Quarterly report, analyst presentation and auditors review report are attached on http://www.newsweb.no 

 

Storebrand will today host a press and analyst conference in Oslo at Felix Conference Centre, Bryggetorget 3, at 0900 CET (in Norwegian). An international conference call will be hosted at 1500 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).

 

Press release:

 

 

"Storebrand displayed good stable, development in a quarter characterised by great market instability. The risk management is functioning as anticipated and underlying operations are developing satisfactorily. The integration work with SPP is proceeding as planned and new sales in Sweden are increasing," says CEO Idar Kreutzer.

 

Storebrand Life Insurance's (excl. SPP) total premium income excluding transferred assets amounted to NOK 6,400 million for Q1 2008. This represents an increase of 18 per cent compared with the same period last year. Group insurance products with investment choice experienced growth of 29 per cent in the same period. In addition, a net transfer of customer assets to Storebrand Life Insurance amounting to NOK 2,193 million was booked during the quarter.

 

The new insurance act and regulations came into effect in Norway at the start of the year. The new act entails extensive changes for life insurance companies. Storebrand has done extensive work to ensure that the changes result in an improvement in the company's competitiveness. The transition to the new insurance act resulted in income in the IFRS accounts of close to NOK 200 million, primarily from the dissolution of the security fund. NOK 235 million in unrealised gains were recognised as income in the company portfolio during the quarter.

 

The SPP Group's total premium income in the quarter developed positively with an increase of 12 per cent compared with the same period last year. SPP has intensified its sales work in all channels. This, together with the increased marketing activities, resulted in growth in new business of 50 per cent compared with the same period last year. The growth in sales was primarily driven by increased activities in its own sales channels. However, it also experienced a growth in sales via insurance brokers.

 

The SPP Group's profit was affected by weak financial markets in Q1. During the quarter, SPP implemented dynamic risk management in accordance with the same principles used in Storebrand Life Insurance. This entails reducing the risk in falling equity markets by selling equities to protect the customers' and owner's risk capital. The conditional bonus (the insurance customer's buffer capital) was NOK 10,200 million at the end of Q1.

 

Storebrand Investments' profit in the quarter was affected by the instability in the financial markets. The combination of reduced assets under management in funds and the relatively weak return on discretionary assets resulted in lower total income compared with the same period in 2007. Total costs were reduced in relation to last year due to lower performance-based remuneration and good costs control. Storebrand Investments managed NOK 230,000 million at the end of Q1. This is an increase of NOK 2,200 million since the start of the year.

 

Storebrand Bank's profit was characterised by a positive development in net interest income with growth of 36 per cent in relation to Q1 last year. Net interest income as a percentage of average assets under management was 1.19 per cent in Q1 versus 1.07 per cent for the whole of 2007. Continued customer growth, price adaptation in the lending portfolio, and an increased deposit-to-loan ratio made positive contributions to the development of the profit.

 

Storebrand Skadeforsikring achieved good sales in Q1. During the quarter, the number of customers increased by 3,315. At the end of Q1 the company had more than 19,000 customers.

 

The Board of Storebrand ASA has decided to supply the life insurance business with NOK 450 million through a share issue in order to ensure an optimum capital structure and tier 1 capital ratio for Storebrand Life Insurance. Following the acquisition of SPP the regulatory key figures were affected by consolidation effects, and the solvency margin and tier 1 capital ratio are somewhat lower than the company's targets.

 

The injection of capital will strengthen Storebrand Life Insurance's solvency margin and the tier 1 capital ratio. Based on the key figures at the end of Q1, the solvency margin and tier 1 capital ratio in Storebrand Life Insurance after the share issue will be 135 per cent and 6.0 per cent respectively. This will have no effect on the group's consolidated financial position.

 

The share issue will be paid in cash from Storebrand ASA's liquidity holding. It will result in a positive debt-equity ratio in Storebrand ASA. The target of a net debt-equity ratio equal to zero over time will be maintained.

 

 

Oslo, 30 April 2008

 

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 Q1 2008