Q2 2009: Satisfactory development in results
- Group result[1] of NOK 505 million in Q2 and minus NOK 228 million for the first half of 2009
- Stronger investment returns produce positive results for Life and Pensions
- Satisfactory financial position: solvency margin of 154% for life insurance activities
- Good sales growth in the Norwegian and Swedish businesses in the first half of 2009
The Board of Director's 1st half report 2009 and the analyst presentation are attached on http://www.newsweb.no
Storebrand will today host a press and analyst conference in Oslo at Vika Kino, Ruseløkkveien 14, at 1000 CET (in Norwegian) and an analyst conference in London at Chartered Insurance Institute, 20 Aldermanbury, at 0900 UK time. An international conference call will be hosted at 15:00 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: +47 80080119 (from Norway) or +47 23000400 (from Norway or abroad).
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Press release:
Q2 2009:
Satisfactory development in results
- Group result[1] of NOK 505 million in Q2 and minus NOK 228 million for the first half of 2009
- Stronger investment returns produce positive results for Life and Pensions
- Satisfactory financial position: solvency margin of 154% for life insurance activities
- Good sales growth in the Norwegian and Swedish businesses in the first half of 2009
- "Storebrand delivers a satisfactory result in a volatile market. The result for the quarter is improved by NOK 312 million compared to the same quarter of last year. The group's financial position is reassuring, and development in sales so far this year is good" comments Group CEO Idar Kreutzer.
Improved financial markets
The Norwegian life insurance business shows a positive development in Q2 with returns above the average interest rate guarantee. This reduces the charge to equity and additional statutory reserves from Q1.
The Q2 result for the Swedish business is positively affected by higher bond interest rates that reduce the value of liabilities, whilst the return on the investment portfolio was affected by the good development in equity and credit markets. Developments in Q2 reduced the total charge on the profit allocated to the owner for the first half of 2009, but the result for the first half of 2009 was still affected by returns on investments being weaker than the development in the value of liabilities.
Strong market position
Premium income developed well in the occupational pensions market. The total net booked inflow of customer assets from competitors amounted to almost NOK 1 billion in the first half of 2009. Sales of life savings products in the retail market remained slow.
The improvement in the financial markets resulted in returns from recommended investment choices for defined contribution pensions improving strongly in Q2. The returns in Q2 were 4.2% for a careful profile, 9.9% for a balanced profile and 15.2% for an aggressive profile respectively. The returns for the first half of 2009 were 3.8% for a careful profile, 6.6% for a balanced profile and 8.9% for an aggressive profile, respectively.
New sales in SPP continued to develop positively. Total new premiums (APE) increased by 21% in the first half of 2009 compared with the same period in 2008.
Storebrand Investments had NOK 336 billion under management at the close of Q2. This represents an increase of NOK 107 billion in the first half of 2009. The growth is due to Storebrand Investments having now taken over management of SPP's customer funds. Net new sales in the asset management business (external discretionary assets and mutual funds) amounted to NOK 2.2 billion in the first half of 2009. 90% and 64% of the mutual funds in Storebrand Fondene and SPP Fonder respectively have outperformed their benchmark indices (calculated before management fees) in the last 12 months.
Storebrand Bank has prioritised deposit growth, and increased the deposit-to-loan ratio from 47% to 53% in the first half of 2009. Total lending in the period decreased by just over 3% to NOK 38 billion. The bank's result for the quarter is affected by lower net interest income.
Insurance policy sales in the new P&C insurance business remain good. Total premiums increased by 12% in Q2 to NOK 284 million, and increased by 26% in the first half of 2009.
Financing and capital situation
Storebrand made a number of adjustments to the group's capital structure and financing in Q2. During the quarter Storebrand ASA issued NOK 550 million in a new 5-year senior bond in the Norwegian market
Storebrand Life Insurance redeemed subordinated loans totalling EUR 245 million, EUR 70 million of which was a subordinated loan provided by Storebrand ASA. The life insurance business also repaid SEK 1.6 billion of perpetual subordinated loans during the period. Storebrand Life Insurance issued NOK 1 billion in a new perpetual subordinated loan in June
The modifications to the capital structure were in line with the communicated plan. The changes have an overall positive effect on the group's financing structure and liquidity.
Storebrand was in a satisfactory financial position at the close of Q2. The Storebrand Life Insurance Group's solvency margin at the close of Q2 was 154%
Oslo, 17 July 2009
Contact people:
EVP Corporate Communications Egil Thompson: Mobile (+47) 93 48 00 12
Head of Investor Relations Trond Finn Eriksen: Mobile (+47) 99 16 41 35
Enclosure: Board's Interim Report for First half 2009
[1] Group result before the amortisation and write-down of intangible assets.