KLP Group
Report for the first quarter of 2025
The first quarter of 2025 was marked by geopolitical unrest, with increased tensions linked to trade restrictions flagged by the USA, wider signs of protectionism, and the ongoing war in Ukraine. This has contributed to uncertainty and unrest in the financial markets. At such times, the value of solid financial buffers comes to the fore, as they provide security and stability for our customers and owners.
- Return of 0.0 per cent on the pension assets in the common portfolio in the first quarter.
- The solvency margin for the Group is 290 per cent
- Good pensions expertise and new and modern system solutions position KLP well to handle pension cases effectively and to advise members on pension matters under new and complicated rules for public-sector occupational pensions from 2025 onwards.
KLP – a customer-owned group with a 75-year history
The KLP Group is made up of the following companies: Kommunal Landspensjonskasse (KLP) and its subsidiaries KLP Banken Group, KLP Skadeforsikring, KLP Kapitalforvaltning, KLP Forsikringsservice and KLP Eiendom.
At the end of the first quarter of 2025, the Group had total assets of NOK 1,149 billion.
Public-sector occupational pensions
NOK MILLIONS | Customers | Company | Total |
---|---|---|---|
Investment result | -4 092 | -2 | -4 093 |
Risk result | 168 | 168 | |
Interest guarantee premium | 2 | 2 | |
Administration result | -27 | -27 | |
Net income from investments in the corporate portfolio and other income/expenses in non-technical accounts | 232 | 232 | |
Tax | -45 | -45 | |
Other profit/loss elements | 0 | 0 | |
Profit/loss after Q1 2025 | -3 924 | 160 | -3 764 |
Profit/loss after Q1 2024 | 18 700 | 249 | 18 948 |
Investment result
KLP manages the pension capital that covers the entitlements that have been accrued. The pension capital is mainly managed in the common portfolio.
The pension money has to be paid out over many years, so part of this amount can be financed from the return on the pension capital (guaranteed return).
KLP’s return guarantee amounts to NOK 3.7 billion after the first quarter. Actual net financial income came to NOK -0.4 billion, a return of 0.0 per cent, so the investment result was NOK -4.1 (+18.7) billion. The negative investment result after the first quarter has been covered with a temporary transfer from the buffer fund, reducing this from NOK 123.0 to 118.9 billion.
Per cent | 31.03.2025 | 31.03.2024 |
---|---|---|
Return on the common portfolio | 0,0 % | 3,0 % |
Return incl. value changes in hold-to-maturity bonds and lending | 0,0 % | 2,7 % |
The returns figures apply to the common portfolio | ||
Capital adequacy, Solvency II | 355 % | 351 % |
Capital adequacy, Solvency II, with transitional measures | 355 % | 351 % |
Management of the common portfolio
The assets in the common portfolio totalled NOK 805.3 (751.5) billion:
Assets | 31.03.2025 | 31.03.2024 | ||
---|---|---|---|---|
All figures in per cent | Proportion | Return | Proportion | Return |
Equities | 34,4 % | -2,3 % | 33,5 % | 8,0 % |
Short-term bonds | 26,8 % | 0,9 % | 28,1 % | 0,8 % |
Long-term/HTM bonds | 13,3 % | 1,7 % | 13,3 % | -0,4 % |
Lending | 10,9 % | 1,2 % | 11,2 % | 1,1 % |
Property | 11,0 % | 1,2 % | 11,0 % | 0,5 % |
Other financial assets | 3,6 % | 1,3 % | 3,0 % | 1,3 % |
Shares and alternative investments
Total exposure in shares and special funds, including equity derivatives, was 34.4 per cent at the end of the first quarter. The total return on shares and special funds was minus 2.3 per cent in the quarter. The return on KLP’s global listed equities was minus 4.5 per cent, while KLP’s Norwegian equity portfolio returned 6.6 per cent in the first quarter.
The currency hedging ratio for equities in developed markets and the most liquid currencies in emerging markets is between 40 and 60 per cent. In the first quarter, the Norwegian krone strengthened against the US dollar and the euro, among other currencies. Currency hedging had a positive impact on the return on shares this quarter.
Short-term bonds and the money market
Short-term bonds accounted for 11.0 per cent and money-market instruments 3.6 per cent of the assets in the common portfolio at the end of the quarter. Long-term government rates rose in the first quarter in Norway and the euro zone, while they fell in the USA. KLP’s global government bond index achieved a currency-hedged return of 0.2 per cent in the quarter, while the return on the Norwegian government bond index was also 0.2 per cent. Global credit margins increased during the quarter. The quarterly return on KLP’s global credit bond index was 1.8 per cent, while the return on the Norwegian credit bond index was 1.1 per cent. Short-term bonds produced a total return of 1.2 per cent in the first quarter. The money market return was 1.3 per cent for the quarter.
Long-term bonds
Investments in long-term bonds (measured at amortised cost) made up 26.8 per cent of the common portfolio at the end of the quarter. Unrecognised decreases in value in the common portfolio amounted to NOK 10.3 billion at the end of the first quarter. The portfolio is well diversified and consists of securities issued by creditworthy borrowers. The return measured at amortised cost in this quarter was 0.9 per cent.
Property
Property investments, including Norwegian and international real estate funds, made up 13.3 per cent of the common portfolio.
Property investments in the common portfolio achieved a return of 1.7 per cent in the first quarter. The returns include currency hedging.
Lending
Lending in the common portfolio totals NOK 86.4 billion. This is split between NOK 77 billion in loans to the public sector, NOK 3.4 billion in secured mortgage loans and NOK 5.9 billion in loans outside Norway secured against mortgages or government guarantees. The lending portfolio is of high credit quality, with no losses on municipal loans and very modest provisions for losses on mortgage-backed loans. Unrecognised decreases in value in the lending portfolio totalled NOK 1.1 billion at the end of the quarter. The return for the first quarter is 1.2 per cent.
Returns on the corporate portfolio
Investments in the corporate portfolio amount to NOK 48.4 (48.2) billion at the end of the quarter.
The corporate portfolio is managed with a moderate-risk long-term investment horizon, with the objective of stable returns. The investments in the corporate portfolio achieved a return of 0.6 per cent in the first quarter.
Risk result
The risk result is an expression of how mortality and disability have developed in the insured population in relation to the assumptions used in the annual setting of premiums.
The risk result came to NOK 168 (82) million in the first quarter.
Administration result
The difference between the cost elements within premium income, withdrawals from management reserves and insurance-related operating expenses constitutes the administration result. This shows a deficit of NOK -27 (-8) million in the first quarter. Insurance-related operating costs came to NOK 479 (432) million in the first quarter.
Financial strength and capital-related matters
KLP’s total assets increased by NOK 2.0 billion in the first quarter and amount to NOK 866.0 billion. The premium reserve increased by NOK 0.4 billion to NOK 615.5 billion in the same period.
The buffer fund amounts to NOK 119.2 billion after the first quarter. The fund can be used to cover any shortfall in returns on the pension capital and constitutes a financial buffer.
KLP’s subordinated loan of EUR 294 million will be repaid in the second quarter of 2025, in line with the standard terms and conditions for the loan. The loan is listed on the London Stock Exchange and can be paid off with the consent of the Financial Supervisory Authority of Norway. The loan qualifies as Tier 2 capital under the Solvency II rules. Repayment of the loan is not expected to have a material impact on capital adequacy with the current capital situation.
Without applying transitional rules, the Company’s solvency capital requirement (SCR) is 355 per cent. This is an decrease of 6 percentage points in the quarter.
KLP’s target is for capital adequacy to exceed 150 per cent. Solvency is well above this target and thus enables sound and stable management of customer assets in a multi-year perspective.
Premium income
Premium income excluding premium reserves received on transfers in amounted to NOK 8.1 (7.8) billion at the end of the first quarter. Of this, premiums related to the settlement of accrued pension rights amount to NOK 0.2 (0.4) billion.
Claims/benefits
Pensions paid and other claims, excluding ceded premium reserves, amounted to NOK 6.9 (6.8) billion after the first quarter.
Other matters
The market situation for public-sector occupational pensions is stable. KLP places great emphasis on close consultation with its customers to further develop service concepts and online solutions with good pension guidance. Efforts have been made in recent years to renew and further develop our pension systems. All benefits now fall within the new system, which enhances the customer experience and provides valuable guidance to the individual employee, as well as immediate responses to most pension applications.
Storebrand filed a complaint against Norway with the ESA in 2022, alleging that KLP is receiving unlawful state aid, and that Norwegian municipalities and health trusts have breached the rules on public procurement. The government has rejected both complaints. KLP has provided relevant information to shed light on the complaint cases when this has been requested. The complaints are still being processed by the ESA, and no formal action has been initiated on either of them. In both cases, as part of its information gathering, the ESA has made its preliminary assessments and asked for the government’s comments on these.
Non-life insurance
The first quarter of 2025 shows a profit/loss before tax and other provisions of NOK 32.2 (-117.7). million The insurance result is slightly better than expected, largely because no major claims were filed in the quarter. Settlement losses of NOK 24.6 million related to previous claims years were posted in the quarter. This equates to 1.0 per cent of the claims provisions at the beginning of the year. Financial income is lower than expected because of the great uncertainty around US economic policy, with a negative return in March in particular.
Volume growth so far this year is NOK 212 million, and premium volume was NOK 3,052 (2,731) million at the end of the first quarter of 2025. The increase is mainly due to good sales in the autumn 2024 procurement round, and slightly increased premium rates. Premium income increased by NOK 79 million, or 10.1 per cent, and amounts to NOK 786 million for the first quarter. The retail market shows growth of NOK 38 million, or 11.4 per cent, while the public-sector and corporate market shows growth of NOK 41 million, or 9.1 per cent.
Key figures
31.03.2025 | 31.03.2024 | 31.12.2024 | |
---|---|---|---|
Claims ratio | 74,8 % | 98,2 % | 77,3 % |
Reinsurance percentage | 8,8 % | 15,0 % | 6,4 % |
Cost ratio | 15,1 % | 14,6 % | 13,0 % |
Combined ratio | 98,7 % | 127,7 % | 96,8 % |
Net financial income in the first quarter of 2025 was NOK 43.8 (96.7) million, equivalent to 0.7 (1.2) per cent.
The solvency margin (SCR) increased from 246 per cent at the end of 2024 to 256 per cent at the end of the first quarter of 2025.
Asset and fund management
KLP Kapitalforvaltning AS handles securities management in the KLP Group. It had a total of NOK 868 billion under management at the end of the first quarter, NOK 232 billion of it on behalf of external customers.
Net new subscriptions to the KLP funds were NOK 5.8 billion in the first quarter. External customers had positive net new subscriptions of NOK 5 billion in the same period.
KLP Kapitalforvaltning made a loss before tax of NOK -8.2 (+11.9) million.
Bank
The KLP Banken Group had a pre-tax operating profit of NOK 76.6 (75.1) million in the first quarter. The change in profits from last year is mainly due to an increase in net interest income and reduced gains on financial instruments.
Broken down by area, pre-tax profits were NOK 55.1 (51.1) million in the retail market and NOK 22.6 (24.0) million in the public-sector market.
The Bank’s operating income, in the form of net interest income, was NOK 133.0 (126.6) million in the first quarter. The increase is mainly due to increased lending volume, as well as slightly higher margins between lending and financing in the retail market.
At the end of the quarter, the income statement includes net income of NOK 1.3 (6.9) million from changes in the value of financial instruments. This profit/loss effect is mainly related to loan buy-backs and changes in the market value of the bank’s liquidity investments.
Operating expenses and depreciation amounted to NOK -82.4 (-79.5) million in the first quarter.
Losses and loss provisions in the retail market taken to profit/loss total NOK -1.2 (+1.1) million so far in 2025. . The change from the same period last year is largely due to the reversal of historical loan loss provisions in the first quarter of 2024. KLP Banken does not believe that losses and loss provisions on mortgages and credit cards have increased significantly from last year. Nor have we seen any losses related to public-sector lending so far in 2025.
KLP Banken manages lending on its own account and loans financed by KLP totalling NOK 130 (124) billion. On its own balance sheet, the KLP Banken Group had loans to customers totalling NOK 43.7 (42.8) billion at 31 March 2025. Mortgage loans in the retail market and public-sector loans totalled NOK 24.3 (24.1) billion and 19.4 (18.7) billion respectively.
The KLP Banken Group manages NOK 3.4 (2.7) billion in mortgage loans and NOK 82.9 (78.5) billion in loans to public-sector borrowers and other businesses on behalf of KLP. The Bank’s mortgage products are aimed at the target group of members of the KLP pension schemes. Net total mortgage growth so far in 2025 is NOK 149 (209) million.
KLP Banken’s lending volume in the public-sector market increased by NOK 0.7 (-0.3) billion in the first quarter. Loans to public-sector borrowers managed on behalf of KLP were down by NOK -0.8 (up 1.5) billion in the same period. New payments of public-sector loans so far in 2025 amount to NOK 2.1 (2.1) billion for KLP and KLP Banken together.
The KLP Banken Group’s external financing consists of deposits and bonds. At the time of reporting, deposits from individuals and businesses amounted to NOK 16.8 (14.5) billion. Deposits grew by NOK 1.0 billion (6.1 per cent) in the first quarter. Liabilities created on issuance of securities totalled NOK 32.3 (31.3) billion. The securities debt is mainly covered bonds issued by KLP Kommunekreditt AS and KLP Boligkreditt AS.
Group
KLP is a mutual insurance company which produces consolidated financial statements in accordance with IFRS Accounting Standards®. These accounting rules reflect the fact that, as a mutual insurance company where all value creation in KLP accrues to policyholders and is posted as a liability to them. The liability to policyholders is made up of the discounted value of future insurance payments, the risk adjustment for non-financial risk, and a remainder (“residual value”) which is any additional capital beyond what we expect to pay out in agreed benefits on the insurance contracts. The Group therefore has no profits or equity. However, some technical equity may still arise if assets or liabilities have been measured at anything other than fair value in the balance sheet, as the liability to policyholders is based on the fair value of net assets. The equity will then represent the difference between book value and fair value, and the change in measurement difference will be posted as a net gain/loss. The change in measurement difference amounted to NOK 13 million in the first quarter. Equity totals NOK -3,291 million, representing unrecognised increases in the value of the Group’s assets.
The Group achieved net investment income of NOK 0.7 (20.1) billion in the first quarter.
Change in Q1 2025 | 31.12.2024 | Change taken to profit/loss | Cash flows posted directly to the balance sheet | 31.03.2025 |
---|---|---|---|---|
Best estimate of insurance liability | 414 490 | -9 962 | -2 564 | 401 964 |
Risk adjustment | 29 303 | -1 045 | 0 | 28 258 |
Residual value | 395 820 | 11 059 | 0 | 406 880 |
Total insurance liability | 839 613 | 53 | -2 564 | 837 102 |
Sustainability
Climate-friendly investments
Climate-friendly investments are investments that contribute directly to emission reductions, or otherwise contribute to the green transition. KLP’s climate-friendly investments have accumulated over time, and accounted for 13 per cent of its financial assets at the end of the first quarter. In the first quarter alone, these investments increased by around NOK 3.8 billion. This increase is mainly due to investments in a number of mutual funds which invest in renewable energy around the world, and in green bonds in Norway.
NOK MILLIONS | Q1/2025 | 31.03.2025 | 31.12.2024 |
---|---|---|---|
Amount invested | Fair value | ||
Climate and nature-based solutions | 3 029 | 50 921 | 53 785 |
Renewable energy | 3 029 | 48 173 | 50 945 |
As a share of KLP’s investments | - | 5,6 % | 6,0 % |
of which: renewable energy in Norway | 2 663 | 2 748 | 28 095 |
of which: renewable energy abroad | 366 | 19 821 | 19 821 |
of which: renewable energy in developing countries | - | 3 028 | 3 028 |
Sustainable forests | - | 2 840 | 2 840 |
Transitional financing | 761 | 58 212 | 57 227 |
Green buildings | 10 | 34 727 | 34 435 |
Green loans | 542 | 14 367 | 13 855 |
Green bonds | 209 | 4 852 | 4 642 |
Sustainable infrastructure | - | 4 266 | 4 295 |
Total climate-friendly investments | 3 790 | 109 133 | 111 012 |
As a share of KLP’s investments | - | 13 % | 13 % |
Active ownership
Sustainability is opposed by the new political leadership in the US, which has implications for international cooperation and companies in KLP’s portfolio. Several U.S. companies are dropping official targets related to diversity, equality and inclusion. We have contacted the relevant companies to clarify what this will mean for their work on these issues going forward.
During the first quarter, we have worked to make contact with renewable energy companies to discuss their handling of corruption risk. The renewables sector plays an important role in climate change. However, it is also a sector where there have been issues related to corruption, and an area we want to work more closely with in the future.
As we did last year, we have prepared a list of companies in which KLP will vote against the re-election of directors at this year’s general meeting. This includes the companies in the portfolios that produce the biggest emissions without having a credible transition plan, and companies that pose a high risk of contributing to tropical deforestation, but lack basic risk management procedures.
Future prospects
KLP considers a wide range of factors that could affect future developments in the financial markets and the Group’s operations. The Trump administration has already signalled significant regulatory and economic changes, with increased volatility in global capital markets. Wider protectionist measures and possible revision of international trade and financing agreements could have an impact on the investment climate and transatlantic relations.
KLP is closely monitoring changes in regulatory frameworks related to data security and privacy and a possible fragmentation of digital collaboration. This is especially relevant at a time of increased geopolitical tension and possible changes in cybersecurity policy.
We are also seeing tougher political rhetoric from the new administration that could have implications for sustainability efforts all over the world. As an operator with high sustainability ambitions and reporting obligations under the CSRD, we are constantly assessing how changing conditions affect both our strategic positioning and our investment decisions.
Despite the uncertainty, the Group is well positioned, with solid financial buffers, a high degree of digital maturity and a robust organisation. This gives us room to adapt to rapid market and regulatory changes, and to seize any opportunities that may arise.
The introduction of new rules for public-sector occupational pensions in 2020, with effect from 2025, provides increased flexibility and incentives for working longer. As manpower shortages are a major challenge for KLP’s customers, the company will continue its work on guidance and digital solutions to support members in their pension choices and show the value of remaining at work for longer.
Increased digitisation and collaboration between pension providers ensures more efficient processes and better data quality. KLP invests in new technologies, including artificial intelligence and cloud-based solutions, to improve services, increase security and reduce costs.
Building financial buffers has been a priority for KLP’s owners for many years. This has resulted in solid financial buffers that provide security for the pension capital, stable receipts and sound management of the pension assets in turbulent financial markets.
KLP will also continue its work on sustainable investments and further development of financial services for the public sector, for the benefit of customers and members.
Oslo, 14. May 2025
The Board of Directors of Kommunal Landspensjonskasse gjensidig forsikringsselskap
TINE SUNDTOFT
Chair
TERJE ROOTWELT-REVHEIM
Deputy Chair
ODD HALDGEIR LARSEN
KJERSTIN FYLLINGEN
TORKILD SINDRE VARRAN
ELI ARNSTAD
VIBEKE HELDAL
Elected by and from among the employees
ERLING BENDIKSEN
Elected by and from among the employees
SVERRE THORNES
CEO
Income statement
KLP Group
NOTE | NOK MILLIONS | Q1 2025 | Q1 2024 | 01.01.2024 -31.12.2024 |
---|---|---|---|---|
3, 5 | Insurance service result | 312 | - 111 | - 1 620 |
Net income from investments measured at fair value with changes in profit and loss | -12 254 | 37 813 | 99 618 | |
4 | Fair value adjustment investment properties and rental income | 1 529 | 29 | 5 011 |
Net income from associated companies and joint ventures | 399 | -549 | -38 | |
Interest income, effective interest method | 616 | 614 | 2 481 | |
Interest expenses, effective interest method | -555 | -529 | -2 187 | |
Unit holder's value change in consolidated securites funds | 11 003 | -17 322 | -38 287 | |
Total net income | 738 | 20 056 | 66 598 | |
Policyholder's share of changes in fair value of underlying items | -408 | -19 837 | -63 663 | |
Other insurance related financial cost | -21 | -19 | -84 | |
5 | Net insurance related financial cost | -430 | -19 856 | -63 747 |
Net insurance services and financial result | 621 | 89 | 1 231 | |
6 | Net costs subordinated loan and hybrid Tier 1 securities | 146 | -261 | -451 |
Operating expenses | -246 | -223 | -808 | |
Other expenses | -67 | -62 | -34 | |
Pre-tax income | 454 | -457 | -61 | |
Cost of taxes | -290 | -318 | -1 634 | |
Income | 164 | -774 | -1 695 | |
12 | Change in actuarial asumptions own emplyees | 0 | 199 | 442 |
Tax on items that will not be reclassified to profit or loss | 0 | -26 | -72 | |
Items that will not be reclassified to profit or loss | 0 | 172 | 370 | |
Fair value adjustment of properties for own use | 9 | 1 | 49 | |
4 | Translation difference foreign exchange | -158 | 651 | 1 124 |
Tax on items that will be reclassified to profit or loss | -2 | 0 | -12 | |
Items that will be reclassified to profit or loss | -151 | 652 | 1 161 | |
Total other comprehensive income | -151 | 824 | 1 531 | |
Total comprehensive income | 13 | 50 | -163 |
Financial position statement KLP Group
NOTE | NOK MILLIONS | 31.03.2025 | 31.03.2024 | 31.12.2024 |
---|---|---|---|---|
Deferred tax assets | 42 | 43 | 40 | |
Intangible assets | 1 603 | 1 430 | 1 551 | |
Tangible fixed assets | 2 326 | 2 277 | 2 312 | |
Investments in associated companies and joint venture | 7 219 | 5 959 | 6 820 | |
4, 9 | Investment property | 98 975 | 95 431 | 98 889 |
5 | Reinsurance contract assets | 369 | 680 | 510 |
7, 9 | Shares and units | 455 021 | 406 457 | 477 165 |
7, 9 | Fixed income securitites at fair value through profit or loss | 426 125 | 406 041 | 419 077 |
7 | Fixed income securitites at amortised costs | 2 351 | 2 253 | 2 334 |
7, 9 | Lending customers at fair value through profit or loss | 87 100 | 82 932 | 87 092 |
7 | Lending customers at amortised costs | 43 721 | 42 837 | 42 836 |
7, 9 | Financial derivatives | 12 951 | 1 280 | 1 469 |
7 | Receivables | 7 024 | 14 914 | 3 534 |
Bank deposits | 4 012 | 3 008 | 3 762 | |
TOTAL ASSETS | 1 148 840 | 1 065 541 | 1 147 389 | |
7, 8 | Hybrid Tier 1 securities | 1 373 | 1 489 | 1 429 |
7, 8 | Subordinated loan capital | 3 470 | 3 533 | 3 560 |
12 | Pension obligations | 566 | 744 | 543 |
5 | Insurance obligations | 837 102 | 784 749 | 839 613 |
7, 8 | Covered bonds issued | 31 478 | 30 448 | 31 529 |
7, 8 | Debt to credit institutions | 12 257 | 2 828 | 1 395 |
7, 8 | Liabilities to and deposits from customers | 16 757 | 14 157 | 15 801 |
7 | Financial derivatives | 3 021 | 9 342 | 11 304 |
Deferred tax liabilites | 1 141 | 1 179 | 1 213 | |
13 | Other current liabilities | 12 446 | 17 245 | 5 427 |
Equity | -3 291 | -3 090 | -3 303 | |
Unit holders`s interest in consolidated securites funds | 232 519 | 202 916 | 238 879 | |
TOTAL EQUITY AND LIABILITIES | 1 148 840 | 1 065 541 | 1 147 389 |
Changes in owners’ equity KLP Group
NOK MILLIONS | 31.03.2025 | 31.03.2024 | 31.12.2024 |
---|---|---|---|
Incoming balance 1. january | - 3 303 | - 3 140 | - 3 140 |
Income | 164 | - 774 | - 1 695 |
Other comprehensive income | - 151 | 824 | 1 531 |
Total comprehensive income | 13 | 50 | - 163 |
Closing balance | - 3 291 | - 3 090 | - 3 303 |
Statement of cashflowKLP Group
NOK MILLIONS | 01.01.2025 -31.03.2025 | 01.01.2024 -31.03.2024 | 01.01.2024 -31.12.2024 |
---|---|---|---|
Net cash flow from operational activities | -7 818 | -7 110 | -6 010 |
Net cash flow from investment activities 1 | -102 | -87 | -428 |
Net cash flow from financing activities 2 | 8 170 | 6 695 | 6 690 |
Net changes in cash and bank deposits | 250 | -502 | 252 |
Holdings of cash and bank deposits at start of period | 3 762 | 3 509 | 3 509 |
Holdings of cash and bank deposits at end of period | 4 012 | 3 008 | 3 762 |
1 Payments on the purchase of tangible fixed assets. | |||
2 Net receipts of owners’ equity contribution, in addition to payments from unit holders in consolidated security funds. |
Notes to the financial statementKLP Group
Note 1 Accounting principles –and estimates
Accounting principles
The financial statements in this interim report show the Kommunal Landspensjonskasse (KLP) group financial statements financial statements for the period 01.01.2025 – 31.03.2025. The accounts have not been audited.
The consolidated financial statements for KLP have been prepared in accordance with IFRS® accounting standards, as approved by the EU, with additions set out in the Norwegian Regulations on annual accounts for insurance companies. The part of the interim report that relates to the Group financial statements has been prepared in accordance with IAS 34 Interim financial Reporting.
All amounts are presented in NOK millions without decimals unless indicated otherwise.
No other changes have been made to the accounting principles that affect the interim financial statements as of 31.03.2025. Refer to the Group’s annual report for 2024 for a more detailed description of accounting principles.
The interim financial statements do not contain all the information required for complete annual financial statements, and this interim report should be read in conjunction with the annual financial statements for 2024. The annual report can be retrieved from www.klp.no.
Changes in IFRS® Accounting Standards
A new accounting standard for presentation and disclosures in financial statements, IFRS 18, has been published by the IASB in April 2024. This new standard will replace IAS 1 Presentation of Financial Statements. If endorsed by the EU, the standard will be effective for annual reporting periods beginning on or after 1 January 2027. KLP does not plan to early implement the standrad.
Accounting estimates
In preparing the interim financial statements, we have exercised discretion and used estimates and assumptions that affect the accounting figures. Actual figures may differ from the estimates used.
The measurement of insurance contracts under IFRS 17 uses a number of new parameters that are fraught with considerable uncertainty. The most important for the various business areas are:
Life insurance activities
- All cash flows arising from the insurance contracts that are within the contract limit are included in the measurement of the insurance contract. Future cash flows are calculated using assumptions of future annual wage growth/adjustment derived from a projection of the NAM (Norwegian Aggregate Model). The model produces a macro projection of key economic variables year by year based on the economic situation at the measurement date.
- The cash flow calculations use best estimates of mortality and disability.
- The cash flows are discounted with an interest rate curve that takes account of the time value of money and any financial risk that is not included in the estimated cash flows. The interest rate curve is based on the EIOPA interest rate curve with an illiquidity mark-up.
- The risk adjustment for non-financial risk is based on the risk appetite in the life insurance business and a 98 percent confidence level and amounts to 8.4 percent of the insurance liability in 2025.
Non-life insurance activities
- The claims provisions are estimated from the company’s historical payment patterns.
- The claims provisions are discounted with an interest rate curve that takes account of the time value of money and any financial risk that is not included in the estimated payments. The interest rate curve is based on the EIOPA interest rate curve with an illiquidity mark-up.
Insurance income under IFRS 17 corresponds to pro-rata premiums earned, adjusted for seasonal variations.
- Seasonal variations are estimated from the historical variation in the company’s history of claims received through the year.
The risk adjustment is derived from the company’s risk appetite. The risk adjustment represents an addition to technical provisions so there is a 75 percent probability that they will be sufficient to cover all insurance obligations. The risk adjustment for non-financial risk is based on the risk appetite in the non-life insurance business and a 75 percent confidence level and amounts to 4.0 percent of the net insurance liability in 2025.
Note 2 Segment information
NOK MILLIONS | Group pensions pub. sect. & group life | Non-life insurance | Banking | Asset management | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
01.01.2025 -31.03.2025 | 01.01.2024 -31.03.2024 | 01.01.2024 -31.12.2024 | 01.01.2025 -31.03.2025 | 01.01.2024 -31.03.2024 | 01.01.2024 -31.12.2024 | 01.01.2025 -31.03.2025 | 01.01.2024 -31.03.2024 | 01.01.2024 -31.12.2024 | 01.01.2025 -31.03.2025 | 01.01.2024 -31.03.2024 | 01.01.2024 -31.12.2024 | |
Result from insurance services | 0 | 0 | 0 | 10 | -196 | 88 | 0 | 0 | 0 | 0 | 0 | 0 |
Premium income for own account | 8 110 | 7 842 | 60 883 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Net financial income from investments | -393 | 22 199 | 65 570 | 44 | 97 | 380 | 136 | 133 | 514 | 10 | 9 | 29 |
Claims for own account | -11 233 | -9 265 | -30 200 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Insurance provisions for own account | 3 968 | -20 239 | -94 146 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Policyholder's share of changes in fair value of underlying items | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Other insurance related financial cost | 0 | 0 | 0 | -21 | -19 | -84 | 0 | 0 | 0 | 0 | 0 | 0 |
Unit holder's value change in consolidated security funds | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Net insurance services and financial result | 452 | 537 | 2 107 | 32 | -117 | 384 | 136 | 133 | 514 | 10 | 9 | 29 |
Net financial income from investments in companys portefolio | 94 | 328 | 2 143 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Net costs subordinated loan and hybrid Tier 1 securities | 136 | -243 | -382 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Operating expenses | -479 | -432 | -1 693 | 0 | 0 | 0 | -82 | -79 | -280 | -162 | -147 | -520 |
Other income and expenses | 2 | -8 | -6 | 0 | 0 | 2 | 23 | 21 | 92 | 143 | 150 | 593 |
Pre-tax income | 205 | 183 | 2 169 | 32 | -117 | 386 | 77 | 75 | 325 | -8 | 12 | 103 |
Cost of taxes | -45 | -83 | -356 | -8 | 29 | -61 | 1 | -1 | -10 | 2 | -2 | -24 |
Income | 160 | 99 | 1 812 | 24 | -88 | 325 | 78 | 74 | 315 | -6 | 10 | 79 |
Total other comprehensive income | 0 | 149 | 329 | 0 | 17 | 36 | 0 | 8 | 17 | 0 | 17 | 31 |
Total comprehensive income | 160 | 249 | 2 142 | 24 | -71 | 361 | 78 | 82 | 332 | -6 | 27 | 110 |
Lending | 107 646 | 306 644 | 106 343 | 0 | 0 | 0 | 45 295 | 43 817 | 44 033 | 0 | 0 | 0 |
Other assets | 758 338 | 498 001 | 757 603 | 7 515 | 7 006 | 6 712 | 7 416 | 5 040 | 7 770 | 694 | 675 | 775 |
Total assets | 865 984 | 804 645 | 863 946 | 7 515 | 7 006 | 6 712 | 52 711 | 48 857 | 51 803 | 694 | 675 | 775 |
Insurance liabilites | 797 920 | 745 385 | 803 036 | 4 039 | 4 007 | 3 294 | 0 | 0 | 0 | 0 | 0 | 0 |
Other liabilities | 20 669 | 15 166 | 13 675 | 497 | 477 | 464 | 49 271 | 45 668 | 48 364 | 207 | 227 | 282 |
Total liabilities | 818 590 | 760 551 | 816 712 | 4 536 | 4 484 | 3 757 | 49 271 | 45 668 | 48 364 | 207 | 227 | 282 |
NOK MILLIONS | Other and eliminiations | Total | ||||
---|---|---|---|---|---|---|
01.01.2025 -31.03.2025 | 01.01.2024 -31.03.2024 | 01.01.2024 -31.12.2024 | 01.01.2025 -31.03.2025 | 01.01.2024 -31.03.2024 | 01.01.2024 -31.12.2024 | |
Result from insurance services | 303 | 85 | -1 708 | 312 | -111 | -1 620 |
Premium income for own account | -8 110 | -7 842 | -60 883 | 0 | 0 | 0 |
Net financial income from investments | -10 062 | 14 940 | 38 393 | -10 265 | 37 378 | 104 885 |
Claims for own account | 11 233 | 9 265 | 30 200 | 0 | 0 | 0 |
Insurance provisions for own account | -3 968 | 20 239 | 94 146 | 0 | 0 | 0 |
Policyholder's share of changes in fair value of underlying items | -408 | -19 837 | -63 663 | -408 | -19 837 | -63 663 |
Other insurance related financial cost | 0 | 0 | 0 | -21 | -19 | -84 |
Unit holder's value change in consolidated security funds | 11 003 | -17 322 | -38 287 | 11 003 | -17 322 | -38 287 |
Net insurance services and financial result | -9 | -472 | -1 803 | 621 | 89 | 1 231 |
Net financial income from investments in companys portefolio | -94 | -328 | -2 143 | 0 | 0 | 0 |
Net costs subordinated loan and hybrid Tier 1 securities | 10 | -18 | -69 | 146 | -261 | -451 |
Operating expenses | 477 | 435 | 1 686 | -246 | -223 | -808 |
Other income and expenses | -236 | -226 | -714 | -67 | -62 | -34 |
Pre-tax income | 149 | -609 | -3 043 | 454 | -457 | -61 |
Cost of taxes | -240 | -261 | -1 182 | -290 | -318 | -1 634 |
Income | -92 | -870 | -4 226 | 164 | -774 | -1 695 |
Total other comprehensive income | -151 | 634 | 1 118 | -151 | 824 | 1 531 |
Total comprehensive income | -243 | -236 | -3 108 | 13 | 50 | -163 |
Lending | -22 120 | -224 691 | -20 449 | 130 821 | 125 769 | 129 927 |
Other assets | 244 056 | 429 050 | 244 603 | 1 018 019 | 939 772 | 1 017 462 |
Total assets | 221 936 | 204 358 | 224 154 | 1 148 840 | 1 065 541 | 1 147 389 |
Insurance liabilites | 35 142 | 35 357 | 33 283 | 837 102 | 784 749 | 839 613 |
Other liabilities | 244 385 | 222 344 | 248 295 | 315 029 | 283 882 | 311 080 |
Total liabilities | 279 527 | 257 701 | 281 578 | 1 152 130 | 1 068 631 | 1 150 693 |
The KLP Group’s business is divided into the five areas: Group pensions public sector & group life, non-life insurance, banking, asset management and other. All business is directed towards customers in Norway.
PUBLIC SECTOR OCCUPATIONAL PENSION AND GROUP LIFE
Kommunal Landspensjonskasse offers group public sector occupational pensions. This segment is followed up according to NGAAP, which deviates from the IFRS Accounting Standards used in the group. Adjustments have therefore been entered in the elimination column to make the total reconcileable to the consolidated accounts.
NON-LIFE INSURANCE
KLP Skadeforsikring AS offers property and personal injury products to employers within the public and private sectors. In addition, a broad specter of standard insurance products is offered to the the retail market.
BANKING
KLP’s banking business embraces the companies KLP Banken AS and its wholly-owned subsidiaries: KLP Kommunekreditt AS and KLP Boligkreditt AS. The banking business covers services such as deposits and lending to the retail market, credit cards, as well as lending with public sector guarantee.
ASSET MANAGEMENT
Asset management is offered from the company KLP Kapitalforvaltning AS. The company offers a broad selection of securities mutual funds both to retail customers and to institutional customers. The securities management has a socially responsible profile.
OTHER
Other segments comprise KLP Forsikringsservice AS which offers a broad specter of services to local authority pension funds.
Note 3 Insurance service result
NOK MILLIONS | Q1 2025 | Q1 2024 | 01.01.2024 -31.12.2024 |
---|---|---|---|
Insurance income | 1 579 | 1 234 | 2 788 |
Insurance service expenses | -1 197 | -1 240 | -4 230 |
Reinsurance income (+)/ cost (-) | -69 | -106 | -178 |
Insurance service result | 312 | -111 | -1 620 |
Note 4 Investment property
NOK MILLIONS | Q1 2025 | Q1 2024 | 01.01.2024 -31.12.2024 |
---|---|---|---|
Net rental income | 1 201 | 1 027 | 4 314 |
Net value adjustment | 328 | -998 | 697 |
Net income from investment properties | 1 529 | 29 | 5 011 |
Translation difference foreign exchange (taken to other comprehensive income) | -158 | 651 | 1 124 |
Net income from investment properties translation difference foreign exchange | 1 372 | 680 | 6 135 |
NOK MILLIONS | 31.03.2025 | 31.03.2024 | 31.12.2024 |
---|---|---|---|
Investment property 01.01. | 98 889 | 92 322 | 92 322 |
Value adjustment, including translation difference foreign exchange | 170 | - 347 | 1 821 |
Net additions | 1 145 | 3 459 | 4 749 |
Reclassification property for own use | - 1 231 | 0 | - 5 |
Other changes | 2 | - 3 | 2 |
Book value | 98 975 | 95 431 | 98 889 |
Note 5 Technical provisions
NOK MILLIONS | 31.03.2025 | 31.03.2024 | 31.12.2024 |
---|---|---|---|
Life insurance contracts | 833 062 | 780 742 | 836 319 |
Non-life insurance contracts | 4 039 | 4 007 | 3 294 |
Insurance obligations | 837 102 | 784 749 | 839 613 |
NOK MILLIONS | Estimates of present value of future cash flows | Risk adjustment for non financial risk | Residual value | Total |
---|---|---|---|---|
Life insurance contracts 1 January 2025 | 411 318 | 29 181 | 395 820 | 836 319 |
Changes that realte to current services | ||||
Change in risk adjustment for non-financial risk for risk expired | 0 | -315 | 0 | -315 |
Experience adjustment not related to future service | 12 | 0 | 0 | 12 |
Insurance service result | 12 | -315 | 0 | -303 |
Change in risk adjustment for non-financial risk at the start of the period | 0 | 0 | 0 | 0 |
Accured interest | 4 102 | 345 | -4 447 | 0 |
Released cash flows | -1 563 | 0 | 0 | -1 563 |
Changes in estimates related to future service | -363 | -31 | 394 | 0 |
Change due to changes in discount curve | -12 421 | -1 043 | 13 464 | 0 |
Result addes to policyholders | 323 | 0 | 1 648 | 1 971 |
Insurance related financial cost | -9 922 | -729 | 11 059 | 408 |
Premium | 8 242 | 0 | 0 | 8 242 |
Claims and other insurance service expenses (incl. Investmentcomponents) | -11 605 | 0 | 0 | -11 605 |
Total cash flows | -3 363 | 0 | 0 | -3 363 |
Life insurance contracts 31 March 2025 | 398 045 | 28 137 | 406 880 | 833 062 |
NOK MILLIONS | Liability for incurred claims (LIC) | Liabilities for remaining coverage | Total | |
---|---|---|---|---|
Estimates of present value of future cash flows | Risk adjustment for non financial risk | |||
Non-life insurance contracts 1 January 2025 | 2 808 | 121 | 364 | 3 294 |
Insurance income | 0 | 0 | -786 | -786 |
Claims | 563 | 22 | 0 | 585 |
Expenses | 173 | 2 | 0 | 175 |
Other movements realted to current service | 0 | -6 | 0 | -6 |
Changes that relate to past service | -30 | -17 | 0 | 0 |
Insurance service expenses | 706 | 2 | 0 | 707 |
Insurance service result | 706 | 2 | -786 | -79 |
Insurance related financial cost | 29 | -3 | 0 | 26 |
Premium | 0 | 0 | 1 550 | 1 550 |
Claims and other insurance service expenses | -705 | 0 | 0 | -705 |
Total cash flows | -705 | 0 | 1 550 | 845 |
Other changes | 1 | 0 | -47 | -46 |
Non-life insurance contracts 31 March 2025 | 2 838 | 120 | 1 081 | 4 039 |
NOK MILLIONS | Liability for incurred claims (LIC) | Liabilities for remaining coverage | Total | |
---|---|---|---|---|
Estimates of present value of future cash flows | Risk adjustment for non financial risk | |||
Reinsurance contracts assets 1 January 2025 | 494 | 18 | -3 | 510 |
Premium paid - reinsurance | 0 | 0 | -39 | -39 |
Recoveries of incurred claims and other insurance service expenses | 0 | 0 | 0 | 0 |
Reinsurance expenses -related to past service | -28 | -2 | 0 | -30 |
Insurance service expenses | -28 | -2 | 0 | -30 |
Insurance service result | -28 | -2 | -39 | -69 |
Insurance related financial cost | 3 | 1 | 0 | 4 |
Premium | -11 | 0 | 60 | 49 |
Total cash flows | -11 | 0 | 60 | 49 |
Other changes | -125 | 0 | 0 | -125 |
Reinsurance contracts assets 31 March 2025 | 334 | 18 | 17 | 369 |
NOK MILLIONS | Life insurance contracts | Non-life insurance contracts | Reinsurance | Total |
---|---|---|---|---|
Specification of profit or loss items per product group 01.01.-31.03.2025 | ||||
Insurance service result | 303 | 79 | -69 | 312 |
Net insurance related financial cost | -408 | -26 | 4 | -430 |
NOK MILLIONS | Estimates of present value of future cash flows | Risk adjustment for non financial risk | Residual value | Total |
---|---|---|---|---|
Life insurance contracts 1 January 2024 | 377 742 | 29 068 | 355 979 | 762 789 |
Changes that realte to current services | ||||
Change in risk adjustment for non-financial risk for risk expired | 0 | -105 | 0 | -105 |
Experience adjustment not related to future service | 19 | 0 | 0 | 19 |
Insurance service result | 19 | -105 | 0 | -85 |
Change in risk adjustment for non-financial risk at the start of the period | 0 | -924 | 924 | 0 |
Accured interest | 3 983 | 335 | -4 318 | 0 |
Released cash flows | -123 | 0 | 0 | -123 |
Changes in estimates related to future service | -7 358 | -618 | 7 976 | 0 |
Change due to changes in discount curve | -6 675 | -561 | 7 236 | 0 |
Result addes to policyholders' residual value | 213 | 0 | 19 747 | 19 960 |
Insurance related financial cost | -9 960 | -1 768 | 31 565 | 19 837 |
Premium | 7 551 | 0 | 0 | 7 551 |
Claims and other insurance service expenses (incl. Investmentcomponents) | -9 350 | 0 | 0 | -9 350 |
Total cash flows | -1 799 | 0 | 0 | -1 799 |
Life insurance contracts 31 March 2024 | 366 002 | 27 195 | 387 545 | 780 742 |
NOK MILLIONS | Liability for incurred claims (LIC) | Liabilities for remaining coverage | Total | |
---|---|---|---|---|
Estimates of present value of future cash flows | Risk adjustment for non financial risk | |||
Non-life insurance contracts 1 January 2024 | 2 944 | 128 | 320 | 3 392 |
Insurance income | 0 | 0 | -707 | -707 |
Claims | 699 | 27 | 0 | 726 |
Expenses | 156 | 2 | 0 | 158 |
Other movements realted to current service | 0 | -6 | 0 | -6 |
Changes that relate to past service | -59 | -21 | 0 | -80 |
Insurance service expenses | 796 | 2 | 0 | 798 |
Insurance service result | 796 | 2 | -707 | 90 |
Insurance related financial cost | 29 | -7 | 0 | 23 |
Premium | 0 | 0 | 1 354 | 1 354 |
Claims and other insurance service expenses | -786 | 0 | 0 | -786 |
Total cash flows | -786 | 0 | 1 354 | 568 |
Other changes | 2 | 0 | -68 | -65 |
Non-life insurance contracts 31 March 2024 | 2 986 | 123 | 898 | 4 007 |
NOK MILLIONS | Liability for incurred claims (LIC) | Liabilities for remaining coverage | Total | |
---|---|---|---|---|
Estimates of present value of future cash flows | Risk adjustment for non financial risk | |||
Reinsurance contracts assets 1 January 2024 | 699 | 39 | -10 | 728 |
Premium paid - reinsurance | 0 | 0 | -34 | -34 |
Recoveries of incurred claims and other insurance service expenses | 0 | 0 | 0 | 0 |
Reinsurance expenses -related to past service | -61 | -10 | 0 | -72 |
Insurance service expenses | -61 | -10 | 0 | -72 |
Insurance service result | -61 | -10 | -34 | -106 |
Insurance related financial cost | 5 | -1 | 0 | 4 |
Premium | -131 | 0 | 80 | -51 |
Total cash flows | -131 | 0 | 80 | -51 |
Other changes | 105 | 0 | 0 | 105 |
Reinsurance contracts assets 31 March 2024 | 617 | 27 | 35 | 680 |
NOK MILLIONS | Insurance obligation with the right to residual value | Other insurance liabilities | Reinsurance | Total |
---|---|---|---|---|
Specification of profit or loss items per product group 01.01-31.03.2024 | ||||
Insurance service result | 85 | -90 | -106 | -111 |
Insurance related financial cost | -19 837 | -23 | 4 | -19 856 |
NOK MILLIONS | Estimates of present value of future cash flows | Risk adjustment for non financial risk | Residual value | Total |
---|---|---|---|---|
Life insurance contracts 1 January 2024 | 377 742 | 29 068 | 355 979 | 762 789 |
Changes that realte to current services | ||||
Change in risk adjustment for non-financial risk for risk expired | 0 | 1 782 | 0 | 1 782 |
Experience adjustment not related to future service | -73 | 0 | 0 | -73 |
Insurance service result | -73 | 1 782 | 0 | 1 708 |
Change in risk adjustment for non-financial risk at the start of the period | 0 | -924 | 924 | 0 |
Accured interest | 16 492 | 1 386 | -17 878 | 0 |
Released cash flows | -4 983 | 0 | 0 | -4 983 |
Changes in estimates related to future service | 3 076 | 258 | -3 335 | 0 |
Change due to changes in discount curve | -28 425 | -2 388 | 30 813 | 0 |
Result addes to policyholders' residual value | 39 330 | 0 | 29 316 | 68 645 |
Insurance related financial cost | 25 490 | -1 668 | 39 841 | 63 663 |
Premium | 38 869 | 0 | 0 | 38 869 |
Claims and other insurance service expenses (incl. Investmentcomponents) | -30 710 | 0 | 0 | -30 710 |
Total cash flows | 8 159 | 0 | 0 | 8 159 |
Life insurance contracts 31 December 2024 | 411 318 | 29 181 | 395 820 | 836 319 |
NOK MILLIONS | Liability for incurred claims (LIC) | Liabilities for remaining coverage | Total | |
---|---|---|---|---|
Estimates of present value of future cash flows | Risk adjustment for non financial risk | |||
Non-life insurance contracts 1 January 2024 | 2 944 | 128 | 320 | 3 392 |
Insurance income | 0 | 0 | -2 758 | -2 758 |
Claims | 2 098 | 84 | 0 | 2 182 |
Expenses | 535 | 7 | 0 | 541 |
Other movements realted to current service | 0 | -45 | 0 | -45 |
Changes that relate to past service | -136 | -51 | 0 | -187 |
Insurance service expenses | 2 497 | -5 | 0 | 2 492 |
Insurance service result | 2 497 | -5 | -2 758 | -266 |
Insurance related financial cost | 103 | -1 | 0 | 101 |
Premium | 0 | 0 | 2 777 | 2 777 |
Claims and other insurance service expenses | -2 741 | 0 | 0 | -2 741 |
Total cash flows | -2 741 | 0 | 2 777 | 36 |
Other changes | 5 | 0 | 26 | 32 |
Non-life insurance contracts 31 December 2024 | 2 808 | 121 | 364 | 3 294 |
NOK MILLIONS | Liability for incurred claims (LIC) | Liabilities for remaining coverage | Total | |
---|---|---|---|---|
Estimates of present value of future cash flows | Risk adjustment for non financial risk | |||
Reinsurance contracts assets 1 January 2024 | 699 | 39 | -10 | 728 |
Premium paid - reinsurance | 0 | 0 | -136 | -136 |
Recoveries of incurred claims and other insurance service expenses | 0 | 0 | 0 | 0 |
Reinsurance expenses -related to past service | -23 | -19 | 0 | -42 |
Insurance service expenses | -23 | -19 | 0 | -42 |
Insurance service result | -23 | -19 | -136 | -178 |
Insurance related financial cost | 19 | -1 | 0 | 17 |
Premium | -342 | 0 | 143 | -199 |
Total cash flows | -342 | 0 | 143 | -199 |
Other changes | 141 | 0 | 0 | 141 |
Reinsurance contracts assets 31 December 2024 | 494 | 18 | -3 | 510 |
NOK MILLIONS | Life insurance contracts | Non-life insurance contracts | Reinsurance | Total |
---|---|---|---|---|
Specification of profit or loss items per product group 01.01. - 31.12.2024 | ||||
Insurance service result | -1 708 | 266 | -178 | -1 620 |
Insurance related financial cost | -63 663 | -101 | 17 | -63 747 |
IMPORTANT ASSUMPTIONS
Discount curve for IFRS 17
Expected cash flows from the insurance contracts will mature at various times in the future. The future cash flows are therefore discounted to the value on the balance sheet date with an interest rate curve that is determined on the balance sheet date. The discount curve for IFRS 17 is generally determined according to the same principles as the curve EIOPA calculates for Solvency II purposes. The main difference is that EIOPA's estimate for volatility adjustment is replaced with an estimate for the illiquidity spread in the bond market, and this is calibrated to the illiquidity degree of the KLP's obligation. Selected values of discounting curves for IFRS 17 are listed below:
Year | 31.03.2025 | 31.03.2024 | 31.12.2024 |
---|---|---|---|
1 | 5,0 % | 5,1 % | 4,8 % |
2 | 4,9 % | 4,9 % | 4,7 % |
3 | 4,7 % | 4,8 % | 4,6 % |
4 | 4,5 % | 4,6 % | 4,6 % |
5 | 4,4 % | 4,5 % | 4,5 % |
10 | 4,4 % | 4,2 % | 4,4 % |
15 | 4,4 % | 4,1 % | 4,3 % |
25 | 4,2 % | 3,9 % | 4,1 % |
50 | 3,9 % | 3,8 % | 3,8 % |
75 | 3,8 % | 3,7 % | 3,7 % |
100 | 3,7 % | 3,6 % | 3,7 % |
Salary growth curve
Future cash flows within the contract boundary are calculated with assumptions about annual future salary growth/regulation as stated in the table below. The salary growth curve is projected by the NAM model (Norwegian aggregate model), which makes a macro projection of key economic figures (salary growth, inflation, etc.) year by year.
Year | 31.03.2025 | 31.03.2024 | 31.12.2024 |
---|---|---|---|
1 | 4,6 % | 4,8 % | 4,6 % |
5 | 4,3 % | 4,4 % | 4,3 % |
10 | 3,7 % | 3,1 % | 3,7 % |
15 | 3,3 % | 3,1 % | 3,3 % |
25 | 3,5 % | 3,5 % | 3,5 % |
50 | 3,5 % | 3,4 % | 3,5 % |
80 | 3,5 % | 3,4 % | 3,5 % |
SENSITIVITY IFRS 17
The table below shows the consequence for the group's residual value of a change in the standard assumptions used in the best estimate. Sensitivity related to costs is also included in the overview. The residual value consists of the part of the insurance liability that is not included in the best estimate or the risk adjustment.
NOK MILLIONER | Change | 31.03.2025 | 31.03.2024 | 31.12.2024 |
---|---|---|---|---|
Reduced mortality | -5 % | -4 507 | -4 356 | -4 674 |
Increased mortality | 5 % | 4 317 | 4 172 | 4 477 |
Increased disability | 5 % | -400 | -387 | -414 |
Reduced disability | -5 % | 402 | 389 | 418 |
Increased costs | 5 % | -1 299 | -1 256 | -1 347 |
Reduced costs | -5 % | 1 299 | 1 255 | 1 348 |
Increased yield curve | *) | 33 759 | 33 594 | 35 002 |
Reduced yield curve | **) | -37 797 | -42 074 | -40 015 |
All changes to assumptions are in % change of the standard assumption applied as of 31.03.2025 (31.03.2024/31.12.2024). | ||||
*) Increased interest rate curve by 50 basis points for the liquid part of the discount rate curve, 1:10 years. Then extrapolated to an estimate for long-term interest based on the sum of long-term real GDP growth and Norges Bank's inflation target. | ||||
**) Reduced by 50 basis points for the liquid part of the discount rate curve, 1:10 years. Then extrapolated to an estimate for long-term interest based on the sum of long-term real GDP growth and Norges Bank's inflation target. |
Note 6 Subordinated loans and perpetual hybrid tier 1 securities
NOK MILLIONS | Q1 2025 | Q1 2024 | 01.01.2024 -31.12.2024 |
---|---|---|---|
SUBORDINATED LOANS | |||
Interest costs | -32 | -40 | -146 |
Value changes | 123 | -166 | -229 |
Net costs subordinated loans | 90 | -206 | -375 |
PERPETUAL HYBRID TIER 1 SECURITIES | |||
Interest costs | -19 | -20 | -80 |
Value changes | 75 | -36 | 5 |
Net costs perpetual hybrid tier 1 securities | 56 | -56 | -75 |
Net costs subordinated loan and hybrid Tier 1 securities | 146 | -261 | -451 |
This note gives a specification of the line "Net costs subordinated loan and hybrid Tier 1 securities" in the income statement. The fluctuations in value change are predominantly due to the loans being denominated in foreign currency. The subordinated loan is issued in euros and the perpetual hybrid Tier 1 security are issued in Japanese yen.
Note 7 Fair value of financial assets and liabilites
Fair value is to be a representative price based on what the equivalent assets or liabilites would be sold for under normal market terms and conditions. A financial instrument is considered as being listed in an active market if listed prices are easily and regularly accessible from a stock exchange, dealer, broker, commercial group, pricing service or regulatory authority, and such prices represent actual transactions that occur regularly at arm’s length. If the market for the security is not active, or the security is not listed on a stock exchange or similar, the Group uses valuation techniques to determine fair value. These are based on information on transactions recently carried out on business conditions, reference to the purchase and sale of similar instruments and pricing by means of externally obtained interest-rate curves and interest-rate differential curves. Estimates are based to the greatest possible extent on external observable market data, and to a small degree on company-specific information.
In the case of this note, there are three different categories of financial instruments: balance sheet classification, accounts classification, and type of instrument. It is for this last category that information is provided about how fair value is derived.
FINANCIAL INSTRUMENTS MEASURED AT AMORTISED COST
This category includes:
- Fixed-income securities and other debt instruments measured at amortised cost
- Lending to local government, enterprises & retail customers measured at amortised cost
- Liabilites to and deposits from customers
- Other debt issued (liabilities)
Financial instruments not measured at fair value are measured at amortised cost by using the effective interest rate method. The internal rate of exchange is determined by discounting contractual cash flows over their expected term. The cash flows include arrangement/up-front fees and direct transaction costs as well as any residual value on the expiry of the expected term. Amortised cost is the present value of these cash flows discounted by the internal rate of interest. This note contains information about the fair value of the financial instruments that are measured at amortised cost.
FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE
This category includes:
- Equity instruments
- Fixed-income securities and other debt instruments measured at fair value
- Lending local government, enterprises & retail customers at fair value through profit/loss
- Derivatives (assets and liabilites)
- Debt to credit institutions (liabilites)
- Subordinated loan capital (liabilities)
Below is a list of which types of financial instrument come under the various accounts categories, and how fair value is calculated.
FIXED-INCOME SECURITIES AND OTHER DEBT INSTRUMENTS MEASURED AT FAIR VALUE
a) Foreign fixed-income securities
Foreign fixed-income securities are generally priced based on prices obtained from an index provider. At the same time, prices are compared between several different sources to spot any errors.
The following sources are used:
- Bloomberg Barcalys Indicies
- Bloomberg
Barclays Capital Indices have first priority (they cover foreign government and foreign credit respecitvely). Then comes Bloomberg based on Bloomberg’s pricing service Business Valuator Accredited in Litigation (BVAL). BVAL has verified prices from Bloomberg.
b) Norwegian fixed-income securities – government
Nordic Bond Pricing is used as the primary source for pricing Norwegian Government Bonds.
c) Norwegian fixed-income securities – other than government ones
Norwegian fixed-income securities – other than government ones Norwegian fixed-income securities (denominated in NOK) are generally priced based on rates from Nordic Bond Pricing. Securities not covered by Nordic Bond Pricing are priced theoretically. The theoretical price should be based on the discounted value of the security's future cash flows. Discounting is performed using a swap curve adjusted for credit spread and liquidity spread. The credit spread should, to the extent possible, be based on a comparable bond from the same issuer. The liquidity spread is determined at the discretion of the evaluator.
d) Fixed-income securities issued by foreign enterprises but denominated in NOK
Fair value is calculated on the same general principles as those applied on Norwegian fixed-income securities described above.
e) Receivables on credit institutions
The fair value of these are considered as being approximately the same as the book value since the terms and conditions of the contract are continually revised in accordance with changes in the market rates.
f) Loans to municipalities and enterprises with municipal guarantee
Receivables are valued by means of a valuation model using relevant credit premium adjustments obtained in the market. For guaranteed loans fair value is calculated as discounted cash flow based on the same interest-rate curves as direct loans, but the credit margin is adjusted to market values for the appropriate combination of guarantee category and type of guarantee. The guarantor is either a state, municipality or a bank.
g) Loans secured by mortgage
The principles for calculating fair value are subject to the loans having fixed-interest rates or not. Fair value of fixed-rate loans is calculated by discounting contractual cash flows by the market rate including a relevant risk margin on the reporting date. The fair value of loans with no fixed rate is approximately equal to book value since the terms and conditions of the contract are continually revised in accordance with changes in the market rates.
EQUITY INSTRUMENTS
h) Shares (listed)
Liquid shares are generally valued on the basis of prices from an index provider. At the same time, prices are compared between different sources in order to spot any errors.
The following sources are used for Norwegian shares:
- Oslo Børs/Oslo Stock Exchange (primary source)
- Morgan Stanley Capital International (MSCI)
- Bloomberg
The following sources are used for foreign shares:
- Morgan Stanley Capital International (MSCI) (primary source)
- Bloomberg
i) Shares (unlisted)
As far as possible, The Group uses the Norwegian Mutual Funds Association’s industry recommendations. This basically means the following:
This means that the last traded price is used as long as it is considered representative. If the price information is deemed outdated, a derived valuation is performed in relation to a relevant proxy (such as a stock index or one or more companies). If this is not possible, a discretionary assessment is made, which may be based on fundamental analysis, broker evaluations, or risk and liquidity adjustments to the price.
j) Private Equity
Most of the investment in Private Equity goes through funds. The funds’ fair value is to be based on reported market values that follow from the International Private Equity and Venture Capital Valuation Guidelines (’IPEV Guidelines). These guidelines are established by the European Venture Capital Association (EVCA) and are based on the principle of approximate market assessment of the companies. Fair value is calculated on the basis of the funds’ reported market value adjusted for payments in and out during the period between the fund’s last reported market value and the period being reported on for the Group. Direct investments in Private Equity are treated in the same way as with current stocks, but valuation can be daily, quarterly or yearly. In cases where it's possible to obtain information on what co-investments are priced within the funds, it will be considered in the valuation process. Other direct investments are valued based on either cost prices, reported market values from companies or available trading prices.
DERIVATIVES
k) Futures/FRA/IRF
All futures contracts for KLP are traded on the stock exchange. Bloomberg is used as a price source. Prices are also obtained from another source in order to check that Bloombergs’ prices are correct. Reuters acts as a secondary source.
l) Options
Bloomberg is used as a source for pricing options traded on the stockmarket. Reuters is a secondary source.
m) Interest-rate swaps
Interest-rate swaps are valued in a model that takes observable market data such as interest-rate curves and relevant credit premiums into account.
n) FX-swaps
FX-swaps with a one-year maturity or less are priced on curves that are built up from FX swap-points obtained from Reuters. The market is not considered particularly liquid for FX-swaps with a maturity of more than one year and basis-adjusted swap curves are used for pricing purposes.
DEBT TO CREDIT INSTITUTIONS
o) Placements with credit institutions and deposits
Placements with credit institutions are made as short-term deposits. Fair value is calculated by discounting contractual cash flows by market rate including a relevant risk margin on the reporting date. Deposits are prices on swap curves.
SUBORDINATED LOAN CAPITAL, OTHER DEBT ISSUED, AND DEPOSITS FROM CUSTOMERS
p) Fair value of subordinated loans
The observable price is used as the fair value of loans listed on an active stock exchange. In the case of other loans that are not part of an active market the fair value is based on an internal valuation model based on observable data.
q) Fair value of subordinated bond/perpetual bond issued
Fair value in this category is determined on the basis of internal valuation models based on external observable data.
r) Covered bonds issued
Fair value in this category is determined on the basis of internal valuation models based on observable data.
s) Deposits from customers
All deposits are without fixed-rate interest. The fair value of these is considered as approximately equal to book value since the contractual terms are continually revised in accordance with the market rate.
The tables below give a more detailed specification of the content of the different classes of assets and financial liabilities.
NOK MILLIONS | 31.03.2025 | 31.03.2024 | 31.12.2024 | |||
---|---|---|---|---|---|---|
Book value | Fair value | Book value | Fair value | Book value | Fair value | |
FIXED-INCOME SECURITIES AND OTHER DEBT INSTRUMENTS AT AMORTISED COST | ||||||
Norwegian bonds | 1 140 | 1 092 | 983 | 941 | 1 102 | 1 052 |
Foreign bonds | 1 210 | 1 146 | 1 271 | 1 192 | 1 232 | 1 166 |
Fixed-income securities and other debt instruments at amortised cost | 2 351 | 2 238 | 2 253 | 2 134 | 2 334 | 2 219 |
LENDING LOCAL GOVERNMENT, ENTERPRISES & RETAIL CUSTOMERS AT FAIR VALUE THROUGH PROFIT/LOSS | ||||||
Loans secured by mortgage | 3 205 | 3 205 | 2 525 | 2 525 | 3 197 | 3 197 |
Loans to local government sector or enterprises with local government guarantee | 76 105 | 76 105 | 74 253 | 74 253 | 76 844 | 76 844 |
Loans abroad secured by mortage and local government guarantee | 6 069 | 6 069 | 5 491 | 5 491 | 6 311 | 6 311 |
Other lending | 1 721 | 1 721 | 664 | 664 | 740 | 740 |
Total loans to local government, enterprises & retail customers at fair value | 87 100 | 87 100 | 82 932 | 82 932 | 87 092 | 87 092 |
LENDING TO LOCAL GOVERNMENT, ENTERPRISES & RETAIL CUSTOMERS – AT AMORTISED COST | ||||||
Loans to and receivables from customers | 43 721 | 43 733 | 42 837 | 42 837 | 42 836 | 42 836 |
Total loans to local government, enterprises & retail customers at amortised cost | 43 721 | 43 733 | 42 837 | 42 837 | 42 836 | 42 836 |
FIXED-INCOME SECURITIES AT FAIR VALUE | ||||||
Norwegian bonds | 143 475 | 143 475 | 127 108 | 127 108 | 137 843 | 137 843 |
Norwegian certificates | 17 834 | 17 834 | 12 805 | 12 805 | 12 361 | 12 361 |
Foreign bonds | 208 622 | 208 622 | 215 067 | 215 067 | 215 443 | 215 443 |
Foreign certificates | 771 | 771 | 707 | 707 | 0 | 0 |
Investments with credit institutions | 55 423 | 55 423 | 50 354 | 50 354 | 53 431 | 53 431 |
Fixed income securitites at fair value | 426 125 | 426 125 | 406 041 | 406 041 | 419 077 | 419 077 |
EQUITY CAPITAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS | ||||||
Shares | 388 593 | 388 593 | 350 855 | 350 855 | 410 894 | 410 894 |
Equity funds | 52 094 | 52 094 | 47 846 | 47 846 | 53 887 | 53 887 |
Property funds | 8 879 | 8 879 | 7 756 | 7 756 | 8 040 | 8 040 |
Total equity capital instruments at fair value | 455 021 | 455 021 | 406 457 | 406 457 | 477 165 | 477 165 |
RECEIVABLES | ||||||
Receivables related to direct business | 1 326 | 1 326 | 869 | 869 | 1 383 | 1 383 |
Receivables related to reinsurance agreements | 0 | 0 | 0 | 0 | 0 | 0 |
Reinsurance share of gross claims reserve | 0 | 0 | 0 | 0 | 0 | 0 |
Receivables related to securites | 5 298 | 5 298 | 13 560 | 13 560 | 1 797 | 1 797 |
Prepaid rent related to real estate activites | 330 | 330 | 148 | 148 | 348 | 348 |
Other receivables | 70 | 70 | 337 | 337 | 7 | 7 |
Total other loans and receivables including receivables from policyholders | 7 024 | 7 024 | 14 914 | 14 914 | 3 534 | 3 534 |
FINANCIAL LIABILITIES | ||||||
Debt to credit institutions | 12 257 | 12 257 | 2 828 | 2 828 | 1 395 | 1 395 |
Covered bonds issued | 31 478 | 31 557 | 30 448 | 30 516 | 31 529 | 31 529 |
Liabilities and deposits from customers | 16 757 | 16 757 | 14 157 | 14 157 | 15 801 | 15 801 |
Hybrid Tier 1 securities | 1 373 | 1 373 | 1 489 | 1 489 | 1 429 | 1 429 |
Subordinated loan capital | 3 470 | 3 470 | 3 533 | 3 533 | 3 560 | 3 560 |
Total financial liabilities | 65 335 | 65 414 | 52 456 | 52 523 | 53 713 | 53 713 |
NOK MILLIONS | 31.03.2025 | 31.03.2024 | 31.12.2024 | |||
---|---|---|---|---|---|---|
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |
FINANCIAL DERIVATIVES - AT FAIR VALUE THROUGH PROFIT OR LOSS | ||||||
Forward exchange contracts | 10 813 | 502 | 377 | 6 044 | 781 | 7 070 |
Interest rate swaps | 1 494 | 2 520 | 405 | 3 298 | 243 | 4 235 |
Interest rate and currency swaps | 644 | 0 | 498 | 0 | 445 | 0 |
Total financial derivatives | 12 951 | 3 021 | 1 280 | 9 342 | 1 469 | 11 304 |
Note 8 Borrowing
NOK MILLIONS | Nominal in NOK | Currency | Interest | Due date | Book value 31.03.2025 | Book value 31.03.2024 | Book value 31.12.2024 |
---|---|---|---|---|---|---|---|
FIXED - TERM SUBORDINATED LOAN | |||||||
Kommunal Landspensjonskasse | 2 530 | EUR | Fixed ¹ | 2045 | 3 470 | 3 533 | 3 560 |
Total subordinated loan capital | 2 530 | 3 470 | 3 533 | 3 560 | |||
HYBRID TIER 1 SECURITIES | |||||||
Kommunal Landspensjonskasse | 984 | JPY | Fixed ² | 2034 | 1 373 | 1 489 | 1 429 |
Total hybrid Tier 1 securities | 984 | 1 373 | 1 489 | 1 429 | |||
COVERED BONDS | |||||||
KLP Kommunekreditt AS | 0 | NOK | Floating | 2024 | 0 | 1 350 | 0 |
KLP Kommunekreditt AS | 1 886 | NOK | Floating | 2025 | 1 891 | 5 015 | 1 892 |
KLP Kommunekreditt AS | 5 000 | NOK | Floating | 2026 | 5 051 | 5 053 | 5 053 |
KLP Kommunekreditt AS | 1 000 | NOK | Fixed | 2027 | 1 021 | 1 021 | 1 012 |
KLP Kommunekreditt AS | 6 000 | NOK | Floating | 2027 | 6 048 | 6 049 | 6 050 |
KLP Kommunekreditt AS | 6 250 | NOK | Floating | 2028 | 6 303 | 0 | 6 306 |
KLP Kommunekreditt AS | 700 | NOK | Fixed | 2029 | 714 | 714 | 706 |
KLP Boligkreditt AS | 0 | NOK | Floating | 2024 | 0 | 729 | 0 |
KLP Boligkreditt AS | 430 | NOK | Floating | 2025 | 430 | 2 502 | 2 501 |
KLP Boligkreditt AS | 4 500 | NOK | Floating | 2026 | 4 533 | 4 534 | 4 535 |
KLP Boligkreditt AS | 2 500 | NOK | Floating | 2027 | 2 514 | 2 516 | 2 516 |
KLP Boligkreditt AS | 3 000 | NOK | Floating | 2028 | 3 008 | 1 003 | 1 003 |
Other | -35 | -35 | -45 | ||||
Total covered bonds | 31 266 | 31 478 | 30 448 | 31 529 | |||
DEBT TO CREDIT INSTITUTIONS | |||||||
KLP Banken AS | 0 | NOK | Floating | 2024 | 0 | 151 | 0 |
KLP Banken AS | 300 | NOK | Floating | 2025 | 301 | 301 | 301 |
KLP Banken AS | 150 | NOK | Floating | 2026 | 151 | 151 | 151 |
KLP Banken AS | 350 | NOK | Floating | 2027 | 353 | 202 | 353 |
KLP Fond | 607 | NOK/EUR/USD | Fixed | 2025 | 607 | 1 087 | 0 |
KLP Fond | 0 | NOK/EUR/USD | Floating | 2025 | 3 994 | 291 | 30 |
Kommunal Landspensjonskasse | 0 | NOK/EUR/USD | Floating | 2025 | 6 798 | 566 | 512 |
Other | 54 | 79 | 47 | ||||
Total liabilities to credit institutions | 1 407 | 12 257 | 2 828 | 1 395 | |||
LIABILITIES AND DEPOSITS FROM CUSTOMERS ³ | |||||||
KLP Banken AS | 16 757 | NOK | 16 757 | 14 157 | 15 801 | ||
Liabilities to and deposits from customers | 16 757 | 16 757 | 14 157 | 15 801 | |||
Total financial liabilities | 52 943 | 65 335 | 52 456 | 53 713 | |||
1 The loan has an interest change date in 2025. | |||||||
2 The loan has an interest change date in 2034. | |||||||
3 There is no contractual maturity date on deposits. |
This note shows the financial liabilities that the Group had at the end of the reporting period, where the majority is funding for KLP Bank Group. The companies listed above are the issuers of the financial debt. Deposits belongs to KLP Banken AS.
Note 9 Fair value hierarchy
NOK MILLIONS | Level 1 | Level 2 | Level 3 | 31.03.2025 | 31.03.2024 | 31.12.2024 |
---|---|---|---|---|---|---|
ASSETS BOOKED AT FAIR VALUE | ||||||
Land/plots | 0 | 0 | 1 283 | 1 283 | 1 283 | 1 283 |
Buildings | 0 | 0 | 97 692 | 97 692 | 94 149 | 97 606 |
Investment property | 0 | 0 | 98 975 | 98 975 | 95 431 | 98 889 |
Lending at fair value | 0 | 87 100 | 0 | 87 100 | 82 932 | 87 092 |
Certificates | 5 701 | 12 904 | 0 | 18 605 | 13 512 | 12 361 |
Bonds | 19 787 | 332 293 | 0 | 352 080 | 342 272 | 353 274 |
Fixed-income funds | 0 | 9 224 | 17 186 | 26 410 | 28 173 | 26 782 |
Loans and receivables | 28 237 | 793 | 0 | 29 030 | 22 083 | 26 661 |
Bonds and other fixed-income securities | 53 724 | 355 214 | 17 186 | 426 125 | 406 041 | 419 077 |
Shares | 376 832 | 5 614 | 6 148 | 388 593 | 410 894 | |
Equity funds | 2 833 | 0 | 37 | 2 869 | 350 855 | 2 952 |
Property funds | 0 | 2 564 | 6 316 | 8 879 | 2 667 | 8 040 |
Special funds | 0 | 3 737 | 1 717 | 5 454 | 7 756 | 4 345 |
Private Equity | 0 | 0 | 49 225 | 49 225 | 50 936 | |
Shares and units | 379 664 | 11 915 | 63 443 | 455 021 | 45 178 | 477 165 |
Financial derivatives | 0 | 12 951 | 0 | 12 951 | 406 457 | 1 469 |
Total assets at fair value | 433 389 | 467 180 | 179 604 | 1 080 172 | 992 141 | 1 083 691 |
LIABILITIES BOOKED AT FAIR VALUE | ||||||
Financial derivatives | 0 | 3 021 | 0 | 3 021 | 9 342 | 11 304 |
Debt to credit institutions ¹ | 10 845 | 607 | 0 | 11 452 | 2 023 | 590 |
Subordinated loan capital | 0 | 3 470 | 0 | 3 470 | 3 533 | 3 560 |
Hybrid Tier 1 securities | 0 | 1 373 | 0 | 1 373 | 1 489 | 1 429 |
Total financial liabilities at fair value | 10 845 | 8 471 | 0 | 19 316 | 16 387 | 16 884 |
¹ The line «Debt to credit institutions» includes liabilities measured at fair value and amortized cost. This line is therefore not reconcilable against the Balance sheet. The liabilities measured at amortized cost amounted to NOK 805 million per 31.03.2025. |
Changes in level 3, financial assets and investment property | Financial assets | Investment property | Total |
---|---|---|---|
Opening balance 1 January | 81 522 | 98 889 | 180 410 |
Sold | -1 605 | -42 | -1 647 |
Bought | 2 028 | 1 187 | 3 216 |
Unrealised changes | -2 340 | 170 | -2 170 |
Other changes | 1 024 | -1 229 | -205 |
Closing balance | 80 629 | 98 975 | 179 604 |
Realised gains/losses | 638 | 0 | 638 |
Unrealised changes and realized gains/losses are reflected on the line "Net value changes on financial instruments" in the consolidated income statement.
The table "Changes in level 3" shows changes in level 3 classified instruments in the period indicated.
Fair value shall be a representative price based on what a corresponding asset or liability would have been traded for on normal market terms and conditions. Highest quality in regard to fair value is based on listed prices in an active market. A financial instrument is considered as noted in an active market if noted prices are easily and regularly available from a stock market, dealer, broker, industry grouping, price setting service or regulatory authority, and these prices represent actual and regularly occurring transactions at arm’s length.
Level 1:
Instruments at this level obtain fair value from listed prices in an active market for identical assets or liabilities that the entity has access to at the reporting date. Examples of instruments at Level 1 are stock market listed securities.
Level 2:
Instruments at this level obtain fair value from observable market data. This includes prices based on identical instruments, but where the instrument does not maintain a high enough trading frequency and is corresponding therefore not considered to be traded in an active market, as well as prices based on assets and price-leading indicators that can be confirmed from market information. Example instruments at Level 2 are fixed income securities priced on the basis of interest rate paths.
Level 3:
Instruments at Level 3 contain no observable market data or are traded in markets considered to be inactive. The price is based generally on discrete calculations where the actual fair value may deviate if the instrument were to be traded. The instruments covered at Level 3 in the Group include unlisted shares and Private Equity.
Valuations related to items in the various levels are described in Note 7. For description of the pricing of investment property, please see the last published annual financial statements. All Investment properties are included in level 3.
For level 3 securities, a change in MSCI Europe index of +/- 10 percent will result in a change in value of +/- NOK 996 million for shares and funds units, +/- NOK 7 383 million in private equity and +/- NOK 687 million in fixed-income funds.
With regard to transferring securities between the levels, a limit is set for the number of trading days and the amount of trading for shares by separating Level 1 and Level 2. The general principles related to the distribution between levels basically concern whether the asset or liability is listed or not and whether the listing can be stated to be in an active market. As regards shares, there is a further distinction between trading days and amount of trading which separates out listed securities that do not form part of an active market. The values at the end of the reporting period provide the basis for any movement between the levels.
During the 1st quarter, NOK 1 075 million in stocks moved from Level 1 to Level 2, and NOK 59 million moved from level 1 to level 3. In addition NOK 2 313 million in stocks moved from level 2 to level 1, and NOK 43 million from level 3 to level 1. The movements are due to changes in liquidity. For the category Bonds and other fixed-income securities, NOK 123 million moved from level 2 to level 1 due to changes in classification of bonds.
Note 10 Presentation of assets and liabilities that are subject to net settlement
31.03.2025 NOK MILLIONS | Related amounts not presented net | |||||
---|---|---|---|---|---|---|
Gross financial assets/ liabilities | Financial instruments | Security in cash | Security in securities | Net amount | Adjusted for the unit holders' interest in consolidated securities funds | |
ASSETS | ||||||
Financial derivatives | 12 951 | -1 435 | -10 748 | -5 817 | 143 | 143 |
Repos | 1 993 | 0 | 0 | 0 | 1 993 | 1 993 |
Total | 14 945 | -1 435 | -10 748 | -5 817 | 2 136 | 2 136 |
LIABILITIES | ||||||
Financial derivatives | 3 021 | -1 435 | -48 | -2 | 1 586 | 1 586 |
Repos | 607 | 0 | 0 | 0 | 607 | 607 |
Total | 3 629 | -1 435 | -48 | -2 | 2 194 | 2 194 |
31.03.2024 NOK MILLIONS | Related amounts not presented net | |||||
---|---|---|---|---|---|---|
Gross financial assets/ liabilities | Financial instruments | Security in cash | Security in securities | Net amount | Adjusted for the unit holders' interest in consolidated securities funds | |
ASSETS | ||||||
Financial derivatives | 1 280 | -682 | -693 | -2 708 | 72 | 72 |
Repos | 2 264 | 0 | 0 | 0 | 2 265 | 2 265 |
Total | 3 544 | -682 | -693 | -2 708 | 2 336 | 2 336 |
LIABILITIES | ||||||
Financial derivatives | 9 342 | -682 | -738 | -3 798 | 4 124 | 3 511 |
Repos | 1 541 | 0 | 0 | 0 | 1 541 | 1 541 |
Total | 10 429 | -682 | -738 | -3 798 | 5 212 | 4 595 |
31.12.2024 NOK MILLIONS | Related amounts not presented net | |||||
---|---|---|---|---|---|---|
Gross financial assets/ liabilities | Financial instruments | Security in cash | Security in securities | Net amount | Adjusted for the unit holders' interest in consolidated securities funds | |
ASSETS | ||||||
Financial derivatives | 1 469 | -1 431 | -483 | -2 483 | 37 | 37 |
Repos | 6 896 | 0 | 0 | 0 | 6 896 | 6 896 |
Total | 8 365 | -1 431 | -483 | -2 483 | 6 934 | 6 934 |
LIABILITIES | ||||||
Financial derivatives | 11 304 | -1 431 | -1 673 | -6 420 | 3 267 | 3 288 |
Repos | 0 | 0 | 0 | 0 | 0 | 0 |
Total | 11 304 | -1 431 | -1 673 | -6 420 | 3 267 | 3 288 |
The purpose of the note is to show the potential effect of netting agreements at the KLP Group; what possibilities the KLP Group has to net bilateral agreements against other counterparties should the latter go bankrupt and the remaining amount if all such netting agreements are materialized.The note shows derivative positions and repo agreements in the financial position statement. Repos are a part of the line "Debt to credit institutions" in the balance sheet.
The consolidated figures include all entities the KLP Group is considered to have control over. In addition, the outer line shows which de facto net amount remains if all the Groups netting agreements are set off; which only includes subsidiaries and entities, where the Group carries the risk.
Note 11 Capital adequacy
The Solvency II balance sheet includes assets and liabilities at fair value. There are no observable market values for KLP’s insurance liabilities, which are thus calculated by way of a best estimate based on actuarial assumptions. In addition there is a risk margin that is to reflect a third party’s capital costs by taking over these liabilities.
Tier 1 own funds appear from the Solvency II balance sheet and hybrid tier 1 securities. In the calculation of eligible own funds hybrid tier 1 securities are limited to a maximum of 20 percent of total eligible tier 1 own funds. Any excess exposure is eligible as tier 2 own funds. Tier 2 own funds otherwise consist of subordinated debt, the risk equalization fund, the natural perils fund and ancillary own funds. The Financial Supervisory Authority of Norway has accepted that KLP’s right to call in further member contribution if necessary, which is laid down in the Company’s articles of association, can be counted as ancillary own funds, the amount corresponding to 2.5 percent of the Company’s premium reserve. Any net deferred tax asset will be considered tier 3 own funds.
In the calculation of eligible own funds to cover the solvency capital requirement, eligible tier 1 own funds shall be at least 50 percent of the solvency capital requirement, eligible tier 3 own funds shall be less than 15 percent of the solvency capital requirement, and the sum of eligible tier 2 and tier 3 own funds shall not exceed 50 percent of the solvency capital requirement before capital requirement contributions from other financial sectors (KLP Banken and KLP Kapitalforvaltning). In the calculation of eligible own funds to cover the minimum consolidated group capital requirement, eligible tier 1 own funds shall be at least 80 percent of the minimum requirement, and eligible tier 2 own funds shall not exceed 20 percent of the minimum requirement. Own funds from other financial sectors (KLP Banken and KLP Kapitalforvaltning), tier 3 own funds and ancillary own funds are not eligible to cover the minimum requirement.
Without the use of the transitional measure on technical provisions the Company’s SCR ratio is 290 percent, which is well over the Company’s target of at least 150 percent. With the transitional measure on technical provisions the SCR ratio is 290 percent.
NOK MILLIONS | 31.03.2025 | 31.03.2024 | 31.12.2024 |
---|---|---|---|
ELIGIBLE OWN FUNDS | |||
Assets | 855 863 | 794 670 | 853 502 |
Liabilities | -807 967 | -749 868 | -805 295 |
Excess of assets over liabilities | 47 896 | 44 802 | 48 207 |
- Risk equalization fund | -4 188 | -3 864 | -4 188 |
+ Hybrid tier 1 securities | 1 373 | 1 489 | 1 429 |
Adjustment for other financial sector own funds | -169 | -246 | -98 |
Tier 1 basic own funds | 44 913 | 42 181 | 45 350 |
Sum tier 1 own funds | 44 913 | 42 181 | 45 350 |
Subordinated debt | 3 449 | 3 461 | 3 514 |
Risk equalization fund and natural perils fund | 4 188 | 3 864 | 4 188 |
Tier 2 basic own funds | 7 637 | 7 325 | 7 702 |
Ancillary own funds | 15 387 | 14 373 | 15 396 |
Tier 2 ancillary own funds | 15 387 | 14 373 | 15 396 |
Sum tier 2 own funds | 23 023 | 21 698 | 23 098 |
Deferred tax asset | 0 | 0 | 0 |
Tier 3 basic own funds | 0 | 0 | 0 |
Sum tier 3 own funds | 0 | 0 | 0 |
Eligible own funds to cover the solvency capital requirement - tier 1 | 44 913 | 42 181 | 45 350 |
Eligible own funds to cover the solvency capital requirement - tier 2 | 7 554 | 7 237 | 7 394 |
Eligible own funds to cover the solvency capital requirement - tier 3 | 0 | 0 | 0 |
A Eligible own funds to cover the solvency capital requirement | 52 467 | 49 418 | 52 744 |
Eligible own funds to cover the minimum requirement - tier 1 | 41 155 | 38 678 | 41 516 |
Eligible own funds to cover the minimum requirement - tier 2 | 861 | 803 | 838 |
B Eligible own funds to cover the minimum consolidated group capital requirement | 42 016 | 39 482 | 42 354 |
CAPITAL REQUIREMENT | |||
Market risk | 176 936 | 169 108 | 176 709 |
Counterparty risk | 3 328 | 3 049 | 3 058 |
Life risk | 141 362 | 119 344 | 140 142 |
Non-life risk | 687 | 709 | 695 |
Health risk | 495 | 448 | 471 |
Diversification | -68 880 | -61 339 | -68 328 |
Operational risk | 3 577 | 3 344 | 3 576 |
Loss absorbing capacity of technical provisions | -240 600 | -218 679 | -239 819 |
Loss absorbing capacity deferred tax | -1 798 | -1 581 | -1 716 |
Capital requirement for other financial sectors | 2 979 | 2 829 | 2 921 |
C Solvency capital requirement | 18 087 | 17 233 | 17 710 |
Minimum capital requirement, KLP | 3 759 | 3 533 | 3 670 |
Minimum capital requirement, KLP Skadeforsikring | 545 | 484 | 522 |
D Minimum consolidated group capital requirement | 4 304 | 4 017 | 4 192 |
CAPITAL ADEQUACY | |||
SCR ratio (A/C) | 290 % | 288 % | 298 % |
MCR ratio (B/D) | 976 % | 983 % | 1010 % |
Note 12 Pension obligations
NOK MILLIONS | 31.03.2025 | 31.03.2024 | 31.12.2024 |
---|---|---|---|
Capitalized net liability 01.01. | 543 | 913 | 913 |
Capitalized pension costs | 56 | 55 | 234 |
Capitalized financial costs | 7 | 8 | 34 |
Actuarial gains and losses | 0 | -199 | -442 |
Premiums / contributions received | -40 | -32 | -195 |
Capitalized net liability | 566 | 744 | 543 |
Assumptions | 31.03.2025 | 31.03.2024 | 31.12.2024 |
---|---|---|---|
Discount rate | 3.95 % | 3.45 % | 3.90 % |
Salary growth | 4.00 % | 3.50 % | 4.00 % |
The National Insurance basic amount (G) | 3.75 % | 3.25 % | 3.75 % |
Pension increases | 3.00 % | 2.80 % | 3.00 % |
Social security contribution rate | 14.10 % | 14.10 % | 14.10 % |
Capital activity tax | 5.00 % | 5.00 % | 5.00 % |
Note 13 Other current liabilities
NOK MILLIONS | 31.03.2025 | 31.03.2024 | 31.12.2024 |
---|---|---|---|
Short-term payables trade in securities | 8 946 | 14 406 | 2 019 |
Incurred not assessed taxes | 1 116 | 289 | 1 206 |
Accounts payable | 276 | 353 | 274 |
Public fees | 779 | 770 | 829 |
Other current liabilities | 1 329 | 1 427 | 1 100 |
Total other current liabilities | 12 446 | 17 245 | 5 427 |
Key figures – Accumulated
NOK MILLIONS | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 |
---|---|---|---|---|---|---|---|---|
KLP GROUP | ||||||||
Total assets | 1 148 840 | 1 147 389 | 1 128 114 | 1 079 281 | 1 065 541 | 1 016 721 | 972 345 | 956 311 |
Equity | -3 291 | -3 303 | -2 594 | -2 556 | -3 090 | -3 140 | -3 555 | -3 684 |
Solvency SCR ratio | 290 % | 298 % | 289 % | 283 % | 288 % | 285 % | 332 % | 297 % |
Number of employees in the Group | 1 189 | 1 169 | 1 168 | 1 168 | 1 153 | 1 133 | 1 120 | 1 099 |
KOMMUNAL LANDSPENSJONSKASSE | ||||||||
Profit before tax | 205 | 2 169 | 1 663 | 926 | 183 | -20 | 1 136 | 774 |
Premium income for own account | 8 110 | 60 883 | 51 795 | 37 257 | 7 842 | 70 326 | 60 032 | 51 102 |
- of which inflow of premium reserve | 40 | 1 | 1 | 1 | 0 | 92 | 91 | 91 |
Insurance customers' funds incl. acc. profit | 11 233 | 30 200 | 23 024 | 16 132 | 9 265 | 28 261 | 21 501 | 14 840 |
- of which funds with guaranteed returns | 4 289 | 2 423 | 2 423 | 2 419 | 2 456 | 2 139 | 2 125 | 2 121 |
Net investment common portfolio | 805 349 | 803 441 | 790 200 | 761 757 | 751 512 | 734 337 | 718 214 | 701 944 |
Net investment choice portfolio | 3 105 | 3 135 | 3 063 | 3 064 | 2 953 | 2 830 | 2 730 | 2 833 |
Insurance funds incl. earnings for the year | 797 920 | 803 036 | 788 668 | 778 458 | 745 385 | 725 781 | 704 815 | 715 239 |
- of which funds with guaranteed interest | 678 596 | 679 801 | 638 919 | 642 860 | 617 219 | 616 315 | 586 941 | 592 053 |
Solvency capital requirement (SCR) | 53 359 | 52 962 | 52 772 | 50 482 | 49 575 | 49 517 | 49 918 | 47 624 |
Solvency SCR ratio | 355 % | 361 % | 351 % | 344 % | 351 % | 346 % | 368 % | 329 % |
Riskprofit | 168 | 790 | 420 | 81 | 82 | 648 | 364 | 270 |
Return profits | -4 094 | 51 090 | 40 471 | 26 553 | 18 729 | 29 466 | 15 822 | 21 243 |
Administration profit | -27 | 77 | 129 | 65 | -8 | 144 | 176 | 62 |
Solvency capital | 159 022 | 162 859 | 193 589 | 167 161 | 155 824 | 164 487 | 147 893 | 151 993 |
Value-adjusted return on common portfolio | 0,0 % | 9,0 % | 7,0 % | 4,6 % | 3,0 % | 6,4 % | 3,9 % | 4,2 % |
Return on unit-linked portfolio | -0,8 % | 10,8 % | 8,6 % | 5,8 % | 4,0 % | 8,3 % | 4,8 % | 5,6 % |
Return on corporate portfolio | 0,6 % | 4,8 % | 3,4 % | 1,9 % | 0,5 % | 3,0 % | 2,1 % | 1,5 % |
KLP SKADEFORSIKRING AS | ||||||||
Profit before tax | 32 | 386 | 196 | 64 | -118 | 273 | 255 | 189 |
Insurance income | 786 | 2 758 | 2 053 | 1 365 | 707 | 2 505 | 1 863 | 1 230 |
Owners' equity | 2 979 | 2 955 | 2 760 | 2 669 | 2 523 | 2 594 | 2 589 | 2 543 |
Claims ratio, gross | 74,8 % | 77,3 % | 79,2 % | 81,4 % | 98,2 % | 83,5 % | 78,9 % | 82,6 % |
Net reinsurance ratio | 8,8 % | 6,4 % | 8,3 % | 9,7 % | 15,0 % | 2,8 % | 4,7 % | 5,0 % |
Claims ratio, net of reinsurance | 83,6 % | 83,8 % | 87,6 % | 91,2 % | 113,1 % | 86,3 % | 83,6 % | 87,6 % |
Cost ratio | 15,1 % | 13,0 % | 13,6 % | 13,6 % | 14,6 % | 14,0 % | 13,0 % | 13,9 % |
Combined ratio | 98,7 % | 96,8 % | 101,1 % | 104,8 % | 127,7 % | 100,4 % | 96,6 % | 101,5 % |
Return on assets under management | 0,7 % | 6,2 % | 5,0 % | 2,9 % | 1,7 % | 5,5 % | 3,3 % | 3,6 % |
Solvency capital requirement (SCR) | 2 969 | 2 785 | 2 598 | 2 487 | 2 446 | 2 514 | 2 377 | |
Solvency SCR ratio | 246 % | 256 % | 238 % | 223 % | 210 % | 227 % | 246 % | 222 % |
Annual premium in force – retail market | 1 272 | 1 620 | 1 178 | 1 149 | 1 107 | 1 068 | 1 042 | 1 013 |
Annual premium in force – public sector market | 1 784 | 1 222 | 1 613 | 1 601 | 1 624 | 1 517 | 1 533 | 1 521 |
Net new subscriptions (accumulated within the year) | 33 | 20 | -14 | -38 | -3 | 72 | 61 | 43 |
KLP BANKEN GROUP | ||||||||
Profit/loss before tax | 77 | 325 | 255 | 167 | 75 | 285 | 203 | 122 |
Net interest income | 133 | 520 | 386 | 255 | 127 | 465 | 340 | 221 |
Other operating income | 24 | 96 | 71 | 46 | 22 | 89 | 67 | 44 |
Operating expenses and depreciation | -81 | -284 | -208 | -140 | -81 | -271 | -201 | -134 |
Net realized/unrealized changes in financial instruments to fair value | 1 | -7 | 6 | 6 | 7 | 3 | -3 | -9 |
Contributions | 16 757 | 15 800 | 15 685 | 15 628 | 14 158 | 14 061 | 14 351 | 14 524 |
Housing mortgages granted | 24 301 | 21 148 | 24 222 | 24 494 | 24 102 | 23 855 | 23 754 | 23 481 |
Loan(s) with public guarantee(s) | 19 419 | 18 688 | 18 006 | 18 311 | 18 735 | 19 001 | 19 371 | 19 449 |
Defaulted loans | 67 | 64 | 58 | 54 | 53 | 44 | 52 | 43 |
Borrowing on the issuance of securities | 32 284 | 32 335 | 32 543 | 30 767 | 31 253 | 31 408 | 31 616 | 31 661 |
Total assets | 52 711 | 51 803 | 51 931 | 49 973 | 48 857 | 48 928 | 49 403 | 49 557 |
Average total assets | 52 257 | 50 365 | 50 429 | 49 450 | 48 892 | 49 719 | 49 957 | 50 034 |
Owners' equity | 3 440 | 3 439 | 3 359 | 3 280 | 3 189 | 3 174 | 3 132 | 3 072 |
Net interest rate | 0,25 % | 1,03 % | 0,76 % | 0,51 % | 0,26 % | 0,93 % | 0,68 % | 0,44 % |
Profit/loss from general operations before tax | 0,15 % | 0,65 % | 0,51 % | 0,34 % | 0,15 % | 0,57 % | 0,41 % | 0,24 % |
Return on owners’ equity before tax | 8,91 % | 10,25 % | 10,70 % | 10,52 % | 9,47 % | 9,62 % | 9,13 % | 8,19 % |
Capital adequacy | 21,7 % | 22,7 % | 20,6 % | 20,8 % | 21,2 % | 21,7 % | 20,2 % | 20,3 % |
Number of private customers | 58 585 | 57 679 | 56 601 | 55 670 | 54 058 | 52 488 | 51 340 | 50 231 |
Of this members of KLP | 38 229 | 37 955 | 37 430 | 36 986 | 36 139 | 35 390 | 34 802 | 34 307 |
KLP KAPITALFORVALTNING AS | ||||||||
Profit/loss before tax | -8 | 103 | 81 | 53 | 12 | 55 | 42 | 4 |
Total assets under management | 867 813 | 878 867 | 859 290 | 818 496 | 797 875 | 760 484 | 715 698 | 687 956 |
Assets managed for external customers | 231 931 | 238 104 | 226 091 | 214 053 | 202 680 | 179 219 | 162 321 | 163 444 |