Storebrand ASA 4Q 2012: Competitive customer returns and strengthened buffer capital
* Group profit[1] of NOK 489 million for 4(th) quarter and NOK 1,960 million
for the year
* Excess value of securities and customer buffers totalling NOK 12.0 billion
in SBL and NOK 8.6 billion in SPP in 2012
* Strong returns for Norwegian and Swedish pension customers
* NOK 4.3 billion in provisions for new mortality tables, 3.2 billion in 2012
* Board of Directors recommends no dividend be paid for 2012
The Board of Director's Interim report for 4Q 2012, 4Q 2012 result presentation
and Supplementary Information are attached on http://www.newsweb.no
Storebrand will today host a press and analyst conference in Storebrands head
office at Lysaker, Professor Kohts vei 9, at 1000 CET (in Norwegian). An
international conference call will be hosted at 1400 CET. To participate in the
conference call please use link on http://www.storebrand.no/ir, or call in and
register 10 minutes before the presentation starts. Dial in number:
+47 23184536.
Full press release:
Storebrand ASA 4Q 2012: Competitive customer returns and strengthened buffer
capital
   · Group profit[2] of NOK 489 million for 4(th) quarter and NOK 1,960 million
for the year
   · Excess value of securities and customer buffers totalling NOK 12.0 billion
in SBL and NOK 8.6 billion in SPP in 2012
   · Strong returns for Norwegian and Swedish pension customers
   · NOK 4.3 billion in provisions for new mortality tables, 3.2 billion in 2012
   · Board of Directors recommends no dividend be paid for 2012
   - Storebrand delivers strong returns to customers in Norway and Sweden.
Defined contribution customers in Norway that have chosen the most usual
investment profile have received 11.6 per cent returns in 2012. We have also
achieved high return within guaranteed pension. This has enabled us to
strengthen our customer buffers with a total of NOK 9.3 billion in 2012, of
which by NOK 3.2 billion is reserved for increased life expectancy, says Group
CEO Odd Arild Grefstad.
Group profit before amortisation and write-downs of intangible assets was NOK
489 million (NOK 268 million) for the 4(th) quarter and NOK 1,960 million (NOK
1,279 million) for the year. The figures in brackets show the corresponding
period last year. The results for the quarter and the full year are affected by
costs in connection with reorganisation and a more focused business. This
reduces the administration and fee results in the quarter, but will contribute
to strengthened results going forward.
Good market and result development
The customers' return in Storebrand Life Insurance has been good throughout the
year, and asset returns in SPP have provided a basis for profit sharing in all
customer portfolios.
The shift from products with guaranteed interest rates to unit linked insurance
products continues in the Norwegian and Swedish life insurance businesses. In
Norway, this trend will be further strengthened by the proposed transitional
rules for defined benefit products from the Banking Law Commission, and the fact
that companies that already have a defined contribution pension may be given an
opportunity to save significantly more for their employees than today.
The customer return in unit linked pensions, in the most common allocation
profile, was 11.6 per cent in 2012. Sales in the Norwegian corporate market were
good, with booked net transfers to Storebrand totalling NOK 525 million.
Asset management's result is affected by weak income growth. This is due to
greater allocation to products with lower margins. Costs have increased
primarily as a result of restructuring.
The banking result increased by NOK 25 million for the year. The underlying
portfolio performance and sales results are in line with the market.
Storebrand Insurance continues its positive financial performance, reflecting a
positive underlying risk performance in the portfolio combined with efficient
operations.
Cost programme progressing according to plan
The measures in the cost programme that will to reduce the Group's costs by NOK
400 million by 2014 are progressing according to plan. The effects realised as
at the end of 2012 total NOK 68 million measured on an annual basis for the
Storebrand Group, with full effect in 2013.
Future reserves for a projected higher life expectancy
The life insurance industry in Norway is working on new mortality tables in
cooperation with the Financial Supervisory Authority of Norway. There is a
general need for strengthening of reserves for longer life expectancy within
group pension. Based on the mortality survey conducted by the life insurance
industry, the Financial Supervisory Authority of Norway will set a minimum level
for new mortality tariffs effective from 1 January 2014. Statistics Norway
middle alternative for projected mortality with a ten per cent security margin
equals a strengthening of the premium reserves by around 7 per cent, amounting
to around NOK 10 billion. Storebrand has set aside a total of NOK 4.3 billion
during the period from 2011 to 2012 for future reserves for longevity.
Board proposes no dividends for 2012
In Norway there is a need to strengthen the longevity reserves. This entails
that the high returns in 2012 have been used in their entirety to strengthen the
longevity reserves. The customers have thus not received any excess return, and
the company's shareholders have not received any profit sharing and will not
receive any dividend for 2012.
Strengthened solidity
The Storebrand Life Insurance Group's (Storebrand Life Insurance and SPP's)
solvency margin was 162 per cent at the end of the quarter. This is an
improvement of nine percentage points since the 3(rd) quarter. This is related
primarily to the quarterly results and higher interest rates in Sweden.
Lysaker, 13. february 2013
Contacts
Elin Myrmel-Johansen
Director of Communications, mob +47 934 80 538
Trond Finn Eriksen
Head of Investor Relations, mob. +47 991 64 135
Enclosure: Board of Director's Interim Report for 4(th) quarter 2012
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act
--------------------------------------------------------------------------------
[1] Group profit before amortisation and write-downs of intangible assets.
[2] Group profit before amortisation and write-downs of intangible assets.
Storebrand ASA Q4 2012 interim report:
http://hugin.info/169/R/1677642/547220.pdf
Storebrand ASA Q4 2012 presentation:
http://hugin.info/169/R/1677642/547221.pdf
Storebrand ASA Q4 2012 supplementary information:
http://hugin.info/169/R/1677642/547227.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Storebrand ASA via Thomson Reuters ONE
[HUG#1677642]