Annual report 2011 Content In brief 2 Key figures 2 Interview with the CEO 4 Highlights of 2011 7 Our vision 8 Our values 9 ABOUT STOREBRAND Storebrand Group 12 Greater responsibility for our own pension 16 Sustainable investments 18 Shareholder matters 22 History of Storebrand 24 REPORT OF THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE Report of the Board of Directors 28 Corporate Governance 54 Board of Directors 64 Members of Storebrand’s corporate bodies 66 Management 67 ACCOUNTS AND NOTES STOREBRAND GROUP Profit and loss account 72 Statement of total comprehensive income 73 Statement of financial position 74 Reconsiliation of Storebrand Group’s equity 76 Cash flow analyses 78 Notes 80 STOREBRAND ASA Profit and loss account 154 Statement of financial position 155 Cash flow statement 156 Notes 157 Declaration by the members of the Board and the CEO 169 Independent auditor’s report 170 Statement of the Control Committee and The Board of Representatives 172 Auditor’s report on corporate sustainability 173 Storebrand’s corporate sustainability work – scorecard 174 Terms and expressions 176 Storebrand Group companies 178 ÅRSRAPPORT 2011 In brief The Storebrand Group is made up of the business areas life and pension, asset mangement, bank and insurance. The group’s head office is at Lysaker and the company has also established life insurance, asset management and health insurance activities in Sweden. Storebrand is the Nordic region’s leading provider of life insurance and pensions, and offers a comprehensive range of products to retail customers, corporate customers, municipali- ties and the public sector. HISTORY AMBITION EMPLOYEES CUSTOMERS Storebrand can tra- Storebrand shall At the end of 2011 There are 1.8 mil- ce its history back be a leader in there were 2,221 lion people who to 1767. The com- long-term savings employees in the have a customer pany has provided and insurance. In group, compared relationship with occupational pen- order to achieve with 2,182 at the Storebrand. Our sions to Norwegian this, Storebrand’s start of the year. vision is to serve employees since ambition is to be a Women represent them so well that 1917, the same leader in corporate 49 per cent of our we are ”Recom- year Storebrand’s social responsibility employees. The mended by our subsidiary SPP and sustainable in- average age of our customers”. was established in vestments. To illus- employees is 44 Sweden. Store- trate how corporate and the average brand Bank ASA social responsibility seniority is 9 years. opened for busi- is integrated in our All employees of ness in 1996, and core operations, Storebrand are in 2006 the group the group reports treated equally, relaunched its pro- on financial and regardless of age, perty and casualty non-financial goals gender, disability, insurance business and results in the religious beliefs, as a service for the group’s annual cultural diffe- retail market and report. rences or sexual selected segments orientation. of the corporate market. Key figures NOK million 2011 2010 2009 2008 2007 Group result before amortisation and tax1 1,279 1,612 1,245 1,310 2,020 Storebrand Life Insurance 481 783 759 348 1,635 SPP 291 410 487 831 na Asset Management 293 333 240 218 138 Bank 213 162 63 68 235 Insurance 281 155 -49 0 na Other activities -278 -231 -255 -155 12 Return on equity (%)2 6% 11% 8% -9% 24% Solvency margin (%) 161% 164% 170% 160% 136% Total assets (NOK million) 401,442 390,414 366,159 372,212 381,837 Equity capital (NOK million) 18,777 18,417 17,217 16,158 19,241 Earnings per ordinary share (NOK) 1.51 3.30 2.08 -5.01 7.95 Dividend per ordinary share (NOK) 0.00 1.10 0.00 0.00 1.20 3.8 % 13. Sick leave in the Storebrand Group was At the end of 2011 there were 2,221 Storebrand qualified for the All the investments in 3.8 per cent in 2011. No change from employees in Storebrand. This corresponds Dow Jones Sustainability Storebrand’s funds and portfolios last year. to an increase of 1.8 per cent during 2010. Index for the 13th year in have been assessed in accord- a row. ance with our sustainability criteria. 1. Result figures for 2007 have not been translated for the financial statement layouts used from 2008. Figures for 2010 and 2011 are translated as a result of adjustments in the group structure. 2. Adjusted for write-downs and amortisation of intangible assets, after tax. 2 | STOREBRAND ASA Retail | Corporate STOREBRAND ASA | 3 ANNUAL REPORT 2011 NEW CUSTOMER-ORIENTED VISION 29 per cent. This corporate relationship is Closer customer Storebrand has recently changed its vision a strategically important relationship that to ”Recommended by our customers”. Why? gives us a point of contact with the em- relationships – This is part of the group’s customer ployees. We are to become an even better orientation. We see that Norwegian em- partner to individuals, and the customers The eurozone crisis, low in- ployees are gaining more influence over and Storebrand will both benefit from this. terest rates and weak global company-paid pensions, and our new Storebrand already has good solutions vision and position takes this into account. for insurance, savings and banking services growth made 2011 a chal- ”Recommended by our customers” is an that combined cover our customers’ overall lenging year for players in ambitious and motivating vision. needs. We must do better at telling our the financial sector. Extensive We are taking a position that is customers that they are doing the right customer-oriented, purposeful and specific. thing when they take advantage of more of regulatory changes are be- Our customer promises shall make it clear the products we offer. Last year we were ing implemented for European to our customers what they can expect ranked as the world’s most sustainable life insurance companies at from their encounter with Storebrand and asset manager by the World Bank and Fi- the same time – changes that act as guidelines for our employees. Our nancial Times. Where the money is invested corporate customers are clear about the is something that an increasing number of Storebrand are monitoring fact that good information and guidance to customers are concerned about. We have closely. In order to become employees is an important and integral part participated in the development and signed more customer-oriented, the of corporate deliveries. This strengthens on to the social responsibilities in the UN group launched a new vision customer satisfaction and improves the Global Compact and the UN Principles for quality of the deliveries at the same time. Responsible Investment. at the start of the year, CEO Idar Kreutzer tells us in this What will the practical consequences of the The changes in the pension system call for interview. new vision be in relation to the day-to-day a shift towards the retail market? work of our employees? – Precisely. The employees have more choi- – We are making many changes as a ces, and these choices are of great impor- result of our new vision: One example will tance to their future financial security. We be how customers can contact us on the must illustrate the consequences of these phone. Today our customers have diffe- choices. There is a great need for informa- rent points of contact for the various tion – and a great need for savings. product areas. In the future customers will Better guidance for employees in encounter a combined Storebrand with an companies with a pension from Storebrand overview of their entire customer rela- also strengthens our position as a leading tionship – from occupational pensions to occupational pension provider in the Nordic insurance and funds. market. Another example is how we have redesigned our customer front end. Our FINANCIAL RESULTS IMPACTED BY THE customers can choose how they would EUROZONE CRISIS like to contact us: by phone, online, chat How would you describe Storebrand’s or meeting in person with an advisor. We financial results for 2011? have also neutralised the incentive system – Our results have been clearly affected by for our advisers. Remuneration focuses the unrest in the financial markets in the on meeting the needs of the customers, second half of the year. At the same time, rather than on the product the customer it is satisfying to note that the customers’ purchases. return has been very competitive. We also see that Storebrand’s ongoing efficiency IMPORTANCE OF THE RETAIL MARKET IS improvement, automation and cost control GROWING efforts are continuing to show results. Storebrand’s stated aim is to grow in the There has been significant growth in pro- retail market. The group will establish a ductivity in the business. leading direct position, and our existing As we enter into 2012 our results will customers are the primary target group. be marked by the fact that we have lower Storebrand has a small share of the retail assets under management than expected market and a large share of the corporate as a result of the falling market. This means market. Why focus on the retail market? that Storebrand at the end of 2011 is be- – We have 1.8 million customers in Norway hind on its plan to reach its result target in ”In Norway alone there are between and Sweden with occupational pensions, 2013. In order to compensate for this situa- health insurance and paid-up policies, tion, cost measures are being implemented 60–80,000 as well as retail market customers. In earlier and more extensively than planned. new employees every year in companies that Norway alone there are between 60,000 The Board of Directors has decided to offer occupational pensions from Storebrand.” and 80,000 new employees every year in propose to the Annual General Meeting companies that offer occupational pensions that the entire annual result for 2011 will be from Storebrand.