Positive effects on results and capital in Q4
On 18 December the Boards of Directors of Storebrand ASA, SPP Livförsäkring AB and Storebrand Livsforsikring AS have approved changes to the discount rate in SPP and reclassification of certain balance sheet items in Storebrand Livsforsikring AS. This strengthens the Group's solidity, and the capital situation is considered good.
Effects on results and capital in Storebrand Livsforsikring Group (including SPP):
For SPP, the new model for assessing liabilities means that the company expects a positive financial result in Q4. The change also strengthens the insurance customers' buffer capital (conditional bonuses).
For Storebrand Livsforsikring AS the changes are expected to reduce the use of additional statutory reserves and shareholders equity by approximately NOK 1.5 billion in Q4. Consequently a positive result for shareholders is expected for Storebrand Livsforsikring AS in Q4.
The approved changes improve the level of the solvency margin for Storebrand Livsforsikring Group. As at 18 December the solvency margin is estimated to be above 141 per cent, which was the level reported at the start of the quarter.
Storebrand's financial targets and expectations regarding future earnings, as presented at the capital markets day held on 12 November and published in a stock exchange notice on the same day, are maintained.
Improved model for discount rates in SPP:
The new cash-flow based model will more accurately reflect the liabilities in the financial accounts. It will also reduce financial result volatility caused by fluctuations in interest rate levels.
A separate discount rate is used for solvency and traffic light calculations in Sweden. On 10 November the Swedish FSA (Finansinspektionen) announced changes in this rate. SPP has decided to use the new discount rate.
Reclassification of balance sheet items in Storebrand Livsforsikring AS:
Parts of the portfolio held at amortised cost in Storebrand Livsforsikring AS have been subject to reclassification. The surplus value in this portfolio improves the return to customers and owner by approximately NOK 1.5 billion in Q4. This improves the customers' buffer capital and provides a basis for a more offensive investment strategy.
Other items
Full accounts for Storebrand for Q4 2008 will be published on Wednesday 11 February 2009. The effects set out above are based on available information as per 17 December 2008.
An international conference call in relation to this stock exchange notice will be held at 11:00 CET. To participate in the conference call please register 10 minutes before the start of the conference call by dialling 800 80 119 from Norway or +47 2300 0400 from Norway or abroad.
Oslo, 19 December 2008
Contact persons:
EVP Corporate Communications Egil Thompson: Mobile (+47) 93 48 00 12
Head of Investor Relations Trond Finn Eriksen: Mobile (+47) 99 16 41 35