KLP Group Oslo, 7th May 2019 Table of contents 1. Main features - - PowerPoint PPT Presentation

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KLP Group Oslo, 7th May 2019 Table of contents 1. Main features - - PowerPoint PPT Presentation

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Financial results Q1 2019 KLP Group Oslo, 7th May 2019 Table of contents 1. Main features 2. KLP Group 3. Life and pension 4. KLP Non-Life Insurance 5. Bedriftspensjon 6. Banking and credits 7. KLP Asset Management 8. Summary

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SLIDE 1

Financial results Q1 2019 KLP Group

Oslo, 7th May 2019

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SLIDE 2

1. Main features 2. KLP Group 3. Life and pension 4. KLP Non-Life Insurance 5. Bedriftspensjon 6. Banking and credits 7. KLP Asset Management 8. Summary

Table of contents

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SLIDE 3
  • Total group assets: NOK 699 billion
  • Common portfolio of life company:
  • Book return of 1.0 per cent
  • Value adjusted return of 3.1 per cent
  • Corporatate portfolio returned 3.7 per cent
  • Solvency ratio KLP: 270 per cent

Main features

Q1 2019 Q4 2018 Q3 2018 Q2 2018 Common portfolio Booked return

1.0 % 0.4 % 0.8 % 1.0 %

Value adjusted return

3.1 %

  • 1.4 %

1.6 % 1.7 %

Value adjusted return incl. HTM bonds/bonds booked at amortised costs

3.5 %

  • 1.4 %

1.2 % 1.8 %

Investment options portfolio

3.7 %

  • 2.4 %

1.8 % 2.2 %

Corporate portfolio

1.3 % 1.2 % 0.7 % 0.7 %

0% 1% 2% 3% 4% 5% 6% 7% 8% 2014 2015 2016 2017 2018

Return

Booked Value adjusted Corporate

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SLIDE 4

KLP Group – results by segment

NOK million Q1 2019 Q4 2018 Q3 2018 Q2 2018 Life insurance 824 673 615 566 Non-life insurance 110

  • 88

69 49 Banking 22 11 28 19 Asset management

  • 2
  • 10

28 1 Other

  • 1
  • 1
  • 1

Group result before tax 953 585 739 635

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SLIDE 5

KLP Group – main figures - results

NOK million 31.03.2019 31.12.2018 Pension premiums and incoming transfers 7 378 40 921

  • of which premium reserves transferred from another company

202 524 Allocated investment income 23 574 5 732 Minority share of return of financial instruments

  • 6 339

4 022 Claims f.o.a.

  • 5 297
  • 20 015

Insurance provisions

  • 4 245
  • 28 096

Interest expenses and value adjustments subordinated loans and subordinated bonds 55

  • 483

Operating cost

  • 454
  • 1 872

Other income and cost 24 33 Technical result 14 696 240 To/from value adjustment fund life insurance

  • 10 880

8 862 To/from supplementary reserves life insurance

  • 2 792

Surplus allocated Life insurance clients

  • 2 864
  • 3 469

Group result pre-tax 953 2 840 Tax

  • 309
  • 125

Other profit/loss elements

  • 35

150 Group result 609 2 866

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SLIDE 6

KLP Group - Balance

Investment properties Debt instruments held to maturity Debt instruments classified as loans and receivables Lending to municipalities, enterprises and individuals Debt instruments at fair value over P/L Equity instruments at fair value over P/L Other Total 31.03.2019 67 257 29 976 143 727 98 099 163 610 179 439 16 908 699 017 31.12.2018 67 570 31 053 141 549 95 764 166 344 159 968 13 310 675 558

  • 100 000

200 000 300 000 400 000 500 000 600 000 700 000 800 000 NOK million

Assets

31.03.2019 31.12.2018 Own funds Hybrid capital and subordinated loans Debt to financial institutions Covered bonds issued Debt to and deposits from clients Insurance reserves Minority interests classified as liabilities Other liabilities Total 31.03.2019 34 457 7 635 2 975 23 796 11 031 532 520 75 164 11 438 699 017 31.12.2018 33 857 7 691 2 794 23 025 10 662 515 005 67 701 14 824 675 558

  • 100 000

200 000 300 000 400 000 500 000 600 000 700 000 800 000 NOK million

Own funds and liabilities

31.03.2019 31.12.2018

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SLIDE 7

KLP Life

100000 200000 300000 400000 500000 600000 700000 2015 2016 2017 2018 Q1 2019

NOK million

Total Assets

5000 10000 15000 20000 25000 30000 35000 40000 45000 2014 2015 2016 2017 2018

NOK million

Premium

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SLIDE 8

KLP – Appropriation of results

Retur on piad-in equity to clients 78 % Result to

  • wners

22 %

Nok million Result Customers Result Company 31.03.2019 31.12.2018 Interest result 2 109 48 2 157 5 207 Risk result 104 103 207 958 Premium interest rate guarantee 207 207 758 Administration result 48 48 137 Net income corporate portfolio 402 402 1 109 Tax

  • 146
  • 146
  • 624

Other result elements

  • 45
  • 45
  • 21

Total 2 213 617 2 829 7 524

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SLIDE 9

KLP Life - Balance

Total assets in corporate portfolio Total assets in common portfolio Assets in investment options portfolio Total assets 31.03.2019 41 466 529 900 2 491 573 857 31.12.2018 40 392 515 905 2 423 558 719

  • 100 000

200 000 300 000 400 000 500 000 600 000 700 000 NOK million

Assets

31.03.2019 31.12.2018

Paid-in equity Risk equalization fund Retained earnings Hybrid capital and subordinated debt Insurance liabilities Other liabilities Total: own funds, provisions and debt 31.03.2019 14 545 4 945 14 953 7 635 524 095 7 684 573 576 31.12.2018 14 554 4 793 14 488 7 691 507 600 9 593 558 719

  • 100 000

200 000 300 000 400 000 500 000 600 000 700 000 NOK million

Own funds and liabilities

31.03.2019 31.12.2018

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SLIDE 10
  • Solvency ratio Q1: 270* per cent
  • Minimum solvnecy ratio Q1: 508* per cent

*without transitional measures

KLP Life - Solvency

31.03.2019 31.12.2018 30.09.2018 30.06.2018 Solvency ratio (SCR) 270 % 263 % 274 % 253 % Solvency ratio (SCR) with transitional measures 342 % 311 % 321 % 321 % Minimum solvnecy ratio (MCR) 508 % 492 % 517 % 472 % Minimum solvnecy ratio (MCR) with transitional measures 669 % 600 % 623 % 623 %

0% 100% 200% 300% 400% 500% 600% 700% 800% SCR SCR with transitional measures MCR MCR with transitional measures

Solvency Ratio

31.12.2018 31.12.2017 31.12.2016

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SLIDE 11

KLP Life - Common Portfolio

Share* Return Share* Return 31.03.2019 31.03.2019 31.12.2018 31.12.2018 Equities 23.6 % 8.9 % 21.4 %

  • 3.6 %

Bonds 18.1 % 3.0 % 18.4 %

  • 0.8 %

Bonds held-to-maturity 28.6 % 0.9 % 29.1 % 3.7 % Lending 12.1 % 0.6 % 12.1 % 2.3 % Property 12.1 % 1.3 % 12.7 % 7.3 % Other financial assets 5.6 % 0.5 % 6.3 % 1.1 % 50 100 150 200 Property Lending Equities Bonds held-to- maturity Bonds Other financial assets NOK bn

Allocation

Q2 2018 Q3 2018 Q4 2018 Q1 2019

*) Measured by exposure

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SLIDE 12
  • 2%
  • 1%
  • 1%

0% 1% 1% 2% 2% 3% 3% 4% 4% 80 82 84 86 88 90 92 94 96 2015 2 016 2017 2018 Q1 2019

Bonds

Value Return

KLP Life - Allocation

NOK bn NOK bn NOK bn NOK bn NOK bn NOK bn

0% 1% 2% 3% 4% 5% 6% 5 10 15 20 25 30 35 40 45 2015 2 016 2017 2018 Q1 2019

Other financial assets

Value Return 1% 2% 3% 4% 5% 6% 20 40 60 80 100 120 140 160 2015 2 016 2017 2018 Q1 2019

Bonds held-to maturity

Value Return

  • 5%

0% 5% 10% 15% 20% 20 40 60 80 100 120 140 2015 2 016 2017 2018 Q1 2019

Equities

Value Return 0% 2% 4% 6% 8% 10% 12% 14% 10 20 30 40 50 60 70 2015 2 016 2017 2018 Q1 2019

Property

Value Return 0% 1% 2% 3% 4% 5% 6% 10 20 30 40 50 60 70 2015 2 016 2017 2018 Q1 2019

Lending

Value Return

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SLIDE 13
  • The portfolio written up by NOK 120

million (0.2 %) in Q1

  • New investments / sales in 2018
  • None

KLP Life - Property

71 % 9 % 16 % 3 %

Property value - by country

Norway Denmark Sweden Europe 61% 10 % 21 % 3 % 4 %

Property value - by sector

Offices, education Shopping centres Hotels Other (leasehold land, co-properties, parking) Sites under development

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SLIDE 14

KLP Life – Property

NOK million 31.03.2019 31.12.2018 30.09.2018 30.06.2018 Fair value total portfolio* 66 076 65 788 63 798 62 788 Fair value common portfolio* 61 380 61 949 60 199 59 193 Q1 2019 Q4 2018 Q3 2018 Q2 2018 Value adjustment in per cent 0.2 % 1.0 % 0.2 % 2.3 % Value adjustment in per cent common portfolio 0.1 % 0.6 % 0.2 % 2.3 % Total return common portfolio** 1.3 % 1.7 % 1.3 % 3.3 %

*Incl exchange-rate hedged and excl. property fund **Incl exchange-rate hedgede and property fund

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SLIDE 15
  • Surplus of NOK 110 million in Q1
  • None large injuries estimated over

NOK 10 million.

  • Some industries have unsatisfactory

high claims rates

  • Motor, Public
  • Property Public
  • Group life
  • Revenue recognition of previous

years reserves of NOK 47 million, 2.7 per cent of reserves at the beginning of the year

  • Financial income of NOK 107million

in Q1 (2,5 per cent)

  • Solvency ratio: 246 per cent

KLP Skadeforsikring (non-life insurance)

66,5 % 91,5 % 91,6 % 81,3 % 77,5 % 68,8 % 77,7 % 75,9 % 84,2 % 79,90% 80,70% 29,1 % 30,4 % 26,5 % 26,4 % 26,2 % 23,1 % 21,1 % 22,8 % 21,8 % 24,60% 18,70% 95,6 % 121,9 % 118,1 % 107,7 % 103,7 % 91,8 % 98,8 % 98,7 % 106,0 % 104,50% 99,40% 0,0 % 20,0 % 40,0 % 60,0 % 80,0 % 100,0 % 120,0 % 140,0 % 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1 2019 Claims ratio on own account Cost ratio on own account Combined ratio on own account

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SLIDE 16

KLP Skadeforsikring (non-life insurance)

NOK million Q1 2019 Q4 2018 Q3 2018 Q2 2018 Premium written f.o.a. 350.0 326,0 321.4 314.2 Claims f.o.a.

  • 282.3
  • 300.5
  • 251.5
  • 260.4

Insurance related expenses

  • 65.6
  • 81.7
  • 50.8
  • 68.4

Other insurance related income 0.4 0,5 0.4 0.2 Result from technical activities 2.5

  • 55,5

19.5

  • 14.4

Result from investment activities 106.8

  • 32,7

49.6 63.1 Other income 0.2 0,1 0.1 0.1 Result from ordinary operation 109.5

  • 88,1

69.2 49.0 Estimated tax expense

  • 27.4

4,1

  • 16.2
  • 9.7

Other elements

  • 4.5
  • 1,1

Provisions for equity fund

  • 4.3
  • 10,1
  • 4.3
  • 10.0

Result after provisions for equity fund 73.3

  • 95,2

48.7 29.2

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SLIDE 17

KLP Skadeforsikring (non-life insurance)

Revenues, NOK million Q1 2019 Q4 2018 Q3 2018 Q2 2018 Gross premium written 350 326 321 314 Premium income for own account

  • 282
  • 301
  • 252
  • 260

Claims paid for own account

  • 66
  • 82
  • 51
  • 68

Insurance related costs for own account 107

  • 33

50 63 Results 110

  • 88

69 49 Key figure balance sheet, NOK million 31.03.2019 31.12.2018 30.09.2018 30.06.2018 Financial assets 4 538 4 164 4 401 4 425 Total assets 4 985 4 495 4 694 4 822 Equity 1 853 1 775 1 861 1 807 Provisions in insurance funds for own account 2 662 2 262 2 400 2 505

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SLIDE 18

KLP Bedriftspensjon – main figures

NOK million Q1 2018 Q4 2018 Q3 2018 Q2 2018 Interest result

3.3 2.8 5,4 8.4

Risk result

1.7 11.3

  • 5,4
  • 2.8

Administration result

  • 9.6
  • 10.3
  • 6,8
  • 10.6

Interest rate guarantee and profit element

2.9 2.5 2,2 2.2

Non-technical result

4.9 0.8 2,3 2.5

Other profit elements

  • 0.7
  • 0.3

Total result

2.5 6.9

  • 2,4
  • 0.2

Of which result to clients

4.0 2.8 6,1 7.9

Result to owner

  • 1.4

4.1

  • 8,5
  • 8.2
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SLIDE 19

KLP Bedriftspensjon – return and solvency

31.03.2019 31.12.2018 30.09.2018 30.06.2018 Common portfolio Book 0.8 % 4.51 % 3,57 % 2.55 % Value adjusted 1.2 % 3.02 % 2,38 % 1.41 % Investment options portfolio 7.4 %

  • 3.80 %

4,47 % 1.13 % Corporate portfolio 1.0 % 1.11 % 0,96 % 0.50 % 31.03.2019 31.12.2018 30.09.2018 30.06.2018 Solvency ratio (scr) 140 % 150 % 133 % 128 % Kapitaldekning (scr) with transitional measures 289 % 308 % 295 % 290 % Minimum solvnecy ratio (mcr) 312 % 333 % 295 % 285 % Minimum solvnecy ratio (mcr) with transitional measures 642 % 684 % 659 % 669 % NOK million 31.03.2019 31.12.2018 30.09.2018 30.06.2018 Value adjustment fund 13.1

7.9

12,5 12.9 Supplementary reserves 111.7

111.4

104,8 105.0 Solvency capital 672.4

646.3

640,9 665.8

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SLIDE 20
  • Retail market: 64 700 clients, net

increase of 1 800 clients.

  • The Group's capital adequacy ratio is

19.0%, which is well above the ICAAP of 17.6%. In addition, there is an internal requirement of 0.5% buffer over ICAAP.

KLP Bank-group – main figures

NOK million Q1 2019 Q4 2018 Q3 2018 Q2 2018 Net interest revenues 66.0 65.3 60,6 58.0 Net fee – and commissions income 4.1 4.9 4,0 4.6 Management fees 14.8 14.5 14,5 14.5 Operating cost

  • 57.5
  • 66.3
  • 46,3
  • 56.3

Value changes financial instruments

  • 3.4
  • 7.7
  • 4,7
  • 1.6

Pre-tax earnings 24.0 10.8 28,1 19.2 Total assets 38 586 37 089 36 468 35 817 5 10 15 20 25 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Per cent

Capital Adequacy

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SLIDE 21

KLP Bank-group – main figures

KLP Kommunekreditt, NOK million Q1 2019 Q4 2018 Q3 2018 Q2 2018 Net interest revenues 14.5 14.6 17.6 14.4 Operating cost

  • 4.6
  • 4.4
  • 2.9
  • 3.9

Value changes financial instruments

  • 5.6
  • 5.8
  • 1.1
  • 1.5

Pre-tax earnings 4.3 4.4 13.6 9.0 Total assets 19 007 18 206 17 880 17 820 KLP Banken. NOK million Q1 2019 Q4 2018 Q3 2018 Q3 2018 Net interest revenues 36.0 35.3 29.5 31.0 Net fee – and commissions income 4.1 4.9 4.0 4.5 Management fees 14.8 14.5 14.5 14.5 Operating cost

  • 41.9
  • 47.9
  • 33.2
  • 41.4

Value changes financial instruments 1.8

  • 0.1
  • 1.7
  • 0.3

Pre-tax earnings 14.8 6.7 13.1 8.3 Total assets 14 150 13 868 13 614 13 545 KLP Boligkreditt. NOK million Q1 2019 Q4 2018 Q3 2018 Q2 2018 Net interest revenues 15.6 15.3 13.5 12.7 Operating cost

  • 11.0
  • 13.9
  • 10.2
  • 11.0

Value changes financial instruments 0.4

  • 0.3
  • 1.9

0.3 Pre-tax earnings 4.9 1.2 1.4 2.0 Total assets 7 743 7 669 7 340 7 721

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SLIDE 22

KLP Bank-group – lending and deposits

Mortage loans, NOK billion 31.03.2019 31.12.2018 30.09.2018 30.06.2018 KLP Banken AS 9.9 9.5 9.4 8.2 KLP Boligkreditt AS 7.1 7.2 6.8 7.6 KLP (Management agreement) 2.9 3.0 3.0 3.1 Total 19.9 19.6 19.2 18.8 Public sector loans, NOK billion 31.03.2019 31.12.2018 30.09.2018 30.06.2018 KLP Kommunekreditt AS 16.7 16.8 16.2 16.3 KLP (Management agreement) 42.8 51.0 49.4 47.2 KLP (currency loans) 9.0 8.0 7.6 7.4 Total 68.3 75.6 73.1 70.8 Deposits, NOK billion 31.03.2019 31.12.2018 30.09.2018 30.06.2018 KLP Banken AS 11.0 10.7 10.5 10.2 Total 11.0 10.7 10.5 10.2

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SLIDE 23

KLP Kapitalforvaltning (Asset management)

475 480 485 490 495 500 505 510 515 520 525 30.06.2018 30.09.2018 31.12.2018 31.03.2019

NOK bn

Total assets under management

Total assets under management 20000 40000 60000 80000 100000 120000 30.06.2018 30.09.2018 31.12.2018 31.03.2019

Number of clients

Number of clients

  • 5

5 10 15 20 25 30 30.06.2018 30.09.2018 31.12.2018 31.03.2019

NOK million

Result before taxes

Result before taxes 61 62 63 64 65 66 67 68 69 70 71 30.06.2018 30.09.2018 31.12.2018 31.03.2019

NOK bn

External assets under management

External assets under management

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SLIDE 24

Contacts in KLP

Position Name Phone E-mail Executive Vice President & CFO Aage E. Schaanning +47 22 03 79 01/90 52 43 12 aes@klp.no Director Finance Oliver Siem +47 934 31 820 sie@klp.no