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By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

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Announcement:

Moody's affirms Storebrand's ratings (IFSR A3); outlook remains stable

18 Jul 2012

London, 18 July 2012 -- Moody's Investors Service has today affirmed the insurance financial strength rating (IFSR) of Storebrand Livsforsikring AS (Storebrand Liv) at A3 and the associated ratings (see list below for more details). The outlook remains stable for all ratings. The ratings of Storebrand Bank are unaffected by today's action.

RATINGS RATIONALE

The affirmation reflects Moody's view of Storebrand's top-tier market position in Norway and solid position within Sweden. The affirmation also reflects the efforts to de-risk the balance sheet ahead of Solvency II, notwithstanding the material economic headwinds Storebrand faces, particularly with regards to the spread deficiency risk which Storebrand is increasingly exposed to as the low interest rate environment continues.

Storebrand's market share in Norway, at around 21.5% of gross written premiums, has consistently remained above 20% in recent years, although witnessed a slight decrease from the 22.7% recorded in 2010. In Sweden, SPP's market share of around 4% remains some distance behind the market leaders, although it increased from 3.5% in 2010.

The Group's reported solvency margin deteriorated from 161% at YE 2011 to 152% as at H1 2012 and Core Tier 1 capital fell by NOK 4.0bn as at H1 2012, in both cases reflecting changes in the consolidation of SPP into Storebrand's regulatory capital calculation and the discounting of insurance liabilities. However, customer buffers increased from 3.3% of customer funds at YE 2011 to 3.9% in Norway at H1 2012 and from 10.0% to 11.1% in Sweden as at H1 2012.

Storebrand's average guarantees in Norway remain significant (at around 3.4%) in the current low interest rate environment, although we note that Storebrand retains the ability to charge for the cost of providing these guarantees (NOK 520m in 2011) and that additional loss absorbing reserves exist (equivalent to 3.9% of customer funds as at H1 2012) to partially mitigate the spread deficiency risk. In 2011, the market return of 3.4% equated to the average guarantee, with the returns credited to policyholders averaged 4.6%, due to the utilisation of the aforementioned reserves. Furthermore, whilst the overall exposure to Greece/Ireland/Italy/ Portugal/Spain remains sizeable (NOK 12.1bn as at YE 2011), this is almost entirely held within the policyholder funds.

Moody's also notes that proposals from Norway's Banking Law Commission, if enacted in 2014, will reduce the risk borne by the company to, in particular, paid up policies by reducing the guarantee and longevity risk.

Commenting on what could lead to positive rating pressure in the future, Moody's noted that these include Storebrand Liv's ability to deliver sustainable capitalisation levels in excess of 160%, a meaningful reduction in spread deficiency risk, financial leverage consistently below 25% and/or a significantly enhanced franchise, either from a product or geographic perspective.

Conversely, negative rating pressure could arise in the event of financial leverage exceeding 35%, the solvency margin falling below 125% under current methodologies and/or sustained negative interest results being delivered.

Storebrand ASA (the parent company of Storebrand Liv) is a Nordic financial services group, primarily focussed on writing life insurance business in Norway and Sweden and is headquartered in Oslo, Norway. As at 30 June 2012, Storebrand ASA reported total assets of NOK 413bn (YE 2011: NOK 401bn), total shareholders' equity of NOK 19,335 million (YE 2011: NOK 18,777 million) and post-tax profits of NOK 661 million (H1 2011: NOK 839 million).

The following ratings were affirmed with a stable outlook:

Storebrand Livsforsikring AS:

Insurance financial strength: A3

Junior subordinated debt: Baa2 (hyb)

Subordinated MTN debt: (P)Baa2

Junior subordinated MTN debt: (P)Baa2

Capital Contribution Securities: Baa3 (hyb)

Storebrand ASA:

Issuer rating: Baa3

Senior unsecured MTN debt: (P)Baa3

Subordinated MTN debt: (P)Ba1

Junior subordinated MTN debt: (P)Ba1

The methodologies used in these ratings were Moody's Global Rating Methodology for Life Insurers published in May 2010 and Moody's Guidelines for Rating Insurance Hybrid Securities and Subordinated Debt, published in January 2010. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Moody's considers the quality of information available on the rated entities, obligations or credits satisfactory for the purposes of issuing these ratings.

Moody's adopts all necessary measures so that the information it uses in assigning the ratings is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

In addition to the information provided below please find on the ratings tab of the issuer page at www.moodys.com, for each of the ratings covered, Moody's disclosures on the lead rating analyst and the Moody's legal entity that has issued each of the ratings.

David Masters
Vice President
Financial Institutions Group
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Simon Harris
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Moody's affirms Storebrand's ratings (IFSR A3); outlook remains stable
No Related Data.
© 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

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MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY550,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​
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