· Group profit of NOK 1,054 million for the fourth quarter and NOK 2,935 million for 2013 · Earnings growth of 11.5 percent and cost reductions of 6 percent during 2013 · Strong returns for customers with defined contribution pensions · Changes in pension and distribution give positive result effect of NOK 275 million
- "2013 annual results are the best ever for Storebrand. This is due to strong growth in revenues from all our business areas as well as successful efforts to cut our costs, says Group CEO Odd Arild Grefstad.
Storebrand's group result was NOK 1,054 million for the fourth quarter of 2013 and NOK 2,935 million for the entire year of 2013, up NOK 489 million from the fourth quarter of 2012 and NOK 1,960 million from 2012. Storebrand's revenues from managing pensions and savings products increased by 11.5 percent to NOK 4,355 million in 2013, from NOK 3,907 million in 2012. During the same period, operating expenses were reduced from NOK 3,647 million in 2012 to NOK 2,983 million in 2013. Adjusted for one-off items contained in the expenses for 2012 and 2013, the nominal cost reduction comprises 6 percent.
Within the Insurance area, a strong 14 percent growth in insurance premiums was obtained. The claims ratio was 76 for the quarter and 73 percent for the year.
The embedded value of Storebrand life and pensions was NOK 27.7 billion in 2013, an increase of NOK 5.9 billion during 2013. The increased value is due to good returns in the customer portfolios, higher interest rates and improved margins. Embedded value is an actuarial calculation that measures the value of a life insurance company, excluding the value of future new sales.
Growth and good returns for defined contribution pensions
In the life and pensions business, the shift continues from products with interest rate guarantees to unit linked products. Storebrand is maintaining its role as the market leader in defined contribution pensions in Norway. In Sweden, SPP has a strong challenger role and during the course of the year has become the third largest participant in the Swedish market in terms of new sales. In total, the group's revenues from premiums for occupational pensions with no interest rate guarantees increased by 20 percent during the quarter and 17 percent for the year.
In Norway, an increasing number of our occupational pension customers are choosing to transfer from defined benefit to defined contribution pensions, driven by the need for predictability and increased cost control. With the Storting's adoption in December of increased maximum saving rates in defined contribution, beginning 1 January 2014, we expect this trend to continue.
- In this regard, I am satisfied to report that the defined contribution customers experienced very good returns on their pension funds during 2013. The most common savings profile, with an equity percentage of 50 percent, provided our customers a return of 16.7 percent last year, says Group CEO Odd Arild Grefstad.
The retail market has also been marked by the transition from guaranteed to unit linked savings.
- For many pension customers with guaranteed pensions, a transition to savings with investment choice will result in higher expected pensions. We therefore pay special attention to the remaining clarifications needed for the regulations for paid-up policies with investment choice being in place soon, so the law can enter into effect during the first half of 2014.
Strengthened solvency and build-up of reserves for increased life expectancy
Expected increases in life expectancy are leading to a need to strengthen reserves. Returns above the interest rate guarantee were in 2013 used to strengthen the reserves for increased life expectancy. On this basis, the Board of Directors has decided to propose to the Annual General Meeting that no dividends be paid for 2013.
The solvency margin for the Storebrand Life Insurance Group was 176 percent in 2013, a strengthening by 14 percentage points in relation to 2012. In addition to the annual results, the strengthening of the solvency margin mainly derives from an increase in long-term interest rates in Sweden, which reduces the insurance liabilities.
Storebrand will today host a press and analyst conference in Storebrands head office at Lysaker, Professor Kohts vei 9, at 10:00 CET (in Norwegian). An international conference call will be hosted at 14:00 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: 21 56 33 18 from Norway and +44 20 3003 2666 for international participants.
The Board of Director's Interim report for Q4 2013, Q4 2013 result presentation, Supplementary Information Q4 2013 and 2013 MCEV report are attached on http://www.newsweb.no
Lysaker, 12 February 2014 Contact persons: Communications Director Elin M. Myrmel-Johansen: Mobile (+47) 93 48 05 38 Head of Investor Relations Trond Finn Eriksen: Mobile (+47) 99 16 41 35 Storebrand’s ambition is to be the best provider of pension savings. The group offers a broad range of products within life insurance, property and casualty insurance, asset management and banking, to companies, public sector entities and private individuals. The group is divided into the segments Savings, Insurance and Guaranteed pension and Other.
This information is subject to disclosure under the Norwegian Securities Act section §5-12.
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The following files are available for download:
http://mb.cision.com/Public/6558/9535366/9c0cd61587e0bcb0.pdfStorebrand ASA 2013 Q4 Interim report
http://mb.cision.com/Public/6558/9535366/93fcb4e915922d1b.pdfStorebrand Q4 2013 Supplementary Information
http://mb.cision.com/Public/6558/9535366/ad281774e8dac8fd.pdfStorebrand ASA Q4 2013 presentation
http://mb.cision.com/Public/6558/9535366/a24677d243f72e7f.pdf Storebrand MCEV 2013