, deposit-based with and without investment choice. Danica is included from 2022. Figures are based on Q3. Market share: Insurance, corporate market, Norway: Market share constitutes land-based insurance in total (industry). The data is collected from Finans Norge and are based on Q3. Savings women Savings Mutual Funds: Share of women: Share of women out of the total number of customers with active transferable fund-based savings in Storebrand (excl. Skagen). 234 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixPeople Categories and indicators Employees (total number and gender) Number of employees Number of female employees Number of male employees Number of employees with non-specified gender Share of women in total workforce (as % of total workforce) Employees (age and gender) Total employees under 30 (total / % FTEs) Total employees 30-50 (total / % FTEs) Total employees over 50 (total / % FTEs) Male employees under 30 (total / % FTEs) Female employees under 30 (total / % FTEs) Male employees 30-50 (total / % FTEs) Female employees 30-50 (total / % FTEs) Male employees over 50 (total / % FTEs) Female employees over 50 (total / % FTEs) Employees (Nationality) Norwegian - share in total workforce (as % of total workforce) Swedish - share in total workforce (as % of total workforce) Danish - share in total workforce (as % of total workforce) Finnish - share in total workforce (as % of total workforce) British - share in total workforce (as % of total workforce) German - share in total workforce (as % of total workforce) Norwegian - Share in all management positions, including junior, middle and senior management (as % of total management workforce) Swedish - Share in all management positions, including junior, middle and senior management (as % of total management workforce) Danish - Share in all management positions, including junior, middle and senior management (as % of total management workforce) Finnish - Share in all management positions, including junior, middle and senior management (as % of total management workforce) British - Share in all management positions, including junior, middle and senior management (as % of total management workforce) German - Share in all management positions, including junior, middle and senior management (as % of total management workforce) Results 2019 Results 2020 Results 2021 Results Targets Targets 2022 2023 2025 1,742 798 904 40 46 % New New New 109 117 531 379 264 302 New New New New New New 1,824 839 959 26 46 % New New New 119 112 572 425 268 302 New New New New New New 2,161 980 1,158 23 N/A N/A N/A N/A 46 % N/A 1,914 875 1,017 3 46 % 15 % 57 % 28 % 154 / 8 % 132 / 7 % 287 / 14 % 1,189 / 57 % 566 / 27 % 157 / 8 % 130 / 6 % 631 / 33 % 673 / 33 % 484 / 25 % 516 / 25 % 260 / 13 % 287 / 14 % 280 / 14 % 279 / 13 % N/A N/A N/A N/A N/A N/A N/A N/A N/A 76.6 % 79.2 % N/A 21.8 % 20.0 % N/A 1.3 % 0.0 % 0.2 % 0.1 % 1.4 % N/A 0.1 % N/A 0.3 % N/A 0.1 % N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A New New 80.9 % 83.1 % N/A N/A New New 17.6 % 15.6 % N/A N/A New New 1.1 % 1 % N/A N/A New New 0.0 % 0 % N/A N/A New New 0.4 % 0.3 % N/A N/A New New 0.0 % 0 % N/A N/A 235 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixCategories and indicators Gender balance in management positions Women in the Board of Directors at Storebrand ASA: number of women / share of women Women in the Group Executive Management: number of women / share of women Women at management level 3: number of women / share of women Women at management level 1-4: number of women / share of women Women in all management positions, including junior, middle and top management (as % of total management positions): number of women / share of women Women in junior management positions, i.e. first level of management (as % of total junior management positions): number of women / share of women Women in top management positions, i.e. maximum two levels away from the CEO or comparable positions (as % of total top management positions): number of women / share of women Women in management positions in revenue- generating functions (e.g. sales) as % of all such managers (i.e. excluding support functions such as HR, IT, Legal, etc.): share of women Share of women in STEM-related positions (as % of total STEM positions). STEM = Science, technology, engineering and mathematics. Results 2019 Results 2020 Results 2021 Results Targets Targets 2022 2023 2025 4 / 44 % 4 / 40 % 5 / 50 % 5 / 50 % 50 % 50 % 3 / 30 % 3 / 30 % 3 / 33 % 5 / 56 % 50 % 50 % 41 % 24 / 38 % 22 / 37 % 27 / 42 % 50 % 50 % New 38 % 83 / 39 % 86 / 37 % 50 % 50 % 39 % 103 / 39% 102 / 37% 116 / 38 % 50 % 50 % New 39 % 39 % 84 / 36 % N/A 50 % New 30 % 34 % 32 / 44 % N/A 50 % New 39 % 35 % 43 % N/A 50 % New New 32 % 30 % N/A 50 % Employee remuneration: compensation ratio between CEO and employee Total CEO Compensation (NOK) 6,899,000 7,373,000 7,638,000 7,952,280 N/A N/A The ratio between the total annual compensation of the Chief Executive Officer and the mean employee compensation 117 8.2 : 1 8.9 : 1 8.76 : 1 8.86 : 1 N/A N/A Employee remuneration: compensation by country and gender Mean Employee Compensation, Group (NOK) Mean Female Employee Compensation, Group (NOK) Mean Male Employee Compensation, Group (NOK) Average salary female employees, Norway (NOK) Average salary male employees, Norway (NOK) Average salary female employees, Sweden (SEK) Average salary male employees, Sweden (SEK) Median hourly pay for female employees Median hourly pay for male employees Global Median raw gender pay gap Average hourly pay for female employees Average hourly pay for male employees Global mean (average) raw gender pay gap New New New 743,684 914,107 644,484 811,717 New New New New New New New New New 760,948 923,686 671,159 842,226 New New New New New New 871,579 897,065 N/A N/A New New 796,854 968,096 705,162 873,155 352 435 19 % 381 455 16 % 811,667 967,873 839,644 994,716 746,384 864,131 364 440 17 % 416 496 16 % N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 117) Ratio figures in 2019 and 2020 only include employees in Norway. From 2021, we included all employees to calculate the ratio between the CEO and all employees in the Group. 236 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixCategories and indicators Results 2019 Results 2020 Results 2021 Results Targets Targets 2022 2023 2025 Employee remuneration: compensation for management positions Ratio of basic salary and remuneration of women to men for specific employment categories (level or function) 118 Expanded top management, women's share of men's salary per position category (Hay Grade 21-26) 119 Employees up to middle managers, women’s share of men’s salary per position category (Hay Grade 12-20) 120 Average salary executive level (base salary only) (Men): NOK Average salary executive level (base salary only) (Women): NOK Average salary executive level (base salary + other cash incentives) (Men): NOK Average salary executive level (base salary + other cash incentives) (Women): NOK Average salary management level (base salary only) (Men): NOK Average salary management level (base salary only) (Women): NOK Average salary management level (base salary + other cash incentives) (Men): NOK Average salary management level (base salary + other cash incentives) (Women): NOK Average salary non-management level (Men): NOK Average salary non-management level (Women): NOK Employees represented by a trade union Share of employees represented by an independent trade union or covered by collective bargaining agreements Human Capital Development: Training Average amount spent per FTE on training and development: NOK Average hours per FTE of training and development: Hours / Days Average hours per FTE of training and development (Men): Hours Average hours per FTE of training and development (Women): Hours Average hours per FTE of training and development (<30 years old): Hours Average hours per FTE of training and development (30-50 years old): Hours Average hours per FTE of training and development (>50 years old): Hours New New 97 % 96 % N/A N/A 100 % 104 % 97 % 95 % 100 % 100 % 99 % 97 % 97 % 96 % 100 % 100 % New 3,459,449 6,103,652 5,250,000 N/A N/A New 2,588,333 3,986,833 4,412,533 N/A N/A New 3,459,449 6,103,652 5,250,000 N/A N/A New 2,588,333 3,986,833 4,412,533 N/A N/A New 1,339,248 1,425,365 1,428,596 N/A N/A New 1,177,527 1,236,121 1,250,607 N/A N/A New 2,165,446 1,478,333 1,515,479 N/A N/A New New New 2,165,446 1,258,104 1,278,346 807,417 825,949 894,631 N/A N/A N/A N/A 680,338 710,497 743,578 N/A N/A 100 % 100 % 100 % 100 % N/A N/A New New New New New New New New 3.9 New New New New New 8,353 7,262 N/A N/A 3.6 (0.5) 6.0 (0.8) N/A N/A 2.4 2.9 3.0 2.5 2.7 5.8 6.3 6.6 6.0 5.8 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 118) Hay Grade 12-26 where there are employees of both genders. 119) From 2022, Hay Grade was extended to 21-26 (from previously 21-25). The positions were re-evaluated as the complexity of the roles has changed since the last assessment. 120) From 2022, Hay Grade has been extended to 12-20 (from previously 13-20). 237 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixCategories and indicators Human Capital Development: Return on investment Results 2019 Results 2020 Results 2021 Results Targets Targets 2022 2023 2025 Total Revenue (NOK) 121 87,403,000,000 81,031,000,000 119,781,000,000 16,103,000,000 Total operating expenses (NOK) 4,015,000,000 4,068,000,000 4,678,000,000 5,008,000,000 N/A N/A N/A N/A Total employee-related expenses (salaries + benefits) (NOK) Human capital return on investment (HC ROI) (profitability) Engagement score Engagement score all employees: Storebrand score/ industry average in peakon, scale from 1-10 Employee Engagement men Employee Engagement women Employee engagement employees under 30 Employee engagement employees 30-50 Employee Engagement employees over 50 Recruitment New hires to the group (total) Number of women recruited this year Number of men recruited this year Number of new hires under 30 (male/female) Number of new hires aged 30-50 (male/female) Number of new hires aged over 50 (male/female) Average hiring cost/FTE (NOK) Number of women recruited or promoted into management positions: number/share Number of men recruited or promoted into management positions: number/share Number of internal hires (total) Number of internal hires (women) Number of internal hires (men) Percentage of open positions filled by internal candidates (internal hires) 2,281,000,000 2,320,000,000 2,725,000,000 2,871,000,000 N/A N/A 37.6 34.2 43.2 4.9 N/A N/A 8.0 (7.8) 8.3 (7.8) 8.4 (7.8) 8.4 (7.9) >8.0 >8.0 New New New New New 204 78 126 New New New New New New New New New New 8.3 8.3 9.0 8.2 8.3 285 124 161 147 (82 / 65) 122 (72 / 50) 16 (7/9) New New New New New New New 8.4 8.5 8.7 8.3 8.3 337 152 175 157 154 26 8.4 8.5 8.5 8.4 8.5 416 184 232 186 (84 / 102) 199 (110 / 89) 31 (20 / 11) 90,000 90,000 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 6 (46 %) 9 (53 %) N/A N/A 7 (54 %) 8 (47 %) 99 54 45 126 67 59 N/A N/A N/A N/A N/A N/A N/A N/A 25 % 23 % N/A N/A 121) Total revenue includes net income from customers’ funds associated with the life business. The decrease in total revenue is due to negative returns on financial instruments in customer funds. 238 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixCategories and indicators Turnover Total turnover rate 122 Voluntary turnover rate (total) Turnover rate for women (Group) Turnover rate for men (Group) Turnover employees under 30 Turnover employees 30-50 Turnover employees over 50 Sick leave Sick leave Norway Sick leave Sweden Absentee rate: employees (% of total days scheduled) Data coverage (% of employees) Incidents rate: Number of staff injuries Employees (temporary employees) Number of Consultants Number of fixed terms employees Number of interns Results 2019 Results 2020 Results 2021 Results Targets Targets 2022 2023 2025 8.0% New 9.7 % 9.2 % New New New 3.1 % 2.5 % 3.1 % 74 % 1 New New New 6.4 % 6.4 % 6.1 % 6.8 % 13.0 % 7.7 % 1.4 % 2.3 % 1.8 % 2.3 % 75 % 0 New New New 6.6 % 6.5 % 5.2 % 7.8 % 9.6 % 8.2 % 2.3 % 2.5 % 1.6 % 2.5 % 77 % 0 New New New 8.1 % 8.1 % 8.5 % 7.7 % 11.3 % 10.4 % 2.4 % 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 3.2 % < 3.5 % < 3.5 % 1.9 % < 3.5 % < 3.5 % 3.2 % 80 % 1 1,143 36 14 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Definitions for indicators about People Employees (total number and gender) Number of employees: Total number of employees at Storebrand ASA as of 31.12.2022. Employees (age and gender) Number of employees in different age groups/gender: Includes all permanent employees in all countries. Capital Investment and Danica are not included. Employees (nationality) Number of employees with different nationalities: Includes all permanent employees in all countries. Only Danica is not included. Gender balance in management positions 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 and Danica are not included. Level 4: Reports to management level 3. Everyone at this level has personnel responsibilities. Administrative roles are not included. Capital Investment and Danica are not included. • Women in all management positions, including junior, middle and top management (as per cent of total management positions): Includes all female managers with personnel responsibilities. Capital Investment and Danica are not included. Women in junior management positions, i.e. first level of management (as per cent of total junior management positions): Includes all female managers at management level 4, 5 and 6. Capital Investment and Danica are not included. Women in top management positions, i.e. maximum two levels away from the CEO or comparable positions (as per cent of total top management positions): Includes all female managers who are at management level 2 and 3. Capital Investment and Danica are not included. Women in management positions in revenue-generating functions (e.g. sales) as per cent of all such managers (i.e. excluding support functions such as HR, IT, Legal, etc.): Includes female managers in the corporate market, retail market, SPP and Storebrand Asset Management. All levels including Group Executive Management. Administrative roles are not included. Capital Investment and Danica are not included. Share of women in STEM-related positions (as % of total STEM positions). STEM = Science, Technology, Engineering and Mathematics: share of women who are permanent employees in the Digital business area. Capital Investment and Danica are not included. 122) In 2022, there has been low unemployment and high competition for talent. This may have contributed to an increase in turnover. 239 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixEmployee remuneration: compensation ratio between CEO and employee The ratio between the total annual compensation of the Chief Executive Officer and the mean employee compensation (CEO - Average Worker Pay Ratio): Basic salary for CEO relative to average salary for all employees. Capital Investment and Danica are not included. Human Capital Development: return on investment Total revenue (NOK): Total revenue includes net income from customers’ funds associated with the life business. Totale operating expenses (NOK): Operating expenses refer to all the expenses the company has from operations. Total employee-related expenses (salaries + benefits) (NOK): This includes training and development programs, pensions, employment, etc., as it covers all costs directly related to employees. Human capital return on investment (HC ROI) (profitability): The figure is total revenue minus (total operating expenses minus total employee-related expenses), divided by total employee-related expenses. Recruitment Number of recruitments: Number of recruitments including permanent employees, temporary employees and interns in all countries. Capital Investment and Danica are not included. The figures also include recruited employees who left the group later in 2022. Turnover Total turnover: Permanent employees who left in the last twelve months with the exception of voluntary termination agreements between employer and employee, reduction in the workforce or retirement, divided by the average number of permanent employees in 2022. Capital Investment and Danica are not included. Voluntary turnover: Permanent employees who leave voluntarily (with the exception of retirements and mutual agreements) divided by the average number of permanent employees in 2022. Capital Investment and Danica are not included. Sick leave Sick leave: Number of sick leave days divided by number of working days at end of the year. Sick leave in Norway includes sick children days. Sick leave in Sweden does not include sick children days. Capital Investment and Danica are not included. Employees (temporary employees) Number of employees, temporary employment: Includes employees who are consultants, temporary employees and interns. Capital Investment and Danica are not included. Employee remuneration: compensation by country and gender Average salary based on gender, position and geography: Average salary for all permanent employees in the Group. Capital Investment and Danica are not included. Average salary and median hourly pay: Annual salary divided by 1,950 hours per year (Norwegian statistics incl. holiday). Includes permanent employees in all countries and salaries have been converted to NOK. Capital Investment and Danica are not included. Employee remuneration: compensation for management positions Employee remuneration: Compensation for management positions 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 salaries for positions that have the same requirements for competence, experience and complexity. The system is used to compare salaries 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 12-26 covers roles except CEO. Employees represented by a trade union Share of employees represented by an independent trade union or covered by collective agreements: The various trade unions can only enter into agreements on behalf of their own members, and only the members can be bound directly through the individual agreements. The employer does not (and does not need) an overview of where and who is organised. The central point is the standard of non- deviation, which means that the company is obliged to implement the collective agreement with the largest trade union towards employees who are not bound by another collective agreement, and who would otherwise be covered by this agreement. We know that the collective agreements that have been concluded with the Finansforbundet (The Finance Sector Union of Norway) are the collective agreements that apply to most employees and the non- departure norm dictates that the same terms apply to everyone who is not covered by other collective agreements. Human Capital Development: training Average amount spent on development per full-time employee (NOK): Average amount per permanent employee spent on courses through 2022. Capital Investment and Danica are not included. Average number of hours spent on development per full-time employee (hours/days): Applies to all permanent employees. Capital Investment and Danica are not included. 240 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixKeeping our house in order Categories and indicators Sustainability rating CDP-rating DJSI score/global percentile Climate data: suppliers Environmentally certified purchases (share of the total expenditure that went to suppliers with certified environmental management system) Climate data: own operations 123 Energy consumption, head offices (kWh per m2) Water consumption, head offices (total m3 / m3 per m2) Results 2019 Results 2020 Results 2021 Results Targets Targets 2022 2023 2025 A - A- A- A A A 75 / 81 81 / 93 82 / 92 88 / 99 Top 10 % Top 10 % 57 % 62 % 60.3 % 64.2 % 55 % 60 % 150 0.32 142 139 145 6,617 / 0.18 5,326 / 0.16 9,305 / 0.26 148 0.31 145 0.30 Total waste, head offices (tonnes / kg per FTE) 203 / 123 120 / 73 99.7 / 51 110.7 / 60 198 / 119 190 / 110 72 % 71 % 82 % 66 % 75 % 80 % Share of waste sorted for recycling, head offices (share of total waste) 124 Greenhouse gas emissions from own operations Greenhouse gas emissions from own operation (total) scope 1-3: tonnes of CO2e / tonnes CO2e per FTE 1,519 / 0.92 477 / 0.28 320 / 0.18 787 / 0.39 Scope 1-emission: tonnes CO2e / tonnes CO2e per FTE 1,1 / 0 1.2 / 0 0.5 / 0 0.8 / 0 Scope 2-emission: tonnes CO2e / tonnes CO2e per FTE 179 / 0.11 164 / 0.09 130.6 / 0.07 131.6 / 0.07 Scope 3-emission: tonnes CO2e / tonnes CO2e per FTE 1339 / 0.74 313 / 0.18 188,9 / 0,11 654.6 / 0.3 CO2e-emissions per FTE due to air travel: Scope 3, tonnes per FTE 125 E-learning 0.67 0.10 0.07 0.29 0.8 N/A N/A N/A N/A 0.6 N/A N/A N/A N/A E-learning conducted, ethics: total / share of man-years 1,518 / 89 % 1,660 / 91 % 1,694 / 91 % 1,668 / 82% 100 % 100 % 1,479 / 87 % 1,642 / 90 % 1,659 / 89 % 1,623 / 80% 100 % 100 % 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 New 1,368 / 75 % 1,662 / 89 % 1,567 / 78% 1,523 / 89 % 1,678 / 92 % 1,673 / 90 % 1,596 / 79% 100 % 100 % 100 % 100 % learning completed, information security: total/ share of man-years Governance incidents Number of complaints processed by the Financial Appeals Board 126 Number of breaches of the Code of Conduct 127 Number of information security incidents Number of privacy incidents 128 Privacy incidents uncovered externally Privacy incidents uncovered internally New New New 1,567 / 78% 100 % 100 % 192 9 30 48 New New 218 2 20 41 New New 198 3 28 125 New New 244 2 55 141 85 56 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 123) We have seen increased activity in the main offices after covid-19, but see that the numbers are still lower than pre-covid levels . 124) The degree of waste sorted for recycling has been reduced somewhat due to, among other things, relocation of other tenants at the head office with large quantities of waste that were not recycled. In addition, increased capacity in the office has led to more residual waste. 125) In 2022, our activity related to business travel increased, but since 2019 (before covid-19) we have still more than halved our internal emissions. This indicates that changed travel habits, as well as our internal carbon price and new guidelines for business travel help to reduce internal emissions. Emissions related to flights are calculated with emissions per flight route (leg) through the system of our travel agency. 126) The figures apply to our Norwegian companies, as these are complaints processed in the financial complaints board. SPP is not included here. 127) Internal misconduct by agents is not included in the key figure on breaches of ethical guidelines, but is included in the detailed reporting of violations of ethical guidelines on page 36. 128) See explanation of trends related to privacy incidents in the in the subchapter Corporate governance and compliance: Privacy and digital trust. 241 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixDefinitions for indicators about Keeping our house in order Sustainability rating CDP-rating: Rating performed by CDP. CDP is an independent organisation focused on 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. • • • • 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. CO2 emissions from air travel: Emissions from business trips the employees of the Group’s Norwegian and Swedish operations have done by air. DJSI score: The Dow Jones Sustainability Indices (DJSI) assesses companies’ performance in sustainability, and rank companies based on a range of economic, social and environmental (ESG) criteria. E-learning E-learning course completed: Employee who completed in our e-learning system. is registered as Climate data: suppliers Environmentally certified purchases (share of the total expenditure that went to suppliers with certified environmental management system): 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. Climate data: own operations 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 monitoring 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. Greenhouse gas emissions from own operations Greenhouse gas emissions from own operation (total) scope 1-3: tonnes of CO2e / tonnes CO2e per FTE: 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. Governance incidents 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. Breaches of the Code of Conduct/ethical guidelines: 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. 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. Privacy incidents: A privacy incident is an incident where there have been deviations related to compliance with the privacy policy. 242 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixFinancial capital and investment universe Categories and indicators Financial results Return on equity Solvency ratio Dividend ratio Sustainability Results 2019 Results 2020 Results 2021 Results Targets Targets 2022 2023 2025 8.0 % 176 % 0 % 8.6 % 178 % 65 % 10.7 % 175 % 52 % 8.3 % >10 % >10 % 184 % >150 % >150 % 72 % >50 % >50 % Share of total assets screened against sustainability criteria 100 % 100 % 100 % 100 % 100 % 100 % 82 % 85 % 88.6 % 91.5 % Increase Increase GRESB score direct real estate investments (value-weighted average) 129 Fossil-free investments NOK billion invested in fossil-free products / Share of AUM130 Equity investments in companies active in fossil fuel sector131 Bond investments in companies active in fossil fuel sector 132 New New New New New New 4,93 % 0.33 % 277 / 33 % 379.2 / 39 % 483 / 44 % 449 / 44 % N/A N/A N/A N/A N/A N/A Solutions investments Investments in solutions (solutions companies, green bonds, green infrastructure and property with environmental certification): NOK billion / share of total assets Equity investments in solutions: NOK billion/ share of total equity investments Bond investments in solutions: NOK billion/ share of total bond investments 133 Investments in green bonds: NOK billion/ share of total bond investments Investments in green infrastructure: NOK billion / share of total infrastructure investments Investments in certified green property: NOK billion/ share of total real estate investments 134 Carbon emissions in equity and bond investments Carbon intensity from equities investments: tonnes of CO2e per NOK 1 million in sales income (against index) 135 Carbon intensity from corporate bond investments: tonnes of CO2e per NOK 1 million in sales income (against index) 136 53.7 / 6.5 % 92.6 / 9.6 % 123.1 / 11.2 % 126.8 / 12.4 % 13 % 15 % 24.3 / 9.3 % 50.3 / 13 % 62.6 / 13 % 39.3 / 9 % N/A New New New 35.0 / 9 % N/A 12.4 / 3.1 % 22.2 / 5 % 25.7 / 6 % 32.0 / 8.3 % N/A N/A N/A N/A New New 1.5 / 100% 3.5 / 100 % 75 % 90% 17 / 41 % 20.1 / 43 % 33.3 / 68 % 49.0 / 64.6 % 70 % 78 % 14 (24) 13 (18) 12 (18) 14 (18) N/A 10 12 9 9 (5) N/A N/A N/A 129) The goal is for all our portfolios to achieve 5 stars in GRESB. This means that you must be among the top 20 per cent globally, and therefore cannot be directly translated into a score (va- lue-weighted average). Capital Investment that we bought in 2021 has not yet reported to GRESB, and is not included in the figures. 130) Fossil-free products are one of several ways to reach our overall goal of net zero emissions, and we have therefore not set a specific goal for how much should be invested in fossil-free products. 131) Figures are linked to PAI. 1.4 in the SFDR regulations. 132) Figures are linked to PAI. 1.4 in the SFDR regulations. 133) This includes investments in solution companies, green and social bonds. 134) In 2022, we included Denmark for the first time. Therefore, the share of environmentally certified real estate investments has been somewhat reduced. Certifications per country are as follows: Norway (89%), Sweden (93%), Denmark (9%). 135) Data was obtained through Trucost (S&P Global) systems and weighted by market capitalization per position. For index figures, corresponding calculations are weighted per index and weigh- ted together with the portfolios’ indices based on portfolio values. This represents a 95 % coverage ratio in our carbon footprint from equity investments, and a 93 % coverage ratio for the index. 136) Data were obtained through Trucost (S&P Global) systems and estimated management data, weighted by market value per position. For index figures, corresponding calculations are weigh- ted per index and weighted together with the portfolios’ indices based on portfolio values. This represents a 42% coverage ratio in our carbon footprint from corporate bond investments, and a 48% coverage ratio for the index. Coverage has decreased because we no longer use estimates, but only data from data providers. Previously, we have included government bonds (government, municipalities, etc.) together with corporate bonds, but now look exclusively at corporate bonds because it is best practice in both the industry and SFDR to look at the figures separately. We will consider having a separate KPI for government bonds next year. 243 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixCategories and indicators Total carbon emissions from equity investments: tonnes of CO2e Scope 1-2 137 Total carbon emissions from corporate bond investments: tonnes of CO2e Scope 1-2 Exposure to high emitting sectors: NOK billion / share of equity investments 138 Greenhouse gas emissions in real estate investments Carbon footprint direct real estate investments: tonnes CO2e / kg CO2e per m2 Scope 1 emissions: kg CO2e /m2 Scope 2 emissions: kg CO2e /m2 Scope 3 emissions: kg CO2e /m2 Climate data in direct real estate investments Energy intensity direct real estate investments: kWh/m2 Water intensity direct real estate investments: m3/m2 Waste quantity direct real estate investments: kg/m2 Share of waste sorted for recycling in direct real estate investments Active ownership and exclusions Companies that have been contacted to discuss ESG through active ownership: number (share of invested capital) 139 Votes at general meetings to promote Storebrand’s ESG criteria: number (share of invested capital) 140 Number of active dialogues related to climate and environmental risks and opportunities Number of companies that have been excluded due to serious climate and environmental damage Companies excluded from the investment universe of the Storebrand Group: number Companies excluded from MSCI ACWI Index: number/share of MSCI ACWI investment universe Social impact Ratio of female board members in companies as a percentage for equity investments 141 Results 2019 Results 2020 Results 2021 Results Targets Targets 2022 2023 2025 3,258,508 3,113,714 2,504,453 2,492,038 N/A 482,504 616,743 262,922 391,993 N/A 34.6 / 13 % 32.2 / 8 % 42.5 / 9 % 49.7 / 11.3 % N/A 10,228 / 9.12 8,456 / 7.9 6,803 / 6.0 5,704 / 5.6 0.15 7.67 1.26 194 0.46 9.2 0.08 6.8 1.04 181 0.44 8.1 0.02 4.96 1.02 170 0.38 8.3 0.04 4.29 1.29 169 0.38 9.2 8.6 N/A N/A N/A 190 0.45 N/A N/A N/A N/A 6.5 N/A N/A N/A 181 0.43 N/A 68.9 % 72.5 % 72.4 % 71.7 % 73 % 80 % 408 151 New New 182 572 503 433 139 215 601 645 (31.2 %) N/A 947 1348 (68.6 %) N/A 318 176 257 465 N/A 199 N/A 323 N/A 178 / 7.6 % 198 / 8.1 % 212 / 7.9 % 217 / 10 % N/A N/A N/A N/A N/A N/A N/A New New New 32.2 % N/A N/A 137) This year, we have chosen to change from financed emissions based on revenues at the companies we are invested in to reporting the figure based on enterprise value. We have done this both because it allows us to include corporate bonds in our emission figures, and because this is in line with the SFDR. Based on the old method, the number would have been reduced from 3,661,218 tco2e to 3,318,508 tco2e (2019-2021). 138) A large part of the increase comes from the energy sector, which has experienced increased turnover in the current period of geopolitical unrest. 139) We have moved from reporting active ownership as part of the total investment universe to looking at it relative to our total investments to provide a better insight into the proportion of our investments we are in dialogue with. 140) We have moved from reporting voting as part of the total investment universe to looking at it relative to our total investments to give a better insight into the proportion of the companies we are invested in that we vote at general meetings of. 141) Key figures are linked to PAI.1.13 in the SFDR regulations. 244 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. Appendix Definitions for indicators related to A driving force for sustainable investments Financial results Return on equity: Return on equity after tax, adjusted for amortisation of intangible assets. Solvency ratio: 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 57). Sustainability Share of total assets screened against sustainability criteria: All companies in our investment universe are screened for sustainability according to our standards: https://www.storebrand. no/en/sustainability/investments GRESB score direct real estate investments (value-weighted average): The score is a global ESG benchmark for real estate investments, which reflects sustainability quality in the management dimension and in the physical property stock. The overall score is a value-weighted average of the scores in the reporting portfolios: Storebrand Eiendom Trygg AS, Storebrand Eiendom Vekst AS, Storebrand Eiendomsfond Norge KS, and SPP Fastigheter AB. The score is calculated annually by the Global Sustainability Benchmark for Real Assets (GRESB). Fossil-free investments 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, or more than 25 per cent of their income from products and services for the oil and gas industry, and the fossil reserves shall not exceed 100 million tonnes of CO2. Equity investments in companies active in fossil fuel sector: Share of investments in shares that are invested in fossil fuel companies. This includes companies that have income from the production or distribution of fossil fuels. Investments in companies based on SFDR’s definition of Principle Adverse Impact Indicator 1.4. Bond investments in companies active in fossil fuel sector: Share of investments in bonds that are invested in fossil fuel businesses. This includes companies that have income from the production or distribution of fossil fuels. Investments in companies based on SFDR’s definition of Principle Adverse Impact Indicator 1.4. Solutions investments Investments in solutions (solutions companies, green bonds, green infrastructure and property with environmental 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. • • • • • Equity investments in solutions: Share of investments in equities in solution companies multiplied with each company’s solution exposure. These are investments in shares in companies that we believe are well positioned to solve challenges related to the UN’s Sustainable Development Goals. Investments 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. Bond investments in solutions: Share of investments in bonds in either green bonds or solution companies multiplied with each company’s solution exposure. These are investments in bonds in companies that we believe are well positioned to solve challenges related to the UN’s Sustainable Development Goals. Investments 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 in green bonds: Share of investments in green bonds. 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). 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. Investments in certified green property: Share of direct real estate investments under operational control in Norway, Sweden and Denmark with environmental certification. The certification system is mainly BREEAM, but can also include LEED, the Nordic Ecolabel or Miljöbyggnad. Carbon emissions in equities and bond investments Carbon intensity from equities and corporate bond investments: Calculations for carbon intensity are based on data from our data supplier in the third quarter of 2022, and on SFDR’s definition of Principle Adverse Impact Indicator 1.3. and TCFD definition. The total carbon intensity 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. 245 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixClimate data in real estate investments 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. Water intensity direct real estate investments: 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 monitoring system. Waste quantity and recycling rate direct real estate investments: Share of recycled waste from real estate including tenants. Residual waste is sorted mechanically at the recycling plant, and mainly goes to energy recovery. Social impact Share of women on the boards of companies in which we invest in: Average proportion of women in board composition for invested companies. Investments in companies based on SFDR’s definition of Principle Adverse Impact Indicator 1.13. Total carbon emissions from equity investments: tonnes of CO2e Scope 1-2: A company’s carbon emissions are distributed over a company’s enterprise value and multiplied by our ownership. Based on SFDR’s definition of Principle Adverse Impact Indicator PAI 1.1. Total carbon emissions from corporate bond investments: tonnes of CO2e Scope 1-2: A company’s carbon emissions are distributed over a company’s enterprise value and multiplied by our ownership. Based on SFDR’s definition of Principle Adverse Impact Indicator PAI 1.1. Exposure to high-emitting sectors: This shows our exposure to high- emitting sectors as a share of total equity investments. The definition of high-emitting 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 Carbon footprint in real estate investments Carbon footprint direct real estate investments: CO2 emissions from direct real estate investments under operational control, per square meter of heated area. Includes direct and indirect emissions (Scope 1-3), including the tenant’s energy and water consumption as well as waste production. The carbon footprint is calculated by Cemasys AS in accordance with the GHG protocol (The Greenhouse Gas Protocol). The Nordic mix emission factor is the basis for calculating location-based emissions from electricity. 246 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixFinanced emissions We transparently disclose information about carbon intensity and absolute carbon emissions for equities, corporate bonds and real estate investments. The information is available both at a total level, per sector and per geographical location. Emission from equities The figures for the calculations for carbon intensities are based on data from our data supplier. The fund’s total carbon intensity is the sum of the companies ‘carbon emissions over the companies’ income, weighted for our ownership in the respective companies. Total carbon absolute emissions from equities investments: tonnes of CO2 e Scope 1-2, by sector 142 Indicators Total carbon absolute emissions from equities investments: tonnes of CO2 e Scope 1-2 Total carbon intensity from equities investments: tonnes of CO2 e Scope 1-2 per NOK 1 million in sales income Coverage: % equities portfolio Agriculture, forestry and fishing Mining and quarrying Manufacturing Electricity, gas, steam and air conditioning supply Water supply; sewerage; waste management and remediation Construction Wholesale & retail trade; repair of motor vehicles Transportation and storage Accommodation and food service activities Information and communication Financial and insurance activities Real estate activities Professional, scientific and technical activities Administrative and support service activities Education Human health and social work activities Arts, entertainment and recreation Other services activities Results 2019 Results 2020 Results 2021 Results 2022 3,258,508 3,113,714 2,504,453 2,492,038 13.88 90.7 % 10,979 342,531 12.56 91.0 % 10,295 368,065 12.47 96.7 % 12,591 309,388 14.08 95 % 8,525 344,392 1,465,039 1,685,674 1,951,128 1,621,406 82,864 104,733 17,617 111,103 721,527 6,554 94,458 21,579 16,077 4,179 7,363 364 5,837 699 288 42,295 104,811 22,411 114,969 327,438 6,382 77,987 138,935 13,817 2,721 5,764 399 4,884 585 98 64,958 131,088 28,158 123,411 278,992 7,058 81,292 21,906 16,326 3,391 3,137 526 5,263 438 82 35,275 104,090 15,363 67,896 176,938 7,239 52,052 30,793 10,309 8,680 3,887 226 2,366 329 89 Total carbon absolute emissions from equities investments: tonnes of CO2e Scope 1-2, by region Africa Asia / Oceania Europe North America South America 287,733 608,344 313,652 623,977 15,412 473,988 34,841 399,916 1,387,127 1,203,608 1,236,455 1,178,402 779,304 46,208 793,210 40,504 760,541 18,058 860,348 18,532 142) The data on emissions by sector is based on Nomenclature of Economic Activities (NACE) codes. NACE codes are the European statistical classification of economic activities. NACE groups organisations according to their business activities. 247 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixIndicators Results 2019 Results 2020 Results 2021 Results 2022 Total carbon intensity from equities investments: tonnes of CO2e Scope 1-2 per NOK 1 million in sales income, by sector Agriculture, forestry and fishing Mining and quarrying Manufacturing Electricity, gas, steam and air conditioning supply Water supply; sewerage; waste management and remediation Construction Wholesale & retail trade; repair of motor vehicles Transportation and storage Accommodation and food service activities Information and communication Financial and insurance activities Real estate activities Professional, scientific and technical activities Administrative and support service activities Education Human health and social work activities Arts, entertainment and recreation Other services activities 13.67 57.66 16.19 50.11 90.74 3.98 4.78 75.08 7.25 3.64 1.23 10.86 3.17 3.52 5.24 8.53 6.33 6.84 8.87 66.47 15.25 21.92 93.82 3.50 3.82 40.67 12.20 3.30 1.74 11.84 2.86 4.43 4.97 9.19 4.93 5.18 Total carbon intensity from equities investments: tonnes of CO2e Scope 1-2 per NOK 1 million in sales income, by region Africa Asia/Oceania Europe North America South America 74.70 12.67 11.96 14.53 11.23 60.08 15.85 10.76 11.70 7.49 8.22 71.05 15.82 25.21 86.52 3.11 4.44 50.37 24.68 3.46 1.01 8.57 2.44 2.83 6.67 8.13 5.23 4.66 26.77 14.95 14.48 10.27 24.16 9.50 59.12 18.41 33.72 84.98 3.93 3.88 47.37 23.90 3.39 1.60 9.58 2.41 2.92 6.35 7.75 8.38 4.90 31.82 14.43 15.34 12.83 21.86 248 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. Appendix Emissions from bond investments The figures for the calculations for carbon intensities are based on data from our data supplier. The fund’s total carbon intensity is the sum of the companies ‘carbon emissions over the companies’ income, weighted for our ownership in the respective companies. Indicators Total carbon absolute emissions from corporate bond investments: tonnes of CO2e Scope 1-2 Total carbon intensity from corporate bond investments: tonnes of CO2e Scope 1-2 per NOK 1 million in sales income Coverage: % corporate bond portfolio Results 2019 Results 2020 Results 2021 Results 2022 482,504 616,743 262,922 391,993 10.13 61.1 % 11.67 63.3 % 9.22 48.1 % 8.82 42 % Total carbon absolute emissions from corporate bond investments: tonnes of CO2e Scope 1-2, by sector 1,549 169,253 183,832 0 27,552 3,154 181,823 198 15,511 17,898 5,376 75 0 0 0 4,989 - 0 244 2 776 84,114 64,248 129,153 109,876 0 395 324 88,520 12,366 7,759 40,170 93,109 6 13 2,722 2,029 1,565 4,776 2,408 5,986 64 45 0 0 0 0 - 0 - 2 88 - 20 0 3,035 339,135 49,786 37 23,770 458,851 131,650 0 1,263 231,936 29,723 0 Total carbon absolute emissions from corporate bond investments: tonnes of CO2e Scope 1-2, by region Agriculture, forestry and fishing Mining and quarrying Manufacturing Electricity, gas, steam and air conditioning supply Construction Wholesale & retail trade; repair of motor vehicles Transportation and storage Accommodation and food service activities Information and communication Financial and insurance activities Real estate activities Professional, scientific and technical activities Administrative and support service activities Public admin. & defense; compulsatory social sec. Human health and social work activities Water supply; sewerage; waste management and remediation Activities of extraterritorial orgs. and bodies 195 28,996 211,449 10,987 25,353 4,599 168,942 176 6,126 16,514 4,853 4 0 0 0 0 - Africa Asia / Oceania Europe North America South America 0 868 374,994 104,042 0 249 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixIndicators Results 2019 Results 2020 Results 2021 Results 2022 Total carbon intensity from corporate bond investments: tonnes of CO2e Scope 1-2 per NOK 1 million in sales income, by sector Agriculture, forestry and fishing Mining and quarrying Manufacturing Electricity, gas, steam and air conditioning supply Construction Wholesale & retail trade; repair of motor vehicles Transportation and storage Accommodation and food service activities Information and communication Financial and insurance activities Real estate activities Professional, scientific and technical activities Administrative and support service activities Public admin. & defense; compulsatory social sec. Human health and social work activities Water supply; sewerage; waste management and remediation Activities of extraterritorial orgs. and bodies 10.72 34.32 15.54 76.84 9.01 4.05 89.61 5.58 6.82 0.73 7.37 1.02 3.92 14.83 577.84 0.00 0.00 7.18 95.31 19.31 10.40 12.03 4.12 80.05 5.52 3.66 0.87 6.75 1.05 0.00 22.14 566.85 119.88 0.00 Total carbon intensity from corporate bond investments: tonnes of CO2e Scope 1-2 per NOK 1 million in sales income, by region Africa Asia/Oceania Europe North America South America 6.27 5.89 10.33 9.43 - 0.75 9.96 12.27 8.23 - 2.07 87.58 22.13 4.78 2.49 3.85 5.53 76.24 28.18 184.78 9.91 4.64 103.79 137.53 3.23 2.21 1.07 7.39 0.76 0.00 19.86 4.10 0.00 0.00 - 15.16 4.87 5.23 - 3.38 2.75 0.45 5.88 1.00 - 0.96 5.98 - 0.48 - 4.81 8.51 11.73 0.94 250 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixEmissions from real estate investments 143 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 intensity is calculated by Cemasys AS according to the GHG protocol (The Greenhouse Gas Protocol). The Nordic mix emission factor is the basis for calculating location-based emissions from electricity. Indicators Total carbon absolute emissions from direct real estate investments: tonnes of CO2e Scope 1-3 Total carbon intensity emissions from direct real estate investments (Scope 1-3): kgCO2e per m2 investments Coverage: % real estate portfolio Results 2019 Results 2020 Results 2021 Results 2022 10,228 8,456 6,803 5,704 9.12 100 % 7.90 100 % 6.01 100 % 5.61 100 % Total carbon absolute emissions from direct real estate investments: tonnes of CO2e Scope 1-3, by sector Real estate 10,228 8,456 6,803 5,704 Total carbon absolute emissions from direct real estate investments: tonnes of CO2e Scope 1-3, by region Europe 10,228 8,456 6,803 5,704 Total carbon intensity from direct real estate investments (Scope 1-3): kgCO2e per m2 investments, by sector Real estate 9.12 7.90 Total carbon intensity from direct real estate investments (Scope 1-3): kgCO2e per m2 investments, by region Europe 9.12 7.90 6.01 6.01 5.61 5.61 143) All property investments are located in Europe. Emissions data related to property investments only include properties from Norway and Sweden. We lack complete data for the Danish portfo- lio (with the exception of environmental certifications) and have a goal of obtaining this in 2023-2024. 251 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixCarbon accounting summary Total greenhouse gas emissions from Storebrand’s operations 144 Indicators Scope 1 emissions: tonnes CO2e Scope 2 emissions: tonnes CO2e (location based) Scope 2 emissions: tonnes CO2e (market based) Scope 3 emissions: tonnes CO2e (own operations, equity investments, real estate investments) Results Results Results Results 2019 1.1 179 60.2 2020 1.2 164 41.2 2021 0.5 130.6 41.5 2022 0.8 131.6 32.8 Scope 3 emissions: tonnes CO2e own operations 1,339 313 188.9 654.6 Scope 3 emissions: tonnes CO2e equity and corporate bond investments (Scope 1-2) 145 3,741,012 3,730,457 2,767,375 Scope 3 emissions: tonnes CO2e equity investments (Scope 1-2) 3,258,508 3,113,714 2,504,453 Scope 3 emissions: tonnes CO2e corporate bond investments (Scope 1-2) 482,504 616,743 262,922 2,884,031 2,492,038 391,993 Scope 3 emissions: tonnes CO2e real estate investments (Scope 1-3 location based) 146 Scope 3 emissions: tonnes CO2e real estate investments (Scope 1-3 market based) 147 Total Scope 1-3 emissions: tonnes CO2e (location based) Total Scope 1-3 emissions: tonnes CO2e (market based) 10,228 8,456 6,803 5,704 31,710 36,267 3,752,760 3,739,391 3,774,123 3,767,079 31,888 2,774,498 2,799,494 35,284 2,890,522 2,920,003 In total, emissions in equity investments have decreased since 2019, but have increased somewhat from 2021 to 2022 due to an increase for corporate bonds emissions, as well as an increase in the energy mix for property investments for market-based emissions. In 2022, we have chosen to change calculations for financed emissions reporting from being based on income in the companies we are invested in, to calculations based on Enterprise Value. This gave us the opportunity to include corporate bonds in our emission figures. The change is in line with the definition of “Principle Adverse Impacts” as part of the EU’s Sustainable Finance Disclosure Regulation (SFDR). The calculation method comes from “Regulatory Technical Standards Annex I” and is shown below: 144) For Scope 3 own operations, the target is -7.6% per year with a base year from 2019 and for Scope 1-2 the target is -52% by 2030 with a base year from 2018. 145) Equity investments are included in our Scope 3, but we look at Scope 1 and 2 for these companies because Scope 3 data is still of limited quality. 146) Real estate investments are included in our Scope 3 and we look at Scope 1 to 3 for these investments. 147) Market-based emissions are based on estimates. 252 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixTCFD-index TCFD-recommended disclosures Governance Disclose Storebrand’s governance around climate-related risks and opportunities. a Describe the Board of Directors’ oversight of climate-related risks and opportunities. b Describe the Group Executive Management’s role in assessing and managing climate-related risks and opportunities. Pages 81-82, 83-95 • 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 the Group 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 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 responsible for 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. 81-82, 83-95 • 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 is particularly important for our property and insurance subsidiaries. • • Storebrands CEO has appointed an EVP Sustainability that is part of the executive management team. • All business areas have designated employees with responsibility for ESG risks and opportunities, and progress is followed up each quarter by Executive Vice President Sustainability. Members of the Group Executive Management are also followed up by the CEO. 253 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. 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 risk formulations: 83-95 • 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 ambitions are insufficient (in relation to zero-emission commitments or customer expectations). 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. 13-14, 64-80, 83-95, 97 • Business strategy is influenced by reputational risks related to 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. 254 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. Appendix 13-14, 64-80, 83-95, 97 81-82, 83-95 83-95 c 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. 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 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 the Group 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. 255 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. Appendixa b c 59-63, 81-82, 83-95 40-41, 45, 64-80, 83-95 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 risk and opportunities of this report. Metrics and Targets Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material. Disclose the metrics used by Storebrand to assess climate- related risks and opportunities in line with its strategy and risk management process. • Carbon intensity in equity investments: 14 tonnes CO2 equivalents per NOK 1 million in sales income (compared to 18 index). • Carbon intensity in bond investments: 9 tonnes CO2 equivalents per NOK 1 million in sales income (compared to 5 index). • Carbon intensity in real estate investments (Scope 1-3 (kg/m2)): 5.6. • Exposure to high-emitting sectors: NOK 49.7 billion / 11.3 per • cent of total equity investments Investments in solutions (solutions companies, green bonds, green infrastructure and property with environmental certification): NOK 126.8 billion / 12.4 per cent of total assets under management. • Number of active company engagements related to climate and environmental-related risks and opportunities: 465. • Number of companies that have been excluded due to severe climate and environmental damage: 199. 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 Sustainability Assurance’s sub-chapters Sustainability indicators and definitions and Carbon Accounting Report. 45, 80, 97 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 2022. 40-41, 45, 80, 83-95, 97 256 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixGRI-index . GRI- Standard Title GRI Standard and disclosures GRI 2: General Disclosures Text The organisation and its reporting practices 2-1 Organisation details Storebrand ASA Professor Kohts vei 9, Lysaker, Oslo, Norge. Chapter Page number Annual Accounts 135, 224 and Notes, Director’s 231, 257 report, Corporate governance, GRI-index 2-2 Entities included in On the investment side, all data is collected for equities and corporate bonds. This is Storebrand, 12-13, the organisation’s It goes across Storebrand and Skagen. For real estate, we obtain data from Director’s report, 18-19, 120, sustainability reporting Storebrand Eiendom, SPP Fastigheter and Capital Investment. For figures on Corporate 231, 257 total assets under management, we have collected data for all legal entities governance, included under Storebrand Asset Management. In the climate accounting GRI-index report, 94 per cent of the workforce across the group is covered by climate data based on the location of employees. 2-3 Reporting period, Reporting period for the sustainability report: 1. January 2022 to 31. December GRI-index 257 frequency and contact 2022. Annual reporting. point Reporting period for the financial report: 1. January 2022 to 31. December 2022. Annual reporting. Publication date for the report: 21.03.23 Contact information for questions about the report: https://www.storebrand.no/en/investor-relations 2-4 2-5 Restatements of information External assurance Sustainability 243-244, Assurance 252 Annual Accounts and 216-222, Notes, Sustainability 263-264 Assurance 2-6 Activities, value chain, The supply chain’s risks related to country, sector and product are described This is Storebrand, 10, 12, and other business in the report that is published for the Transparency Act. The report will be Keeping our house in 42-43, relationships published in the updated policy on Human Rights Policy and Responsible order, GRI-index 135, 257 Business Conduct that can be found on Storebrand’s Sustainability Library: https://www.storebrand.no/en/sustainability/sustainability-library We describe Storebrand ASA’s main activities per country in the accounts in note 4. 2-7 Employees We only have permanent employees in the annual report. In our Gender People, Equality Report (Likestillingsredegjørelse), we divide employees into temporary GRI-index and permanent employees, and shows the distribution of women and men per company. The gender equality report can be found in Storebrand's sustainability library here: https://www.storebrand.no/en/sustainability/ sustainability-library 32, 235-237 257 2-8 Workers who are not The most common type of temporary workers and contractual relationships Sustainability 239, 257 employees that are not permanent employees are external consultants. They have Assurance, temporary contracts and performs work related to the needs of the business GRI-index areas. Most of the consultants are from the same supplier, and it has been relatively stable over time. 257 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixGRI- Standard Title Governance Text 2-9 Governance structure and composition 2-10 Nomination and selection of the highest governance body 2-11 Chair of the highest governance body 2-12 Role of the highest governance body in overseeing the management of impacts 2-13 Delegation of responsibility for managing impacts 2-14 Role of the highest governance body in sustainability reporting Chapter Page number This is Storebrand, 16-19 , People, Corporate 31, governance, Appendix Corporate governance Corporate governance 227-228, 270-279 226-227 227 This is Storebrand, 13, Corporate governance 227-228 This is Storebrand, 13, 17-18, Keeping our house 35-36, in order, Corporate 225, 254 governance Director’s report, 98, 215, Annual Accounts and 224-225, Notes, Corporate 227 governance 2-15 Conflicts of interest The Board adopts our internal document ”Guidelines for managing conflicts Corporate 226, 258 of interest”. The guidelines describe our procedures for identifying, assessing, governance, documenting and managing conflicts of interest. 2-16 Communication of critical concerns 2-17 Collective knowledge of the highest governance body 2-18 Evaluation of the performance of the highest governance body 2-19 Remuneration policies GRI-index People, Keeping our house in order People 29, 36 29 Corporate governance 225, 227 Annual Accounts and 173-174, Notes, Corporate governance 229 2-20 Process to determine We use external benchmarks to assess and compare salaries in the market. We Corporate 229, 258 remuneration do not use external consultants to look at pay ratios. 2-21 Annual total compensation ratio Strategy, policies and practices 2-22 Statement on sustainable development strategy governance GRI-index Sustainability 236-237 Assurance This is Storebrand, 5, 13, 64 Keeping our house in order, Director’s report 258 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixGRI- Standard Title Text 2-23 Policy commitments Storebrand-Standard. Chapter Page number People, Keeping 14, our house in order, 41-42, In the document Human Rights Policy and Responsible Business Conduct at Director’s report, 71, Storebrand, we describe the company’s work related to human rights, decent GRI-index working conditions and responsible business operations: 76-77, 257 https://www.storebrand.no/en/sustainability/sustainability-library/_/attachment/ inline/9fbb435e-1a4a-4b8a-a45d-f473c56d3cbb:92e6fa7160b8ea47016b5d2a 5c798c8b94783676/Human%20Rights%20Policy%20and%20Responsible%20 Business%20Conduct%20at%20Storebrand%202022.pdf 2-24 Embedding policy We are working to streamline the document hierarchy, which includes People, 29-30, 35, commitments guidelines, routines and routines that have not been adopted, but which Keeping our house 42-43, 259 operationalise the governing documents. 2-25 Processes to remediate negative impacts 2-26 Mechanisms for seeking advice and raising concerns 2-27 Compliance with laws and regulations in order, GRI-index People, Keeping our house in order, 29, 31, 36, 39, 64, 67, Director’s report 74-75, 76 People, 29, 35-36, Keeping our house 38-39 in order Keeping our house 35-36, 39, in order, Sustainability Assurance 241 2-28 Membership associations Accounting for Sustainability GRI-indeks 259 Investor group under UNEP FI working with TCFD Climate Action 100+ Nature 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 Just Transition on Climate Change Skift – Næringslivets klimaledere UN Global Compact UNEP Finance Initiative UN Principles for Responsible Investment UN Principles for Sustainable Insurance Stakeholder engagement 2-29 Approach to stakeholder engagement This is Storebrand 17-18 2-30 Collective bargaining 100 % in Norway and 100 % in Sweden. GRI-index 259 agreements Material Topics GRI 3: Material Topics 2021 259 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixGRI- Standard Title Text Chapter Page number 3-1 Process to determine Storebrand carried out an initial materiality analysis i 2017. This was adjusted, This is Storebrand, 17-18, 260 material topics following ongoing stakeholder engagement, both in 2018 and 2019. In 2020, GRI-index we carried out a new, thorough analysis based on qualitative and quantitative input from both internal and external sources to further develop our materiality analysis. A new and comprehensive materiality analysis was initiated in 2022 and will be completed in 2023. See the document Materiality analysis Storebrand ASA here: https:// www.storebrand.no/en/sustainability/sustainability-library/_/attachment/ inline/03dea882-579e 3-2 List of material topics Storebrand carried out an initial materiality analysis i 2017. This was adjusted, This is Storebrand, 17-18, 260 following ongoing stakeholder engagement, both in 2018 and 2019. In 2020, GRI-index we carried out a new, thorough analysis based on qualitative and quantitative input from both internal and external sources to further develop our materiality analysis. A new and comprehensive materiality analysis was initiated in 2022 and will be completed in 2023. See the document Materiality analysis Storebrand ASA here: https:// www.storebrand.no/en/sustainability/sustainability-library/_/attachment/ inline/03dea882-579e 3-3 Management of material We have started the process of renewing our materiality analysis. The four This is Storebrand, 17-18, 260 topics important topics we have from 2020 are largely what we still consider to be the GRI-index most important. Since we are working with a new materiality analysis, GRI point 3-3 is unfinished, and will be completed for the next annual report. Economic Performance 201-1 Director’s report 2022, Annual Accounts and Notes 201-2 Financial implications and other risks and opportunities due to climate change Anti-corruption 205-2 Communication and training about anti- corruption policies and procedures Emissions Director’s report, 104, Annual Accounts and 132-135, Notes 198 Director’s report 83-95 Keeping our house in 30, 36, order, Sustainability 241 Assurance 305-1 Direct (Scope 1) GHG Storebrand ASA’s total emissions figures are shown in the Carbon Accounting Keeping our house in 45, 241, Emissions Summary. order, Sustainability 252, 260 Assurance, The climate accounts for Storebrand and SPP can be accessed here: https:// GRI-index www.storebrand.no/en/sustainability/sustainability-library/_/attachment/ inline/82e8ffb9-8c56-4080-b71b-7335a7bf4801:c4528df26af779cffee1d07544e 3b5fa19b87892/2022-Storebrand-SPP-Carbon-Accounting-Report.pdf The climate accounts for Skagen can be accessed here: https://www. storebrand.no/en/sustainability/sustainability-library/_/attachment/ inline/4ca2259c-78d0-409c-a520-52fbe255194b:05e09282894a930c7e5e39bb d5cffd65cc8aa1bb/2022-Skagen-Carbon-Accounting-Report.pdf 260 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixGRI- Standard Title Text Chapter 305-2 Energy indirect (Scope 2) Storebrand ASA’s total emissions figures are shown in the Carbon Accounting Sustainability GHG emissions Summary. Assurance, GRI-index The climate accounts for Storebrand and SPP can be accessed here: https:// www.storebrand.no/en/sustainability/sustainability-library/_/attachment/ inline/82e8ffb9-8c56-4080-b71b-7335a7bf4801:c4528df26af779cffee1d07544e 3b5fa19b87892/2022-Storebrand-SPP-Carbon-Accounting-Report.pdf The climate accounts for Skagen can be accessed here: https://www. storebrand.no/en/sustainability/sustainability-library/_/attachment/ inline/4ca2259c-78d0-409c-a520-52fbe255194b:05e09282894a930c7e5e39bb d5cffd65cc8aa1bb/2022-Skagen-Carbon-Accounting-Report.pdf 305-3 Other indirect (Scope 3) Storebrand ASA’s total emissions figures are shown in the Carbon Accounting Director’s report, GHG emissions Summary. In addition, emissions figures related to equities, bonds and real Sustainability estate investments can be seen in the sub-chapter Financed Emissions. Assurance, GRI-index The climate accounts for Storebrand and SPP can be accessed here: https:// www.storebrand.no/en/sustainability/sustainability-library/_/attachment/ inline/82e8ffb9-8c56-4080-b71b-7335a7bf4801:c4528df26af779cffee1d07544e 3b5fa19b87892/2022-Storebrand-SPP-Carbon-Accounting-Report.pdf The climate accounts for Skagen can be accessed here: https://www. storebrand.no/en/sustainability/sustainability-library/_/attachment/ inline/4ca2259c-78d0-409c-a520-52fbe255194b:05e09282894a930c7e5e39bb d5cffd65cc8aa1bb/2022-Skagen-Carbon-Accounting-Report.pdf Page number 241, 244, 247-251, 252, 261 80, 241, 243-244, 247-251, 252, 261 305-4 GHG emissions intensity Storebrand ASA’s total emissions figures are shown in the Carbon Accounting Director’s report, 80 Summary. In addition, emissions figures related to equities, bonds and real Sustainability estate investments can be seen in the sub-chapter Financed Emissions. Assurance, GRI-index 247-251, 252, 261 The climate accounts for Storebrand and SPP can be accessed here: https:// www.storebrand.no/en/sustainability/sustainability-library/_/attachment/ inline/82e8ffb9-8c56-4080-b71b-7335a7bf4801:c4528df26af779cffee1d07544e 3b5fa19b87892/2022-Storebrand-SPP-Carbon-Accounting-Report.pdf The climate accounts for Skagen can be accessed here: https://www. storebrand.no/en/sustainability/sustainability-library/_/attachment/ inline/4ca2259c-78d0-409c-a520-52fbe255194b:05e09282894a930c7e5e39bb d5cffd65cc8aa1bb/2022-Skagen-Carbon-Accounting-Report.pdf In the annual report, we mainly report carbon intensity for equities, bond and property investments. For own operations, the intensity figure is calculated as follows (emissions / revenues148): - - - - Scope 1: 0.0001 tonnes CO2e / MNOK Scope 2: 0.02 tonnes CO2e / MNOK Scope 3: 0.08 tonnes CO2e / MNOK Sum scope 1-3: 0.08 tonnes CO2e / MNOK Employment 401-1 New employee hires and employee turnover Training and education Sustainability 238-239 Assurance 148) The figures from the climate accounts show that Scope 1-3 emissions in own operations are 787 tco2e (Scope 1: 0.8 tco2e, Scope 2: 131.6 tco2e, Scope 3: 654.6 tco2e). Revenues are defined in the appendix Taxonomy reporting and are aggregated to the following: NOK 7,731.6 million Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixGRI- Standard Title Text 404-2 Programs for upgrading employee skills and transition assistance programs 404-3 Percentage of employees receiving regular performance and career development reviews Diversity and Equal Opportunity 405-1 Diversity of governance bodies and employees Page number 27-28, 126 Chapter People, Annual Accounts and Notes People 30 People, Sustainability Assurance, Appendix 32-33, 235-236, 270-279 405-2 Ratio of basic salary and In our Gender Equality Report we describe a detailed breakdown of pay ratios People, 236-237 remuneration of women based on Hay Grade and per region. See the report (Likestillingsredegjørelse) Sustainability to men here: https://www.storebrand.no/en/sustainability/sustainability-library/_/ attachment/inline/53349f97-2b67 Assurance, GRI-index Public Policy 415-1 Political Contributions We do not make contributions to political parties. GRI-index 262 Marketing and labeling 417-2 Incidents of non- We work to ensure that all marketing communications and sales of products Keeping our house 35, 262 compliance and services meet relevant legal requirements and industry standards. We have in order, concerning product and not had any incidents related to this or received any notices, orders or fines for GRI-index service information and this from supervisory authorities or others labeling 417-3 Incidents of non- We work to ensure that all marketing communications and sales of products Keeping our house in 35, 262 compliance and services meet relevant legal requirements and industry standards. We have order, GRI-index concerning marketing not had any incidents related to this or received any notices, orders or fines for communications this from supervisory authorities or others Customer Privacy 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data FS - Egne KPIer FS10 Share and number of companies in the portfolio with which the reporting organisation has interacted on environmental or social matters FS11 Share of assets subject to positive and negative environmental or social screening Keeping our house 35, 241 in order Director’s report, 80, 244 Sustainability Assurance Director’s report, 80, 243 Sustainability Assurance 262 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. AppendixAuditor’s statement To the Board of Directors of Storebrand ASA Independent statement regarding Storebrand's sustainability reporting We have examined whether Storebrand ASA has prepared a GRI Index for 2022 and measurements and reporting of key performance indicators for sustainability (sustainability reporting) for the year ending 31 December 2022. Our assurance engagement was conducted to obtain limited assurance. Storebrand's GRI index for 2022 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 sustainability information is reported. Storebrand’s GRI Index for 2022 is available and included in Storebrand’s annual report for the period ending 31 December 2022. We have examined whether Storebrand has developed a GRI Index for 2022 and whether mandatory disclosures are 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 measures and controls. The tables are available and included in Storebrand’s annual report for 2022, specifically in the chapters "Sustainability indicators and definitions", "Financed Emissions" and "Carbon Accounting Summary". Storebrand has defined the key figures and explained how they are measured in the chapter “Sustainability indicators and definitions” under each material topic “Customer relations”, “Our people”, “Keeping our house in order” and “Financial capital and investment universe” (criteria). 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, 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 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 (including International Independence Standards) (IESBA Code), and we have fulfilled our ethical obligations in accordance with these requirements. We use ISQM 1 - Quality management for firms that perform audits or reviews of financial statements, or other assurance or related services engagements and maintain a comprehensive system of quality control including documented guidelines and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory claim. Auditor's responsibilities Our responsibility is to express a limited assurance conclusion on Storebrand’s sustainability reporting based on the procedures we have performed and the evidence we have obtained. We conducted our work in accordance with the Standard on Assurance Engagements ISAE 3000: “Assurance engagements other than audits or review of historical financial information". A limited assurance 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 263 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. Appendix engagement in accordance with ISAE 3000 involves assessing the suitability in the circumstances of management's use of the criteria as the basis for the preparation of the sustainability reporting, assessing the risks of material misstatement of the sustainability reporting whether due to fraud or error, responding to the assessed risks as necessary in the circumstances, and evaluating the overall presentation of the sustainability reporting. 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. The procedures we performed were based on our professional judgement and, among others, included an assessment of whether the criteria used are appropriate, as well as an assessment of the overall presentation of the sustainability reporting. Our procedures also included 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 key performance indicators for sustainability; and controlling the calculations of key performance indicators for sustainability based on an assessment of the risk of error. The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had we performed a reasonable assurance engagement. Accordingly, we do not express a reasonable assurance opinion about whether the sustainability reporting has been prepared, in all material respects, in accordance with the criteria. 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 2022 is not, in all material respects, developed 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, 7 February 2023 PricewaterhouseCoopers AS Thomas Steffensen State Authorized Public Accountant Note: This translation from Norwegian has been prepared for information purposes only. (2) 264 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. This is Storebrand2. Customer relations3. People4. Keeping Our House in Order5. Director’s report6. Shareholder matters7. Annual Accounts and Notes8. Corporate governance9. Sustainability assuranceSustainability indicators and definitions 233Financed emissions 247Carbon accounting summary 252TCFD-index 253GRI-index 257Auditor’s statement 26310. Appendix 10 Appendix 266 Taxonomy reporting 270 Group Executive Management CVs 275 Board of Directors CVs Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275Taxonomy 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 with 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 Share of taxonomy eligible activities aggregated at Group level 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 linked to the EU taxonomy will over time become increasingly important as a measure for climate change as data quality and the degree of 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. In this reporting we have used templates from Finance Norway, which are based on the reporting framework from the EU. Since we are a cross-sector financial group, the reporting will be somewhat different for the different business areas. Below is a table showing the Group’s business activities that are Taxonomy eligible at an aggregated level. Business area Banking Insurance (non-life) Insurance (life) Other (asset management, savings, guaranteed and other) Total Revenue (MNOK) 149 708.6 730.8 495.8 5,796.5 7,731.6 Share of eligibile Share of eligibile Share of total activities for each activities weighted revenue business area against total revenue 9 % 9 % 6 % 75 % 99 % 98 % 0 % 0.01 % 18 % 9 % 9 % 0 % 0 % 18 % 149) For the Insurance business, premium payment - compensation payment (the insurance result) is used as the basis for total revenue. For other segments, Fee and administration income is used as the basis for total revenue. Relevant from the reporting year 2023. 266 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275Mandatory 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 98 % Share of taxonomy eligible activities for non-life insurance Activities A.1 Non-life insurance activities and reinsurance that is taxonomy eligible 151 A.1.1 Of which is reinsured 152 A.1.2 Of which constitutes reinsurance activity 153 A.1.2.1 Of which the remainder is reinsured (retrocession) A.2 Non-life insurance activities and reinsurance not taxonomy eligible Sum A.1+A.2 Total gross written Share of total gross written Total gross written premium for the premium for the reporting premium previous reporting year (MNOK) year (percentage) year (MNOK) 150 3,326.8 37.0 0 0 55.4 3,382.2 98 % 1 % 0 % 0 % 2% 100 % N/A N/A N/A N/A N/A N/A Non-life insurance activities that is taxonomy eligible for each line of business Non-life insurance activities covered by the taxonomy, for each line of business. Reported values must correspond with the company’s Solvency II reporting. Line of business Medical expense insurance 155 Income protection insurance Workers' compensation insurance Motor vehicle liability insurance Other motor insurance Marine, aviation and transport insurance Fire and other damage to property insurance Assistance (travel insurance) Other 156 Gross written premium (MNOK) Share of total gross written premium154 552.7 94.8 11.2 526.3 1,075.9 0 913.5 152.4 55.4 16 % 3 % 0 % 16 % 32 % 0 % 27 % 5 % 2 % 150) Relevant from the reporting year 2023. 151) Implicit coverage of climate-related risks is to be regarded as covered by the taxonomy. 152) Share that is reinsured with other companies. 153) This row is only relevant for companies that offer reinsurance. 154) ”Total gross written premium” is here limited to insurance coverage that is taxonomy eligible. 155) We only report 50 per cent of Storebrand Helse’s data since we only own 50 per cent of the company. This is in line with how we report financial data. 156) This is mainly Animal Insurance (Dog and Cat) and is not covered by the taxonomy. 267 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275 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.157 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.158 If the product does not specifically mention that it excludes compensation as a result of climate-related risks, then it is considered covered by the taxonomy. Most of our non-life insurance products have additional coverage defined by the natural damage regulations and will then be covered by the taxonomy.159 Activities related to health insurance are included in the reporting, but as Storebrand only owns 50 per cent of the health insurance business, only half of the activities are reported in our calculation. The insurance products in Storebrand, which are both defined under Solvency II and which refer to climate-related risks, correspond to 98 per cent of the total insurance premium. The rest of our insurance business is not covered by the taxonomy. Key indicators related to activities within the bank’s lending Share of the bank’s lending that is Taxonomy-eligible 99 % 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. r o t a r e m u N i r o t a n m o n e D Financial corporations NFCs subject to NFRD/CSRD disclosure obligations Households Excluded from numerator Activities non-assessed by EU taxonomy & Non-Significant Impact (NSI) NFCs subject to NFRD/CSRD disclosure obligations Non-EU country counterparties Derivatives & others Total Assets Covered Other Assets excluded from GAR scope Sovereigns Central banks Trading book Total balance sheet Share of the bank’s lending that is taxonomy eligible Key indicators related to investment activities Share of investments that is Taxonomy-eligible in the mandatory reporting Exposure (MNOK) 0 0 66,552 442 0 0 53 67,047 6,307 73,354 99 % 0.01 % 157) 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 158) 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 159) Norwegian Natural Disaster Regulations: Act no. 70 of 16 June 1989 relating to natural disaster insurance. 268 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275 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. There is only one company that has reported share of activities that are taxonomy eligible and which is included in the mandatory reporting. 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 in the voluntary reporting. Below you will find the voluntary taxonomy reporting, with a more detailed description for equities, corporate bonds, real estate, infrastructure and private equity. Voluntary reporting for Storebrand as an insurance-dominated cross-sectoral financial group: Key indicators related to activities within equity and bond investments Share of equity investments that is Taxonomy-eligible Share of bond investments that is Taxonomy-eligible 10.15 % 4.76 % The data provider Sustainalytics provides estimates of how much of the investee companies’ activites that are eligible in accordance with the Taxonomy. The numerator multiplies our investments (assets under management) in companies with headquarters in Europe by the proportion of activities covered by the Taxonomy of the respective companies. Exposures to governments, central banks and supranational issuers are excluded from the calculation of the numerator. The denominator includes all investments globally, with the exception of exposures to central governments, central banks and supranational issuers. Thus, only 10.15 per cent of Storebrand’s equity investments and 4.76 per cent of Storebrand’s bond investments are covered by the Taxonomy. This is the share of companies that are taxonomy eligible in accordance with the regulations, i.e. companies that are either located within the EU and are covered by the taxonomy’s environmental goals. These are estimates based on information from our data suppliers and may change somewhat when the data quality improves. Key indicators related to activities within investments in infrastructure Share of infrastructure investments that is Taxonomy-eligible 69.6 % 69.9 per cent of our infrastructure investments are in activities that are eligible in accordance with 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 are also Taxonomy eligible. Key indicators related to activities within investments in private equity Share of investments in private equity that is Taxonomy-eligible 2 % Only 2 per cent of private equity investments are eligible in accordance with the taxonomy. 52 per cent of investments in private equity are outside Europe, and the remaining companies are not covered by the NFRD. 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 eligible in accordance with the taxonomy. Real estate investments are not covered by the NFRD, and are thus not reported as mandatory reporting, but as voluntary. 269 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275 Group Executive Management CVs Odd Arild Grefstad (1965) Lars Aa. Løddesøl (1964) Group Chief Executive Officer Storebrand ASA Group Chief Financial Officer and Executive Vice President Strategy, Education State-Authorised Public Accountant Authorised Financial Analyst (AFA) Finance and Legal, Storebrand ASA Education MSc in Economics and Business Administration, BI Norwegian Business School MBA Thunderbird School of Global Management (AGSIM), USA Previous positions AMP, Columbia University, USA Managing Director, Storebrand Livsforsikring (2011–2012) Executive Vice President Finance and Legal, Storebrand ASA (2008–2011) Previous positions Executive Vice President Finance, Storebrand ASA (2002–2008) Executive Vice President, Life and Pensions Norway and Managing Director, Manager of the Group Controller Unit, Storebrand ASA (1998–2002) Storebrand Livsforsikring AS (2008–2011) Group Controller, Life Insurance, Storebrand ASA (1997–1998) Executive Vice President, Corporate Market Life Insurance, Storebrand Vice President, Internal Auditing, i Storebrand ASA (1994–1997) Livsforsikring AS (2004–2008) External Auditing, Arthur Andersen & Co (1989–1994) CFO, Storebrand ASA (2001–2004) Ownership in Storebrand Number of shares as of 31.12.2022: 245 520 Vice President/Relationship Manager, Citibank International plc (1994–2001) Asst. Treasurer, Scandinavian Airlines Systems (1990–1994) Number of shares owned by the close associate: 2 000 Ownership in Storebrand Number of shares as of 31.12.2022: 156 271 270 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275Heidi Skaaret (1961) Executive Vice President, Retail Market Vivi Måhede Gevelt (1983) Executive Vice President, Corporate Market Education Education MSc in Economics and Business Administration, University of Washington, Master in Technology Management (NTNU) Seattle, USA Previous positions Interest rate analyst (NFF) Master of Business Administration - Master of Science in Business Administration (NHH) Lindorff Group AB, Executive Vice President, Scandinavia Region, Managing Director of Lindorff AS in Norway (2008–2012) Previous positions Managing Director, IKANO Finans ASA (2001–2008) Head of Service and Settlement, Storebrand Livsforsikring AS (2021–2022) Managerial positions at DNB ASA (1987–2000) Head of Product and Service, Storebrand Livsforsikring AS (2019–2021) Financial Services Officer, Bank of America, San Francisco, USA (1986–1987) Head of Settlement, Storebrand Livsforsikring AS (2015–2019) Ownership in Storebrand Head of Operations, Storebrand Forsikring AS (2014–2015) Head of Service, Storebrand Forsikring AS (2013–2014) Number of shares as of 31.12.2022: 119 115 Head of Finance and Business Development, Storebrand Forsikring AS (2011–2013) Business Controller, Storebrand Livsforsikring AS (2009-2011) Management Trainee, Storebrand Livsforsikring AS (2007-2009) Ownership of Storebrand Number of shares as of 31.12.2022: 7 413 271 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275Jan Erik Saugestad (1965) Jenny Rundbladh (1977) Executive Vice President, Storebrand Asset Management Managing director, SPP Education Education MSc in Engineering, Norwegian University of Science and Technology (NTNU) Master in Psychology, Luleå University of Technology, Sweden MBA INSEAD, France Previous positions Executive Training Business Administration and Management, Harvard Business School Executive Training, Sales and marketing, Harvard Business School Investment Director, Storebrand Asset Management (2006–2015) Senior Portfolio Manager, Storebrand Asset Management (1999–2006) Previous positions Sector Head Equities, Energy/Shipping, Handelsbanken Markets (1997–1999) Sales Director/CCO SPP Pension och försäkring AB (2019–2022) Partner, Marsoft Capital (1995–1997) Sales Manager SPP Pension och försäkring AB (2018–2019) Head of Research, Christiania Markets (now: Nordea Markets) (1992–1995) Managing Director, Aon SE & Head of Affinity (2016-2018) Junior Consultant, McKinsey & Company (1990–1991) Head of Sales and Customer Service, If Care (2012-2016) Ownership in Storebrand Marketing Manager, Sveriges Ingeniörer (2008–2012) Sales and Marketing Manager, Union (2004–2008) Number of shares as of 31.12.2022: 131 305 Project manager, Sif (2002–2004) Management Consultant, Miljöteknik Orbit AB (1999) Ownership of Storebrand Number of shares as of 31.12.2022: 4 424 272 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275Karin Greve-Isdahl (1979) Executive Vice President, Communications, Sustainability and Public Affairs 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 31.12.2022: 35 705 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 31.12.2022: 32 412 273 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275Tove Selnes (1969) Executive Vice President, People Education Master in Law, University of Oslo, Norway Previous positions HR Director, Sorebrand Livsforsikring (2015–2020) Group Director HR, Opera Software (2007–2015) HR Director, Eltel Networks (2004–2007) HR Manager East Norway Region, Avinor (1997–2004) Legal Advisor, Aetat (1995–1997) Ownership in Storebrand Number of shares as of 31.12.2022: 35 772 274 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275Board of Directors CVs Didrik Munch (1956) Christel Elise Borge (1967) Board Chair at Storebrand ASA since 2017 Board Director, Storebrand ASA since 2021 Position Self-employed Education Position CEO, Entur AS Education Norwegian Police University College Master in Law Master of Science, Computer Science, NTNU, Norway MBA Programme INSEAD, Fontainebleau, France Previous positions Previous positions Group Chief Executive Officer, Schibsted Norway (2011-2018) Telenor ASA (2005-2020) Group Chief Executive Officer, Media Norway (2008–2011) CEO, Dipper AS Chief Executive Officer, Bergens Tidende (1997–2008) Senior Vice President, Head of Group Strategy and CEO Office Division Director, Corporate Market, DNB (1995–1997) Senior Vice President, Head of Group Strategy and Portfolio Development Regional Bank Manager, Corporate Market Bergen, DNB (1992–1995) Strategy Director, Telenor Nordics, Oslo Various managerial roles at Nevi and DNB (1987–1992) Strategy Advisor, Innovation AS (2002-2004) Attorney, Kyrre AS (1987–1987) Project Manager, Schibsted (2001) Police intendant I/II, the Bergen Police Department (1984–1986) Director, Cell Network AS (2000-2001) Police inspector, the Oslo/Bergen Police Department (1979–1984) Strategy Advisor, McKinsey & Company (1991-1999) Positions of trust Board Chairman, NWT Media AS Board Director, Grieg Maritime Group AS Board Director, Lerøy Seafood Group Board Chairman, SH Holding (Solstrand Fjord Hotell) Ownership in Storebrand Number of shares as of 31.12.2022: 40 000 Number of shares owned by the close associate: NWT Media AS: 215 000 Board Director, Sparebank1 Midt-Norge, SND Invest, Telenor Digital, Telenor Denmark, Talkmore, Component Software Ownership in Storebrand Number of shares as of 31.12. 2022: 11 000 275 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275Karin Bing Orgland (1959) Board Director, Storebrand ASA since 2015 Marianne Bergmann Røren (1968) Board Director, Storebrand ASA since 2020 Position Self-employed Education Position CEO, Mesta AS Education MSc Economics and Business Administration, Norwegian School of Economics Master in Law, University of Oslo, Norway (NHH) Top Manager Programme (IMD, BI and Management in Lund) Previous positions Previous positions Danske Bank Corporate & Institutions (2007-2019): Global Head of COO Office Executive Vice President of DNB, and various managerial positions in the same Global Head of Risk group (1985–2013) Global Head of AML Programme Consultant, Ministry of Trade and Shipping Handels og skipsfartsdepartementet COO and Deputy Country Manager (1983–1985) 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 Corporate Assembly, Telenor ASA Board Director and Chair of the Audit Committee, Grieg Seafood ASA Board Director, SmartCraft ASA Ownership in Storebrand Number of shares as of 31.12. 2022: 5 000 Number of shares owned by the close associate: 2 000 Board Chair, GIEK Positions of trust Board Chair, Entur AS Board Director and Chair of the Audit Committee, KID ASA Board Director, Eksportfinansiering Norge (eksfin) Board Director and Chair of the Audit Committee, NRC Group ASA Ownership in Storebrand Number of shares as of 31.12. 2022: 27 000 276 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275Karl Sandlund (1977) Martin Skancke (1966) Board Director, Storebrand ASA since 2019 Styremedlem i Storebrand ASA siden 2014 Position COO, AcadeMedia AB Education Position Self-employed Education MSc Industrial Engineering and Management, University of Linköping, Authorised Financial Analyst, Norwegian School of Economics (NHH), Norway Sweden Previous positions 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 Executive Vice President & CCO, SAS (2019-2022) MSc Economics and Business Administration, Norwegian School of EVP Commercial, SAS (2017-2020) EVP & Chief Strategy Officer, SAS (2014-2017) Vice President, Network, SAS (2009-2014) Economics, Norway Previous positions Vice President, Commercial, SAS (2007-2009) Special Adviser, Storebrand (2011–2013) Vice President, Corporate Development, SAS (2006-2007) Deputy Director General and Director General, Ministry of Finance, Norway Director, Business Strategies, SAS (2004-2006) (1994–2001, 2006–2011) Consultant, McKinsey & Company (2001-2004) Director General, Office of the Prime Minister, Norway (2002–2006) Ownership in Storebrand Number of shares as of 31.12. 2022: 7 000 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: 32 500 277 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 91. 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AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275Fredrik Åtting (1968) Hanne Seim Grave (1974) Board Director, Storebrand ASA since 2020 Employee Representantive, Storebrand ASA since 2021 Position Partner EQT Education MSc (Stockholm School of Economics) Previous positions Position Senior Authorised Insurance Advisor, Storebrand Forsikring AS 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, Securitas AB Member of the Nomination Comittee, Storytel AB Ownership in Storebrand 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 Number of shares as of 31.12.2022: 400 000 Sales, Storebrand Skadeforsikring Number of shares owned by the close associate, EQT Public ValueInvestments Manpower, Storebrand Eiendom S.à r.l.: 14 900 000 Ownership in Storebrand Number of shares as of 31.12.2022: 650 278 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275Hans-Petter Salvesen (1968) Bodil Catherine Valvik (1973) Employee Representantive, Storebrand ASA since 2020 Employee Representantive, Storebrand ASA since 2020 Position Position Head of Union Representantives, the Finance Sector Union of Norway, Head of Fund Administration, Storebrand Asset Management ASA Storebrand ASA Education Education BA(Hons) Travel & Tourism Management, University of Northumbria at Newcastle Marketing Communications, BI Norges Markedshøyskole/NMH People Management, Høyskolen i Akershus, Norway Previous positions Internship top union representatives, Høyskolen Kristiania Manager, Customer Services, Public pensions, Storebrand Pensjonstjenester AS Previous positions Manager, Customer Services, Pensions & Savings, Storebrand PM (2013-2018) Sales Manager, Storebrand Bank ASA (2016-2020) Manager, Customer Services, Link and Mutual Funds, Storebrand Sales Manager, Storebrand Finansiell Rådgivning AS (2014-2016) Kapitalforvaltning (2007-2012) Head of Dialogue Marketing/CRM, Storebrand ASA, (2012-2014) Manager, Customer Services, Link, Storebrand Livsforsikring (2002-2006) Operational Manager, Storebrand Baltic UAB (2010-2012) Manager for Helpline Link, Storebrand Livsforsikring (2001-2002) Key Account Manager, Storebrand Bank ASA (2005-2010) Financial Advisor, Storebrand Livsforsikring (1999-2001) (2019-2020) Web Manager/Project Management, Storebrand Bank ASA (2003 – 2005) Web Manager/Project Management, Finansbanken ASA (2000-2003) Ownership in Storebrand Employee, Gjensidige Forsikring (1988-2000) Number of shares as of 31.12.2022: 1 910 Ownership in Storebrand Number of shares as of 31.12. 2022: 0 279 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275 Page 1 Photo: Johnér Bildbyrå AB Page 5 Photo: Lise Eide Risanger / Storebrand Page 7 Photo: Adobe Stock Page 7 Photo: Lise Eide Risanger / Storebrand Page 7 Photo: Karoline Næss / Storebrand Page 7 Photo: Johnér/Stefan Isaksson Page 11 Photo: Johnér Bildbyrå AB / Hans Berggren Page 15 Photo: Karoline Næss / Storebrand Page 16 Photo: Ihne Pedersen Page 19 Photo: Shutterstock Page 21 Photo: Shutterstock Page 23 Photo: Storebrand Page 24 Photo: Johnér Bildbyrå AB Page 26 Photo: Johnér Bildbyrå AB Page 28 Photo: Johnér Bildbyrå AB Page 30 Photo: Johnér Bildbyrå AB / Pernille Tofte Page 34 Photo: Shutterstock Page 38 Photo: Shutterstock Page 41 Photo: Caiaimage/Johnér Bildbyrå AB Page 44 Photo: Johnér Bildbyrå AB / Susanne Kronholm Page 46 Photo: Johnér Bildbyrå AB Page 50 Photo: Shutterstock Page 54 Photo: Maskot / Offset.com Page 58 Photo: Johnér Bildbyrå AB Page 64 Photo: Shutterstock Page 70 Photo: Julien McRoberts Photography / Offset.com Page 71 Photo: Jens Lindström / Johnér Bildbyrå AB Page 78 Photo: Erik Isakson Photographics / Offset.com Page 82 Photo: Johnér Bildbyrå AB Page 95 Photo: Johnér Bildbyrå AB Page 96 Photo: Cultura / Offset.com Page 99 Photo: Johnér Bildbyrå AB Page 223 Photo: Maskot bildbyrå Page 232 Photo: Johnér Bildbyrå AB / Michael Jönsson Page 265 Photo: Fredrik Schlyter / Johnér Bildbyrå AB 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. 280 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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. AppendixTaxonomy reporting 266Group Executive Management CVs 270Board of Directors CVs 275Storebrand ASA Professor Kohts vei 9, P.O. Box 474, N-1327 Lysaker, Phone: +47 915 08 880, storebrand.no 281 Table of contentsFacts and figures 2022 3Foreword by our CEO 5Foreword by the Chair 7Highlights in 2022 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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