STOREBRAND ASA: Results for the 2nd Quarter 2020
Growth in Core Business and Assets under Management, Solvency Affected by low Interest Rates
- Group profit of NOK 808m in the 2nd quarter, 40% growth y/y
- 23% growth in Unit Linked premiums y/y
- 15% growth in insurance portfolio premiums y/y, Combined Ratio 92%
- Assets under management (AuM) NOK 880 billion, 17% growth y/y
- Solvency II ratio 163% (167% Q2 2019)
- The situation in the Norwegian and Swedish society and markets following the COVID-19 pandemic has started to normalise after a turbulent first quarter. Group profit is strong, we experience strong growth in our core business, our cost control is good, and we have a solid increase in assets under management. We are particularly pleased to see that our Swedish business is continuing to capture market shares, says CEO Odd Arild Grefstad.
Growth in Core Business
Storebrand continued to grow its core business in Savings and Insurance.
Gross written premiums in the Insurance segment increased by 15% compared to same period last year.
Premiums from Unit linked increased by 23% compared to second quarter last year, to NOK 5,1 billion. Storebrand succeeds well in the Norwegian and Swedish markets for occupational pensions. Assets under management (AuM) increased by 17% from same period last year and is now NOK 880 billion.
In Sweden, strong growth in sales, positive net transfers and portfolio transfers led to NOK 6.7 billion net flow in the first half of 2020. SPP is the fastest growing provider of occupational pensions in Sweden (excluding unionised pension schemes), with a market share of 14%. All SPP funds are fossil free, driven partly by strong customer demand.
Storebrand's position as a leading player in the field of sustainable investments was recognised by our customers this quarter. Storebrand was ranked as number one in performance of sustainable investments by Prospera, an annual survey among institutional investors.
Strong Cost Control
The Group’s operational costs for the quarter were NOK 975 million (compared to NOK 1,030m in second quarter 2019). Storebrand has a strong cost discipline, in line with the Group's targeted cost level. Storebrand maintains the target of flat nominal costs in 2020 compared to 2018.
Solvency Affected by Lower Interest Rates
The solvency margin was 163% at the end of the second quarter. The reduction in the quarter is due to historical low interest rate levels, reduced regulatory volatility adjustments, as well as a higher allocation to bonds and equites.
The Board of Storebrand ASA expects to pay normal dividends for 2020.
- The COVID-19 situation has led to record low interest rates and volatile financial markets. Customer buffer capital is at nearly 10% in both Norway and Sweden and we have seen the volatility in the markets as an opportunity to increase expected returns and increase our share of bonds with amortised cost. However, the solvency margin is still well within our target range of 150-180%, says CEO Odd Arild Grefstad.
Capital Markets Day – Save the Date
Storebrand plans to host a capital markets day 10 December 2020. More information and a formal invitation will follow.
Key Figures in the Quarter:
(Q2-2019 in brackets)
- Solvency ratio 163% (167%)
- Earnings per share, adjusted for amortisation NOK 1.23 (NOK 1.21)
- Equity NOK 34,396m (NOK 32,242 m)
- Assets under management NOK 880bn (NOK 752bn)
Activities Related to the 2nd Quarter 2020
07:30 CEST: Release of stock exchange notification. Press release, quarterly report and analyst presentation will be available at www.storebrand.no/ir.
10.00 CEST: Live press and analyst conference in English in a combined webcast and conference call. The presentation will be available on demand afterwards. Participants who would like to ask questions at the end of the presentation must dial-in to the conference call, or alternatively submit their written questions in the provided form in the webcast. We kindly ask media with separate interview requests to e-mail SVP Communications, Margrethe Assev, in advance. Reporters will be contacted after the conference.
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