Results 4th Quarter 2002

Group result, which represents the shareholders' share of operating profit, showed a profit of NOK 29 million in Q4 and a loss of NOK 1,701 million for 2002 as a whole. Q4 produced an operating profit of NOK 837 million, with an operating loss for the year as a whole of NOK 2,713 million.

 

"An upswing in financial market conditions over the last three months of 2002 gave a positive end to a year otherwise dominated by very weak earnings. We maintained a close focus in 2002 on improving the matters that we do have control over. The measures we have implemented to improve profitability are progressing as planned, and we have reinforced our leading position for life insurance and long-term savings products", comments Idar Kreutzer, Group Chief Executive Officer.

 

In view of the very turbulent stock market conditions, the group has placed particular emphasis on risk management and the implementation of cost-saving measures. Storebrand closes 2002 with a satisfactory financial condition and an overall capital ratio for the group of 16%.

 

Continuing growth for sales of health insurance and personal risk

Storebrand Livsforsikring achieved a realised investment return of 1.8% for Q4 and 2.7% for the full year. The corresponding figures for value adjusted return were 1.8% for Q4 and 1.9% for the year. The life company starts 2003 with a sound balance sheet and NOK 3,034 million of additional statutory reserves.

 

Storebrand's life insurance activities reported a positive sales performance for the quarter. Sales of health insurance products were up by 64%, and in the market for municipality pension schemes Storebrand attracted 79% of transferred premium reserves. Storebrand signed 247 new contracts for defined contribution occupational pension schemes in 2002 as opposed to 101 in the previous year.

 

An increase in the number of disabled persons has created a need for the insurance industry as a whole to strengthen its disability reserves. In consultation with the Norwegian Banking, Insurance and Securities Commission, Storebrand Livsforsikring allocated NOK 235 million in this respect in 2002. This reflects a move to a longer accrual period for some aspects of the planned disability reserve, and following this change the allocation to disability reserves in Q4 was NOK 7 million.

 

Weak conditions in the financial markets meant that the group's investment management activities experienced a decline in funds under management and management fees in 2002. Storebrand Kapitalforvaltning generated a good relative return for its customers in Q4, and attracted net inflows to mutual securities funds of NOK 800 million. Its competitors saw net outflows totalling NOK 1.1 billion for the same period.

 

Reduction in Finansbanken's lending volume

Loan loss provisions in Finansbanken are developing as expected in Q4, with net new provisions of NOK 17 million. The bank's net interest income remains weak due to a sharp reduction in lending volume and a continuing high level of loans on which no interest is accrued. Loss exposed loans are closely monitored. Storebrand Bank reported better results following the implementation of cost saving measures. However its earnings were depressed by weak market conditions for sales of savings products. The merger approved between Storebrand Bank and Finansbanken will create further cost savings in the banking area.

 

The technical insurance result for If, where Storebrand has a 22.47% shareholding, showed sound improvement. The combined ratio was 105.5% in Q4 and 106.4% for the year, as compared to 124.1% and 113.1% (pro forma) for the same periods of 2001

 

Storebrand has implemented a comprehensive range of measures to improve the focus and efficiency of its operations. The Q4 accounts include a charge of NOK 84 million for restructuring costs and write-downs of goodwill in respect of the extensive reorganisation that is now underway.

 

 

Oslo, 25 February 2003

 

 

Appendix: Interim report for Q4 2002