Earnings call transcript: Storebrand Q1 2025 shows strong growth

Storebrand ASA reported robust financial performance for the first quarter of 2025, with significant growth across key metrics. The company saw a 16% increase in operating results, reaching NOK 800 million, and a 10% rise in top-line growth. Storebrand’s stock price increased by 2.31% following the announcement, reflecting positive investor sentiment. According to InvestingPro data, the stock is currently trading at $7.90, with an impressive year-to-date return of 72.16%. Analysis suggests the stock is currently undervalued, presenting a potential opportunity for investors.

Key Takeaways

• Storebrand’s operating results grew by 16% year-over-year.
• The company announced a new partnership with Danske Bank in the Swedish pension market.
• Storebrand’s stock price rose by 2.31% post-earnings call.

Company Performance

Storebrand demonstrated strong performance in Q1 2025 with a 16% year-over-year increase in operating results, amounting to NOK 800 million. The company’s financial results stood at NOK 367 million, and top-line growth was reported at 10%. Storebrand’s annualized return on equity reached 15%, and its solvency margin was 198%, indicating a solid financial position. InvestingPro data reveals the company trades at an attractive P/E ratio of 5.67 and offers a substantial dividend yield of 5.63%. For deeper insights into Storebrand’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Financial Highlights

• Operating result: NOK 800 million (+16% YoY)
• Financial result: NOK 367 million
• Top-line growth: 10%
• Annualized return on equity: 15%
• Solvency margin: 198%

Market Reaction

Following the earnings announcement, Storebrand’s stock price increased by 2.31%, with a change of NOK 1.94. The stock’s movement reflects investor confidence in the company’s performance and future prospects. InvestingPro analysis indicates a ’FAIR’ Financial Health Score of 2.29, with particularly strong relative value metrics. The company’s next earnings report is scheduled for May 15, 2025, and analysts forecast robust revenue growth of 58% for FY2025.

Outlook & Guidance

Storebrand provided positive guidance for the future, targeting a combined ratio of 92% or less in its insurance segment. The company expects fee income to be back-end loaded in the third and fourth quarters. Storebrand also aims to continue its annual dividend growth at a rate of 15%.

Executive Commentary

CEO Odd Aril Grefsta emphasized the company’s strong earnings momentum and its ability to capture structural growth. He also highlighted the effectiveness of Storebrand’s risk management systems. The company’s strategic initiatives, including new partnerships and market expansions, are expected to drive future growth.

Risks and Challenges

• Currency exposure in assets under management (AUM) could affect financial results.
• Insurance combined ratio challenges may impact profitability.
• Rising operational costs due to acquisitions could pressure margins.
• Market saturation in the Nordic region may limit growth opportunities.
• Macroeconomic pressures could influence consumer spending and investment trends.

Storebrand’s Q1 2025 performance reflects its strong market position and strategic growth initiatives. The company’s focus on innovation, partnerships, and cost control positions it well for future success, despite potential risks and challenges.

Full transcript - Storebrand ASA (STB) Q1 2025:

Johannes, Moderator/Host, Storebrand: Good morning, ladies and gentlemen, and welcome to Storebrand’s First Quarter Result Presentation. As usual, our CEO, Odd Aril Grefsta, will present the key highlights of the quarter, followed by CFO, Lars Lede Sol, who will dive deeper into the numbers. At the end of the presentation, participants in the team’s webinar will have a chance to ask questions. Details on how to join the webinar are found on the Investor Relations website. But without further ado, I give the word to our CEO, Obd Eiril Gresta.

Odd Aril Grefsta, CEO, Storebrand: Thank you, Johannes, and good morning, everyone. 2025 has so far been characterized by increased geopolitical uncertainty and market volatility. But the impact on Storbran has been very limited, and our risk management system work as intended. Equity markets have recovered since Liberation Day, and interest rate volatility has stabilized. Through the first quarter, we saw increased demand for support and advice from our customers.

Our customer facing teams maintained high availability and swift customer response times. In periods of market volatility, Storebrand benefits from having a diversified business model and asset under management base. Storebrand’s AUM is a mix of long term pension money, which flows into equity mandates and more stable AUM from alternatives and bonds. The captive AUM accounts for 44% of Storebrand’s equity investments, making it very sticky. This is supported by an annual net inflow of around 20,000,000,000 from the unit linked pension business.

This is long term money mostly coming from mandatory corporate sponsored pension schemes. In addition to these supporting drivers, Storebrand’s overall AUM base has become increasingly diversified. More than 50% of our AUM is now allocated to bonds and alternatives, characterized by longer commitments and less immediate sensitivity to market fluctuations. And with that introduction, let me turn to highlights for the first quarter. Storebrand’s group cash based earnings amounted to million in the quarter, while the operating result was NOK800 million, up by 16% year on year.

The operating result was driven by strong growth, particularly in savings and insurance and satisfactory cost control despite an increase in sales driven cost in insurance. Meanwhile, the financial results of $367,000,000 was made up of profit sharing from both Norway and Sweden and solid returns from the company portfolios. Storebrand’s long term ambition is to conduct annual share buybacks of billion, taking total buybacks to NOK12 billion by the February. The buyback program for 2025 is split into two tranches of NOK750 million each, the first of which is expected to be completed by the June. During the first quarter, we executed buybacks of NOK 300,000,000.

Since the end of the quarter, we have bought back shares worth NOK 140,000,000, taking the total amount so far this year to million. As many of you are familiar with, Storebrand aims to take three commercial positions in the markets we operate in: a, to be a leading provider of occupational pensions in both Norway and Sweden and b, to be a Nordic powerhouse in Asset Management and c, to be a fast growing challenger in the Norwegian retail market for financial services. These positions are strengthened by our strategic enablers, people, sustainability and digital front runner, together, unlocking additional growth. I’m again pleased to report that the growth in the business continued strongly during the quarter, particularly in our Insurance segment. Now let me go into further detail on our growth areas and share some highlights from the quarter.

Within Unit Linked, volumes grew by 9% year on year, supported by structural growth in both our core markets in Norway and Sweden. In the same period, we saw strong result growth of 9% in our Norwegian business. I’m pleased to report that we have entered into a new distribution partnership with Danske Bank in our Swedish pension business, which is expected to further enhance our market reach. Within public occupational pension, the majority of the mandates worth 4,500,000,000.0 won in 2024, was transferred into Storben in this quarter. Within Asset Management, fee and administration income increased by 19% from first quarter twenty twenty four.

The inclusion of Infrastructure Asset Manager, AIP Management, had a negative effect of our operating result in the quarter, but the full year impact is expected to be positive. This is driven by additional fees expected to be recognized in the second half of the year. It is also worth mentioning that Asset Management saw positive net flow during the quarter, supported by flow from the captive unit linked business. The Norwegian retail market is also this quarter characterized by strong growth. Notably, the result contribution from Retail Banking, including Kurun, was up by 73% compared to the first quarter twenty twenty four.

Additionally, portfolio premiums in Retail Insurance have increased by 24% since the first quarter of twenty twenty four, driven by effective repricing strategies and strong distribution. The market share in P and C insurance is now 7.1%, up from 6.5% in the same quarter last year. Although strong sales contribute to increasing cost in the short term, I’m pleased to see that we continue to take market share in this market. More long term, we gradually see a more balanced and scalable Insurance business with more P and C risk in Storban. I’m convinced that this is a very value creating journey for our shareholders.

Now let me take a step back and look at the business overall. The earnings momentum in the Storbang Group remains strong. The shift in the business model continues. We capture the structural growth. And finally, we succeed with our new growth initiatives with insurance and public sector.

And with that, I give the word back to you, Johannes.

Johannes, Moderator/Host, Storebrand: Thank you, Oberil. Now let’s take a closer look at the numbers. Lars, please go ahead.

Lars Lede Sol, CFO, Storebrand: Thank you, Johannes. The quarterly result of $1,167,000,000 is up 8% from last year. The operating result is up from the corresponding period last year, whilst the financial result is slightly down in turbulent financial markets. We have included a new reporting item in the upper right hand side with our annualized return on equity for the quarter, which ended at 15% ahead of our financial target. The solvency margin is relatively stable, and the expected return on the guaranteed portfolios now has a 180 basis point spread to the average guaranteed rate of return, further strengthening the solidity and long term profitability of the guaranteed business.

The solvency margin at 198% has been positively affected by strong post tax results in the quarter. Regulatory assumptions, volatility adjustment and symmetric equity adjustment, together with the share buyback program initiated in February, have a negative effect. With the current level of solvency, buffers and interest rates, the solvency margin is very robust to fluctuations in the financial markets. Reduced capital requirements in Storebrand Bank Group implemented in April will have a positive effect on the solvency going forward. Let me start with a comment on the deviations between our results and market expectations.

One, fee administration income is slightly below the expectations. This may be explained by periodization effects on AIP and lack of event driven fees in Storebrand Asset Management in the first quarter. ’2, the insurance result is somewhat behind expectations due to a combination of some minor reserve strengthening and large losses and runoff losses above normal. And three, costs are a little higher than expectations due to higher sales cost in connection with a very strong growth in P and C. In combination, this has a negative impact of around hundred million dollars on the operating result.

On the other side, financial results are a little better than consensus. The growth in the business continues, and the top line growth for the first quarter was 10%. The Insurance result is up 28%. With the seasonally weaker winter behind us, we expect further improvements in the insurance results in the coming quarters. Operational costs are up 11% due to the acquisition of AIP and increased sales related costs in insurance and is in line with our guiding.

The financial results are relatively flat. The tax charge for the quarter was 11%, well below normal due to currency movements and asymmetry in how tax is calculated on assets and currency hedges. Our tax guidance is still 19% to 22%. This table shows the same numbers as on the previous page, but split into the business lines, savings, insurance and guaranteed. Storebrand’s front book in savings and insurance continues to grow, while the guaranteed back book shows relatively stable results.

There is satisfactory development in all business lines within savings. In Unit Linked Norway, the margins remained stable. In Sweden, margins drifted downwards, explained by changes in the product mix. Within Asset Management, transaction fees were low in the quarter, whilst performance fees contributed positively. At our last presentation for the fourth quarter last year, I said that we expect AIP to deliver a positive result for the full year 2025.

We maintain the guiding for the full year, but fee income is expected to be back end loaded in the second half of the year, and we record a negative result of approximately million in the first quarter. Total AUM in Storebrand Asset Management is down primarily due to currency effects. Net flow is positive. The bank continues to grow and is now the ninth largest in Norway. We have changed reporting on insurance results into retail insurance and corporate insurance for better comparability with competitors and in line with how we measure this internally.

Both lines show improvement from last year. The strong growth and rotation into relatively more P and C risk and less biometric risk continues. The largest insurance line in retail is P and C, which is benefiting from implemented price increases and developing according to plan. The largest insurance line in corporate pension related disability insurance delivers positive results after a few weak years. Reserve strengthening in some smaller product groups pulls down the net numbers.

Growth comes with a cost, and strong sales have led to increased sales provisions. The increased sales cost weakens the combined ratio by approximately two percentage points. We maintain the ambition to deliver 92% or less in combined ratio for the full year 2025. In Guaranteed, results are satisfactory. We have received approximately billion in municipality reserves in the quarter from tenders won last year.

Profit sharing in the first quarter may seem soft, but is back end loaded toward the end of the year like it was last year. We expect a gradual improvement in the coming quarters, depending, of course, on financial market development. Buffers are intact after the turbulence, and we have not incurred additional trading costs for rebalancing the portfolios during the ups and downs in 2025. Nothing special to comment on here. On sustainability, I would like to mention three things in particular.

One, AIP sustainability report has just been published. Investment in sustainable infrastructure is an important part of the green transition. AIP’s current investment pipeline will generate 25,000 gigawatt of clean energy by 2028, which is enough to supply electricity for more than the total population of Norway. Two, we have just updated our green bond framework to align with the EU taxonomy and new market standards. And three, we have now passed 16,000,000,000 in green bonds issued since we started in 2021.

With the results we present today, we have a good momentum in the group and are well on our way to deliver on our 2025 ambitions. And then I hand it back to Johannes.

Johannes, Moderator/Host, Storebrand: Thank you, Lars. We are now ready to take questions from the audience. It seems like we have a first question here from Hans Rettendahl Kristansen in Danske Bank. Please go ahead, Hans.

Hans Rettendahl Kristansen, Analyst, Danske Bank: Yes. Thanks for taking my question. My first question is on the fee income result. And also you mentioned that there’s a lack of activity related sort of transaction revenues. I was just wondering if you could explain what these are?

And should we interpret it as sort of economic cycle driven? Or is it more the fact that they will be back end loaded this year? Or just when do you expect these to come back? And then my second question is on sort of revenues versus the cost side. It sounds like quite a lot of the revenues that you’re expecting in 2025 will be back end loaded versus it looks like the OpEx is more front end loaded.

Is this the correct interpretation? Or should the OpEx also follow once we look into sort of the second half of this year?

Lars Lede Sol, CFO, Storebrand: Thank you, Hans. Let me start with your first question on fee income and transaction fees. You may recall that we have the subsidiary capital investment in Denmark, and they have a stable ongoing base of income based on the properties that they manage. And then they have transaction fees related to transactions happening from time to time. That has the Danish property market has been very quiet over the last year and into this year.

However, the pipeline is good. So we do expect more transaction fees coming from that business in during the rest of the year. Furthermore, as I mentioned explicitly on the call or earlier was that on AIP, we have both some fees related to funds closing as well as to transactions, and they are expected to happen in the second half of this year. So on the fourth quarter presentation, I said that AIP would add both income and cost to our business in 2025, but that the bottom line should be positive by the end of the year. And we do not see that in the numbers in the first quarter, but we still expect that to happen and take place during the second half of the year.

So in terms of your second question, some of the revenue is back end loaded. Profit split in the guaranteed portfolios typically happens when you can when you know what the return for the full year is towards the end of the year. And during these volatile times that we’ve seen in the first quarter and also into the second quarter, though we do not take out that estimated profit split in the first half. So that typically happens in the second half. On the front loading of cost, the particular cost elements in this is related to P and C sales and P and C sales.

We’re very happy to see the growth in the P and C business. We’re sure that this is profitable for shareholders, but it does have a cost in the first year to have that growth. And the second part is also on the public sector side, where we have strong growth ambitions. There has been some investments in that area as well, which will pay off gradually when we take these new customers on board and hopefully bring new customers on board towards the end of this year.

Odd Aril Grefsta, CEO, Storebrand: Yes. And as you know, there is no deferred acquisition cost calculations when we do the P and C business. So we take all the cost upfront. And with this extraordinary growth, that has an impact.

Hans Rettendahl Kristansen, Analyst, Danske Bank: Okay. Thank you very much.

Johannes, Moderator/Host, Storebrand: Thank you, Hans. We have a next question from Michele Ballatorre in KBW. Please go ahead, Michele.

Michele Ballatorre, Analyst, KBW: Yes. Thank you for taking my question. So the first question is about the movement in the asset under management, especially on the currency side. I see quite a material negative effect there and I just want to understand the moving parts. They are also considering the sharp move sorry, the high volatility we have observed in the second quarter up to now.

So this is the first question. The second question is on the more generally on the solvency. I mean, of course, solvency is quite comfortable position. And what are the chances for you to upgrade the, you know, the second tranche of the share buyback if just logistically if you need an approval, if it’s something that you can do? Any color on that.

Thank you.

Lars Lede Sol, CFO, Storebrand: Sure. Thank you, Michele. On the AUM movement, we have included in the analyst presentation in the appendix some how we have what kind of currency exposure we have. So you may want to look at that as well. But the way it works with Norwegian kroner strengthening versus the dollar in the quarter, our dollar investment have reduced in value.

And also on the Swedish krona has strengthened. We don’t have too many investments in Sweden. But compared to the U. S. Dollar, then also the investments that we have in the Swedish operation has fallen in value as they are in dollars.

So that’s the main explanation on the change in AUM. And what has happened after the quarter? I guess the dollar is still a little down, but these the currency fluctuations, yes, they can fluctuate on a short basis. But as I said in the appendix, you may find some more exact information about the exposure in the different currencies. Yes.

Farooq Hanif, Analyst, JPMorgan: And my

Michele Ballatorre, Analyst, KBW: Sorry, there is no hedge there in general? I mean

Lars Lede Sol, CFO, Storebrand: Yes. And that is also included in the appendix where you see the exposure, which is not the same as so for example, in international index funds, you typically have 70% U. S. Dollar exposure. However, some of our funds have a dollar hedge, and therefore, the currency exposure that we have is smaller than 70% of the index fund.

But that should have been all included in the chart in the appendix.

Unidentified Executive, Storebrand: And I can also add that, of course, on the long dated guaranteed liabilities, everything is hedged in the right currency. But when you look at the general AUM with external mandates and the unit linked pensions, there’s different and various degrees of hedging, which are alluded which Lars alluded to in the appendix. Yes.

Odd Aril Grefsta, CEO, Storebrand: And that is very much, of course, the choice of the customers. When it comes to share buyback, we as I said, we have the commitment of SEK 1,500,000,000.0 this year and the long term commitment of the SEK 12,000,000,000 up to 2,030. And on top of that, we have also been very clear on a growing annual dividend, and that is the strategy from the Board that we are very firm on.

Lars Lede Sol, CFO, Storebrand: And Michele, obviously, if solvency continues to strengthen, we have a capacity to do additional M and A or increase the capital distribution in due course.

Johannes, Moderator/Host, Storebrand: Thank you, Michele. We have a next question from Farooq Hanif in JPMorgan. Please go ahead.

Farooq Hanif, Analyst, JPMorgan: Hi, there. I hope you can hear me. Can you hear me, by the way?

Johannes, Moderator/Host, Storebrand: Yes.

Farooq Hanif, Analyst, JPMorgan: Fine. Absolutely. Great. Thank you. So my first question is on P and C.

You mentioned a number of items in the combined ratio that seem one off in nature, so the additional cost of growth. Can you just run through all of the items? So what you can mention in terms of large losses, other costs, just to get an idea of the direction of travel because to get to sub 92%, clearly you need a peak improvement in the following quarters as soon as possible, but just want to understand what we can take out of the combined ratio in 1Q to get there. Related to that, I’m going to do three questions even though it’s going to sound like two, but just related to that, in the 24% growth that you talked about in premiums in P and C, how much of that is volume and how much of that is pricing? That would be very interesting to know.

And my last question is the impact of Danske. What will that do to level of volumes in the business? Thank

Lars Lede Sol, CFO, Storebrand: you, Verruck. On the insurance side, the most important element is the increased cost related to increased sales, which is an investment in growth and profitability long term. I also mentioned that large losses and runoff losses were slightly above the expected level in the first quarter. However, those are not very abnormal but somewhat above the average and the expected level. Then the last element is that we have had some reserve strengthening on some minor product lines.

The important thing, I think, is that on the main retail product, I. E, P and C in the Norwegian retail market, continues to grow, is now back on the profitability path that we have established, and the price increases are coming through without additional churn. So the main product in retail is more or less fixed. The main product line within corporate pension is the pension related disability insurance. That product is now profitable with a low 90% combined ratio.

And after the several years of bad disability results in that product, we now see that the repricing and the work we’ve done on cost and other things is succeeding and that we are now reaching the desired profitability on that product line as well. So we still have a few minor products that we need to fix, but and where resource strengthening has happened in the first quarter. But the main products in both corporate and retail insurance is now developing according to plan, which means that we according to our forecast, we maintain the ambition to reach 92% or below by the end of the year.

Farooq Hanif, Analyst, JPMorgan: May I quickly ask before you go on to the second question, on the elements that you talked about, the increased cost due to sales, large losses above expected levels and reserve strengthening, are you able to give some combined ratio impact?

Lars Lede Sol, CFO, Storebrand: On the increased sales cost, that has and if you compare that to the cost in the first quarter last year, that would have a two percentage points impact on the total. Then the other ones would be a couple of more percentage points, but I haven’t given you I don’t want to give you a specific number on that. Impact on Bank in Sweden?

Odd Aril Grefsta, CEO, Storebrand: Well, yes, that was a question about Danske Bank. That was the second question. I think well, this is a good start, I will say, in the Swedish market that opened up the reach for distribution from SPP with external distribution. It’s scalable how we build the solutions towards Danske Bank. And it starts with some parts of the pension market in Sweden.

Then we hopefully will also be open to broaden our cooperation going forward. It’s not will have any major impact on growth on the results short term. But over time, we hope this could be an important contributor to the growth and result generation in the Swedish market.

Lars Lede Sol, CFO, Storebrand: So it’s basically part of how we broaden our distribution in the Swedish market. And I believe I forgot to answer the second question on insurance, the price and volume balance. So of the increase of 21%, about twothree is price increases and about onethree is volume growth. So roughly like it was in the fourth quarter as well.

Johannes, Moderator/Host, Storebrand: Thank you, Farooq. We have a next question from Jan Erik Jelen in ABG. Please go ahead. Line muted, Jan Erik. Would you please unmute yourself?

No response on our side.

Jan Erik Jelen, Analyst, ABG: Are you interested in coming now? Is it

Johannes, Moderator/Host, Storebrand: It’s working.

Jan Erik Jelen, Analyst, ABG: Okay. Good. Thank you. When it comes to indexation and profit sharing in Norway and Sweden, I was sort of bearish into the quarter because I had some negative return outlook versus what you managed to go through. Could you shed some more light into the indexation in Sweden, if that is also sort of estimate and we will get the full answer in September year?

And secondly, how should we think about profit sharing in Norway and Sweden versus your guided expectations for 2025 and 2026 and 2027 when it comes to your robustness when it comes to that line? Secondly, on the insurance part, could you give us some million numbers on how much you have provided for in the different areas, so we can understand the more underlying level of combined ratio improvement as the previous question that Oscar also asked for? And finally, would you prefer to do extraordinary dividends or extraordinary share buyback, if you could choose?

Unidentified Executive, Storebrand: Right. I will start on the indexation. Around half of the results from the Swedish business this quarter came from indexation, so roughly €30,000,000 And as you say, it’s finally concluded at the third quarter. So you can, of course, have volatility in it until that time. But as it looks now, it looks like we’re going to be able to book that.

Second part of the Swedish financial result was from the recuperation of so called deferred capital contribution and very little came from profit sharing this quarter. And on the overall profit sharing, Lars?

Lars Lede Sol, CFO, Storebrand: Yes. So the guiding at the Capital Markets Day one point years ago was about EUR 300,000,000 from Sweden and about EUR 300,000,000 from Norway. And we maintain that guiding even if we are a little bit below with the financial performance in the first quarter, we should be able to reach that by the end of the year.

Jan Erik Jelen, Analyst, ABG: And

Odd Aril Grefsta, CEO, Storebrand: of course, we see also strong return on company capital based on higher interest rate compared to what expected when we started the

Lars Lede Sol, CFO, Storebrand: year. On insurance reserves, I don’t think I want to go into each product line in terms of reserve strengthening. So I think I will leave it with what I’ve already communicated.

Odd Aril Grefsta, CEO, Storebrand: If I would take a bit more on dividend and share buyback, we are asking our shareholders regularly about what is what they prefer. For us, it’s the same if we do share buybacks or doing dividends. The answer is quite balanced actually. So we see a good balance between share buyback and dividends. It seems to be the best way of taking down our capitalization over time.

And as you see, we have been doing a 15% growth in the annual dividends now over time. And that is also what we expect to do going forward, growth in Okay.

Lars Lede Sol, CFO, Storebrand: Thank you.

Johannes, Moderator/Host, Storebrand: You, Jan Erik. We have a next question from Thomas Swenson in SEB. Please go ahead, Thomas.

Thomas Swenson, Analyst, SEB: Good morning. So a question to the Non Life. It seems like you have this sort of sales push here. So how is the response in the market for this growth initiatives? And should we expect this to continue in the following quarters of this year?

Odd Aril Grefsta, CEO, Storebrand: Yes. If I start, it’s fantastic to see how the brand name of Storebrand is appreciated in the market. We have a really good standing or in front of the mind for people that wants to look at especially retail P and C with our history in The Nordics in Norway after now two fifty eight years doing P and C. That in combination with a good multichannel distribution network with sales agents and digital distribution, has led to a very strong growth. And we continue seeing that strong growth coming through.

I’m very pleased to see it and are sure that, that brings a lot of value into Storebrand and our shareholders.

Thomas Swenson, Analyst, SEB: Yes. And in the extension of that, have you considered or played with the thought of expanding into new segments in the SME segments like motor or more of the

Odd Aril Grefsta, CEO, Storebrand: Started up with pure retail. Now we have been doing for well, is it a year or two? Now SME market, of course, with a starting point four zero, that takes a bit time before we reach the critical point where we have profitability, but we are getting closer also in that market and have also ambitions for growth in combination with also our pensions customers. We see the combination of doing P and C and pension is an attractive offering to our SME clients in store brand in Norway.

Unidentified Executive, Storebrand: And it’s also worth mentioning that we have entered a change of home ownership insurance in the quarter, very quick setup of the product already showing quite a good premium inflow. And if everything goes to plan with the distribution partnership we have, we think it could be possible to have a 7% to 10 market share in this market in the not too distant future.

Thomas Swenson, Analyst, SEB: Okay. And just finally, in the bank, you pointed to your size there, but the market share is still low. So is it fair to assume 10% annual lending growth in the coming years in the mortgage bank?

Odd Aril Grefsta, CEO, Storebrand: Yes. Bank now is growing at that level and even a bit more. And we see still that we have very strong growth in the bank, both on loans and on deposits actually. We had the same growth size of loans and deposits in the first quarter. And with also now lower capital charges in the second half or in the second quarter, we see that we can have very profitable growth in the bank stand alone, and it’s an important basis also for distribution, both for savings and for pensions going forward.

Thomas Swenson, Analyst, SEB: Thank you for that.

Johannes, Moderator/Host, Storebrand: Thank you, Thomas. It’s a busy reporting day for Nordic financials. So I think we have a last question from Hakon Astrup in DNB Markets. Go ahead, Hakon.

Lars Lede Sol, CFO, Storebrand: Morning. Thank you for taking the questions. Two questions from me. The first one, can you just elaborate a bit on the competitive environment in the Norwegian unit linked business? If I read your supplementary correctly, you seem that you have a negative net transfer balance there of over 1,000,000,000.

So you have that for some quarters. And second question on you mentioned your increased market share on retail banking. How has this new and improved position impacted your ability to cross sell insurance product and also savings product? It seems that you are still using a lot of agents on the insurance sides.

Odd Aril Grefsta, CEO, Storebrand: Yes. There is a strong competition in the Norwegian market for unit linked. And we see price pressure on some of the special risk products to be able to take also the savings part. We are very focused on profitability in this market. We want to also see results on the right side when it comes to the risk products that are attached to the corporate pension schemes.

So we are running this for profitability with a strong focus on that. On top of that, I will say that in combination, we see also an individualization of part of this market where there is more people now that has also chosen their own pension account. And I’m very pleased to see again that the bank, with both their agents and also with the solution we now have developed in Kiruna as a part of the bank, are taking a very large part of the flow when it comes to pension accounts for our own account in the individual market. So a part of the flow goes also into own choices when it comes to pension. So I think that is most maybe the most important part that we see that the bank now with the size and the distribution are taking with the integration of Kurul that also now will be pension ready with new elements coming into the app very, very soon.

We see that we are able to cross sales into savings, cross sale into also pensions, individual pensions. And we also have seen that, I think, around 40% of customers coming into the bank are taking one or another of the insurance products. So this is starting to be a very important distribution platform for us in the retail market.

Lars Lede Sol, CFO, Storebrand: And Hakon, if I may add on the first question, there has been some volume departure on Unit Linked Norway, but we do not see any negative impact on the bottom line as a consequence, I. E, the customers that have moved have been either low profitability or unprofitable for us. And therefore, it’s not a big loss that they are leaving us. So we continue to run the business for profitability. And when we have seen customers with large, for example, disability results over time, they we have to reprice, and we can live with the consequences.

Perfect. Thank you so much.

Johannes, Moderator/Host, Storebrand: Thank you, Hakon. That was the final question. So that concludes today’s presentation from us. Our next set of results is due on July 11, and we look forward to seeing you again then. Goodbye.

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