Storebrand: Result Q2 2004

"All business areas reported stronger earnings for the first six months than at this stage last year. This confirms that Storebrand is working well, and the measures we have implemented are delivering the results intended. We are making changes to the company's organisation with effect from 1 September, and this will further strengthen our market and customer focus as well as ensuring better use of resources throughout the group", comments Idar Kreutzer, Group CEO.

 

Storebrand Life Insurance reports continuing growth in life insurance premium income. Premium income, excluding transfers, was 73% higher than in H1 2003, amounting to NOK 7.3 billion. Q2 produced a year-on-year increase of 131%, of which group pension business accounted for 26%. All product areas produced higher premium income for the first six months.

 

The value-adjusted investment return for the first six months was 3.2%, of which Q2 accounted for 1.1%. Booked investment return for the first six months was 2.8%, of which Q2 accounted for 1.5%. This is equivalent to an annualised return of 5.7%. The value-adjusted return including unrealised gains on bonds held to maturity was 3.0% in the first six months of 2004, of which Q2 accounted for 0.2%.

 

Storebrand Investments had assets under management of NOK 174 billion at the close of Q2, representing an increase of NOK 8 billion in Q2 and NOK 15 billion for the first six months. Net new business was NOK 490 million in Q2 and NOK 1,155 million for the first six months as compared to NOK 800 million for the whole of 2003 (excluding If).

 

Storebrand Investments produced a better return for the first six months than the comparable benchmark indices (before deducting management fees) on 62% of the securities funds it manages (32 out of 52 funds). Six of the eight portfolios managed for Storebrand Life Insurance outperformed their benchmark indices.

 

Storebrand Bank reports a steady improvement. Q2 produced a profit after loan losses and write-downs of NOK 17 million. Net loan loss provisions and write-downs totalled NOK 13 million in the quarter, as compared to NOK 33 million for the same period last year. The bank has produced a pre-tax profit of NOK 38 million for the first six months as compared to a loss of NOK 40 million for the same period last year. The reduction in operating costs seen in Q1 continued in Q2.

 

A program of work was started on 1 June to adjust the Storebrand group's management structure. The objective is to further strengthen the group's market and customer focus, reinforce its commitment to the retail market and improve resource allocation throughout the group. The program is proceeding well, and the new management structure is due to come into effect on 1 September.

 

Under the new structure the Storebrand group will be made up of five operational business areas: Retail Distribution, Corporate Market Life, Life Production & Service, Banking, and Asset Management.

 

A new executive management team for the life insurance company and group has been announced as part of the new management structure. The management team for life insurance activities will, in addition to CEO Idar Kreutzer, be made up of Maalfrid Brath (Executive Vice President - Retail Distribution), Lars Løddesøl (Executive Vice President - Corporate Market Life) and Rolf Corneliussen (Executive Vice President - Life Production & Service). Maalfrid Brath is currently responsible for Retail Distribution, Lars Løddesøl is currently Executive Vice President  - Finance and Risk Management and has also been Deputy Managing Director of Storebrand Bank over the past 15 months, and Rolf Corneliussen is currently Executive Vice President - IT.

 

The group management team will be made up of the life insurance management team together with Per Kumle (Managing Director - Storebrand Bank), Allan Åkerstedt  (Managing Director- Asset Management), Hans Henrik Klouman (Executive Vice President - General Counsel), Odd Arild Grefstad (Executive Vice President - Chief Financial Controller), Erik Råd Herlofsen (Executive Vice President - Human Resources) and Egil Thompson (Executive Vice President - Corporate Communications and Brand).

 

 

Oslo, 18 August 2004

 

 

 

Appendix: Board of Directors' Interim report for Q2 2004