Result 1st quarter 2003

The group's result, which represents the shareholders' share of operating profit, showed a loss of NOK 47 million in Q1 as compared to a loss of NOK 62 million for Q1 2002. Operating profit in Q1 was NOK 53 million as compared to NOK 95 million for Q1 2002.

 

Positive trend for life insurance sales

"The improving trend seen for the life insurance company continued in Q1, as demonstrated by a net inflow of new customer reserves totalling NOK 410 million in Q1. Although the life insurance company is affected by turbulent equity market conditions, the measures we have implemented have stabilised its earnings as we intended", comments Idar Kreutzer, Group CEO.

 

"It is very satisfactory to note that we have sound control over the group's costs and that sales of life and health insurance products are strong. Storebrand Helseforsikring's premium income was 59% higher than in the first quarter of last year. The banking activities still report high default levels, which means we will continue to pay undiminished attention to problem loans", adds Idar Kreutzer.

 

Satisfactory financial condition

In view of the turbulent conditions in financial markets the group continues to place particular emphasis on risk management and cost saving measures. Storebrand's financial condition is satisfactory, and the group's capital ratio was 15.5% at the end of Q1.

 

Storebrand Livsforsikring reported booked and value-adjusted investment returns of 1.4% for Q1. There were no significant changes in the composition of the investment portfolio in Q1, and the portfolio's exposure to equities, including derivatives, was 9%. The life company reported a profit for Q1, giving an increase in risk capital from NOK 4.7 billion to NOK 5.0 billion. Risk capital increases to NOK 6.6 billion if unrealised gains on bonds held to maturity are included.

 

Good relative investment return

The long-term weak equity market conditions seen have caused assets under management by Storebrand Investments to fall, leading in turn to lower income. This underlines the importance of a strong focus on operating costs, which showed a fall in Q1 from the same period last year. The group's asset management business achieved a good relative investment return in a difficult market. The investment return achieved in Q1 was better than the relevant benchmark indices for the life insurance company's investment portfolio, as well as for over 70% of the mutual funds and discretionary portfolios under management.

 

Bank merger now completed

Storebrand Bank and Finansbanken have merged with accounting effect from 1 January 2003 and the merged bank now operates from offices at Filipstad Brygge in Oslo. The bank's Q1 results were affected by reduced lending volumes and continued high default levels. Storebrand's main distribution channel for the retail market is now organised as an independent unit within the bank. The distribution unit is proceeding as planned with the implementation of measures already announced.

 

The technical insurance results from If, where Storebrand has a 22.47% ownership interest, showed a steady improvement. If reported a combined ratio of 105.0% for Q1, representing an improvement of 6.3 percentage points from the same period last year.   

  

 

Oslo, 8 May 2003

 

 

Appendix: Board of Directors' interim report for Q1 2003.