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DNB Wealth Management Nordic Insurance Trip by Carnegie
Oslo 5 June 2014
Tom Rathke Group Executive Vice President and
head of Wealth Management
NORWAYS LARGEST ASSET MANAGER
NOK 530 billion AuM
1 million private clients within pensions, mutual funds
and Private Banking
30,000 corporate clients within pensions and asset
management
Best Private Banker in Norway1
No. 1 in Prospera2 Norway, no. 2 in Sweden
No.1 in Global Equities 3
No. 1 in Fixed Income NOK 3
Best provider of pension solutions in Norway4
Best provider of defined contribution schemes5
1 Euromoney Private Banking and Wealth Management Survey 2014 2 Prospera – instituional investors, 2014
3 Morningstar Fund Awards 2013 4 Aalund bedriftpensjons barometer 2013 5 Gabler Wassum innskuddspensjonsanalyse 2013
Agenda – New pensions products
1. • The regulatory requirement and future growth prospects
2. • Growth and profitability in our new pension products
3. • Distribution and cooperation within the Group
4. • Q & A
Traditional life separated from new business - to increase competitive power and secure operational efficiency
Products Wealth Management
Win
the pension
battle
Increase
our share of the
insurance market
Secure sufficient return
and efficient operation
of the back book
New pension products
& Savings Insurance Traditional Life
Regulatory environment - progress in new pension regulations
Completed Not completed
Mandate
Banking Law
Commission -
report
NOU (Official
Norwegian
Report)
Law-
proposition
Parliament
processing In effect
New occupational pension
(«Hybrid»)
1.1.2014
New contribution limits for
DC schemes Regulation December 2013 1.1.2014
New disability pension NOU: deadline for
comments
expired
1.1.2015
Transition rules:
From DB to new
occupational pension
2015?
New occupational DB
scheme
NOU Q4/2014
Individual paid-up policies
with investment option
Q3 2014 ?
DC = Defined contribution , DB = Defined benefit
New pension products
- includes defined contribution, risk coverage and private pension savings
DNB’s volume as of 31 March 2014:
NOK 51.2 bn
55%
5%
40%
Defined contribution
Risk coverage associatedwith DC pensions
Private pension savings(Unit Linked etc).
Defined contribution vs. defined benefit
- Norwegian private pension market
2010 2011 2012 2013
Share of DC plans 87.5 % 88.9% 90.2 % 90.7 %
Share of DC members 74.1 % 76.5 % 79.1 % 81.4 %
Share of DC assets 12.9 % 14.8 % 17.9 % 22.2 %
Source: Finance Norway. The statistics cover Finance Norway´s members
DB
DC
Premium defined benefit vs defined contribution
0
10
20
30
40
50
60
70
80
90
100
2007 2008 2009 2010 2011 2012 2013
DC market size (Capital in NOK billion)
Defined contribution
- DNB growth in premium contribution and capital under management
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Annual premium (NOK mill)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Total capital (NOK mill)
12M growth
rate: 28 %
12M growth
rate: 16 %
Growth potential for defined contribution schemes
New customers
Transition from DB till DC
New contribution limits
• Before 1.1.2014:
• 5 per cent between 1 and 6G1,
8 per cent between 6 and 12G
• After 1.1.2014:
• 7 per cent between 0 and 7.1G,
25.1 per cent between 7.1 and 12G
Private pension savings
1) G = NOK 88 370
Defined contribution
- DNB’s DC P&L for 2003-2013, break even after 10 years
-400
-300
-200
-100
-
100
200
300
400
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Income Costs Results
Increased focus of capital-light products
– “Our customer mindset” and reporting based on customer segments
1 Credit market shares, household and commercial
Pensions and savings on the agenda in DNB
(from Capital Markets Day, Nov. 2013)
Potential for growth