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Lunch presentation Arctic Securities
20 August 2015
Traditional Life
Anders Skjævestad
CEO DNB Livsforsikring AS
Traditional Life separated from new business within DNB
Maximising value Profitable growth
Traditional Life Wealth Management
& Insurance
CAGR* 30.6 2015 2012 2013 2014
Development in premium income 2012-2014
3
Wealth Management
Traditional Life
Insurance
Premium income
(NOK bn)
6.4 8.8 9.9 24 % 3.2
11.1 10.1 9.3 -8 % 4.1
1.0 1.2 1.3 14 % 0.7
* 2012-2014
Strong results marked by longevity provisions
403
1,320
2,134
1,844
913
186
56 852
315
2011 2012 2013 2014 30/06/2015
Result before tax DNB Livsforsikring AS (NOK million)
Highlights as at 30 June 2015
Satisfactory investment returns
5 per cent nominal decrease in costs
9 per cent growth in AuM for Defined
Contribution
Wind-up of Public Sector on track
Longevity provisions,
owner’s share
Strong results and declining guaranteed reserves for Traditional Life*
* Defined benefit, paid-ups, old individual contracts and public sector
** Ex. public sector
*** Additional statutory reserves and market value adjustment reserves
212
194 182
31.12.2013 31.12.2014 30.06.2015
8.5 %
reduction
Guaranteed reserves reduced
Strong value creation in 2014**
Amounts in NOK million 2014 30.06.2015
Longevity – customer’s share 2,057 484
Longevity – owner’s share 852 249
Allocation to buffers*** 1,079 365
Result after tax 1,112 594
Total value created 5,100 1,692 394
1,211
1,600
1,204
583
186
56 852
315
2011 2012 2013 2014 30/06/2015
Result before tax Traditional Life (NOK million)
Longevity provisions,
owner’s share 6.0 %
reduction
Profitability
measures
Reduce
growth De-risk
Longevity
provisions
Optimal
capitalisation
Building
buffers
Solvency II toolbox for traditional back book
Approaching Solvency II with sound management actions
Targeted asset allocation in the paid-up portfolios* (per cent)
5.2
13.6
51.3
13.4
8.8 7.7 7.7
13.6
51.3
.4.3
15.3
7.8
Equity Current bonds HTM Bonds Money Market Real Estate Other
Paid-ups fully reserved Paid-ups under longevity reservation
* Asset allocation as at 30.06.2015
Covering the guaranteed interest rate and longevity - Hold to maturity bonds and real estate are key
3.2
2.3
4.2
2.4
6.7
2.9
1.1
1.4
Other* Equity HTM Bonds Real Estate Interest rate
guarantee
Longevity Allocated to buffers Allocated to
customers
7 * Incl. money market, current bonds and other investments
Investment income common portfolio 2014 (NOK bn)
Earned Allocated
Expected return on paid-ups
4.51 4.49 4.34
4.54 4.51 4.46
3.87 3.85 3.73
3.93 3.90 3.85
2015 2016 2017 2018 2019 2020
Paid-ups under longevity reservation Paid-ups fully reserved
8
Expected return paid-up policies 2015-2020 (per cent)
Q4
201516-year duration of transitional measures
Solvency Capital requirement Projected Solvency capital incl. Omnibus II measures Projected Solvency capital excl. Omnibus II measures
DNB’s solvency capital versus capital requirement
Sufficiently capitalised under Solvency II - Omnibus II measures curbs the effects of a persistent low interest rate level
Illustration
The standard model under Solvency II
10
What is standard and what is not?
Mathematics Stress Principles
Company
specific Profit Model Volatility
Diversity Nationality
Standard: Explicitly described in the standard model
Not standard: Not explicitly described in the standard model or dependent on individual factors
Well on track with longevity provisions
7.4
11.7
17.9 4.3
Reserved
2011- 2014
Remaining Total provisioning
requirement*
Available buffers**
Total reserve strengthening requirement is
NOK 11.7 bn
Reserved NOK 0.8 bn in 2015
Owner’s share of 0.3 bn
Longevity provisions as at Q2 2015 (NOK bn)
Key aspects
* Will be influenced by new premiums, reserve growth and transfers
** Incl. statutory reserves, market value adjustment reserve and overvalue bond at amortised cost as at 31.12.2014