Storebrand ASA (STB) Earnings Call Transcript & Summary

Good morning, everyone, and a warm welcome to our Capital Markets Day presentation 2023. We are live from our offices at Lysaker just outside of Oslo, and we look forward to spending time with all of you who are participating from elsewhere in the world digitally. Our aim today is to give a full, but concise strategy update from the commercial areas in the group and outline new ambitions for how we generate and plan to distribute capital. We'll start off with CEO, Odd Arild Grefstad, who will outline the general strategic direction, including a deep dive in digital as a strategic enabler from CTO, Trygve Hakedal. We'll continue with our 4 commercial areas where EVPs, Vivi Gevelt, Jenny Rundbladh, Jan Erik Saugestad and Camilla Leikvoll will give us an update on why customers choose Storebrand and what we plan to do to strengthen customer relationships, resulting in higher volumes and result generation for the group. Lastly, our CFO, Lars Loddesol, will tie the strategic and financial together and take a deep dive into how our capital generation now increases and how we plan on distributing capital. Afterwards, we'll open up for Q&A. But first, let us hear from our CEO, Odd Arild. The stage is yours.

Thank you, Kjetil. It gives me a great pleasure to welcome you to Storebrand's Capital Markets Day 2023. We hosted the last one back in 2020 and a capital update in 2022. So this is the first time in 3 years. We have a full presentation of the group's ambition and its strategy to get there and beyond. I'll start briefly with our legacy and who we are in the Nordic financial space today. Before we take a closer look at our strategy which are fueled by structural market growth and group synergies. Lastly, I'll end up with our ambitions going forward. We have been a pioneer in Nordic Financial Services with roots back to 1767. From the roots in P&C, to a Norwegian occupational pension provider, we have been building the truly Nordic Savings and Insurance group, we are today. We are the market leader in Norwegian occupational pension and a strong challenger in the Swedish market. That constitutes half of the assets in our asset management franchise and is a backbone of recurring flows. On top of that, we have half of the asset under management from external clients, mostly from the Nordics, but also some from clients elsewhere in Europe. In addition, we are experiencing strong growth within our insurance and banking business, driven by group synergies, organic growth and bolt-on M&A. Our core mission in society is in many ways to secure customers from adverse outcomes and help their savings to grow. So our customers can achieve their goals and dreams for the future. For individuals, we are the safety net outside of the welfare system. For corporate customers, we enable the risk-taking and value creation in their core business by covering risks that would otherwise hamper value creation if all businesses were to take them on their own balance sheet. We have a digital business model, but that does not change the core tenet in how we engage with our customers. We need to be closest to our customers, and we need to make it easy for them to make the right decisions based on their goals. We are at the top of customer satisfaction in our core product, occupational pension. And we actively work to maintain and build customer loyalty in all segments we operate. As the group, our sustainability footprint has a long history. We aspire to continue to be a brave pioneer in this field, and I'll revert to this later on. Looking at our milestones since the last CMD, a lot have happened. We have completed 3 acquisitions and divested 2 businesses, and we reached a long awaited milestone in 2022 with the start of our share buyback program. We have been upgraded by both S&P and Moody's, and the solvency ratio has exceeded 200%. And more importantly, underlying double-digit growth continues with both strong structural growth, growth for higher interest rates and strong organic growth built on our group synergies. This also means that we have more than delivered on the guiding we put forward on the last CMD. The exception is insurance this year where the results are negatively affected by weather-related claims and increased disability levels. The insurance result year-to-date 2023 implies that it is not likely to reach the NOK 4 billion ambition for 2023. We will revert with more on new ambitions and how we plan to get there during the day. I will go so far as to say that the world has radically changed since our last Capital Markets Day. We came out of a pandemic into a world where great power dynamics and security concerns came on top on the political agenda. In Europe, war has returned. Supply chains has gone from just in time to just in case. And the liberal world order based on trade is changed to a language of decoupling and derisking. At the same time, inflation has gone from being believed to be transitory to the number one concern for all Western central banks. Our starting point is that we are operating in stable and financially robust Nordic economies. We also start off with a higher interest rate level than the last strategic plan. This will improve result contribution from financial results going forward, and have already significantly reduced business risk. I also want to remind you that occupational pension still enjoys strong structural growth. Projected annual growth in assets under management will be double digit for years to come as very few people is in the pension payout phase. The composition of the group enjoys strong synergies that can be divided into capital synergies, cost synergies and revenue synergies. We have market risk as the dominant risk factor under Solvency II. Both under the standard model and our internal model, we have significant diversification synergies when we write insurance. This means higher return on capital for that type of business. We can also use the life insurance balance sheet for a portion of the bank's lending business, which is a win-win for the customers in the life insurance company and for the capital requirements in the bank. As for cost synergies, building scale as an asset gatherer through both life insurance and asset management platforms, is the most important factor to build operational leverage. And it creates positive ripple effects throughout our business system. We also use group functions to take out cost synergies in both technology and management function. Revenue synergies are driven by a strong and well-known brand with a good standing in the Nordic markets. We also see that 21% of the individuals in corporate pension schemes choose to become retail customers in Storebrand. And they are more satisfied than other customers and more loyal to Storebrand. So with growth impulses from interest rates, structural market growth and strong synergies as a backdrop, let me turn to our commercial strategy for how we generate capital and then how we plan to distribute it. Storebrand has followed an active and consistent strategy to shift our business mix towards capital-light savings and insurance products, replacing guaranteed business. For those of you who follow us closely, you are probably well familiar with our strategy at this point. We aim to take 3 position in the Nordic market for financial services. We are the market leader in occupational pension and asset management. And we are a challenger in the Norwegian retail market for finance services. The management team will revert in more detail on how we'll continue to develop these positions in the coming presentations. We will now rather spend some time on our group-wide strategic enablers. People, sustainability and digital before I finish off with how we plan to distribute capital and present our strategic ambitions. A revision we have made to our overall strategy this year is to add in people as a strategic enabler. And it goes without saying that in our type of business, the people who work in the group is the difference between success and failure. In all modesty, Storebrand is known for developing and retaining competent people. The Storebrand culture is all about performance and development, but never at the expense of anyone else. If you don't want others to succeed internally, there is no place for you in Storebrand. As a result of our culture, I'm proud to say that we have higher engagement scores, lower sick leave and lower turnover than the industry at large. And according to survey results, we are succeeding in creating the growth-focused culture we are striving for. When it comes to the workforce, we have created diverse teams, both in general and at the top management. Our second strategic enabler is sustainability. For the last 28 years, we have been working with sustainability. But sustainability or ESG has evolved. It has become more regulated, and the reporting requirements are increasing. It has also been criticized and sometimes rightly for being pay per exercises for consultants and window dressing to make yourself look good. So why do we still believe that sustainability is absolutely core for us as long-term business. It's simply because we believe that our customers, investments and group operations will have a much more profitable future in a world that mitigates the climate crisis, restores and reserves biodiversity, eliminates corruption and have high levels of workforce participation. I'm often asked how do you actually stay ahead of the curve on sustainability. And I think the answer is that we were there when it was not fashionable and will be there if it falls out of fashion again. Sustainability is an integrated part of the business and the culture in the group. The effort to have some positive ripple effects on society happens first and foremost, by the people working in their businesses. I think that that's why we are also recognized externally as being a leader in the field. And let me turn to a couple of specific examples of what we do and focus on. Our work to maintain the leading position is threefold: First, as an actor in the society, Second, in our own operations and finally, in our products and services. Let me give you some examples. We use our knowledge and insights to push ourselves, our competitors and partners to accelerate the needed transition by engaging in various industry-wide initiatives such as the net-zero asset owner alliance. The value and impact of high workforce participation and inclusion is also a fundamental driver for economic growth and has a substantial value for each individual. We work actively with preventive measures and early intervention to reduce disability among our customers. Our win, win, win for individuals, business and society. Let me move to our third strategic enabler, Digital. Storebrand's digital offerings have had an incredible journey since our last Capital Markets Day in 2020. Automation has made life easier for our customers and kept cost down. Digital sales are up, and we have moved most of our digital ecosystem to the cloud and much more. And to elaborate on our digital development, let me now give the word to our Chief Technology Officer, Trygve Hakedal.

Thank you, Odd Arild. Financial Services runs on technology. And technology is at the heart of Storebrand. Mastering digital is key to our future commercial success and financial value creation. Our vision for Storebrand through this lens is a fully digital, data-driven and automated business system. This vision is being operationalized at a rapid pace through these 6 key areas. The financial services company of the future runs in the cloud, and we are a financial services cloud pioneer. We are proud to have reengineered and transformed Storebrand's infrastructure to deliver on our business case of cost optimization, risk mitigation and future proofing. Our progressive cloud transformation has provided us with a solid foundation for cyber resilience, where we will continue to advance our capabilities and dedicated cyber defense center to stay ahead of the external threats to the values we safeguard for our customers and shareholders. Storebrand has a rich legacy within the financial services industry, spanning more than 250 years. Using data to manage pricing, risk and capital is at the core of our business. Since 2015, we have been leveraging machine learning models and cloud-based analytics across critical areas such as fraud detection, risk pricing and automated claims processing. 2023 marked the year when artificial intelligence truly became mainstream technology. External studies indicate a substantial potential, and we are now unlocking this through investing in AI tools and training for our employees and industrializing AI in our business processes. Our goal is sustainable, gradually scaling up AI through tackling real-world opportunities, creating tangible business outcomes and customer value. Automation is key to scalable growth in the financial services industry. Through straight-through processing, we can reduce costs, increase process quality and improve customer experience. Operating in a mature digital market, we have been steadily moving forward our digital offerings, winning industry awards and customer service. Through this proven foundation, we will continue to advance our digital positions as an enabler for business growth. To sum up, our digital master plan is key to fueling Storebrand's growth journey. We are building an innovative digital factory, scalable and future-proof resilient and powered by our digital talent and ways of working. With that, I'll give the word back to you, Odd Arild.

Thank you, Trygve. Let me now sum up where the strategy is taking us. We operate in structurally strong markets with resilient economic development. With higher solvency, higher result generation and less need for capital, the strategic direction of the group is shown on this Slide. As scale increases and capital need reduces, we come into a position with higher return on equity from increased results and lower capital base. That leads me to how we plan to distribute capital. Let's take a look at what this means in terms of new group ambitions. A NOK 5 billion ambition in group profit in 2025. A revised return on equity target up from 10% to 14%. And an ambition to increase ordinary dividends every year and NOK 1.5 billion in buybacks per year in the coming period. And an estimate on total buybacks on top of ordinary dividends of around NOK 12 billion until year-end 2030. And with that, I leave the word back to Kjetil.

Thank you, Odd Arild. We will now move into the 4 commercial areas, Corporate Norway, Corporate Sweden, Asset Management and Retail. We'll start off with Executive Vice President, Vivi Gevelt, that will outline the strategy and ambitions for Corporate Norway. Please go ahead, Vivi.

Thank you, Kjetil. I'm looking forward to present Storebrand's Norwegian corporate business area and our ambitions going forward. Let me start with some key takeaways I'll cover in my presentation. First, the market for private sector occupational pension is profitable and growing. We are and aim to keep our market-leading position. Second, there is a large untapped market in the public sector. Since we entered the market, we have a proven track record of attracting new customers. We're seen as a challenger and will keep strengthening our position. Third, based on our core market skills and customer base, we are expanding our business with greenfield operations in the P&C and corporate pension fund markets. These efforts are based on a scalable business platform, which is the result of targeted investments in end-to-end process digitalization and automation. Let me describe the business area today. The corporate division is a well-positioned full-range provider with NOK 350 billion in pension asset under management and NOK 18 billion in annual premium. The organization is characterized by highly motivated employees, high customer centricity and continuous process improvement. We have strong distribution channels, both in-house, digital, broker relations as well as partnerships with other financial institutions. We have a strong market footprint in Norway, both in pensions and insurance. In private sector, pensions. We have more than 30,000 corporate clients and a 30% market share. In the public sector, we have a 3% and growing market share. In the insurance segment, we have a strong position in disability and group life, whilst we're a new entrant in the P&C space. In other words, we are a market leader in parts of our business and a challenger in other parts of the business. The large number of employees in the corporate pension schemes constitute an important part of our retail market potential through B2B2C offerings. Camilla Leikvoll will revert to how we utilize this group synergy later on in the presentation. Now let me turn to main markets we operate in. The Norwegian pension system is based on 3 pillars: the national level, the occupational level and private savings. Our key market is the occupational pension area where we are present in both the private and public sector market. The private sector market is characterized by structurally growing defined contribution schemes and defined benefit in long-term runoff. Storebrand is a market leader in both of these segments. The public sector scheme is somewhat different from the private sector. A simplified view on public sector is to see it as a hybrid or a defined benefit life product with lower risk and more risk manageable guarantees than defined benefit in the private sector. A key point for all the products is that the asset under management is sticky in nature and cannot be withdrawn before annual pension payments starts at retirement age. The government is working on legislation that will gradually increase the earliest possible withdrawal date of pension as longevity increases, which, in turn, will make the asset under management even more sticky. The corporate division has generated above NOK 1 billion in cash results in 2021 and 2022. The individual pension account reform had significant negative impact on income at introduction, but the income loss due to the reform has been compensated by other results improvements. As of third quarter 2023, the corporate division generated a NOK 650 million cash result, which was on the softer side due to increased disability claims. CFO, Lars Loddesol, will further elaborate both on disability results and the future prospects for profit sharing in his presentation. Looking back on our Capital Markets Day ambitions from 2020, we have delivered on all 3 of them. We are the #1 player in private sector pensions although equal market share when you look at annual premiums, but the single #1 player measured by asset under management. We have accumulated NOK 5 billion in assets on an annual average in public sector pension. We have maintained profit levels within our occupational unit-linked business despite negative income effect due to regulatory changes. Let me now turn to how we differentiate us and create attractive customer value propositions. We are experiencing strong net sales and growth in our business, both in private and public sector and throughout our product offerings. In fact, we have all-time high net sales and asset growth in unit linked with more than NOK 800 million in net average premium equivalents, and we continue to have 100% hit ratio on tenders in the public sector. And we do have a competitive edge due to top-performing investment funds and profiles generating market-leading returns, which we also combined with a strong group ESG position that are increasingly emphasized by our customer as well. In addition, we have leading and award-winning digital solutions in our day-to-day customer interaction, and we have a top-level customer satisfaction. These elements in combination with our strong brand is key to our market success. Let me move from our position to date to which positions we aim to take in the markets we operate in going forward and end up with what success looks like expressed as our updated ambitions. Going forward, our focus is continued growth in the unit-linked occupational pension, which is Section A in this picture and constitutes our core market. Based on our strong position in the private pensions, we are leveraging group synergies to continue our growth journey in B, the public sector; C, corporate pension funds and; D, the P&C segment which is also the outline for the rest of my presentation. The market for defined contribution opened in 2001, and has become the dominating scheme in the private sector with about 1.9 million members compared to only 25,000 members in the traditional benefit scheme. Annual total savings are NOK 45 billion and growing, and the market is currently a little more than NOK 500 billion in assets under management. Based on normalized return on assets growth in members and the demographic development, we expect double-digit growth going forward. The members are on average in their 40s and the share of pension payments is still very low. This means a strong structural growth in the market in the years to come. The growth estimate is based on a minimum savings rate of 2% of salary, which is today regulated minimum level. However, it is not unlikely that the minimum level is to be increased by the legislator in the foreseeable future. This will imply even higher market growth. We aim to maintain our market-leading position and continue to utilize our economies of scale. We are also realizing strong cost synergies as part of our Danica acquisition which altogether will improve our cost income ratio going forward in this market. We define the public sector open for competition as a total addressable market of NOK 800 billion, mainly held by one provider, KLP and pension funds constituting the other part. It's a large market, which is growing and profitable. Storebrand reentered the market late 2019 due to regulatory changes, making it a more attractive market with sounder capital and guarantee structures. We have had success with 7 out of 7 municipality tenders won. And this year, we have won additional 2 municipalities, which will enter our portfolio from January 2024. Besides the municipalities, we also have more than 100 public corporations varying in size and amounting to NOK 20 billion in assets under management. Looking ahead, we expect higher volume of tender offers. Already next year, we expect a tender volume of NOK 10 billion to NOK 20 billion in assets under management and foreseeing a strong continued growth where we aim to succeed and further strengthen our position. A part of the private sector market is privately managed corporate pension funds, which is typically managed by larger corporations for their employees. These funds represent about NOK 250 billion in assets under management. Storebrand has since the last Capital Markets Day onboarded 5 pension funds with NOK 7 billion in assets under management to profit levels above our new return on equity target. Going forward, we expect more migration from pension funds. We aim to be the preferred transactional partner for corporate pension funds where we can utilize our existing platform to make this a great customer value proposition for corporations who want to let us handle their pension schemes. Turning to the P&C offering for corporates. We aim to continue the growth in the P&C business focusing on the SME segment, which is sound and profitable market. We invest in a greenfield growth strategy where we capitalize on strong group capital synergies, in-house competencies and cross-selling potential to existing pension customers. We have attracted 1,700 new customers year-to-date and has a total customer base of 11,000. Since January 2021, we have a 50% increase in premium volumes and we expect strong growth going forward. The foundation for our strategic position and effort is our scalable business model. Our business operation is characterized by high transactional volumes such as monthly premiums and pension payments. We have invested significantly in digitizing and automating our business, which has given us a highly efficient and scalable operating model. To substantiate the effect on our operations, we have tripled the efficiency of each claims handler and automated 2 out of 3 disability claims. We have reached over 90% automation ratio for all major defined contribution pension processes, where some processes actually are at the 100% automation level. Next step is to explore the potential in AI to further improve cost base and scalability whilst providing superior customer service. Let me end by stating our ambitions for what we see as success in the medium term. Towards 2025, we set 3 -- set out 3 new ambitions. One, maintain a market-leading position in the structurally growing private sector pension; Two, to grow assets under management in public sector by plus NOK 7 billion annually. And together, we aim for a 20% growth in cash results per annum. Thank you. And back to you, Kjetil.

Thank you, Vivi. Our next speaker will explain how SPP will leverage its digital leadership in the Swedish market for occupational pension. Executive Vice President, Jenny Rundbladh, the stage is yours.

Thank you, Kjetil. As said, I'm Jenny Rundbladh, CEO of SPP, and I'm proud to present our journey and our plans ahead. Starting with the key takeaways. SPP, Storebrand Swedish subsidiary since 2007 makes a significant value creation to the group, driven by both cash results and capital release. We're leading the new sales market of unit linked last 12 months, and as we have an edge in digital solutions and a strong market position, we expect growth to continue into adjacent profit pools. And by that, we will increase the footprint in Sweden. But before going into specific records and ambitions ahead of us, let's take a quick glance at the market where SPP operates. Our core market is the occupational pension space, which adds to the foundation of public pensions. The total gross written premium in occupational pensions, which is not mandatory by the way, and the private pension solutions far exceed the level of premiums of public pensions. Our go-to-market is mainly business-to-business where we win the employers trust and by that, add additional value to the employee. We have a blended distribution mix with emphasis on external distribution. So the Swedish life insurance market is huge, and the growth is expected to continue. Total assets under management is approximately SEK 6,000 billion and the importance of both occupational pensions and added individual solutions is predicted to increase further due to both demographic changes and higher expectations when it comes to retirement lifestyle. We believe the market will continue to stay highly attractive. However, besides the strong growth, you also note somewhat increased market dynamics linked to transfer of old pension policies. The main driver behind the increased activity is regulatory changes, fueled by short-term incentive campaigns offered by competitors. This has, in many ways, been a challenging headwind for sustainable and profitable transfer business. From SPP's perspective, we've been fighting the result of aggressive campaigns with the response of increased client communication and relentlessly continue to develop our value proposition without taking eye of profitability. And I'm happy and quite humbled to share an effect of a turnaround with greatly improved net trends for balances as a result of hard work that will continue going forward. Despite the transfer dynamics, SPP has delivered strong, scalable growth. Since 2015, our premium income has grown almost 120%. And during the same period of time, we have been working systematically with digitalization and improved efficiency. In addition to cash results and operating profits, our portfolio with a high guaranteed back book in decline and rapidly growing capital-light front book has led to capital release. By 2022, SEK 9.6 billion was released to group in dividends. Looking at market shares from an external perspective, SPP's strong sales, client value proposition and high activity accelerated us into #1 position in new sales unit linked. That meaning 24% of all new premiums actually went into SPP books. And when looking at premium income, SPP are #2 in the market with 16% market share with a rising curve. So from a strong baseline, we are excited to look ahead towards new ambitions. We aim to maintain the position as a preferred partner, guiding our clients into more sustainable choices based on a high level of competence and deep understanding of client needs. Over the last few years, we've been through a digital transformation, exchanged the core system into a modern cloud-based platform and will now accelerate with new set ambitions for digital smoothness and reduce time to market. As a result of these ambitions, we're aiming to deliver double-digit growth in the years to come, and we aim to increase the footprint in the Swedish market. To support our Express target, I will highlight 4 stronghold areas that have boosted our performance and will naturally be part of our journey ahead. As mentioned, SPP has been through a digital transformation journey, where we have invested in a new digital platform. This is a competitive edge for SPP and enable us to focus on front-end services, reduce time to market and further exploration on AI functionality. In addition to new capabilities, SPP's digital position gives us the ability to grow at low margin cost. And by that, we have the power of scalable growth. Our market position is strong with the rated #1 position from external partners. We are associated sustainable front runners with strong synergies with asset management and award-winning fund products. Our people are key assets and SPP's engagement score is far above peers. This characteristics will enable us to raise the bar for the future and secure an expanding business pool in the new nearby profit pools. To be more concrete in commercial initiatives, I will deep dive into 3 areas with ambitions of further growth. Growth in the SME segment, growth in capital-light guaranteed savings and consolidation and portfolio transfers. First, the segment of small and medium-sized businesses is a large, fast-growing market, where SPP actually has a limited footprint today. Customer needs are characterized by smoothness, a one-stop shop and a digital client journey. SPP's capabilities built on a well-known position as serving the employer, and our existing value proposition can rather easily repackage is an attractive solution. And I'm pleased to see our initial market moves are met by a positive and promising start as seen in the graph. Secondly, we see a large potential in guaranteed savings due to high interest rate environment. The product we are planning to grow is a capital-light business. So this initiative is a front book driver. Highly attractive value proposition for the client segment of 55-plus years who potentially wants to initiate retirement planning. This year, SPP was selected also in the saving with guarantee segment in addition to our current unit-linked position within ITP. And ITP is the largest collective agreement for white collar workers in Sweden. This win will be an excellent start to build further growth in the segment front. Last but not least, we foresee continuous consolidation in the Swedish market, driven by both regulation, digitalization as well as new ways of working. SPP with deep understanding of pension saving, a proven experience of smaller bolt-ons and a digital front-runner position in addition to a scalable operative model can take an active role in the ongoing shift. With that said, we will proactively look for portfolios and partnerships and can act as a consolidator in the market. So to wrap it up and summarize our ambitions for near future. SPP are aiming for continuity and strong growth by tangible initiatives fueled by digital capabilities. And by that, we will increase the footprint in the Swedish market. We are excited for the journey ahead of us. Thank you for your attention, and back to you, Kjetil.

From the Swedish market, let us turn our attention to where all the assets from the pension business, the retail business and external clients get managed. Let me give the word to Executive Vice President for Storebrand Asset Management, Jan Erik Saugestad.

Thank you, Kjetil. Ladies and gentlemen, I'm happy to present the present and future for asset management in Storebrand. I will take you through 3 key takeaways. First, our growth track record, the successful transformation of the business through 3 successful acquisitions and consistent net inflow. Secondly, our strong strategic enablers, our ability to attract and keep talent, the investments in one of the most modern and AI-ready platforms in asset management. Furthermore, the fact that we are considered a thought leader in sustainable investments. Thirdly, our 3 clear long-term positions, the local Nordic partner, Gateway to the Nordic and Sustainability Pioneer. In Asset Management, Storebrand is recognized as a front runner in the Nordic investment industry and our growth history. Since 2015, we have transformed the business from an internally oriented asset manager to become a Nordic multi-boutique manager with a footprint in all Nordic countries as well as servicing clients beyond the Nordics. Size matters. And we are not only the largest manager in Norway, but also the fourth largest in the Nordics. Let me share some numbers with you. Since 2015 through third quarter of 2023, the AUM has almost doubled from NOK 575 billion to NOK 1,131 billion (sic) [ NOK 575 million to NOK 1,131 million ]. Since last CMD, the AUM has increased NOK 209 billion (sic) [ NOK 209 million ] and more than 70% of the growth come from noncaptive clients. In 2015, the captive capital represented more than 70% of our AUM and 65% of our revenues. Today, captive capital represents roughly 50% of our AUM and only 34% of revenues. Transformation of our business to more alternatives supported by Captive Capital has been key to protect the revenue margin and ensure revenue growth. We have clear ambitions to continue this journey. We are now the fourth largest asset manager in the Nordics. This has been supported by the acquisitions, but we have been among the top 15 Nordic asset managers if you look at net flow. This year, we clearly have the strongest flow. Our clients recognize us and institutional clients even rank us highly both in Sweden and Norway. We are gaining foothold in both Denmark, Finland and Iceland and even beyond the Nordics. We have been focusing on sustainable investments since the mid- '90s. And our ability to continuously pioneer in this area is highly recognized by clients and competitors. Storebrand has an ambition as a Nordic powerhouse in asset management. This is underpinned by 3 very clear long-term positions. Local Nordic partner, Gateway to the Nordic and Sustainability Pioneer. I will expand on these positions later. The strategy and drive for scalability is supported by strong strategic enablers, people first, digital frontrunner, sustainability leadership. As we all know, the key resources in asset management, our people and technology. We have a strong ability to attract and keep talent and experienced organization with an average tenure at 8.5 years and a diverse organization with more than 24 nationalities, our sustainability leadership, growth and modern platform is contributing to this. We have invested in digital to stay ahead and currently have a modern, scalable and robust operational platform. It's cloud-based and AI-ready. Clearly important to build scalability. We believe our platform is future-ready and support offering of relevant domiciles to our clients. Our sustainability leadership is not only important to attract talent, but also a key enabler in itself. In a multi-boutique, there are many perspectives and diversity. But it's still important that we share some perspectives as a group. We point to 3 key trends. The first is that private markets and alternatives are increasingly important. Secondly, sustainable investments are a strong trend, and we see increased focus on active ownership. Thirdly, use of technology in AI will be ever more critical. With respect to value drivers for clients and the business, I want to highlight some of them as well. Active management adds client value executed well. Sound integration of ESG in investment processes improves long-term risk-adjusted returns. Alternatives provide liquidity, complexity and risk premiums not available in the conventional markets. Growth is crucial to support clients and stay competitive. As mentioned, we have 3 clear long-term positions, the local Nordic partner, Gateway to the Nordic and Sustainability Pioneer. I will now revert to them. Let me address the local Nordic partner position and growth first. The Nordic profit pool is, in our view, in excess of NOK 30 billion. For many, it's an extra interesting market because the Nordics acts as a proving ground for sustainable investments. Furthermore, Nordic investors have a diverse, but growing allocation to alternatives like private equity and infrastructure. So it is a favorable investment environment with long-term perspectives and well-regulated markets. It is an attractive market and growing market. We are well positioned with strong performance and a cost-efficient organization. With physical presence in Norway, Sweden, Denmark and Finland, we are truly a local Nordic partner, with a full range of conventional products, including local strategies. In addition, we have an attractive offering of alternatives, which currently represents 17% of our AUM, 5 percentage points more than our peers, and we offer private equity, private debt, infrastructure and real estate to clients. We have been growing fast in Sweden, gained a clear foothold in Denmark and Iceland and are also making progress in Finland. More than 80% of our growth will be outside of Norway. The second clear long-term position is labeled the Gateway to the Nordics. The Nordics is, as mentioned, an attractive market, but it's also an attractive investment region. We live in a world with increased geopolitical tensions, increasing inequalities. The Nordics is a robust investment universe and also very diverse. The Nordics is an attractive investment region for institutions with world-leading industry clusters, a long tradition of public-private collaboration and a high digital maturity. We hold a strong position and have solutions to capture investment flow into the Nordics. We have all relevant solutions in the conventional space of equity and fixed income. We already offer Nordic exposure to institutional and international clients, and this is particularly relevant for alternative asset classes. Storebrand is increasingly recognized brand in Asset Management in the Nordics and beyond. With strong performance, a dedicated international sales force, local presence even in the U.K. and relevant domiciles in Luxembourg, Ireland and Guernsey, we can leverage our expertise and reputation to attract new client segments, from other regions who are interested in investing in the Nordic markets. We have high AUM ambitions also outside the Nordics. This growth is not only linked to the gateway to the Nordic position, but also to the sustainability pioneer position. We are recognized as a sustainability pioneer. To keep this position, we need to continue to provide innovative, sustainable solutions, demonstrate international thought leadership and report on our real economy impact through our solutions. This is clearly an enabler for further growth. There is strong support and market for sustainable investments. This is clear if we look at policy trends, market trends and investment requirements. We have a competitive offering of sustainable solutions. In the conventional space, we have theme-based strategies, sustainable equity index strategies, sustainable credit and fixed income strategies. In the alternative space, we offer both private equity, infrastructure and real estate solutions. We have a track record of solutions and a strong ability to innovate that will help us secure growth. We will continue to push the boundaries of active ownership and engagement to create value for clients and the society at large as well. There has been a substantial growth in AUM, and we expect to continue high growth in the sustainable solutions. It is a key driver for us. To conclude and sum up, our growth story is closely linked to our 3 strategic positions. As a local Nordic partner, we will develop our position in Norway as well as achieve a robust growth in all Nordic countries. As a gateway to the Nordic, we seek to grow assets in conventional and alternatives and grow our international client base. As a sustainability pioneer, we will continue to nurture our role as a thought leader and capitalize on leading position within sustainable investments. We expect continued growth in AUM in the range of 7% to 11%, driven by both markets and strong positive net inflow. In terms of cash results, our ambition is to keep the revenue margin at the 18 to 22 basis point range and deliver a double-digit growth in cash flow from operations. I trust you found this informative and ambitious and turn back to you, Kjetil.

Now let us turn the attention to our retail business. Executive Vice President, Camilla Leikvoll, will give you insight into our position as a growing challenger in the retail market. The floor is yours, Camilla.

Thank you, Kjetil. I'm excited to present our ambitions on the Norwegian retail market. Storebrand has a proven track record across the Norwegian retail market for financial services. Since the last Capital Markets Day, we have delivered on our ambitious double-digit growth targets in all areas. Insurance, banking and savings. Looking ahead, we are raising the bar, continuing our profitable growth journey through boosting customer experience, unleashing additional cross-sales potential and continuing to ensure a scalable growth platform. First, let me give you a short introduction to Storebrand's presence in the Norwegian retail market. The organization has approximately 500 employees serving around 570,000 customers. We cover our customers' financial needs through a broad product offering, and we are gaining market share across the board. We divide our offering into 3 product lines, representing a well-diversified earnings pool. Insurance is the biggest contributor to our profits and in the number of customers, accounting for 45% of earnings while banking and savings make up the remaining 55%. Our presence in the retail market is driven by strong group synergies. We leverage from a large customer base in the pension business through B2B2C distribution. We have both cost and capital synergies in the mortgages and insurance segments, and we're building an attractive savings and pensions offering with a leading asset manager on our team. Our foundation is built on the group's strong in-house competency with ability to attract and retain talent. The Norwegian retail market for financial services is an attractive market, both in terms of underlying growth and profitability. The banking industry has managed to navigate through low and high interest rate environments. Savings has a strong underlying growth and has shifted towards a digital distribution model that fits a highly digitized population and margin pressure. The insurance market has a steady and profitable growth driven by population growth, inflation and underlying value creation in society. Our market position has grown steadily over the years with our business model gaining tractions across the market. And with substantial growth potential going forward. In the largest market, retail mortgages, we are now at 2.3% market share. Within savings, we have increased our market share through both organic growth and acquisition with Kron as a valuable addition to the Storebrand family as of January of this year. In the insurance market, we have also pursued both organic and structural options with the acquisition of Danica and Insr increasing our market share by more than 2 percentage points, making us the fifth largest insurance company in the retail market in Norway. With this growth journey, we have delivered on our capital markets volume targets from 2020 and at the same time, increased our profits annually by 19%. We combined our volume growth targets with cost control and margin discipline to ensure a sustainable platform going forward and to strengthen our ability to continue the growth journey. Our key competitive edge within retail is driven by our strong capabilities. More than 250 years of history has led to a well-known and respected brand in the Norwegian population that attracts and retains customers. Our hybrid go-to-market strategy, combining an efficient adviser core with digital distribution has enabled a strong market presence, while our partnerships have added additional distribution power towards attractive customer segments. Our acquisitions of Insr and Danica have been successful bolt-on additions with seamless integration, complementing our portfolios to enhance scale in an established cost-efficient model. Kron has added key capabilities in digital distribution and customer engagement. We will continue to capitalize on these capabilities going forward. And in addition, we have 3 main drivers looking forward to 2025 that will scale our growth journey further. We will boost customer experience to attract and retain customers, unleash our cross-sales potential through attractive customer concepts and services and invest in our platform to ensure scalable and profitable growth. Over the past years, we have invested in digital solutions to offer the best possible customer experiences that aim to both attract and retain customers. In 2023, we acquired Kron, which recently was ranked the #1 savings provider in terms of customer satisfaction. One year after the acquisition, we see that Kron's ability to simplify and often complex space for the customer in combination with Storebrand's strong product offering and distribution power has increased engagement both for the previous Kron's customers, but also with the Storebrand's customers who have started using this service to build their savings. The year-to-year date growth has been 48% in number of customers and 60% in assets under management. By delivering user-friendly solutions across business segments, enhance customer engagement and solvent customer needs, we will continue to attract and retain customers in the years to come. As we continue to grow our customer portfolio, we aim to continuously develop our customer base over time. By increasing customer loyalty and understanding our customers through analytics, we're able to both offer the best products and solutions to meet their needs. By utilizing selected customer journeys, such as including P&C and life insurance products in our mortgage advice process, we can take a holistic and customer-driven approach to increasing the share of wallet over time. Currently, around 40% of our mortgage customers also have their insurance needs covered by us. We also developed concepts specifically aimed at introducing our customers to new value propositions across product lines. One key focus is broadening our pension customers to retail customers through B2B2C, where corporate clients' employees gain access to additional product and services benefits in the retail market space. Another launch from this year is Storebrand Fram, which we aim to scale up going forward. Storebrand Fram is a customer program for the affluent and wealthier segments where customers gain access to priority service and exclusive product rates. So far, we see that 65% of customers in this program now have products across different product lines. The key to profitable growth is combining increasing volumes with investments in scalable platforms. Through smart use of data and technology, we will continue to improve our operations to ensure that our cost efficiency increases over time. Already, we have implemented AI solutions to reduce manual tasks and improve the customer experiences by providing improved capabilities for self-service. The goal in the banking operation is to offset the increased volumes driven by the number of customers through automation and efficiency measures. We have a diversified distribution mix today through both adviser-driven and digital solution. We will continue to enhance and optimize our distribution mix, increasing the share of digital sales over time. This will contribute to lowering the cost ratio in insurance going forward. A third driver for scalability is using sustainable solutions in our insurance claims. By focusing on the circularity of materials and the repair process, we ensure that our customers have access to a more cost-efficient and sustainable process, reducing our joint carbon footprint while upholding quality and customer satisfaction. To summarize, we will continue to leverage our capabilities going forward to continue our profitable growth journey, combining volume targets with delivering engaging customer experiences to attract and retain customers, increasing the share of wallet on our large customer base and investing in cost-efficient operations and digital distribution to ensure profitability over time. In doing so, our goal is to continue with a double-digit growth target for all product lines going into 2025 and double-digit growth in cash results from the retail segment. Thank you for your attention, and over to you, Kjetil.

Our last speaker of the day is our CFO, Lars Loddesol. Lars will give an update on how the strategy aim to give increased capital generation and increased capital distribution. Over to you, Lars.

Thank you, Kjetil. Looking back at the last 11 years to the time Odd Arild took the helm as group CEO, it is gratifying to see that the work we have done and the transition that has taken place in the Storebrand Group are reflected in shareholder returns in excess of 500% and above European peer average. Another way of looking at this is through the solvency development and the operating capital generation in the group. Taking us from a solvency level of 117%, excluding any transitional capital back in 2016, at the introduction of the Solvency II capital adequacy framework, 204% now. In addition, we have paid out 45 percentage points in dividends and share buybacks and we have spent 20 percentage points in accretive M&A, something I will revert to in a moment. The risk in the group has significantly changed from guaranteed liabilities to capital-light growth areas. Through 2023, we have come close to finalizing our internal model. When using this model, the solvency comes out even stronger. We will submit our application in the first half of 2024. The regulator is likely to spend up to 12 months to approve the application, so any regulatory relief from the model is still around 2 years away. In Storebrand, we have chosen to organize sustainability in the CFO department. This organizational change further strengthens our ability to integrate sustainability in the risk assessment as well as in products, services and practices across the group. Storebrand has been a frontrunner in sustainable investments since 1995, and we are constantly striving to expand our efforts categorized within 3 areas: Our position in society, our own operations, and products and services. In our annual report, we give detailed information on all of our nonfinancial KPIs and around 350 in total. We do believe that what you measure is what you get and that the reporting on these topics strengthens accountability and leads to change in Storebrand as well as in the market in general. Furthermore, it makes us well prepared for CSRD when that becomes mandatory next year. Here, I have highlighted the status on 4 targets in the investment portfolios. Greenhouse gas emissions, companies with a strategy in line with science-based targets and investments in companies with a strategy linked to solutions to address the UN social development goals. We believe it is imperative for all stakeholders that sustainability is integrated in our strategy. We want to take an active part in shaping a better future through our core business. for example, making a positive impact on the development and disability in society. On the investment side, we believe sustainable investments generate better risk-adjusted returns for our customers and shareholders. In our financing needs, green bonds issuance reduced the cost of borrowing and in P&C insurance, recycling and damage prevention can reduce claims cost just to mention a few of the areas we work with. I have now briefly talked about 2 of the fundamentals of our operation. A solid balance sheet with a solvency at 204% and a long-term sustainable strategy. I now want to turn the focus on increasing cash results, strong capital generation and cash conversion and capital distribution. Let's start with cash results. Looking back at our last Capital Markets Day in 2020, we presented a picture on our assumptions and goals, substantiating the NOK 4 billion cash result ambition for 2023. As you can see, we are delivering on 9 out of 10 elements. Unfortunately, the tenth will significantly underperform this year, jeopardizing the ambition for a full year result of NOK 4 billion. The winter came early this year. And unfortunately, the most recent numbers indicate that disability is still on the rise. The group results have been improving for a number of years. The move from NOK 2 billion to NOK 3 billion in cash equivalent earnings before amortization and tax took 7 years. The move to NOK 4 billion with a probable miss due to weak risk results this year took 4 years. And we are now on a trajectory to reach NOK 5 billion in the next 2 years. Let me just start with that the numbers we present today are based on our cash-based reporting and factors outside of our control, including the forward curve, normal risk premiums in the markets, the regulatory environment and other factors can, of course, affect actual result generation going forward. My purpose here is to outline the income plan to reach NOK 5 billion in cash equivalent earnings in 2025. With other words, these are the assumptions you must believe in to get to NOK 5 billion in profits. I will start with the income assumptions, then the cost assumptions so that it's possible to make estimates and sensitivities to our operational result. Next, I'll go through the main scenario for the financial results to end up at the NOK 5 billion ambition. But first, income assumptions. As you can see from the picture, we expect high single-digit to double-digit growth in all front book areas and limited margin pressure. We will miss on the combined ratio target for 2023, but with the initiatives implemented, including significant price adjustments, we aim to get the combined ratio back below 92% by 2025. Storebrand under the current administration has shown strong cost discipline since 2012. To optimize result generation, we have moved our guiding from cost targets to profit targets. This will allow us to increase cost where we do see attractive profitable growth opportunities. Nonetheless, here is a guide to the planned cost for next year. Starting from roughly NOK 5.7 billion, as previously guided for 2023, we will put the integration costs from Danica behind us. We add normalized inflation and expected growth, whilst we continue to drive efficiency in the organization for about NOK 5.9 billion in cost in 2024. The NOK 5.9 billion does not include expenses related to performance fees, and will be adjusted for currency movements. The income ambitions and cost control will create an operating result. In addition, there is the financial result. With higher interest rates and new buffer capital rules in Norway, the financial results will improve. We already reaped the benefits of higher rates in the company portfolios which are invested in short-term fixed income markets. Furthermore, returns on part of the insurance reserves belongs to shareholders. In 2025, based on today's interest rate level, this equates to NOK 600 million, NOK 700 million in total. On top of that, profit sharing from the guaranteed portfolios is expected to generate around NOK 600 million, equally split between Norway and Sweden. In the result item, financial items and risk result life, there is also a contribution from risk coverage embedded in the guaranteed products. The additional expected contribution from risk is roughly NOK 200 million per year for a total financial result of NOK 1.4 billion to NOK 1.5 billion per year. Please note that the financial result is subject to market movements outside our control. Let's now move over to capital generation and return on capital. Over the last 11 years, the premium income in the group has increased by 63%, and the balance sheet has grown by 156%. The composition of the premiums and the balance has radically changed from guaranteed to savings. The group has executed well on the transition strategy and increasingly become a capital-light asset gatherer and an insurance company. This picture is familiar to many of you, showing the return from the front book or future Storebrand and the back book, the runoff guaranteed business, together with the allocated IFRS shareholder equity in the 2 areas. In the last 12 months, the future Storebrand had a cash equivalent result in excess of NOK 2 billion over NOK 5 billion in capital requirements, giving a return on shareholder IFRS equity of more than 40%. The guaranteed business is also a significant contributor to the results with more than NOK 1.4 billion, but requiring a lot more capital leading to an ROE of only 6% in the year. The combined ROE for the group results, therefore, end up at 13%. With a future Storebrand showing double-digit growth with negligible capital needs and the guaranteed business and long-term runoff, the group ROE will improve. In addition, the guaranteed business will generate higher returns with profit sharing and require less capital as the duration falls. The combination of the transition from guaranteed to savings and insurance together with better profitability from guaranteed bodes well for both higher profits and significant ROE improvements. This is also a familiar picture for many. We now expect cash equivalent earnings to generate around 16 percentage points in solvency capital in the next few years. On top of that, the guaranteed back book should release around 4% of capital, deduct from that capital consumption for organic growth, and we end up with an operating capital generation or OCG of about 18% per annum. Now we have talked about making money and generation of capital through the regulatory capital lens. Let's then move over to capital distribution and allocation. Looking back, we have paid gradually increasing dividends from 2016, only interrupted by the regulatory limitations caused by COVID in 2019. On top of that, we started the share buyback program in 2022 with an ambition to buy back NOK 10 billion worth of shares by the end of 2030. The listed companies, Storebrand ASA is a holding company and a 100% owner of Storebrand Life who in turn owns SPP in Sweden, Storebrand Asset Management, Storebrand Insurance and Storebrand Bank. We have good fungibility of capital in the group and have historically been able to upstream close to all the results to the holding company. Over the last 8 years, SPP has lifted almost NOK 6 billion of excess capital to Storebrand Life in addition to results generated in the period. Looking ahead, remittance is expected to increase from growing cash results and upstreaming of excess cash as the life business requires less capital. With a capital generation of 18 percentage points, we plan to continue with rising ordinary dividends equivalent to around 7 percentage points of capital usage. In addition, NOK 1.5 billion of annual share buybacks consumed around 5 percentage points of capital. With the current pace of the share buyback program, we are on the path to return in excess of NOK 12 billion by the end of 2030, higher than the previously communicated NOK 10 billion. But there is more capital. The additional capital generated is no longer needed to strengthen the balance sheet or the solvency. This capital will cushion our ability to deal with external market volatility and still be able to pay growing dividends and buy back shares. Furthermore, it can allow us to accelerate organic growth, to do accretive M&A, optimize debt levels, or increase capital repatriation. We will not, at this stage, commit to how to spend this capital as a good portion of it is relevant -- is reliant on future earnings, but it does show increased strategic flexibility. A short note on M&A. Over the last 6 years, Storebrand has made 7 acquisitions and 2 divestments. The combined considerations paid have been NOK 6.2 billion, and the proceeds from the divestments will be NOK 2.1 billion when Storebrand health insurance transaction is closed early next year. In addition, we have taken out NOK 1 billion in capital synergies. The net profitability impact on a normalized basis is well above NOK 500 million indicating that the transactions have been highly accretive for shareholders and accelerated the organic growth of the group. If we deliver on our targeted NOK 5 billion cash equivalent group result in 2025, we will have achieved a 22% CAGR growth on group result before tax and amortization in the period from 2022 to 2025. If we continue with the annual share buybacks of NOK 1.5 billion, that will lead to an even higher EPS before tax and amortization growth of 26% annually. After some 40 years of falling interest rates, the trend seems to have turned with higher rates supporting further growth and profitability. Two, over the last 20 years, we have turned the company from a Norwegian monoline corporate pension company to a diversified Nordic capital-light growth business. Three, the markets we operate in are attractive and growing. Four, with a guaranteed business in runoff and the front book which is close to self financing, the ROE is growing. And five, shareholders will be rewarded with high and increasing capital return. The capital management policy of the company remains unchanged with a solvency target of 150% for ordinary dividends and 175% for share buybacks. And our updated financial ambitions are NOK 5 billion in cash equivalent results in 2025 and ROE above 14%, increasing ordinary dividends and a stable share buyback program of NOK 1.5 billion per year. Our nonfinancial targets include net 0 investments, reduced disability in our portfolios, gender balance and science-based targets. And with that, I pass the word on to Johannes, who will moderate the Q&A session.

Thank you, Lars. That concludes the presentation part of the Capital Markets Day, and we are ready to take questions from the audience logged into the team's webinar. [Operator Instructions] So with the practicalities out of the way, we have a first question here from David Barma in Bank of America. Please go ahead, David.

The first one on investment income in the holding and more generally across the group. So you talked that Q3 about an excess spread of 160 bps. Can you tell us where you are now and what your targets are based on? Because if I look at the -- your target for the NOK 1.2 billion of investment income at the holding, it seems to suggest you're at the same level as the 9 months to date despite interest rates have been falling about 80 bps since Q3? So that's my first question. Secondly, on the profit sharing in Norway. So thank you for the details in the appendix. If I read this correctly, I understand that the large majority of the excess spread on the -- under the 6 portfolios that are in the profit-sharing territory, then most of the excess will be redistributed. So do you have no [hope] for building in that part of the of the paid-up book? And then thirdly, on non-life, please. So you mentioned weather and disability pressure in Q4. Could you give us a bit more color on this, please?

Sure. Let me start, David. On the investment income and the spread that we presented are after the first -- sorry, third quarter. That was on -- that is not going to change like from month to month even if rates fall because there are a lot of bonds held at amortized cost here. So this is more of a long-term spread. So it will not change significantly from -- due to short-term interest rate movements. And also that -- you will see that, that was based on the assets or the reserves, whilst the picture in the appendix is based on the liability. So it's slightly different in the way the 2 numbers are presented, and that's the difference on the guaranteed rate from 2.9% to 3.1%. On the profit split in Norway, we have 8, not 6 portfolios. The picture here is illustrative and the 8 different portfolios have slightly different characteristics. So it's impossible to go into an exact detail on the profit split in each one of these portfolios. But it's an illustrative way to explain how -- where there is risk capacity, we take risk which will lead to buffer building to some minimum level and then profit split over and above that. So hopefully, this will explain the way we operate these portfolios in a better way. And I didn't capture the last question.

I can give a little bit more color on question #2. So what you see from the illustration on Page 107 and Page 108, is that the first 3 portfolios go into profit sharing first. That implies by default that we will be building some buffers in the mid-section of portfolios, and then they will come into profit sharing territory thereafter from roughly 2025. So that is what the illustration is meant to show. And the last question, Lars, was on -- if you can give some more color on the P&C and the disability results.

Yes. P&C and disability results. The risk results in the group have been weak so far this year. Partly, we've had extremely bad weather. First, there was a winter that lasted much longer than usual with slippery roads and fires and frozen water pipes. Then we had extreme like torrential rains, et cetera during the summer which again created flooding. And then the winter and the snow in Norway usually comes in December. This time it came in October. So we had more incidents around car accidents, et cetera, into the fourth quarter as well. On disability, we've had after the pandemic, we expect the disability to go down. As we have explained in the first and second quarter, instead, we've seen that disability has gone up rather than down after -- or this year. And we see that, that pattern seems to continue into the fourth quarter. And the kind of disability causes are related to undefined diseases, psychological issues and just tiredness, which seems to indicate that this is some kind of long COVID connection, although we still -- and we -- then I'm talking about the whole society, we have not been able to reach clear conclusions on how this disability development is going to go forward.

If I can just come back on the first one. Are you able to give us some sensitivity on the holding investment results to movements in market rates?

Well, I can try to elaborate. On the holding company, the interest rate duration is extremely short. So it is not very interest rate sensitive. Other than that, it follows the short-term interest rate in Norway mainly.

Over to the next question then from Tryfonas Spyrou in Berenberg. Over to you to Tryfonas.

I've got 3 questions. So the first one is on the 6 points of solvency capital generation. That is a free capital after the dividend and buybacks. I think it's around NOK 1.5 billion, which is quite significant. So I was wondering if you can maybe mention the order of priority between the 3 or 4 users you mentioned in the Slides, and I was wondering whether, I guess, coming back to the 3 capital of the company and the investment result, whether you see any opportunities to retire debt given that, that is taking away some of that capital generation on the financial side? So that was my first question. The second one is on the fee margin guidance of 50 to 60 basis points. I think the run rate at Q3 is slightly above 60%. So I was wondering why is that sort of set lower? And why do you see more pressure in margin in Unit Linked? And the third one is on -- I guess related to that, the Unit Linked growth is nice to see uplift in the quarter. However, it doesn't seem to translate into an uplift in the asset -- the same uplift in the asset management AUM and here, I was wondering whether you expect the higher share of non-captive assets to grow lower and hence why it's driving that overall AUM growth down? So those were my question.

Yes. Thank you, Tryfonas. On the 6 percentage points of additional capital generation, as I mentioned, we are not going to commit to exactly how to use that at this stage because we first have to create these results before we actually distribute them. But as we said, it gives us an increased strategic flexibility. And these 4 areas of organic growth, bolt-on -- further bolt-on M&As, debt optimization, i.e., retirement of debt and additional share buybacks or repatriation are amongst the things that we may do. On fee margins, there has been some pressure on Unit Linked from previous Capital Markets Day to now, and we expect continued slight but lower margin pressure from here on. Margins have stabilized after the individualized pension account changes taking place in Norway. But we also see that we have strong growth in the unionized part of the Swedish market with lower margins. So that's going to dilute the average margin somewhat going forward. Although, as I said, it's limited margin pressure as we see from here on. With respect to the Unit Linked growth in assets under management, you have to look at the total asset management or assets under management, which is about 50% non-captive. And then the 50% captive is partly the guaranteed liabilities in runoff. So they will be stable or slightly decreasing and then the Unit Linked which is growing. So the combined is what we see when we forecast the growth in asset management in total.

And just to add one more on...

Maybe be affecting. Sorry, go ahead.

If you look at the [indiscernible] management flow, we are very satisfied with the flow we see in the market. And the last time I looked at these numbers from the third quarter, we had doubled the flow of any other players in the Nordic market, close to NOK 50 billion, positive flow this year. So we are in a very good trajectory here to also get flow going forward.

Maybe just to come back on the first one. Lars, on the buyback, you mentioned buybacks as being one of the options. Can you technically do more than NOK 1.5 billion in a given year? I was just curious because I thought you couldn't. So how do you see that optionality there?

Yes, we can do more than NOK 1.5 billion, but now we have committed to do NOK 1.5 billion in the next couple of years. let's start with that, and then we'll see if we will increase in due course.

And just a quick comment on the debt side as well. We have some Tier 2 debt that is not counting in the solvency ratio as of now. And of course, that will be something on a long-term basis, we will not have. We will not have any subdebt that does not count towards the solvency in the long run.

Over to the next question from Hakon Astrup in DNB Markets. Over to you, Hakon.

Three questions from me as well. The first one on insurance. Do I understand you correctly there that it will be difficult to meet 92% combined ratio next year as there continue to be some challenges? Or is it still possible in your view? And then on capital and on the dividends, you are -- in terms of your targets, you are targeting to grow this profit before amortization by say, 25% from your target this year to your target in '25. Should we accept -- should we expect similar kind of growth in dividends as well? And then last one on this additional capital generation that you have not decided what to do with. When will you make this assessment? Do you have to wait until 2025? Or is this something that you will say, assess every year?

Why don't you start with dividends?

Yes, I can start with dividends. The starting point here that we have guided on nominal increase in dividends per share. But as Lars also said that the Board is very clear about the high and increased capital return to the shareholders. And that means that by growing results, and also lower capital need in the business, you should expect also higher growth in the dividends in the years to come as long as the results are coming along. We used to have this more than 50% based on the result before we went into IFRS 17. And we still believe that we -- based on a cash basis, this is more like the regulatory changes that was difficult to measure it into IFRS 17. That made us change the guidance on that more to a nominal growth. But we still aim for high and even higher portions of the results going forward to be distributed as dividends. So you should expect us to see increasing dividends as long as the results are coming through.

With respect to your 2 other questions, Hakon. On insurance, we -- as I said in my presentation, we aim to be below -- back below -- no, sorry, 92% in '25. It is likely that we will be significantly -- or significant improvement in '24, but it's unlikely that we'll reach below 92% next year with the current trajectory and the current results that we have on disability and weather related. So -- but by '25, we should be there. And on additional capital distribution, that is an ongoing discussion how we optimize the capital in the group. So it's -- we will continually look at how to -- first of all, we have to create the additional capital, and then we will, on an ongoing basis, discuss how to apply it.

And surfing back to Odd Arild's comment. Of course, if the Board increases the dividends in trajectory with increased earnings, that will, of course, also be a part of that additional capital generation being used to be repatriated to shareholders.

Just a very quick follow-up on your comments, Odd Arild. Did I understand you correctly that if these plans -- if you deliver on the plan that you then expect to increase the growth in normal dividend? Or did I misunderstand you?

No, I think with higher results, we have earlier said that around 50% -- more than 50% of the result is going to be distributed, and that is still what we are aiming for, more than that going forward. So first of all, a stronger results, higher dividends, and we also have possibilities to increase the share of the dividends going forward.

We have our next question from Ulrik Zürcher in Nordea. Please go ahead, Ulrik.

I guess some of the questions were answered, but I was wondering, what is your plan for your current excess capital? Because it seems like implicitly like the buyback trigger of 175% has sort of been moved upwards since all the distributions will be covered by organic capital generation. And then secondly, I was also wondering if the -- sorry for this question, but the financial result estimates that you have, is that based on the like very recent forward curves that pencil in like 4 or 5 rate cuts in Norway next year?

Should we start on the plan for current excess capital?

Yes, it's not on the dividends. Well, there's no change in our guidings. We view ourselves to be over capitalized when we are above 175% in solvency. We have now put forward very clear measures about growing annual dividends, as I also answered about even higher, maybe growth when we see the results are coming through here. And on top of that, the NOK 1.5 billion as a starting point for the share buybacks on an annual basis the next years to come. And of course, to have some, well, buffer from the 175% to make it very sure that we could deliver on these targets is wise to have. Then we have to view on an annual basis, of course, the actual results and the actual situation how to use, distribute the capital in the group. I can be very clear about there is no plan to build a warchest in Storebrand. We want to have the right capitalization, to have the right return on equity and to distribute excess capital to our shareholders.

Yes. On the second question, we have the cutoff for the financial result assumptions pretty close to the CMD date here with the forward curve at the time. And then, of course, there are sensitivities in any financial result for financial market movements going forward. But pretty recent on the estimates, Ulrik.

And just a follow-up, so it's clear. You will be doing sort of a valuation, I guess, the Board, when it comes to dividends or payouts for -- on the 2023 results this year. Like can you rule out a special dividend based on your strong cash capital and potential solvency generation already in Q4?

I think I will let the Board decide on the -- decisions by the fourth quarter. But our guidance is quite clear, growing dividend from the NOK 3.70 we had last year, and we will also continue to fulfill the share buyback program of NOK 1.5 billion. That is the starting point.

We have our next question from Peter Eliot in Kepler Chevreux. Please go ahead, Peter.

Two remaining questions from me, please. The first one, just carrying on, on the insurance division. One thing you haven't talked about is the sort of reinsurance costs. And I'm just wondering what you're expecting there? I mean, can you continue with the sort of retention as low as you've enjoyed up until now, for example? Or do you think that might be reflected? And what the outlook there would be very helpful? And second one, it's a little bit of a cheeky question, so apologies. But I guess I was in the audience of your 2006 Capital Markets Day when you were talking about the opportunities from municipalities or public sector pensions. And I mean we've had a couple of gross asset, but 17 years on, it still sort of seems to be an opportunity and with -- the tendering, we're not seeing very many people tendering. So I'm just wondering what should change that opportunity now? Yes, what is sort of the catalyst to change that at this point?

On insurance and reinsurance. Our reinsurance program, we carry most of the risk ourselves. So the reinsurance program and the change in cost of the reinsurance program is not a material impact on our results.

And I think also the [coverage] is similar to what you have seen this year. When it comes to the municipality market, well, you have a good memory back to 2006 here, but we have been out of that market for some years from 2012 to -- we started -- we reentered that market in 2018, 2019. So after we reentered this market, we have had a growth of NOK 5 billion annually, and we now see even higher growth going forward. Already now, we have noticed that there will be much more tender offering in the market next year. And there is some regulatory also processes that we believe over time will open this huge market even more. So we are very looking forward to the municipality market and see stronger flows and tender offerings in this market going forward.

And if I may add, Peter, since we reentered the market, we have a 100% hit rate in terms of the tenders that we have participated in. We have won every one of them. So we do have a strong proposal and opportunity to the municipalities. And if the market indeed opens up, which it does seem to do, then that will -- we are quite optimistic to be able to grow that somewhat faster going forward.

Peter, it seems like we lost connection here with the studio, but let's see if we can have a next question here. Just a little moment. We have the next question here from Thomas Svendsen. Please go ahead, Thomas.

Yes. Three questions from me. First, on the sale of Storebrand Helsforsikring and the big gain you have announced there. Could you expect that this -- the capital there is paid out as an extraordinary dividend for next year if you get regulatory approval for these transactions? Or should you see it as more part of the total capital? And second question is the profit split in Sweden. If I don't remember wrong, also last year, you guided for NOK 300 million in profit split there, but it's much lower than that this year. So how confident should it be about your revenue guidance of NOK 300 million from there? And final question on non-life. What is your growth plan in non-life? Is it to grow more products per client or entering new segments in the market? Or should we expect it to just grow by the markets?

Yes. Let me start with Storebrand Hels. First, we need the regulatory approval. We hope to get that in -- well, early in 2024. So the dividend discussion will be a part of the 2024 year-end dividend discussion. But I think what we have said now about growing ordinary dividend on top of -- or then also with NOK 1.5 billion in share buybacks, that is the starting point for also the framework when we are looking at the 2024 discussions for dividends.

With respect to profit split in Sweden, Thomas, the profit split is threefold. I would say, I think we discussed on the capital update a year ago. And so we need to have outperformance in some of the risk classes, equities and real estate and credit spreads in order to get some of it. We have to have a total consolidation for some of the portfolios to get full indexation fee. And we need to have profit split in some of the other -- now we have to return some of the deferred capital contribution in some of these portfolios. So if we deliver on these 3, which we will be on a normalized basis, then we will have around NOK 300 million in profit split from Sweden. And this year, obviously, the real estate market has underperformed. And also the inflation in Sweden was very high, which made us unable to fully index some of the portfolios there. So that's the explanation why it's lower this year. And while we, on a normalized basis, expect that it will return to around NOK 300 million next year. On non-life growth plan, we do continue to expect growth in non-life. And I think Camilla said that we are aiming to move up to double-digit market share in the retail P&C market in Norway over time. We're currently at 6.5% market share. So we do expect continued growth in the P&C retail market going forward.

And if I might add on that from the corporate side, we also do more now P&C, SME coverage as a part of the cross-selling efforts in the corporate business.

We are ready for the next question from Hans Rettedal Christiansen in Danske Bank. Please go ahead, Hans.

Yes. So my first question, I guess, we've spoken a lot about the extraordinary dividends. But then, I was just wondering around what thoughts you've made on considering to have an upper limit on your solvency ratio rather than just a lower limit at 175% to sort of trigger these extraordinary payouts? And then my second question is around the updated return on equity target of above 14%. And given that you're sort of trailing now on a 12-month trailing basis at 13% and you're saying that you expect your results to be up around 25%. It sounds a bit low also when you consider that the IFRS 9 equity is lower than your previous target. So just around sort of if you take your 2025 ambitions, what is the equivalent return on equity target that you have done on those ambitions? And thirdly, I was just wondering on the capital generation, you're saying now 16% on your ordinary result, up from 14% earlier. Could you just confirm that, that is on a return on equity of 14% or is it above 14%?

I can start briefly on the return on equity. With the 13% versus the 14%, I think it's important to take into consideration that we did not have a normalized tax rate year-to-date when you look at the 12 months trailing. So that makes the ROE a little bit higher than what you would see on a normalized basis. And if you take our current IFRS 17 equity and you do the result ambitions we have now put forward, you will end up at somewhere above 14% when you look into the future and try to adjust the equity for the buybacks we are planning to execute.

I think when it comes to limits for solvency and payouts, I think the framework that Lars has talked about now with growing ordinary dividends, share buybacks on the NOK 1.5 billion annually. And on top of that, the extra capital that can be used both for share buyback and extraordinary dividends or dividends, but also for even stronger growth or bolt-on M&A, it's the framework we use. And I'm sure with that framework, we will be able to keep the solvency ratio on the right level not needing to put any caps on it.

Yes. And the last question on capital generation. Yes, what is put into the capital generation going forward from results are result after tax and then adjusted for amortization, which is a noncash item under Solvency II and also in real life, of course, which corresponds to -- with the ROE targets and the result ambition we have put forward. So that's what in the calculation on cash generation, Hans.

Vegard Toverud from Pareto Securities is next in line. Over to you, Vegard.

If you look at your guiding on the guaranteed volumes, it stays below 0 while at the same time, if I understand you correctly, the NOK 1.5 billion of buybacks each year comes from the release of capital from the same portfolio. Is it possible to be more specific on how much you expect the volumes to be below 0 going forward? And secondly, on the P&C side, could you indicate also the combined ratio estimate for P&C, not to insure P&C next year if that's below 92. And if I understand you correctly that the 10% market share is within the high bars for 2025, so we could already see 10% in '25. And then lastly, on the risk result. If I understand you correctly, the NOK 200 million estimated risk result is below what has been the last 12 months. So if you just could either give some more detail on why that is the case? Or tell me that I'm measuring this the wrong way?

So thank you, Vegard. Quite a lot of detailed questions there. On the guaranteed level you have different buckets, and they are partly explained in the appendix of the presentation here as well. But -- so there is capital release from the paid policies, which is the highest guarantees, the highest capital consuming part of it that will go down with duration, down with higher rates, et cetera. But then you also have some growth areas in the public sector and in the low guarantees in Sweden. So -- and also possibly these closed pension funds that we take over from time to time. So it's impossible to give you an exact answer on that. We would like to kind of keep it as the whole group on the guaranteed. On the P&C side, we are not guiding on combined ratio in each sub portfolio, but we're trying on a group basis to guide on an overall combined ratio, which is a combination of the different combined ratios in the different parts. So again, I'm not going to give you a number for P&C in '24 stand-alone. The 10% market share is a long-term goal. It's not a goal for '25. So that's going to take longer. And we have not given a time limit for when we want to achieve that. But we're saying we're going in that direction. And thirdly, on NOK 200 million in risk result in finance, we have had a good longevity results and also reasonably good other kind of results within the guaranteed portfolio so far this year, which indicates that the numbers for this year is going to be somewhat higher than the guided NOK 200 million, that is correctly [absolved].

We have our next question from Jan Erik Gjerland in ABG Sundal Collier. Please go ahead, Jan Erik.

I have a couple of questions around, firstly, on the growth side. And then secondly, on the risk on the getting below the solvency of 175%. And then finally, on the reserves on the asset side when it comes to the paid-up portfolio versus the reserves you showed us. So on the asset side, on the growth side, could you shed some light into why and how you sort of -- your Swedish book is back in positive territory again after this campaign? Is it so that the campaign is gone? Or have you done actually different things that has actually happened in a positive way for you that actually have taken back volumes on the side in Sweden? And on the asset under management growth in Sweden, Finland, Denmark and Iceland. What kind of products do you sell in those areas? And finally, what -- how is capital doing when it comes to this -- the capital company you bought in Denmark, are they actually selling any commercial real estate products at all? Then when it comes to the risk, is it -- how do you view the risk getting below 175% solvency ratio? What should take you there actually? And then finally, on the paid-up side, you showed the reserves on the Page 108 and Page 109. How should we think about the asset side? Is this the asset side you actually take profit sharing on? Or is just reserves?

Yes. So we start on the growth side. The first question on growth was on -- help me...

I think it was Unit Linked Sweden.

Unit Linked in Sweden, yes. Yes, the transfer balance. Yes, because there's been a fantastic turnaround in the volumes here. There is still some players that are doing some transfer bonuses in that market. But they've also been -- opened up the market more. So more portfolios are now up for transfer. That was more limited for SPP to transfer in from compared to how the market was before. And they are also focused very much on own customers to keep them happy, of course, and also specialized teams when we acquire new customers in to work with the employees in the company to also get their individual pension accounts into SPP. So I think it's the combination of the work that is done in SPP that has really turned this around, even if there still is some bonuses in the market. When it comes to asset management and the growth in the Nordic and you might also say in Europe, however, it's typically that we come into new customers with our edge in sustainability. We have very strong products both -- more index-linked sustainability product, but also with more specified products on sustainability. That opens up often the discussion. But then we also have a very strong platform on the different active funds, but also in private equity with Cubera and so on. So which help -- we broadened that approach, but it's often the starting point with the more sustainability-based product as an edge to get into the discussion with our clients in the Nordics and also in Europe. When you look at Denmark, the capital -- investment in capital, they are typically asset in their administration. So we manage different buildings in Denmark. What we have seen this year is that, of course, the transfer market or the [process] of different buildings has been very low. So that market with fees has been also very slow this year. But then we have been working more with asset under administration, managing these different buildings that had [indiscernible] up for some of the, well, shortfall short term when it comes to fee income in that respect. But I don't know if Kjetil or Lars wants to add anything on growth?

No, I think that covers from my perspective, the growth issues. On the risk that we will fall below 175%, we do show sensitivities to solvency every quarter. So I will ask you to look at that. Then obviously, the stresses that we present in the scenarios every quarter are on one of these things happening. So if you have more of these things happening or you fall in the equity markets and fall -- and lower rates and fall in the property market at the same time, then you will get somewhat different development. But -- so you can make different kind of scenarios, but the risk that we will fall below 175% at this stage coming with 204% as of last quarter is very, very low. And the chance that we will fall below 150% is almost unthinkable. So the solvency of the group is quite strong now and the sensitivities have significantly decreased from the past with less of the group tied up in guaranteed products.

Yes. And if I could add on that because I think it's a shift in how you maybe look at Storebrand because it was very much focused on different asset classes that was changing interest rate movement and so on. The sensitivity now is much lower. What you now see is that the real sensitivity is around our assets owned management, our volumes for growth and of course, the margins that is attached to this. So that is very much changed in the way I view the risk of the company going forward. It's more like business risk. Are we really going to still make this double-digit growth come through and take out the margins, that is much more in focus now compared to when we had the Capital Markets Day 3 years ago.

And I guess the last one, I can start on that. The guarantees on the liability. So the amount of Norwegian kroner we make above the guaranteed level is what is eligible for 2018 profit split.

So basically the return is on the assets, but the profit split is on the liabilities, and that is the same as the reserves. So the buffer will be an additional revenue source in order to meet the profit split.

Exactly. Just one follow-up then. Should we understand the portfolio you have on Page 108 to be locked in, which means that you should never expect profit sharing to happen because you've sort of taken down the risk so much as you have closed the gap on the duration mix, et cetera, for those portfolios? Or how should we really read your sort of illustrative price there?

I can start on the portfolios that you alluded to, which are the ones with the most locked-in risk. They are also the portfolios that are being paid out the fastest with the highest interest rate guarantees. So they are much less likely to get into a profit split territory. But of course, some of them will remain and over time, if buffer levels are sufficient, some or a small portion of it can come into profit sharing territory. But we're not kind of -- we're not alluding that, that will happen in the first 2 years, clearly.

It seems like we have Tryfonas Spyrou in Berenberg back in the queue. Please go ahead Tryfonas.

I have 3 hopefully quick questions. The first one is on the -- I was wondering how much visibility do you have on the expected NOK 600 million profit sharing coming from Norway and Sweden, which feels like is what causing the uplift in capital generation. I guess what I'm trying to understand is how much downturn there is if rates do continue to come down, presumably the 6% free capital generation also provides with some flexibility there? The second one is on the growth ambition in P&C, clearly, it is very strong, and particularly on the P&C side, I think it's 20%, 25%. So how comfortable are you in sort of achieving that without sacrificing on the margin side? And then lastly, just on the bank and net interest income 1.4%, I think it's upper end of the guidance. It looks like this is the actual 9-month run rate. So I was hoping it is more because I think you said previously that the margin is coming through with a bit of a lag, but it feels like it has kind of [paid]. So any comment on that would be appreciated.

So on the profit split in Norway and Sweden, that's dependent on the inflation level and the returns on the different asset classes. But based on normalized returns and based on like Kjetil said a moment ago on the markets and the yield curves that we saw a couple of weeks ago, this is our expected return in the coming years, as explained in the material. Then obviously, financial markets will not move as expected, they never do. And therefore, the result will be somewhat different. It can be higher and it can be lower. I didn't catch the P&C question.

I can start on that. I think as Lars said, this is a long-term growth ambition. If you look at the ambitions that we have put forward or what you need to believe in to reach the NOK 5 billion target, you see that we have, given the price increases, a pretty modest growth expectation in P&C and insurance over the next couple of years. So clearly, we believe that we should be a larger player in this market, but we are also pretty clear that the way to build a larger profitable P&C company goes through having a smaller profitable P&C company. So that is the way we want to go about it.

Yes, I think profitability is, of course, key here to grow in a profitable way. But I also think that we have a very strong position here. We have a brand name in Norway when it comes to P&C that is second to none. And on top of that, we also see that there is a quite concentrated market. We even had [indiscernible] combination yesterday, but that was announced between Aka and Fremtin. So we are the real challenger in this market now. And of course, I think that is a very good place to be with the brand name to grow with profitability in the P&C market in the years to come.

And on bank margins, we have seen a significant improvement in bank margins with higher rates over the last years. And we are guiding that this will come down somewhat from today's level. But -- while that's one of the assumptions to get to the NOK 5 billion. But we will obviously optimize to keep the interest rate margin as high as possible also in the coming years.

It seems like we have some additional questions from Johan Strom in Carnegie. Please go ahead, Johan.

So a lot of good questions, but I have a few remaining. To start with on the buyback program, if I remember right, the current buyback program will end during the next week, maybe two. So when can we expect the next tranche? And will you continue to split your annual buybacks to tranches of NOK 500 million? I guess what I'm really wondering here, if you're going to be able to be in the market buying back shares at all times? Or if there will be sort of technical stops? And then secondly, you've talked about the ambition to grow the ordinary dividend per share. So I just wanted to confirm that you will also have dividend growth after the effects from buybacks and a lower share count?

Sure. Thank you. On the technicalities on the share buyback program, we have a program that now runs till the end of next week. And then when that is finalized, we are going to apply for a new program, but it is unlikely that we will get the permission from the regulator before we present the fourth quarter numbers on February 7. So our ambition is to be back in the market shortly after presenting the fourth quarter numbers, but it is dependent on the FSA approval. Then the approval that we have from the AGM last until the next AGM in the beginning of April. So there will be also a pause around the AGM in order to get a new approval and get that accepted by the FSA in order to continue. So we will have one share buyback program that will start as soon as possible after the fourth quarter numbers, last until the AGM, then there will be a pause, hopefully, a short one, before we start the next tranches after the AGM based on the new AGM decision.

Yes. And then again on the dividends. What we are committed is to nominally increase in dividends per share. But of course, with expected increase in returns that Lars has shown here with a 20% increase annually, we also expect, of course, to keep the level of distribution of capital in the pace, at least with the increased results. So -- but that is, of course, dependent on the results are coming through as we expect and have guided for.

We have some more questions here from Thomas Svendsen in SEB.

Yes, just one question there on the cost slide. So I guess the 2023 includes extraordinary costs and performance fees, while the bar to the right does not include performance fee? Is that correct?

Yes, it's not included with the performance fees in the '23 numbers either.

Yes, it is. The full graph is including integration costs, currency effects and performance-related customers, Thomas, and you can compare it to -- and those costs are split on top of the NOK 5.3 billion we have guided for as those were including those items. And looking into 2024, I think it's correct, as Lars said, those costs only assumes that we will achieve benchmark returns on our asset management business. So there's some hybrid fee costs but no clean performance fee.

But just let me clarify, the fourth quarter numbers are not yet clear. So we do not have the performance fees, et cetera, for the fourth quarter. And so that was unprecise from me, but the fourth quarter numbers will be what they will be, and we will present that on February 7.

Okay. And just on costs on a sort of general basis, should you expect some extraordinary investments during 2024 on IT to sort of facilitate the scalability? Or do you think it will be more a normal year when it comes to costs?

It's obviously built into our guiding, our expectations on IT investments for next year.

So -- but do you expect sort of linear development in costs during '24 and '25 to reach the NOK 5 billion in '25? Or are there some sort of harvesting of investments in '25? Or would you not comment on that?

You know what we -- what I said in the presentation and that we changed our guiding on cost away from a clean cost guiding like we had from 2012 until 2020. And then we changed it into profitability targets, and that will allow us to do profitable investments in growth where we see that -- those kind of opportunities. So therefore, we moved to a NOK 4 billion profit goal in 2020 and now to NOK 5 billion for 2025. So we would like you to measure us on our ability to create results. Nonetheless, we have given a guiding for next year so that you can build that into your spreadsheets. But we would like to assess the opportunities in the market and the opportunities for additional profitable growth before we give you a guiding for the '25 cost. .

Yes, and if I just add to that, I think what we try to do and do very much internally is to focus on, what we call, scalable growth and measure that in many ways in decreasing cost/income ratios in different businesses and of course, also cost ratios versus AUM cost ratios in insurance and so on. And always have -- looking at the scalability of the growth of our business. As long as we are doing that, of course, I hope the cost can increase because that means that the bottom line will increase even more going forward. So that is the focus when we internally work with this to get the profitable growth going forward.

We have some additional questions from Jan Erik Gjerland in APG Sundal Collier. Please go ahead, Jan Erik.

This merger between the market value adjustment reserve and the additional steps to reserve in the first quarter or 1st of January probably. How should we think about the market value adjustment reserves, which is sort of nonallocated between you and the [indiscernible]? Should we then assume all being built into buffers? Or should we think that actually some of them coming through to you in some way during Q4 this year?

Well, the change takes place from January 1. So obviously, what comes -- the split is also coming into the numbers when we finalize the '24 figures and returns.

And just to be clear on that, all these buffers belongs to the customers and they will make our risk management better. We can take more risk on the behalf of the customers, and we can use the buffers to cover negative returns, which we couldn't do previously. But none of this money is the company's money as such to be clear on that.

Ladies and gentlemen, it seems like that was the last question. So that concludes today's presentation and Q&A session. If further questions arise, please contact us by phone or e-mail, and we will revert as soon as we can. Thank you for following us today. We look forward to seeing you again when we present the fourth quarter results on February 7. Have a nice day, and goodbye.