Earnings Call: Q2 2021

Jul 14, 2021

Good morning, ladies and gentlemen, and welcome to Stolbrand's First Half Result Presentation. My name is Sjert Elramberg, and I'm Head of Strategy and Finance in Stolbrand. As usual, CEO, Odd Arielle Gresta, will start with a presentation of the main points of the quarter. And afterwards, CFO, Lars Berdesso, will go into the numbers. After the presentation, the operator will open up for questions. To ask questions, you need to be dialed into the meeting. Dial in numbers are to be found on the invitation and on the Storebrand Investor Relations website. With that short introduction, I leave the word to group COO, Odd Arild Gressa. Thank you, Kjetil, and welcome this morning to this presentation. I'm very pleased today to present for you the historical strong result for Storebrand for the Q2 2021 of NOK 1353 1,000,000,000. This is driven by continued underlying growth within savings and insurance combined with disciplined cost control and increased profitability within the insurance segment. Reserves in unit linked grew by 20 percent compared to last year, driven by growth in premium income And also market return and very strong new sales. A milestone is passed this quarter. As Storebrand now exceeds NOK 1,000,000,000 in asset under management. This represents a 18% growth in asset under management from the last during this last year. Within insurance, the annual portfolio premium also grew by 18% compared to last year. Storebrand's solvency ratio weakened by 4 percentage points from last quarter to 172%. The decrease is due to falling long term interest rates in the quarter and increased regulatory country cyclical stress factors. This is offset by a strong group profit after tax. The overall customer buffer capital level strengthens to more than 12% of the guaranteed customer reserves. The financial result is positively affected by a gain of NOK 546,000,000 in the quarter due to the divestment of the shares in our Sverdasperuke. Given strong investment performance in Skagen and Delphi in the first and the second quarter, The performance related cost is already booked, while the matching SEK230,000,000 in performance fees It's not recognized under IFRS. These performance fees will be booked at year end. So this means if we have closed the books After the Q2, we would have a $230,000,000 higher result year to date. Moving to Storebrand's strategy. Storebrand follows a twofold strategy With a compelling combinations of self funded growth in the front book and capital return from a maturing back book of guaranteed pensions. Storebrand aims to be the leader leading provider of occupational pension in both Norway and Sweden to build a powerhouse in asset management and Nordic powerhouse and continue fast growth as a Challenger in the Norwegian retail market for financial services. The combined synergies stemming from capital, Customer base, cost and data across the group provide a solid platform for profitable growth and value creation. The ambition is to deliver a profit of about $4,000,000,000 in 2023. Storebrand also continues to manage capital and back book with guaranteed products for capital release. This leads to a dividend policy of growing ordinary dividends from earnings as well as an estimated capital release of NOK 10,000,000,000 Norwegian kronor towards 2,030. Moving to the strong growth across the future Storebrand. Unit linked reserves grew by 26% compared to Q2 in 2020. The growth in unit linked savings is driven by premiums from existing contracts, new sales, investment returns and increased savings rates. Within retail unit linked, we recognized a 42% premium growth year by year. Asset under management in Storebrand Asset Management increased by NOK 157,000,000,000 or 18% compared to last year. The growth is driven by positive net flows from new sales as well as market returns. Within insurance, the annual portfolio premium grew by 18% compared to last year. The premium growth is primarily attributed to Retail P&C Insurance Due to strong contribution from sales agents, distribution partnerships and acquisition of the customer portfolios from Insure. Growth in P and C and in Nudula Life portfolio premiums amounted to the strong number of 48% compared to last year. The bank lending portfolio increased by $2,700,000,000 or 5 percent €254,000,000,000 during the Q2. Compared to the same quarter last year, the growth was 15%. The portfolio consists of low risk home mortgages with an average loan to value of 55%. Moving to Asset Management. The positive flow continues for Storebrand Asset Management from an increasingly share of external clients. In the quarter in the Q2 2021, Storebrand for the first time Exceeds NOK 1,000,000,000 in assets under management. The growth in 2021 has been NOK 75,000,000,000 kroner. NOK 36,000,000,000 stems from external institutional clients, and we also recognize Strong growth from retail customers. In total, now 44% of the assets under management It's coming from external clients. Non captive assets, It's now than 44% of the asset under management is coming from external non captive assets, And this is a radical difference from 2016, where there was only 24% of the assets stemming from these external non captive assets. This transformation in business model has led to growth with stable fee margins. The fee margins in 2021 is 18 basis points, which could be compared to 17 basis points in 2016. In the second quarter, Storebrand finished a Full transition to Claude for Storebrand Asset Management. This has been a 14 month Large scale transformation projects. It has included full consolidation of existing data centers for asset management And implies a shift from traditional infrastructure to fully automated cloud services. The purpose of this transformation has been to build a cost effective and scalable platform for further growth and development. Storebrand continues to hold the number one position in sustainability in the industry and the region. We continue to push the agenda forward. In 2021, we have continued engagement in nature and biodiversity issues As part of the working group for task force of nature related financial disclosures, We are also continuing our growth of sustainable funds internationally. And the Central Bank of Ireland Has approved Storebrand ESG Plus to be launched on AMX in August. In the 2021 Prospera service, Storebrand strengthens the position as the number one sustainable brand. 100% of our investment undergoes strict sustainability screening. And in more than 10% of the Asset Management is in Green Solution Companies. Last but not least, coming from a challenger Position in the Norwegian P and C market, Storebrand has grown steadily over the past 8 years with high single digit organic growth in portfolio premium and increased market share in the period. The performance is due to our strong position in the markets, where we are able to leverage a strong brand name with significant customer product and capital synergies. Over the past couple of years, we have increased the focus on cross sales. And since December 2020, we have transferred approximately NOK 550,000,000 from the Insure transaction. In total, we expect NOK 700,000,000 to be the converted volume during 2021 from Insure. It is satisfactory to see the strong growth in retail P and C With a steady growth in market share, now increased to 5.2% by the end of the first quarter. And with that, I'll leave the word to our CFO, Lars Thank you, Rodol. Good morning, ladies and gentlemen. Storebrand delivers a solid set of figures for the 2nd quarter and first half of twenty twenty one. All business areas are performing well. Financial markets have been generally good and our risk management performance according to plan. This means strong results and a solid balance sheet. Let me start with the key figures. The underlying operating profit adjusted for performance related expenses of 68,000,000 It's at an all time high of $754,000,000 In addition, the financial result is strong at 6 67,000,000 including profits from the announced sale of Verdausbrucke of 546,000,000. The solvency numbers are slightly down to 172%, following falling interest rates and higher regulatory stress factors. The regulatory solvency does not contain any transitional capital. Importantly, the customer buffers are at all time highs, which lead to stronger risk capacity for customers and better protection for shareholders and customers for potential future financial market volatility. The solvency position ends the quarter at 172%, down by 4 percentage points. Model and assumption changes are neutral. The fall in Norwegian interest rates caused a reduction in solvency of 5 percentage points. This is slightly higher than what can be read from the Q1 sensitivities due to a twist in the interest rate curve. Lower volatility adjustment by 3 basis points in Norway and one basis point in Sweden have a negative impact of 2 percentage points, while a higher equity stress now at 45% Should equity markets correct? Strong asset returns and strong quarterly results give a positive contribution of 6 percentage points. As usual, we set aside for future dividends quarterly for a final solvency at 172%. This falls slightly behind market consensus, which may be a result of the interest rate fall at the end of the quarter and reduced volatility adjustment set by EIOPA after the end of the quarter. The sensitivities described here show strong resilience in different scenarios. I would like to emphasize that Storebrand aims to reach a solvency above 180% during 2022. Lower interest rates make this more challenging, but we will continue to strive to close the gap through measures that we have at our own disposal. Fee and administration income continues to grow Strongly at double digit levels. The insurance results are picking up after a period of weakness With no extraordinary claims in the quarter and a positive development from growth and price adjustments. Importantly, we see that the employment market has started to recuperate towards the end of the second quarter, which leads to expected improvements in reactivation and disability results going forward. This is in line with previous communication. Despite including $68,000,000 in performance related expenses in the quarter, overall reported cost Remains well under control and below the run rate of our guided SEK4,400,000,000 for the year as a whole, excluding performance related expenses. We do expect the cost level in the second half to go up in line with increased economic activity, but within the previously guiding of SEK 4,400,000,000. Financial items are particularly strong, including a gain of SEK 546,000,000 from the sale of Verdalsprukke. The profit from the sale of shares in Verdalsprukke is Tax free, combined with lower taxes from our Swedish operation, this leads to a very low tax charge of only SEK 52,000,000 for the quarter. Our normalized tax rate remains at 19% to 22%. This picture shows the same results as The previous page now broken into the profits area, savings, insurance and guaranteed. As you can see, there is a positive development in all areas. The savings area shows continued good growth in earnings despite margin pressure. The reported cost is up primarily due to higher reported cost related to good performance in the our funds with performance fees. The corresponding profits from good performance will be booked in the Q4 according to the IFRS accounting rules. All business lines show satisfactory growth and profitability. The earned but not booked performance fees In asset management, year to date are SEK 230,000,000. This means the best half year value creation in the asset management section on record. The growth is further illustrated here, but since Oda Riel has already commented on most of the important parts. I will move on to Insurance. Insurance continues its strong growth, partly driven by the acquisition of customers from Insure, but also from price adjustments and partnerships as well as own sales. We have increased the number of people to handle the growth as previously announced. Still, there is good cost control and a stable cost ratio. There are no significant extraordinary claims in the quarter. The disability results, which have been weak since the beginning of the COVID-nineteen situation, show sign of improvement towards the end of the second quarter, and we hope to be able to report gradual improvements from here on. The combined ratio of at 91% is within the targeted level in the quarter. The growth is particularly strong within P and C and Individual Life. At the end of the second quarter, We had signed up $553,000,000 from insurance clients, and we now expect a total acquisition of around SEK 700,000,000 in portfolio premiums, somewhat ahead of the original business case. The portfolio shows satisfactory profitability and relatively low turnover. The guaranteed area delivers strong results. The operational results continue to be stable. The inclusion of new customers in the public sector in the beginning of the year as well as a takeover of a small private closed pension funds with solid buffers Drive fee and administration income. There is strong cost control. High buffer levels across the different products, Combined with continued good booked financial return leads to profit sharing in some sub portfolios as well as The guaranteed reserves have now reached Just below 50% of total pension reserves, continuing the long term transition journey in Storebrand. The remaining liabilities have gradually lower guaranteed rates of return, lower duration and better asset liability matching through long term investments in long dated fixed income instruments. The buffer capital is at all time highs, ensuring the guaranteed rate of return to policyholders and protecting shareholders. And the high buffer capital level, as we have seen this quarter, is gradually lifting expectations of profit sharing in the guaranteed products, which may make them more profitable in the coming years. Under other, the financial results It's primarily driven by the profit from sale of shares in Veralsbrucke as communicated. And with that, I leave the word to Kjetil. Thank you, Lars. The operator will now open up for questions. Remember that you need to be dialed into the conference to ask questions at this And the first question comes from the line of Peter Eliot from Kepler Cheuvreux. The first one, you hinted just now that you might have some tools or you might think about using some tools to boost Could you maybe just remind us how you're thinking about those tools at the moment and what you have available? I guess you obviously mentioned The various ones before debt, reinsurance, AMM, internal model, etcetera. So I'm sort of thinking that the debt lever, I guess, you've already called to an extent, and I said if There's more you think you can do there. The internal model, I guess, will take some time to come into effect. So yes, it'd just be useful to think about how you're thinking about those various levers. The second question was on net Flows, the €24,000,000,000 year to date, I think, is the same number that you showed in Q1. So I guess Q2 was 0 in aggregate. But I was just wondering, could you just maybe is it possible to break down And especially the SEK 14,000,000,000 of non captive net flows, break it down By segment, where they're coming from and maybe give some hints on Q2 as well. And then finally, Just looking at the solvency sensitivities. I was a little bit surprised by the equity sensitivity, which Basically, it seems to say that if equities fall by 25%, then the without transitionals ratio increases by 2 percentage points. So I just wonder if you could confirm what's happening there and exactly what your net equity exposure is. Thank you very much. Sure. Thank you, Peter. With respect to the solvency tools, we talked about that at some length at our Capital Markets Day. And you comment on all the right things. So we will continue to work with the toolbox that we have. And you already mentioned the available tools for us. So we don't want to go into any further detail, but we still have availability to work with those tools. In terms of net flows, we have had good sales both in alternatives in the Nordic as well as a good sale of in retail funds and institutional funds across the Nordic and Norway. So I don't know if you I think just One point to add there is that there is a positive net flow also in the Q2 in isolation. The large bulk came in Q1, whilst I think by memory, it's Roughly SEK 2,000,000,000 positive in net flows also in the second quarter. Yes. And in terms of solvency sensitivities, I guess that shows some of the weakness of the solvency, the model that you have some technicalities that makes this happen. And it happens with respect to the Norwegian rules where There is a limit as to how much solvency capital you have from the back book and the front book. And if you have a strong fall in the equity markets, a cap is lifted in terms of the balance between the front book and the back book, which lifts the actual solvency levels, which doesn't really make a whole lot of sense, but that's the way the solvency model is set up With the Norwegian capping of solvency capital from the front book. But I think also what you see is that even the underlying solvency without any transitional Increase it with 2 percentage points. And that is due to the fact that really now we have a very high level of stress Of the equity in the model. And with the fall of 25% in the equities, we will also have a corresponding reduced stress in equities. And that reduced equity stress is even higher than the effect of the fall in equities. So that is what you see with the ultracyclic elements really kicking in. The next question comes from the line of Ashik Knuszadi from JPMorgan. Please go ahead. Hi, thank you and good morning, Lars, good morning, Oder. Just a couple of questions I have mainly with respect To the Unit Linked Margin. Now Unit Linked Margin in the quarter declined quite a lot for both Norway as well as for Sweden. Now I agree that you have given some guidance that the unit linked margin will gradually decline, But I think the decline quarter on quarter was, say, 7, 8 basis points, which sounds a bit higher than what I would have assumed. So I mean, was there anything funny in this quarter that the margins declined? Or would you say that this is what is reasonable we should be expecting going forward as well? And especially how do we think about like year on year basically from a full year basis, like I think last year you did 80, 81 basis point in Unit Linked Norway and you did about similar 80 basis point in Unit Linked Sweden. So Are we talking about 5 basis point decline every year for next 3, 4 years? Or are we talking about 1 or 2 basis point decline a year over next 3, 4 years? So I think some clarity on that would be very helpful because that was a big driver today. Secondly is how do you think about this Asset Management related margin. I mean, clearly, Asset Management AUM has been going up pretty rapidly. I mean, It is up, say, quite a lot this year only. So does that put any pressure on margin? Because I mean, is there any shift business business shift mix, etcetera, that drives it? And third question I have is a simple one is, I I mean, you have lots of tools to address the solvency concern and you can move towards 180%. But how Is there anything you can do to reduce the interest rate volatility? Because the reason I'm asking this is interest rate is one of the biggest driver of your solvency up and down, And it just moves in a wild way. I mean, this quarter, it's just minus 5%. So clearly, that creates a lot of noise in your solvency ratio. Like 1 quarter, you are like very closer to 180, next quarter, you'll be closer to 170. So anything you can do on reducing the interest rate sensitivity? Thank you. So if we start with the Unit Linked margin for Norway and Sweden, there are no particular extraordinary items this quarter. As we have mentioned, the individual pension account in Norway will put pressure on margins for Unit Linked Norway this year. And we've already made some adjustments in the pricing to and we have transferred customers into the Individual pension accounts, which lead to gradually lower margins. In Sweden, there was also a big difference between last quarter and this quarter, But that's primarily related to a one off gain in the last quarter. So if you adjust the last quarter by SEK 36,000,000, You will get a much more straight line in terms of the development in Sweden. On our Capital Markets Day in December last year, We guided that we expect the unit linked premiums overall to remain in the 60 to 80 basis point level in the next or for 2023. And we maintain that guiding on the overall. In terms of details for each individual product, that's too early to say exactly. Good. When it comes to Asset Management, as you see, we see strong growth. We also see that a large part of the growth comes from alternatives: Private Equity, Infrastructure, Real Estate has been very successful also for external sales. And that keeps up the fee margin, the top line margin. And we also have kept our cost level very steadily Nominally over this growth period, that means that we have seen reduced cost margin over the last quarter. So actually, We have seen increased margins over the last years due to a falling level of the cost margin. And as I thought about being now into an even more scalable platform means that we believe we should Be able to keep this margin also going forward due to the shift in the business mix and a very scalable platform. And in terms of sensitivities for interest rates in the solvency calculation, we have this year Increased our holding of bonds at amortized cost. We have bought some SEK 14,000,000,000 of long dated fixed income instruments With an average duration of 13 years longer than the past, which means that we reduce the sensitivity to interest rate swings. As you are very well aware of, we have this dilemma where we have to manage the risk on a 1 year horizon due to Norwegian guaranteed product rules and at the same time, we have to hedge the long term risk. So in the balance between the two, we have increased duration in the investment portfolios so far this year, which will lead to lower sensitivity on swings in the interest rates on the solvency. However, it's impossible to lock this all together due to Norwegian product rules as they force us to also look The 1 year horizon in terms of our risk management. That's very clear. I just have one follow-up question again going To the retail margins basically. I mean, I agree that 60 to 80 basis points is the margin guidance you have given. But I mean, is it possible at some point, not now, but at some point in the future to just narrow it down? Because the reason is, I mean, 62 basis points, 80 basis points is a big GAAP, I mean, 20 basis point is basically a third of your revenues in the retail business, which could be NOK 1,000,000,000 and NOK 1,000,000,000 It's basically a third of your group profits. So if we can get a bit more narrowing down of this number, that would help a lot because it's just a very wide Revenue margin number. So I agree that you have your limitations how the book will evolve the in IPA book will evolve over time, I agree. But Any thoughts at a later stage would be very, very helpful. Thank you for this. Ashish, as you know, the individual pension count is one of the largest Changes in the Norwegian pension market that has taken place for a very, very long period of time. And it's impossible to say At this point exactly how that plays out in terms of margins. But we will obviously come back to you with more guiding as this market It's finding a new balance. I think I will discuss that the guiding we gave in our Capital Markets Day showing quite well. The result from these areas should be in line with what we saw in 2020. You will expect around $100,000,000 in decline But due to the growth in the business and also cost measures, we expect to be at the same level As we have seen in 2020, already in 2023 again. So there will be a dip due to this margin squeeze in 2020 2, but it's limited to around SEK 100,000,000. Okay, sure. Thank you. Thanks a lot for this. Thank you. The next question comes from the line of Hakan Astrup So I have Two questions. First one, just a clarification with regard to solvency and dividend. So In order to start to pay out the excess capital next year, do you need to have a solvency II ratio Above 180%, that is the first question. And the second question is regarding the inflation and the uptake that we are I was wondering if you can share some thoughts on how this is expected to impact your insurance result and Well, the 180%, of course, is an internally set target for us Where we measure ourselves to be overcapitalized when we are above this level. Of course, there is a gradual shift in the balance sheet That we also have to take into account, but that is our best estimate today to where we set target to being overcapitalized and to start doing share buybacks. And as Lars said, we are very committed as a team to work towards reaching this goal during 2022. During 2021 and into 2020. In terms of inflation impact, obviously, the insurance results, P and C insurance result is Smaller impact on the overall results for us than for some of the large competitors. However, we as everyone else Put our inflation expectations into the price adjustments we do. And in terms of the results this first half year, We saw a particularly strong increase in the G in the base number for in Norway, Which means that we have increased reserves by some SEK 50,000,000 to strengthen expected cost related to GE related expenses. So that's something that is taken into the accounts right away. But of course, this also drives the growth of the business because very much of Premiums and so on is also regulated by this same inflation based numbers. So we see stronger growth coming out of inflation. And of course, if it also leads to higher interest rates, that is absolutely positive for Storebrand. Thank you. And just a quick follow-up here on the solvency. So In the past, you have been talking about that, which have down the road, is that just 180% In order to be more in line with the new business that you are in Stordland, could that be as early as Next year or is this north of the 5 years, but down the road type of adjustments? We are following, of course, this very closely, but we are not ready to change any target for our capitalization at this stage. It's still the 80% that we believe to be the limit for us to reach to start doing share buybacks. The next question comes from the line of Ulrik Huvigscher from Nordea. Please go ahead. Thank you for taking my questions. I have 3. I think this was asked about previously, but I didn't quite hear it Because I think the AUM inflow was 0% net in the quarter. And I was just wondering if there was If this is a sales issue or an outflow issue or a situation and color on that would be nice. And then I was wondering on the sensitivity. Is it so that the increased duration of the bonds that have a big impact on your sensitivity to higher rates? Because I think it's fallen a bit this year. It was 4 percentage point last quarter, and I don't think it's 7%, so it's a bit up. So I'm wondering what's driving that. And the last Juan, since you now had a positive sensitivity to the equity markets falling, does that means you have a negative impact To equity markets, for example, going up 25%. Thank you. All right. I can start on the net Flow number. I think that the correct number for the second quarter is roughly SEK 2,000,000,000 positive Net flow, I think in the I looked into it now. And fortunately, I think we have Forgot to include company capital in the numbers here. So we need to do a little small correction there. But there's But besides that point, there's normal outflows and good sales in Asset Management in the quarter. And you are correct in assuming that when we have increased the duration of the investments and the interest rate sensitivity on the upside and the downside will go down. And in terms of the equity sensitivities, it's as mentioned, a technicality that makes this the strong Or the positive development in solvency as a consequence of falling equities, you don't see the Opposite happening if equities continue to go up, that will generate more returns and will be positive. Actually, we now have very high stress factors on equities. It's on 45%. It cannot be higher than 49%. That will be the highest level you can have on these stresses. So we are now pushing these limits. So higher equity will The positive for us also in the solvency calculations going forward. It's very interesting position. Thank you a lot. The next question comes from the line of Blair Stewart from Bank of America. Please go ahead. Thank you. Just two questions from me. The developments in the defined contribution markets As that you mentioned in the report, where it seems to have been expanded to more people, albeit at a lower level. Just wondering, Is that a positive or is it a negative for you? It seems to be opening up to more people, but possibly not the right types of people. I don't know if that's the correct And secondly, could you comment on what how much debt capacity you think you have, Whether you're measuring that on a solvency basis or something else, but just interested in how much debt capacity you think you have in the business? Yes. Let me start on the question on expanding defined contribution So this is a proposal that is now going to parliament to expand it to People who previously didn't have a right to earn pension. This is a positive for us. It in expectation, if it goes through, it will increase premium volumes in the market with roughly roughly SEK 3,000,000,000 annually. And we will then take whatever market share we get from that as premiums in store brand. And I don't know, Lars, if you want to start on debt capacity. I think that We look at it on a Solvency II basis. 1st and foremost, of course, also we look at it in terms of rating and IFRS measures. We think that as of now, we are still in the lower end of the leverage scale compared to the sector. And To think that we can be somewhere in the area of 20% to 25% of leverage in terms of own funds, That it's reasonable. So we have we still have room to do more debt if we should should we wish to do so. Are you able to quantify the debt number? I can do it myself, but I was wondering if you've got a number in mind to take you to 20% to 25% of loan funds. Well, I think when you look at the SCR now, You could increase it with a couple of 1,000,000,000. A little bit it's a little bit fluctuations In the numbers here and we also, of course, need to be within the limits of the how much we can have in Tier 2 capital and in Tier 1 capital as a percent of the SCR. But again, there are in addition to that threshold, we need to, of course, look at rating and other measures Before we make a decision to change the absolute level of leverage compared to what we have today. Is that about 5 to 10 points then, Chateau, of capital could come from that if you chose to do so? So you can think that with a capital requirement of around SEK 30,000,000,000 it's 10 percentage points is SEK 3,000,000,000. Yes. Conceptually sorry to go on, guys, but conceptually, would the management or the board consider You know, should utilizing that debt capacity, say, 10 points in order to push you above the 180 and And trigger equity, equity capital returns? Well, as Lars said, we have a toolbox, And it's a lot of tools in that toolbox. You are talking about the debt and debt capacity. That is 1. You also have reassurance agreements that is possible to do that we have Done in more debt earlier on that can be used. And as you remember, we see what can get The most solvency capital for us at the lowest cost. So that is the trade off we are doing and discussing with our Board. What is very important to say is that the management team and the board is very committed to reach this 180% solvency threshold as soon as possible and working with the toolbox actively to do so. Okay. That's interesting. I think sorry, apologies. Just on my first question, I think is it also the case that People with disabilities can also be eligible for a cheaper pension As well, is that part of the proposal from the government? This is Quite simple actually because before pension was earned from a threshold, you needed to earn, Well, NOK 30,000 before you started to earn pension on your salary. The largest shift now is that everyone earns from the first krona. So it's people that's already in the schemes that now get more pension out of their wages and their savings. So it's not like new people coming Into schemes, but it's higher savings rates is the And part time employees as well as young people. Yes, also part time employees is also now included. So everyone From 13 year in Norway that has a work today, we'll also have savings into pension based on this new regulation. And that will have more than $3,000,000,000 in annual increased savings into the market. Understood. Great. Thanks very much, guys. The next question comes from the line of Johan Strom from Carnegie. Please go ahead. Thank you. So I was wondering if you have any Further comments on profit sharing in this quarter. Is all of this related to Sweden? Or have you started to take anything out of the Norwegian book? And then secondly, on the insured premiums. At the level that you have kind of reached now been better than expected? And if so, do you think you will be able to transfer more than initially thought? Or is the SEK 700,000,000 still a base case? Thank you. So profit sharing, we do have some profit sharing in certain paid up policy portfolios as well as a little bit in the individual portfolios in Norway. So as we've had very good booked return in the Norwegian market, there is also Some profit split in certain portfolios. This is still at a relatively low level, but as I mentioned previously in the presentation, As when we continue to build very, very strong customer buffers, more and more portfolios will be able to get Profit sharing in the future. Also there was a discussion on inflation here. Inflation usually leads to higher rates. Higher rates again will lead to a higher probability for profit sharing and possible significant strengthening in the profitability of all the guaranteed And then you are correct, we've also had good booked profit in or good booked results in Sweden, Which has led to a reduced need for the deferred capital contribution, which is reversed. And furthermore, the indexation fee in Sweden is strong at approximately SEK 140,000,000 per year, which is booked into the income on a monthly basis or a quarterly basis based on strong consolidation in all the relevant Product Groups. And in terms of the insured premiums, we have had booked SEK553,000,000 at the end of the second quarter. And as I mentioned, we expect to be able to finalize this around SEK 700,000,000 which is slightly above the So business case that we communicated. And might I also add one thing on the Thank you very On the one thing on the retail P and C that also if we take insurer and the growth from insurer out of that Number, we are still growing that segment with 16% in the retail market. The next question comes from the line of Vegard Tovarud from Pareto. Please go ahead. Thank you and good morning. Just following up on the paid up profit sharing. With the current buffers you have, Should we expect at least the current level that we reported in this quarter going forward? First question. As I said, the actual profit split is booked in the 4th quarter, and we make on a quarterly basis. So we made an estimate based on the booked return so far this year and a normalized return the rest of the year. And then whatever the actual return becomes at the end of the year will impact how much is actually booked as a Profit split in the year as a whole. Okay. Thank you. And on U. S. Linked in Norway. Could you tell us how much of the reserves that are currently On the new pension accounts and how much are on the pension deficit? The paid up policies that we had at the end of last quarter was SEK 39,000,000,000 data policies. Sorry, pension certificates, yes. Pension certificates was SEK 39,000,000,000 is currently at SEK 35,000,000,000 And that should go down towards the end of the year as more and more pension certificates are moved into individual pension accounts. So how much of those EUR 35,000,000,000 or How much of the remaining SEK 115,000,000,000 is already on pension capital? As I said, SEK 39,000,000,000 in pension certificates has gone down to SEK 35,000,000,000 and we expect approximately half of the SEK 35,000,000,000 To be transferred into pension accounts by the end of the year. Okay. And if you look at the transfer valve, it's negative SEK 2,500,000,000 in the quarter. Is that Connected to pension account and volumes moving away from you. Well, there is some volatility in the numbers with a lot of pension certificates being moved to us and being moved away from us. And there may be some periodic effect between the quarters in terms of when things are moved. But we do expect a small leakage in terms overall in terms of the pension Overall, but then there in the numbers you look at in the supplementary information That includes also customers moving to us and from us. So but there will be some volatility in these numbers this year due To the fact that we have quite large transfers in the individual pension account market. And there may be, as I said, Some shifts between the different quarters in terms of the actual net numbers for the year. Yes. So is it doesn't get to assume that the numbers we see, the last power plant for U. S. In Norway, it's related to the pension account? Sorry, I didn't get that. Is it fair to assume when we look at The transfer balance for Unit Linked Norway. This transfer balance, the net transfer balance is related to pension accounts and not Movement of unit linked activity and schemes? It's a combination of the 2. So far 98.2% of all our individual clients have chosen to stay within Storebrand Either in their own individual pension accounts or in the corporate schemes that they have with Storebrand. And we actually see quite low Into our own choices these days. It was some activities at the starting point of the regulation, but it's very low activities as we speak. Okay. The next question comes from the line of Roy Thillay from Arctic Securities. Please go ahead. Thank you very much and good day guys. A couple of questions from me. Just One follow-up on Veigar's question on the transfer balance. I also saw the transfer balance was negative in Sweden again for the 3rd quarter in a row after you had many quite a few quarters with a positive transfer balance. So just wondering how the competition looks there? That's the first question. And then secondly, if there are any updates on the outstanding tax cases you have going on? And then lastly, in the bank, you have a very strong growth rate there as well. Just wondering what's driving the growth there. Is it price? Or are you just Doing better sales. And also if you could touch upon how much of your growth there is in fixed rate mortgages versus floating? Thank you. Yes. When it to start with Sweden, we have, of course, seen a very strong growth in Sweden over A number of years now, and we also still see strong growth in overall premiums. There is strong competition, especially from one player in Swedish market that has introduced also fees to customers to directly move to them. And that is, of course, quite a costly way of customer acquisition. We have a very good position in the Swedish market. We have a very low cost level compared to our competitors, a very high degree of digitalization. So we, of course, are looking into this situation and following it closely. But so far, we have not chosen to follow These players' introduction of fees to really transfer their balances. So That is what we see as a situation that have occurred over the last half a year. We find that the competitive position for SPP in Sweden is extremely strong, both due to sustainability, to digitalization and to the very Low relative cost level. We feel that over time, we will be in position for further growth and also further transfer in SPP. Yes. On the tax update, as we said before, We will challenge the tax authorities' decision and that has been done through a formal complaint to the tax authorities. And we expect that to take some time to be handled according to So basically no news, just business as we have previously communicated. And in terms of the bank growth, We have changed our sales strategy. We have entered new partnerships and we have Been able to maintain margins while still growing quite strongly. I do not have the mix between fixed and floating, but I don't know if I think it's mainly floating rate mortgages. Yes. There is some interest for fixed rate, but we don't see that as a large part of the total yet. The next question comes from the line of Thomas Svensson from SEB. Please go ahead. Yes. Hi, good morning. Two questions. You highlight your recognition for sustainable impact. Does that make you optimistic about possible new business, new travel fans, new asset management? Or Is it so that the competition is also increasing here, that everybody else is getting By doing things, we're getting more sustainable. That's the first question. The second question So M and A, you have talked about and also on and about, of course, add on acquisitions. How do you see the environment now Pricing and opportunities. Thank you. I heard the first question about sustainability, but I didn't drill. The second was on And how you see opportunities? Okay. Within the whole space? That was how I understood it. The line is unfortunately a little bit poor, Thomas. So we got Okay. Due to your strong ESG profile, is the competition increasing for this green business or ESG business? Yes. Just start with that. We feel that we have a very Strong position and when we look at the scorings like I talked about Prospera here, we see that we actually have A larger have increased our position Towards our competitors during the last year. So everyone is working with sustainability, and that is a good thing for the world. But I think we have been working with this for very long time. We have increased Our work also with active management towards our investments, and We feel that we have a very strong position and are recognized for that in the Nordics, but also internationally. And we Absolutely see growth in sustainable solutions both in the Nordics and in Europe going forward and Are looking very closely and are in part of our competitions on that as we speak. When it comes to M and A, of course, we are following what is happening in the Nordics very closely. But as I presented today, we have extremely strong growth rates, both when it comes to unit linked, when it comes to asset management, when it Comes to insurance, the growth rates are, I will say, fantastic. So we don't need to do any M and A to have the growth coming through. But of course, if there are opportunities to strengthen our positions, would say especially as we have done in asset management, where we have strengthened our offering in the Nordics towards Alternatives, we are looking very closely to that. And we are, of course, also feel that this has been a very success for us with the takeover reinsurers. So if there is opportunities in the insurance space, we also look closely to that. Also due to the fact that we have a very high capital synergy taking on more insurance volumes into our balance sheet. Okay. Thanks a lot. There are no further questions in the queue. So I'll hand the call back to your host Any closing remarks? All right. Thank you. And thanks to everyone who followed the call. We are, of Course available for questions later if there if anything should occur. And other than that, it just remains to wish everyone a nice summer break, and We look forward to see you over the summer as well. So thank you, and goodbye.