Results for the 3rd quarter of 1998: Satisfactory Storebrand result in turbulent quarter
o Operating result NOK 1,136 million. Group profit NOK 510 million.
o Non-life reports improved technical result.
o Competitive yield.
o Storebrand's financial strength good after capital market unrest.
o Storebrand's ability to assume risk gives flexibility.
o In non-life insurance, the market share is rising, in life it is maintained.
The Group's result for the last three months period was a loss of NOK 75 million, compared to a profit of NOK 274 million last year.
Storebrand can report a competitive yield, despite weak financial results in the 3rd quarter. In the life insurance company, the booked yield after nine months was 4.4 per cent, or 5.9 per cent on an annual basis. The value-adjusted capital yield in the period was 0.1 per cent.
The Group had unrealised gains of NOK 1,375 million at 30 September 1998, which is NOK 5,174 million lower than at the beginning of the year. NOK 1,207 million of the unrealised gains were in the life company's portfolio, NOK 152 million in the non-life company, and NOK 14 million in the parent company, Storebrand ASA.
Developments in the financial markets after 30 September 1998 have resulted in unrealised gains rising to NOK 3.6 billion at the beginning of November.
The life company, Storebrand Livsforsikring, had an operating profit of NOK 964 million in the first nine months of the year, compared NOK 2,962 million in the same period last year. Storebrand Skadeforsikring, the non-life company, had an operating profit of NOK 416 million, compared to NOK 536 million last year. The Storebrand Group's total operating income at the end of the 3rd quarter amounted to NOK 25,586 million, compared to NOK 22,515 million in the same period in 1997.
Net financial income in the Group's insurance activities amounted to NOK 4,480 million, which is NOK 1,670 lower than last year. Of this, net gains on sales and write-downs on securities in the insurance activities amounted to NOK 113 million, compared to a net gain of NOK 2,089 million last year. Write-downs on the Group's securities portfolio totalled NOK 208 million.
Insurance-related operating expenses at the end of the 3rd quarter totalled NOK 2,086 million, or NOK 285 million more than in the same period last year. This was due to higher sales volumes, improvement programmes, and information technology costs.
The Storebrand Group had total assets of NOK 121,732 million at 30 September 1998, a rise of 6.4 per cent since the beginning of the year. Storebrand's financial strength is still good despite the weak financial market in the 3rd quarter. The Group's capital ratio stood at 12.9 per cent at 30 September 1998, while the statutory minimum is 8.0 per cent. At the beginning of the year, the capital ratio was 14.4 per cent, while it was 13.3 per cent at 30 June 98. The decrease in the capital ratio in the 3rd quarter was due first and foremost to growth in the risk-weighted assets.
In the first nine months of the year, earnings per share amounted to NOK 1.67, compared to NOK 2.56 in the same period last year.
Full quarterly report is available on the attached link.