Q4 2023 Interim report KLP Group, sustainability and KLP
KLP Group
Report for the fourth quarter of 2023
In brief
NOK 21.4 billion to be transferred to the customers’ premium fund.
Return on the common portfolio of 2.4 per cent in the fourth quarter and 6.4 per cent in the year.
Provisions in the pension scheme for hospital doctors increased by NOK 2.5 billion
Total assets in excess of NOK 1,000 billion
KLP – a customer-owned group
The KLP Group is made up of the following companies: Kommunal Landspensjonskasse (KLP) and its subsidiaries KLP Banken, KLP Skadeforsikring, KLP Kapitalforvaltning, KLP Forsikringsservice and KLP Eiendom.
At the end of the fourth quarter of 2023, the Group had total assets of NOK 1,017 billion, an increase of NOK 117 billion in 2023.
The Group's parent company, Kommunal Landspensjonskasse gjensidig forsikringselskap (KLP), offers public-sector occupational pensions to municipalities, county authorities, health enterprises and businesses affiliated to the public sector.
Corporate result
Investment result
The investment result for customers was NOK 29.2 (-20) billion in 2023, and NOK 13.9 billion in the fourth quarter. The book return on the common portfolio was 6.4 per cent for the year, and 2.4 per cent for the fourth quarter. Actual financial income is NOK 42.7 billion in 2023, of which NOK 17.2 billion was earned in the fourth quarter.
Of the customers’ investment result, NOK 20 billion has been transferred to the customers’ premium fund, NOK 7.2 billion has been allocated to the customers’ buffer fund and NOK 2 billion has been used to strengthen the premium reserve in the Pension Scheme for Hospital Doctors. After many years of low interest rates where it has been necessary to build buffers, KLP now has financial strength commensurate with today’s interest levels. KLP is therefore transferring a historically large amount from surplus returns in 2023 to the premium fund. Good returns in KLP mean lower payments for pensions and more money for other purposes benefitting our customers. The customers are thus directly aware of the consequences of good results in KLP.
Risk result
The risk result is an indication of whether disability and mortality in the insurance stock are developing as expected.
The total risk result for 2023 amounts to NOK 648 million. NOK 594 million has been transferred to the customers’ premium fund, while NOK 54 million has been used to strengthen the premium reserve in the Pension Scheme for Hospital Doctors.
In 2023, disability rates were higher than expected and the risk result for disability now amounts to NOK -280 million.
For KLP’s schemes as a whole, mortality has been higher than expected and the risk result for longevity is NOK 842 million. The risk result associated with survivors’ cover is NOK 85 million.
The mortality basis in the Pension Scheme for Hospital Doctors will be strengthened from 01.01.2024 after several years of negative results on longevity in this scheme. The conditions for women in this scheme to re-enter the labour market are also changing. The increase in the reserve amounts to NOK 2,528 million, and is included in the accounts for 2023.
Administration result
The difference between the cost elements within premium income, withdrawals from management reserves and insurance-related operating expenses constitutes the administration result. The Company’s administration result shows a surplus of NOK 144 (-17) million so far this year, of which NOK -32 million fell in the third quarter. Insurance-related operating expenses came to NOK 1.5 (1.5) billion so far this year.
Total profit/loss
The profit to insurance customers amounts to NOK 29.8 (-19.3) billion, while the profit to the company is NOK 856 (897) million.
NOK MILLIONS
Customers
Company
Total
Investment result
29,171
295
29,465
Risk result
648
648
Interest guarantee premium
291
291
Administration result
144
144
Other income from technical accounts
-508
-508
Net income from investments in the corporate portfolio and other income/expenses in non-technical accounts
1,024
1,024
Tax
-277
-277
Other profit/loss elements
-111
-111
Profit/loss after Q4 2023
29,819
856
30,675
Profit/loss after Q4 2022
-19,306
897
-18,409
Financial strength and capital-related matters
KLP’s total assets have increased by NOK 76.9 billion in the year to date and amount to NOK 787.2 billion. The premium reserve increased by NOK 55.0 billion to NOK 573.6 billion in the same period.
NOK 7.2 billion of the investment result for the year was allocated to the buffer fund. NOK 813 million has been transferred from the customers’ buffer fund to the customers’ premium fund, and NOK 343 million has been moved out of transferred contracts. In total, the buffer fund increased by NOK 6 billion in 2023 and amounts to NOK 108.2 billion after the fourth quarter. The fund is contract-based, and can be used to cover the shortfall in returns from the management of customer assets. The buffer fund is therefore important for financial strength and expected returns on customer funds in future periods.
Without applying transitional rules, the Company’s solvency capital requirement (SCR) is 350 per cent. This is a fall of 17 percentage points in the quarter, and is due to a reduction in interest rates in the fourth 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 funds in a multi-year perspective.
Key figures
Per cent
31.12.2023
31.12.2022
Return on the common portfolio
6.4
-1.1
Return incl. value changes in hold-to-maturity bonds and lending
6.8
-3.9
The returns figures apply to the common portfolio
Capital adequacy, Solvency II
350
337
Capital adequacy, Solvency II, with transitional measures
350
337
Premium income
Premium income excluding premium reserves received on transfers in amounted to NOK 70.2 (50.1) billion at the end of the fourth quarter. Of this, premiums related to the regulation of accrued rights amount to NOK 40.1 (21.2) billion.
Claims/benefits
Pensions paid and other claims, excluding ceded premium reserves, amounted to NOK 26.1 (23.9) billion at the end of the fourth quarter.
Management of the common portfolio
The assets in the common portfolio totalled NOK 734.3 (660.4) billion:
Assets
31.12.2023
31.12.2022
All figures in per cent
Proportion
Return
Proportion
Return
Equities
31.6%
16.1%
30.2%
-8.0%
Long-term/HTM bonds
28.6%
3.2%
29.0%
3.3%
Property
13.3%
-3.2%
14.7%
7.1%
Lending
11.3%
3.9%
12.0%
2.5%
Short-term bonds
11.5%
5.8%
12.2%
-9.9%
Other financial assets
3.6%
4.7%
1.9%
1.6%
Equities
Total exposure in shares and alternative investments, including equity derivatives, was 31.6 per cent at the end of the fourth quarter. The total return on shares and alternative investments was 4.2 per cent in the quarter. The return on KLP’s global equities was 7.5 per cent, while KLP’s Norwegian equity portfolio returned 2.4 per cent in the fourth quarter.
The currency hedging ratio for equities in developed markets and the most liquid currencies in emerging markets was between 50 and 70 per cent. In the fourth 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 money market instruments measured at fair value
In total, short-term bonds achieved returns of 4.5 per cent in the fourth quarter. The money market return was 1.5 per cent for the quarter. Short-term bonds accounted for 11.5 per cent and money-market instruments 3.6 per cent of the assets in the common portfolio at the end of the quarter. Norwegian, Eurozone and US government interest rates all fell during the fourth quarter. KLP’s global government bond index achieved a currency-hedged return of 5.5 per cent in the quarter, while the return on the Norwegian government bond index was 4.2 per cent. Global credit margins were lower through the quarter. The quarterly return on KLP’s global credit bond index was 6.8 per cent, while the return on the Norwegian bond index was 4.7 per cent.
Bonds measured at amortised cost
Investments in bonds recognised at amortised cost made up around 28.6 per cent of the common portfolio at the end of the quarter. Unrecognised decreases in value in the portfolio rose in the first quarter and amounted to NOK 8.0 billion at the end of the fourth quarter. The portfolio is well diversified and consists of securities issued by creditworthy borrowers. The return on investment measured at amortised cost was 0.6 per cent in the fourth quarter, and 3.2 per cent for the full year.
Property
Property investments, including Norwegian and international real estate funds, made up 13.3 per cent of the common portfolio. Property values in the common portfolio were written down by NOK 6.7 billion in the fourth quarter. The write-downs are based on higher required rates of return due to higher interest rates.
Property investments in the common portfolio achieved a return of minus 3.2 per cent in the year. The returns include currency hedging and property funds. There is still uncertainty associated with the effects of the various factors that influence the property market, including interest rates, required rate of return, inflation and costs.
Lending
Lending in the common portfolio totals NOK 82 billion. This is split between NOK 70.8 billion in loans to the public sector, NOK 2.8 billion in secured mortgage loans and NOK 0.2 billion in loans with government guarantees, with the remaining NOK 7.7 billion made up of direct lending. The lending portfolio is of high quality, with no losses on municipal loans and very modest provisions for losses on mortgage loans. Unrecognised decreases in value in the lending portfolio (fixed-interest loans) totalled NOK 1.3 billion at the end of the quarter. Returns in 2023 were 3.9 per cent.
Returns on the corporate portfolio
The corporate portfolio covers assets financed by owners’ equity and subordinated loans/hybrid Tier 1 and Tier 2 securities.
The corporate portfolio is managed with a moderate-risk long-term investment horizon, with the objective of stable returns. Investments in the corporate portfolio achieved a return of 0.9 per cent in the fourth quarter, and 3.0 per cent for the year. The return is affected by write-downs on property.
Other matters
The market situation
The market situation for public-sector occupational pensions is stable, and customers with premium reserves totalling around NOK 2.1 billion decided to move their schemes away from KLP with effect from 1 January 2024.
Business areas of the subsidiaries
Non-life insurance
Operating profit before tax was NOK 273 (111) million at the end of the fourth quarter of 2023. The fourth quarter produced a profit of NOK 18 (62) million. The growth in profit in the quarter is mainly due to good financial results outweighing a weak result from insurance operations. Operating costs are lower than expected.
Premium volume stood at NOK 2,586 million at the end of the fourth quarter, an increase of NOK 294 million from the position at 31.12.2022. Premium income increased by NOK 305 million, or 13.9 per cent, in 2023, and amounts to NOK 2,505 million. The retail market shows growth of NOK 97 million, or 10.6 per cent, while the public-sector and corporate market shows growth of NOK 208 million, or 16.2 per cent. The solid growth in the public-sector and corporate market is due mainly to substantial premium increases in some high-risk segments.
The insurance result (premiums minus claims paid in 2023), was NOK 350 (442) million at 31.12.2023. Both the property and motor insurance sectors within the retail market produced weak results. Increased material costs resulting from higher inflation are contributing to this trend, but the Company is also seeing an increased claims rate in the motor segment. Over time, the Company’s premiums will be adjusted upwards to reflect the increased costs.
There was one large claim in the quarter. For the year, five individual claims and three natural peril events over NOK 10 million were reported. Reversal of previous years’ claims is still positive, and this year NOK 79 million has so far been taken to income, equivalent to 3.6 per cent of the reserves at the beginning of the year.
There were no large natural peril claims in the quarter. The Company’s share of the natural perils is estimated at NOK 114 million in 2023. Reinsurance covers NOK 56 million of this sum.
Key figures for the Company
31.12.2023
31.12.2022
Claims ratio
83.5
98.3
Reinsurance ratio
2.8
-19
Cost ratio
14.0
13.9
Total cost ratio
100.3
93.2
Net financial income at 31.12.3023 was NOK 313.3 (-95.6) million, representing a return of 5.5 (minus 1.7) per cent. Returns for the fourth quarter in isolation were NOK 128.7 (41.3) million, or 2.3 per cent. (0.8)
The Company’s financial position is good, with a solvency capital requirement (SCR) of 227 per cent at the end of 2023, compared to 222 per cent at the end of 2022 and 246 per cent after the third quarter of 2023.
Asset and fund management
KLP Kapitalforvaltning AS provides securities management in the KLP Group. It had a total of NOK 760 billion under management at the end of the fourth quarter, of which NOK 179 billion was for external customers. The majority of the assets are managed on behalf of KLP and its subsidiaries.
Net new subscriptions to the KLP securities funds in 2023 amounted to NOK 13.9 billion, with a net gain of NOK 17.2 billion from customers external to the Group. The number of direct unit-holders at the end of the third quarter was 37,930.
KLP Kapitalforvaltning made a profit before tax of NOK 54.7 million in 2023.
Bank
The KLP Banken Group finances mortgages and other credit to individual customers (retail market) as well as loans to municipalities, county municipalities and companies that provide public services (public-sector market). The Bank’s lending business is financed by deposits from private customers and companies, loans from the securities market and owners’ equity. The Bank also manages a substantial volume of lending financed by pension assets in KLP.
At the end of the fourth quarter, the KLP Banken Group achieved an operating profit before tax of NOK 285.4 (180.5) million, of which the second quarter in isolation accounted for NOK 82.3 (83.0) million. The change in 2023 is mainly related to increased net interest income in both business areas and reduced losses on financial instruments. Broken down by area, profits were NOK 199.4 (107.7) million in the retail market and NOK 86.0 (72.8) million in the public-sector market.
The KLP Banken Group’s lending balance as of 31 December 2023 was NOK 42.9 (42.4) billion. The split between the retail and public-sector markets was NOK 23.9 (23.3) billion and 19.0 (19.1) billion respectively.
KLP Banken manages NOK 2.8 (2.9) billion in mortgage loans and NOK 79.3 (75.6) billion in loans to public-sector borrowers and other businesses on behalf of KLP.
Losses and loss provisions in the fourth quarter amount to NOK 0.9 (0.3) million in the retail market, a small reduction from the third quarter. The rise in interest rates has so far not resulted in a significant increase in mortgage losses, but persistent high inflation and interest rates could lead to a reduction in borrowers’ ability to repay their loans in the longer term . Nor have we experienced any losses related to public-sector lending in 2023.
Group
From 2023 onwards, the KLP Group will present its accounts in accordance with the new accounting standard IFRS 17 Insurance Contracts. The new standard takes account of the fact that KLP is mutually owned, and that the policy-holders for public-sector occupational pensions are entitled to net assets in the Group. This means that, according to IFRS 17, the Group has no equity and the profit/loss will be zero.
The Group’s insurance liabilities related to contracts for public-sector occupational pensions amounted to NOK 762 billion at 31.12.2023. This is an increase of NOK 28 billion in the quarter, and NOK 75 billion in the year. Increases in the value of assets and premium payments are the main reasons for the growth.
Refer also to Note 37 to the 2022 financial statements for a further description of the transition to IFRS 17.
Corporate social responsibility
Throughout 2023, the Board worked together with senior management on a new strategy for its corporate social responsibility work, one result of which was to set targets for key areas. The corporate responsibility strategy was formally adopted at the very end of the year, and we are now working to get it incorporated into the corporate strategy, and into the reporting.
The new Corporate Sustainability Reporting Directive (CSRD) is based around annual materiality assessments following the principle of double materiality. The rules enter into force for financial institutions on 01.01.2025, for the 2024 reporting year. As a natural extension of our corporate social responsibility strategy work, we are conducting a pilot test of sustainability reporting under the new Directive for the 2023 reporting year.
Due diligence assessments of publicly traded companies in the Gulf States (Saudi Arabia, Qatar, the United Arab Emirates and Kuwait) were completed, and it was announced that 11 companies would be excluded because of a high risk of human rights violations, particularly related to issues with authoritarian regimes that limit freedom of expression and political rights, particularly for critics and human rights activists. The companies excluded are within the building, construction and property sectors and telecommunications, where the risk is considered particularly high. KLP also excluded the oil company Saudi Aramco, due to a combination of close ties with dominant state owners and an active position contrary to KLP’s expectations for climate and energy transition plans.
In response to the war in Gaza, KLP is carrying out a special due diligence assessment of Israeli companies to pick up any possible involvement in human rights violations. We are also in regular contact with players such as Norwegian People’s Aid and the Norwegian Union of Municipal and General Employees on the ongoing war, as they have been reviewing the funds offered by Norwegian banks to their customers, to see whether these are invested in companies with activities in the occupied Palestinian territories.
The non-life company has worked to make selected insurance products more sustainable, including meeting the criteria for sustainable non-life insurance in the EU taxonomy.
The non-life company is constantly working to reduce emissions and other environmental damage from claims settlements. The burnt-out Meierigården building in Porsgrunn was demolished in December with electric-powered machinery which reduces both greenhouse gas emissions and local air pollution from the work site.
Future prospects and events after the end of the quarter
KLP achieved good results in 2023 and we expect this to continue in 2024.
The disability figures increased during the pandemic, and it is unclear whether they will persist or return to pre-2020 levels. KLP is monitoring developments in case there is a need to increase the disability tariff.
We may expect to see more tendering procedures for public-sector occupational pensions, and we will continue to strive to be the best provider to the Norwegian local government and healthcare sector. We will continue to focus on delivering good services to our customers and being a responsible and sustainable player in the market.
Oslo, 16 February 2024
The Board of Directors of Kommunal Landspensjonskasse gjensidig forsikringsselskap
TINE SUNDTOFT
Chair
Terje Rootwelt
Egil Matsen
Kjerstin Fyllingen
Rune Simensen
Odd Haldgeir Larsen
Vibeke Heldal
Elected by and from among the employees
Erling Bendiksen
Elected by and from among the employees
The Board of Directors uses digital signature
Income statement KLP Group
NOTE
NOK MILLIONS
Q4 2023
Q4 2022
01.01.2023 -31.12.2023
01.01.2022 -31.12.2022
3, 5
Insurance service result
- 890
414
- 1 925
485
Net income from investments measured at fair value with changes in P/L
37 594
13 313
76 629
-38 960
Net income from investments not measured at fair value with changes in P/L
19
-220
78
8 748
4
Fair value adjustment investment properties and rental income
-90
-1 753
-2 547
6 558
Net credit loss from financial assets not measured at fair value
49
0
-186
0
Net income from associated companies and joint ventures
214
-4
416
334
Net interest income banking
126
111
468
371
Unit holder's value change in consolidated securites funds
-10 638
-3 640
-27 286
15 966
Total net income
27 274
7 808
47 573
-6 985
Policyholder's share of changes in fair value of underlying items
-25 001
-11 743
-43 586
24 823
Other insurance related financial cost
-44
-14
-42
49
5
Net insurance related financial cost
-25 045
-11 757
-43 628
24 872
Net insurance services and financial result
1 338
-3 536
2 019
18 372
6
Net costs subordinated loan and hybrid Tier 1 securities
-57
201
-463
-169
Operating expenses
-318
-253
-1 124
-968
Other income
48
23
77
57
Other expenses
-18
-25
-77
-77
Pre-tax income
993
-3 590
432
17 215
Cost of taxes 1
-195
-136
-1 227
-826
Income
798
-3 726
-794
16 389
12
Actuarial loss and profit on post employment benefit obligations
-496
57
-146
132
Tax on items that will not be reclassified to profit or loss
77
-5
22
-17
Items that will not be reclassified to profit or loss
-419
53
-125
115
Revaluation real property for use in own operation
-56
-207
-308
-43
4
Currency translation foreign properites
566
-561
2 139
148
Tax on items that will be reclassified to profit or loss
14
52
77
11
Items that will be reclassified to income particular specific conditions are met
524
-717
1 908
116
Total other comprehensive income
105
-664
1 784
231
Total comprehensive income 2
903
-4 390
990
16 621
1 Unit holders share of taxes in consolidated security funds
-82
-279
-375
-359
2 From and including 2023, the KLP group will submit accounts according to the new accounting standard IFRS 17 Insurance contracts. The new standard takes into account the fact that KLP is mutually owned, and the policyholders on public occupational pensions are entitled to all value creation in the group. This means that according to IFRS 17 the group has no equity and that the result will be zero. However, the group has reported an equity as of 31.12.2023 of minus 2,655 million. This equity arises as a result of the fact that the policyholders are entitled to the fair value of all the assets and liabilities in the business, but certain asset and liability items are not accounted for at fair value. This creates a valuation difference that constitutes equity in a mutual insurance company.
The period's change in valuation difference, NOK 903 million will thus appear as a result.
Financial position statement KLP Group
NOTE
NOK MILLIONS
31.12.2023
31.12.2022
Deferred tax assets
48
48
Other intangible assets
1 379
1 049
Tangible fixed assets
2 277
2 633
Investments in associated companies and joint venture
6 620
5 456
4, 9
Investment property
92 322
93 992
5
Reinsurance contract assets
728
736
7, 9
Fixed income securitites and other debt instruments at fair value
410 569
181 802
7
Fixed income securitites and other debt instruments at amortized costs
2 254
198 752
7, 9
Lending local government, enterprises & retail customers at fair value through profit / loss
79 579
0
7
Lending local government, enterprises & retail customers at amortized costs
44 509
121 360
7, 9
Equity capital instruments at fair value through profit/loss
354 757
282 399
7, 9
Financial derivatives
15 587
6 820
7
Receivables
2 674
1 700
Cash and bank deposits
3 509
3 321
TOTAL ASSETS
1 016 813
900 068
7, 8
Hybrid Tier 1 securities
1 434
1 428
7, 8
Subordinated loan capital
3 327
3 147
12
Pension obligations
913
815
5
Insurance obligations with the right to residual value
762 196
686 834
5
Other insurance liabilities
3 392
3 181
7, 8
Covered bonds issued
30 504
32 430
7, 8
Debt to credit institutions
13 041
6 683
7, 8
Liabilities to and deposits from customers
14 060
13 779
7
Financial derivatives
3 249
3 158
Deferred tax
1 055
1 153
14
Other current liabilities
6 364
4 233
Equity
-2 650
8 395
Unit holders`s interest in consolidated securites funds
179 929
134 831
TOTAL EQUITY AND LIABILITIES
1 016 813
900 068
Contingent liabilities
30 934
31 083
Changes in owners’ equity KLP Group
2023 NOK MILLIONS
Equity
Owners’ equity 31 December 2022
8 395
Change of principle 01.01.2023, IFRS 9 1
- 12 035
Owners’ equity 1 January 2023
- 3 640
Income
- 794
Items that will not be reclassified to income
- 125
Items that will be reclassified to income later when particular conditions are met
1 908
Total other comprehensive income
1 784
Total comprehensive income
990
Owners’ equity 31 December 2023
- 2 650
2022 NOK MILLIONS
Equity
Owners’ equity 31 December 2021
40 732
Change of principle 01.01.2022, IFRS 17 1
- 48 918
Owners’ equity 1 January 2022
- 8 186
Income
16 389
Items that will not be reclassified to income
115
Items that will be reclassified to income later when particular conditions are met
116
Total other comprehensive income
231
Total comprehensive income
16 621
Other changes
- 39
Owners’ equity 31 December 2022
8 395
1 For more information see the annual report 2022, note 37, points 37.1.11 and 37.2.5 Transitional effects.
Statement of cashflowKLP Group
NOK MILLIONS
01.01.2023 -31.12.2023
01.01.2023 -30.09.2023
01.01.2023 -30.06.2023
01.01.2023 -31.03.2023
01.01.2022 -31.12.2022
Net cash flow from operational activities
-19 180
-14 051
-3 581
116
36 130
Net cash flow from investment activities 1
-470
-351
-252
-113
-346
Net cash flow from financing activities 2
19 838
14 149
3 812
-347
-35 851
Net changes in cash and bank deposits
188
-254
-21
-344
-66
Holdings of cash and bank deposits at start of period
3 321
3 321
3 321
3 321
3 388
Holdings of cash and bank deposits at end of period
3 509
3 068
3 301
2 978
3 321
1 Payments on the purchase of tangible fixed assets.
2 Net receipts of owners’ equity contribution, rising of new loans and repayment of debt, 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 and parent company financial statements for the period 01.01.2023 – 31.12.2023. The accounts have not been audited.
That part of the interim report that relates to the Group financial statements has been prepared in accordance with IAS 34 Interim financial Reporting.
The accounting standard IFRS 17 Insurance contracts entered into force for the financial year which started on 1st January 2023, and has been adopted by the Group. IFRS 17 requires comparative figures for 2022, so the implementation effect of this standard of minus NOK 48.9 billion after tax, was posted to Group equity from 01.01.2022.
As a result of IFRS 17 being implemented, the voluntary exemption from using IFRS 9 Financial instruments for insurance-based business also ceases. KLP used this exception in the consolidated accounts, and has thus implemented IFRS 9 from and including 1st January 2023. IFRS 9 does not require comparative figures, so the implementation effect of this standard of minus NOK 12.0 billion was posted to Group equity from 01.01.2023. Final figures for the implementation effect for IFRS 9 have been reduced by NOK 1.6 billion from our preliminary estimates given in the annual report for 2022. The change reflects a change in measurement method. For more information on the accounting principles associated with these standards, and the transitional effects, refer to the Group’s annual report for 2022, Note 37.
No other changes have been made to the accounting principles that affect the interim financial statements as of 31.12.2023. Refer to the Group’s annual report for 2022 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 2022. The annual report can be retrieved from www.klp.no.
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 95% confidence level, and amounts to 7.77% of the insurance liability in 2023.
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.
Risk adjustment has also been introduced.
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% 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% confidence level, and amounts to 4.3 % of the insurance liability in 2023.
For more information, refer to the Group’s annual financial statements for 2022, Note 37.
Note 2 Segment information
NOK MILLIONS
Group pensions pub. sect. & group life
Non-life insurance
Banking
Asset management
Other
Eliminations
Total
01.01.2023 -31.12.2023
01.01.2022 -31.12.2022
01.01.2023 -31.12.2023
01.01.2022 -31.12.2022
01.01.2023 -31.12.2023
01.01.2022 -31.12.2022
01.01.2023 -31.12.2023
01.01.2022 -31.12.2022
01.01.2023 -31.12.2023
01.01.2022 -31.12.2022
01.01.2023 -31.12.2023
01.01.2022 -31.12.2022
01.01.2023 -31.12.2023
01.01.2022 -31.12.2022
Result from insurance services
-1 925
485
342
457
0
0
0
0
0
0
-342
-457
-1 925
485
Net financial income from investments
74 859
-22 950
319
-91
468
345
23
0
0
0
-809
-254
74 859
-22 950
Policyholder's share of changes in fair value of underlying items
-43 586
24 823
0
0
0
0
0
0
0
0
0
0
-43 586
24 823
Other insurance related financial cost
-42
49
29
49
0
0
0
0
0
0
-29
-49
-42
49
Unit holder's value change in consolidated security funds
-27 286
15 966
0
0
0
0
0
0
0
0
0
0
-27 286
15 966
Total income
2 019
18 372
690
414
468
345
23
0
0
0
-1 180
-759
2 019
18 372
Net costs subordinated loan and hybrid Tier 1 securities
-463
-169
0
0
0
0
0
0
0
0
0
0
-463
-169
Operating expenses
-1 124
-968
-356
-310
-268
-245
-528
-602
-12
-11
1 165
1 168
-1 124
-968
Other income
77
57
10
7
92
84
560
607
13
12
-675
-711
77
57
Other expenses
-77
-77
0
0
-7
-4
0
0
0
0
7
4
-77
-77
Pre-tax income
432
17 216
343
111
285
180
55
5
1
2
-684
-299
432
17 216
Cost of taxes
-1 227
-826
-147
-53
-15
-17
-12
-2
0
0
175
72
-1 227
-826
Income
-794
16 389
196
59
270
163
42
3
1
1
-509
-227
-794
16 389
Total other comprehensive income
1 784
231
99
19
-13
11
-14
11
0
0
-72
-41
1 784
231
Total comprehensive income
990
16 621
295
77
257
174
29
14
0
2
-581
-267
990
16 621
Assets
1 016 813
900 068
6 559
6 109
48 928
50 511
682
635
11
11
-56 181
-57 265
1 016 813
900 068
Liabilities
1 019 463
891 673
3 965
3 739
45 754
47 544
260
241
4
3
-49 983
-51 528
1 019 463
891 673
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.
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 comprises KLP Forsikringsservice AS which offers a broad specter of services to local authority pension funds.
Note 3 Insurance service result
NOK MILLIONS
Q4 2023
Q4 2022
01.01.2023 -31.12.2023
01.01.2022 -31.12.2022
Insurance income
143
1 309
1 780
3 743
Insurance service expenses
-1 051
-899
-3 635
-3 677
Reinsurance income (+)/ cost (-)
17
4
-71
418
Insurance service result
-890
414
-1 925
485
Note 4 Investment property
NOK MILLIONS
Q4 2023
Q4 2022
01.01.2023 -31.12.2023
01.01.2022 -31.12.2022
Net rental income
1 011
860
3 873
3 219
Net value adjustment
-1 102
-2 613
-6 420
3 338
Net income from investment properties
-90
-1 753
-2 547
6 558
Currency translate foreign properites (taken to other comprehensive income)
566
-561
2 139
148
Net income from investment properties included currency translate
476
- 2 314
- 407
6 706
NOK MILLIONS
31.12.2023
31.12.2022
Investment property 01.01.
93 992
89 535
Value adjustment, including currency translation
- 4 280
3 486
Net additions
2 653
991
Other changes
- 42
- 20
Investment property
92 322
93 992
Note 5 Technical provisions
From and including 2023, the group reports insurance liabilities according to IFRS 17. The standard requires comparison figures one year back, so that the opening balance according to the new standard will be 01.01.2022.
The transition from the insurance liabilities according to previous rules to new rules is shown below:
NOK MILLIONS
Insurance liabilites linked to insurance contracts with the right to residual value
Earned pension benefits with the agreement's calculation basis and basic interest (gross premium reserve) 31/12/2021
486 277
Administration reserve and reserve related to incurreed,but not reported claims and reserves related to reported, but not setteled claims
-18 737
Net premium reserve 31.12.2021
467 540
Net move of earned premiereserves 01.01.2022
-3 318
Earned pension benefits with the insurance contracts calculation basis and base rate (net premium reserve)
464 222
Earned pension benefits with best estimate calculation basis and discount curve for IFRS 17
403 400
Cash flows related to future premiums and associated accrual of pension benefits and other cash flows within the boundary of the contracts with best estimate calculation basis, salary growth curve and cash discount curve for IFRS 17*
-30 089
Premiumfund balance
41 006
Best estimate pension liabilities 01.01.2022 before risk adjustment
414 317
Risk adjustment
35 107
Best estimate pension liabilites 01.01.2022 including risk adjustment
449 424
Residual value
248 260
Insurance liablities 01.01.2022
697 685
* Other cash flows consist of cost premiums, costs, interest guarantee premiums, equity grants and contributions to premium funds
NOK MILLIONS
Other insurance liabilities
LRC*
LIC*
LIC Reinsurance
Provision 31.12.2021/01.01.2022
216
2 400
335
Effect of seasonal variation
9
0
0
Discounting
0
-134
-7
Provision 01.01.2022 before risk adjustment
225
2 266
328
Risik adjustment
0
95
13
Provision 01.01.2022 including risk adjustment
225
2 361
341
LRC = Liability for remaining coverage
LIC = Liability for incurred claims
NOK MILLIONS
Estimates of present value of future cash flows
Risk adjustment for non financial risk
Residual value
Total
Insurance obligations with the right to residual value 1 January 2023
322 226
27 304
337 305
686 834
Changes that realte to current services
Change in risk adjustment for non-financial risk for risk expired
0
2 321
0
2 321
Experience adjustment not related to future service
-53
0
0
-53
Insurance service result
-53
2 321
0
2 268
Change in risk adjustment for non-financial risk at the start of the period
0
-2 257
2 257
0
Accured interest
12 553
1 089
-13 643
0
Released cash flows
-15 978
0
0
-15 978
Changes in estimates related to future service
-2 558
-222
2 780
0
Change due to changes in discount curve
9 599
833
-10 432
0
Result addes to policyholders
22 526
0
37 038
59 564
Insurance related financial cost
26 143
-557
18 000
43 586
Premium
57 921
0
0
57 921
Claims and other insurance service expenses (incl. Investmentcomponents)
-28 494
0
0
-28 494
Total cash flows
29 426
0
0
29 426
Other changes
0
0
81
81
Total other changes
0
0
81
81
Insurance obligations with the right to residual value 31 December 2023
377 742
29 068
355 386
762 196
Liability for incurred claims (LIC)
NOK MILLIONS
Estimates of present value of future cash flows
Risk adjustment for non-financial risk
Liabilities for remaining coverage
Total
Other insurance liabilities 1 January 2023
2 790
115
276
3 181
Insurance income
0
0
-2 505
-2 505
Claims
2 043
83
0
2 126
Expenses
158
6
0
164
Other movements realted to current service
0
-40
0
-40
Changes that relate to past service
-118
-41
0
-158
Insurance service expenses
2 084
9
0
2 092
Insurance service result
2 084
9
-2 505
-413
Insurance related financial cost
62
5
0
66
Premium
-1 983
0
0
-1 983
Claims and other insurance service expenses
0
0
2 551
2 551
Total cash flows
-1 983
0
2 551
568
Other changes
-8
0
-2
-10
Other insurance liabilities 31 December 2023
2 944
128
320
3 392
Liability for incurred claims (LIC)
NOK MILLIONS
Estimates of present value of future cash flows
Risk adjustment for non-financial risk
Liabilities for remaining coverage
Total
Reinsurance contracts assets 1 January 2023
705
30
0
736
Premium paid - reinsurance
0
0
-164
-164
Recoveries of incurred claims and other insurance service expenses
137
8
0
145
Reinsurance expenses -related to past service
-44
-8
0
-52
Insurance service expenses
93
0
0
93
Insurance service result
93
0
-164
-71
Insurance related financial cost
16
9
0
25
Premium
-108
0
154
45
Total cash flows
-108
0
154
45
Other changes
-7
0
0
-7
Reinsurance contracts assets 31 December 2023
699
39
-10
728
NOK MILLIONS
Insurance obligation with the right to residual value
Other insurance liabilities
Reinsurance
Intercompany eliminations
Total
Specification of P/L items per product group Q4 2023
Insurance service result
-2 268
413
-71
0
-1 925
Net insurance related financial cost
-43 586
-66
25
0
-43 628
NOK MILLIONS
Estimates of present value of future cash flows
Risk adjustment for non financial risk
Residual value
Total
Insurance obligations with the right to residual value 1 January 2022
414 317
35 107
248 260
697 685
Changes that realte to current services
0
0
0
0
Change in risk adjustment for non-financial risk for risk expired
0
167
0
167
Experience adjustment not related to future service
-195
0
0
-195
Insurance service result
-195
167
0
-28
Change in risk adjustment for non-financial risk at the start of the period
0
0
0
0
Accured interest
7 055
598
-7 653
0
Released cash flows
-11 802
0
0
-11 802
Changes in estimates related to future service
2 689
228
-2 917
0
Change due to changes in discount curve
-103 802
-8 796
112 597
0
Result addes to policyholders' residual value
0
0
-13 021
-13 021
Insurance related financial cost
-105 859
-7 970
89 006
-24 823
Premium
41 389
0
0
41 389
Claims and other insurance service expenses (incl. Investmentcomponents)
-27 426
0
0
-27 426
Total cash flows
13 963
0
0
13 963
Other changes
0
0
39
39
Total other changes
0
0
39
39
Insurance obligations with the right to residual value 31 December 2022
322 226
27 304
337 305
686 834
Liability for incurred claims (LIC)
NOK MILLIONS
Estimates of present value of future cash flows
Risk adjustment for non-financial risk
Liabilities for remaining coverage
Total
Other insurance liabilities 1 January 2022
2 266
95
225
2 586
Insurance income
0
0
-2 200
-2 200
Claims
2 068
80
0
2 148
Expenses
153
5
0
159
Other movements realted to current service
0
-31
0
-31
Changes that relate to past service
-84
-30
0
-113
Insurance service expenses
2 138
25
0
2 162
Insurance service result
2 138
25
-2 200
-38
Insurance related financial cost
-44
-5
0
-48
Premium
0
0
0
0
Claims and other insurance service expenses
-1 570
0
2 265
694
Total cash flows
-1 570
0
2 265
694
Other changes
-1
0
-13
-13
Other insurance liabilities 31 December 2022
2 790
115
277
3 181
Liability for incurred claims (LIC)
NOK MILLIONS
Estimates of present value of future cash flows
Risk adjustment for non-financial risk
Liabilities for remaining coverage
Total
Reinsurance contracts assets 1 January 2022
327
13
0
341
Premium paid - reinsurance
0
0
-97
-97
Recoveries of incurred claims and other insurance service expenses
475
21
0
497
Reinsurance expenses -related to past service
23
-4
0
19
Insurance service expenses
498
17
0
515
Insurance service result
498
17
-97
418
Insurance related financial cost
0
0
0
0
Premium
0
0
98
98
Repayments
-122
0
0
-122
Total cash flows
-122
0
98
-24
Other changes
1
0
0
1
Reinsurance contracts assets 31 Decemeber 2022
705
30
1
736
NOK MILLIONS
Insurance obligation with the right to residual value
Other insurance liabilities
Reinsurance
Intercompany eliminations
Total
Specification of P/L items per product group Q4 2022
Insurance service result
28
38
418
0
485
Insurance related financial cost
24 823
48
0
0
24 872
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
31.12.2023
31.12.2022
1
4,8 %
4,2 %
2
4,5 %
4,0 %
3
4,0 %
3,9 %
4
3,6 %
3,8 %
5
3,5 %
3,9 %
10
4,0 %
4,3 %
15
3,9 %
4,0 %
25
3,7 %
3,7 %
50
3,5 %
3,5 %
75
3,5 %
3,5 %
100
3,5 %
3,5 %
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
31.12.2023
31.12.2022
1
5,3 %
4,5 %
5
4,9 %
4,3 %
10
3,7 %
3,8 %
15
3,2 %
3,3 %
25
3,3 %
3,4 %
50
3,5 %
3,4 %
80
3,5 %
3,4 %
SENSITIVITY
For insurance contracts with a right to residual value, interest rate changes will have a major impact on the best estimate of the pension liabilites
NOK MILLIONS
Best estimate pension liability
Calculated with the interest rate curve as of 31.12.2023
377 742
All interest rates in the discount rate curve are increased by 0.5% points
264 650
All interest rates in the discount rate curve are reduced by 0.5% points
554 646
Note 6 Subordinated loans and perpetual hybrid tier 1 securities
NOK MILLIONS
Q4 2023
Q4 2022
01.01.2023 -31.12.2023
01.01.2022 -31.12.2022
SUBORDINATED LOANS
Interest costs
-35
-32
-153
-131
Value changes
-21
48
-229
-143
Net costs subordinated loans
-56
15
-382
-274
PERPETUAL HYBRID TIER 1 SECURITIES
Interest costs
-17
-16
-75
-72
Value changes
16
201
-6
176
Net costs perpetual hybrid tier 1 securities
-1
186
-81
104
Net costs subordinated loan and hybrid Tier 1 securities
-57
201
-463
-169
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:
Barclays Capital Indices
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
31.12.2023
31.12.2022
Book value
Fair value
Book value
Fair value
FIXED-INCOME SECURITIES AND OTHER DEBT INSTRUMENTS AT AMORTIZED COST
Norwegian bonds
1 017
935
65 861
62 754
Foreign bonds
1 237
1 108
132 892
125 280
Fixed-income securities and other debt instruments at amortized cost
2 254
2 043
198 752
188 034
LENDING LOCAL GOVERNMENT, ENTERPRISES & RETAIL CUSTOMERS AT FAIR VALUE THROUGH PROFIT/LOSS
Loans secured by mortgage
2 571
2 571
0
0
Loans to local government sector or enterprises with local government guarantee
71 141
71 141
0
0
Loans abroad secured by mortage and local government guarantee
5 245
5 245
0
0
Other lending
622
622
0
0
Total loans to local government, enterprises & retail customers
79 579
79 579
0
0
lending to local government, enterprises & retail customers – at amortized cost
LENDING TO LOCAL GOVERNMENT, ENTERPRISES & RETAIL CUSTOMERS – AT AMORTIZED COST
Loans to and receivables from customers
42 856
42 850
26 107
24 701
Loans to and receivables from central banks
75
75
0
0
Loans to local government sector or enterprises with local government guarantee
0
0
89 743
88 342
Loans abroad secured by mortage and local government guarantee
0
0
5 352
5 352
Loans to and receivables from credit institutions
1 578
1 578
0
0
Other lending
0
0
158
158
Total loans to local government, enterprises & retail customers
44 509
44 503
121 360
118 553
DEBT INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
Norwegian bonds
133 716
133 716
58 922
58 922
Norwegian certificates
8 189
8 189
7 648
7 648
Foreign bonds
209 125
209 125
72 565
72 565
Foreign certificates
898
898
420
420
Investments with credit institutions
58 641
58 641
42 246
42 246
Total debt instruments
410 569
410 569
181 802
181 802
EQUITY CAPITAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
Shares
302 882
302 882
238 730
238 730
Equity funds
44 885
44 885
37 155
37 155
Property funds
6 990
6 990
6 514
6 514
Total equity capital instruments
354 757
354 757
282 399
282 399
RECEIVABLES
Receivables related to direct business
750
750
379
379
Receivables related to securites
1 309
1 309
912
912
Prepaid rent related to real estate activites
148
148
0
0
Other receivables
466
466
408
408
Total other loans and receivables including receivables from policyholders
2 674
2 674
1 700
1 700
FINANCIAL LIABILITIES - AT AMORTIZED COST
Debt to credit institutions
905
905
1 055
1 055
Covered bonds issued
30 504
30 526
32 430
32 402
Liabilities and deposits from customers
14 060
14 060
13 779
13 779
Hybrid Tier 1 securities
0
0
1 428
1 428
Subordinated loan capital
0
0
3 147
3 093
Total financial liabilities
45 469
45 492
51 839
51 757
FINANCIAL LIABILITIES - AT FAIR VALUE THROUGH PROFIT OR LOSS
Debt to credit institutions
12 137
12 137
5 628
5 628
Hybrid Tier 1 securities
1 434
1 434
0
0
Subordinated loan capital
3 327
3 327
0
0
Total financial liabilities
16 897
16 897
5 628
5 628
NOK MILLIONS
31.12.2023
31.12.2022
Assets
Liabilities
Assets
Liabilities
FINANCIAL DERIVATIVES - AT FAIR VALUE THROUGH PROFIT OR LOSS
Forward exchange contracts
13 525
1 152
5 024
1 570
Interest rate swaps
1 383
2 096
1 077
194
Interest rate and currency swaps
679
0
583
1 393
Share option
0
0
135
0
Total financial derivatives
15 587
3 249
6 820
3 158
Note 8 Borrowing
NOK MILLIONS
Nominal in NOK
Currency
Interest
Due date
Book value 31.12.2023
Book value 31.12.2022
FIXED - TERM SUBORDINATED LOAN
Kommunal Landspensjonskasse
2 530
EUR
Fixed ¹
2045
3 327
3 147
Total subordinated loan capital
2 530
-
-
-
3 327
3 147
HYBRID TIER 1 SECURITIES
Kommunal Landspensjonskasse
984
JPY
Fixed ²
2034
1 434
1 428
Total hybrid Tier 1 securities
984
-
-
-
1 434
1 428
COVERED BONDS
KLP Kommunekreditt AS
0
NOK
Floating
2023
0
2 985
KLP Kommunekreditt AS
1 553
NOK
Floating
2024
1 562
5 021
KLP Kommunekreditt AS
5 000
NOK
Floating
2025
5 015
5 010
KLP Kommunekreditt AS
5 000
NOK
Floating
2026
5 053
5 036
KLP Kommunekreditt AS
1 000
NOK
Fixed
2027
1 012
1 012
KLP Kommunekreditt AS
6 000
NOK
Floating
2027
6 052
0
KLP Kommunekreditt AS
700
NOK
Fixed
2029
706
706
KLP Boligkreditt AS
0
NOK
Floating
2023
0
1 603
KLP Boligkreditt AS
1 554
NOK
Floating
2024
1 555
2 501
KLP Boligkreditt AS
2 500
NOK
Floating
2025
2 501
2 501
KLP Boligkreditt AS
4 500
NOK
Floating
2026
4 536
3 521
KLP Boligkreditt AS
2 500
NOK
Floating
2027
2 516
2 512
Other
-4
22
Total covered bonds
30 307
-
-
-
30 504
32 430
DEBT TO CREDIT INSTITUTIONS
KLP Banken AS
0
NOK
Floating
2023
0
300
KLP Banken AS
450
NOK
Floating
2024
453
450
KLP Banken AS
300
NOK
Floating
2025
301
303
KLP Banken AS
150
NOK
Floating
2026
151
0
KLP Fond
4 218
NOK
Floating
2023
4 218
1 302
KLP Fond
1 111
NOK
Floating
2023
1 111
1 540
Kommunal Landspensjonskasse
6 727
NOK
Fixed
2023
6 727
2 678
Kommunal Landspensjonskasse
0
NOK
Floating
2023
0
0
Other
80
110
Total liabilities to credit institutions
12 957
-
-
-
13 041
6 683
LIABILITIES AND DEPOSITS FROM CUSTOMERS ³
Retail
12 087
NOK
12 087
11 722
Business
1 924
NOK
1 924
2 021
Foreign
50
NOK
50
37
Liabilities to and deposits from customers
14 060
-
14 060
13 779
Total financial liabilities
60 837
62 366
57 467
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
31.12.2023 NOK MILLIONS
Level 1
Level 2
Level 3
Total
ASSETS BOOKED AT FAIR VALUE
Land/plots
0
0
1 283
1 283
Buildings
0
0
91 040
91 040
Investment property
0
0
92 322
92 322
Lending at fair value
0
79 579
0
79 579
Certificates
1 578
7 508
0
9 086
Bonds
27 564
315 287
0
342 850
Fixed-income funds
0
9 591
16 041
25 632
Bonds and other fixed-income securities
29 142
332 386
16 041
377 569
Loans and receivables
32 349
651
0
33 000
Shares
293 389
5 996
3 497
302 882
Equity funds
2 378
0
37
2 415
Property funds
0
1 980
5 010
6 990
Special funds
0
0
0
0
Private Equity
0
0
42 470
42 470
Shares and units
295 767
7 976
51 014
354 757
Financial derivatives
0
15 587
0
15 587
Total assets at fair value
357 258
436 178
159 377
952 814
LIABILITIES BOOKED AT FAIR VALUE
Financial derivatives
0
3 249
0
3 249
Debt to credit institutions ¹
11 026
1 111
0
12 137
Total financial liabilities at fair value
11 026
4 360
0
15 385
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 905 million per 31.12.2023.
31.12.2022 NOK MILLIONS
Level 1
Level 2
Level 3
Total
ASSETS BOOKED AT FAIR VALUE
Land/plots
0
0
1 377
1 377
Buildings
0
0
92 615
92 615
Investment property
0
0
93 992
93 992
Lending at fair value
0
0
0
0
Certificates
2 254
5 815
0
8 069
Bonds
21 099
110 390
0
131 489
Fixed-income funds
0
8 129
9 835
17 964
Bonds and other fixed-income securities
23 353
124 333
9 835
157 521
Loans and receivables
23 447
835
0
24 281
Shares
229 463
5 131
3 378
237 972
Equity funds
2 067
0
60
2 127
Property funds
0
2 165
4 349
6 514
Special funds
0
0
0
0
Private Equity
0
0
35 785
35 785
Shares and units
231 530
7 297
43 572
282 399
Financial derivatives
0
6 820
0
6 820
Total assets at fair value
278 330
139 285
147 399
565 014
LIABILITIES BOOKED AT FAIR VALUE
Financial derivatives
0
3 158
0
3 158
Debt to credit institutions ¹
4 326
1 302
0
5 628
Total financial liabilities at fair value
4 326
4 460
0
8 786
Changes in Level 3, Investment Property
Book value 31.12.2023
Book value 31.12.2022
Opening balance 1 January
93 992
89 535
Sold
0
-148
Bought
2 653
1 139
Unrealised changes
-4 280
3 486
Other changes
-42
-20
Closing balance 31.12.
92 322
93 992
Realised gains/losses
0
0
Changes in Level 3, Financial Assets
Book value 31.12.2023
Book value 31.12.2022
Opening balance 1 January
53 407
40 122
Sold
-4 923
-5 749
Bought
15 430
14 524
Unrealised changes
3 141
4 510
Closing balance 31.12.
67 055
53 407
Realised gains/losses
1 863
2 322
Closing balance 31.12.
159 377
147 399
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 9. For description of the pricing of investment property, please see the annual financial statements.
No sensitivity analysis has been carried out on securities included in Level 3. A sensitivity analysis for investment property is available in the annual report. A change in the variables of the pricing is considered of little significance. On a general basis, a 5 percent change in the pricing would produce a change of NOK 7 969 million as of 31.12.2023.
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 4th quarter, NOK 469 million in stocks moved from Level 1 to Level 2, NOK 16 million moved from Level 1 to Level 3, NOK 1 419 million moved from level 2 to level 1 and NOK 2 million moved from level 2 to level 3. The movements is due to changes in liquidity.
Note 10 Presentation of assets and liabilities that are subject to net settlement
31.12.2023 NOK MILLIONS
Related amounts not presented net
Gross financial assets/ liabilities
Gross assets/ liabilities presented net
Book value
Financial instruments
Security in cash
Security in securities
Net amount
Adjusted for the unit holders' interest in consolidated securities funds
ASSETS
Financial derivatives
15 587
0
15 587
-1 376
-10 882
-7 399
214
209
Repos
6 172
0
6 172
-1 113
0
0
5 058
5 058
Total
21 759
0
21 759
-2 489
-10 882
-7 399
5 272
5 267
LIABILITIES
Financial derivatives
3 249
0
3 249
-1 376
-25
-6
1 866
1 885
Repos
1 111
0
1 111
0
0
0
1 111
0
Total
4 360
0
4 360
-1 376
-25
-6
2 977
1 885
31.12.2022 NOK MILLIONS
Related amounts not presented net
Gross financial assets/ liabilities
Gross assets/ liabilities presented net
Book value
Financial instruments
Security in cash
Security in securities
Net amount
Adjusted for the unit holders' interest in consolidated securities funds
ASSETS
Financial derivatives
6 820
0
6 820
-1 861
-3 879
-1 796
470
437
Repos
0
0
0
0
0
0
0
0
Total
6 820
0
6 820
-1 861
-3 879
-1 796
470
437
LIABILITIES
Financial derivatives
3 158
0
3 158
-1 861
-63
-235
1 256
1 256
Repos
1 304
0
1 304
0
0
0
1 304
1 304
Total
4 462
0
4 462
-1 861
-63
-235
2 560
2 560
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 SCR ratio
The Solvency II balance sheet includes assets and liabilities at fair value. For assets that have a different value in the accounts change in balance value are added. 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 capital appears from the Solvency II balance sheet and Hybrid Tier 1 securities. Tier 2 capital consist of subordinated loans and ancillary own funds. Starting 30.09.2022 the risk equalization fund will also be considered tier 2 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 per cent of the Company’s premium reserve. Capital that may be included in Tier 2 capital is limited upwards to 50 per cent of SCR.
Without the use of the transitional measure on technical provisions the Company’s SCR ratio is 317 per cent, which is well over the Company’s target of at least 150 per cent. With the transitional measure on technical provisions the SCR ratio is 317 per cent.
31.12.2023
31.12.2022
Solvency II - SCR ratio
317 %
288 %
Solvency II - SCR ratio
317 %
288 %
NOK BILLIONS
31.12.2023
31.12.2022
Simplified Solvency II Financial Position Statement
Assets, book value
790
713
Added values - hold-to-maturity portfolio/loans and receivables
-9
-13
Added values - other lending
-1
-2
Other added/lesser values
0
0
Deferred tax asset
0
0
Total assets - solvency II
779
699
NOK BILLIONS
31.12.2023
31.12.2022
Simplified Solvency II Financial Position Statement
Best estimate
704
632
Risk margin
11
12
Hybrid Tier 1 securities/Subordinated loan capital
5
5
Other liabilities
13
9
Deferred tax liabilities
0
0
Total liabilities - solvency II
733
657
Excess of assets over liabilities
46
42
- Deferred tax asset
0
0
- Risk equalization fund (tier 2 own funds starting 30.09.2022)
-5
-5
+ Hybrid Tier 1 securities
1
1
Tier 1 basic own funds
42
38
Total eligible tier 1 own funds
42
38
Subordinated loans
3
3
Risk equalization fund (tier 2 own funds starting 30.09.2022)
5
5
Tier 2 basic own funds
8
8
Ancillary own funds
14
13
Tier 2 ancillary own funds
14
13
Deduction for max. eligible tier 2 own funds
-15
-14
Total eligible tier 2 own funds
7
7
Deferred tax asset
0
0
Total eligible tier 3 own funds
0
0
Solvency II total eligible own funds
49
46
Solvency capital requirement (SCR)
16
16
Solvency II- SCR ratio
317 %
288 %
Note 12 Pension obligations
NOK MILLIONS
31.12.2023
31.12.2022
Capitalized net liability 01.01.
815
870
Capitalized pension costs
197
215
Capitalized financial costs
28
19
Actuarial gains and losses
146
-132
Premiums / contributions received
-274
-157
Capitalized net liability 31.12.
913
815
Assumptions
31.12.2023
31.12.2022
Discount rate
3.10%
3,00 %
Salary growth
3.50%
3,50 %
The National Insurance basic amount (G)
3.25%
3,25 %
Pension increases
2.80%
2,60 %
Social security contribution rate
14.10%
14,10 %
Capital activity tax
5.00%
5,00 %
The effect of changes in pension assumptions reduces the pension liability for employees with NOK 146 million as of 31.12.2023. The change is recognized in other comprehensive income in the income statement.
Note 13 Loss provisions on fixed-income securities and loans to customers at amortised cost
This note shows expected credit loss provisions on fixed-income securities measured at amortised cost in KLP Skadeforsikring AS as well as provisions for losses on loans to customers in KLP Banken AS.
Refer to note 26 in the annual report for KLP Skadeforsikring AS and respectively note 2 and note 10 in the annual report for KLP Banken AS, for a detailed description of both models.
Expected credit loss (ECL) on fixed-income securities measured at amortised cost
NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
stage 1
stage 2
stage 3
Total stage 1-3
Opening balance ECL 01.01.2023
261
42
0
303
Transfer to stage 1
0
0
0
0
Transfer to stage 2
0
0
0
0
Transfer to stage 3
0
0
0
0
Net changes
-34
-5
0
-38
New losses
27
0
0
27
Write-offs
-14
-24
0
-38
Change in risk model
0
0
0
0
Closing balance ECL 31.12.2023
240
14
0
254
Changes (01.01.2023 - 31.12.2023)
-21
-28
0
-49
Expected credit loss (ECL) loans to customers – all segments
NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
stage 1
stage 2
stage 3
Total stage 1-3
Opening balance ECL 01.01.2023
2 390
2 090
998
5 478
Transfer to stage 1
873
-657
-216
0
Transfer to stage 2
-35
53
-18
0
Transfer to stage 3
-2
-108
110
0
Net changes
-2 166
-949
269
-2 847
New losses
333
119
227
678
Write-offs
-196
-157
-185
-538
Change in risk model
1 214
1 937
284
3 436
Closing balance ECL 31.12.2023
2 411
2 328
1 468
6 207
Changes (01.01.2023 - 31.12.2023)
20
238
471
729
This includes provisions for losses on loans and receivables - unused credit
3 029
Expected credit loss (ECL) loans to customers – mortgage
NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
stage 1
stage 2
stage 3
Total stage 1-3
Opening balance ECL 01.01.2023
144
207
422
774
Transfer to stage 1
7
-7
0
0
Transfer to stage 2
-8
25
-18
0
Transfer to stage 3
0
-34
34
0
Net changes
-66
152
450
537
New losses
65
13
188
266
Write-offs
-4
-36
-28
-68
Change in risk model
0
0
0
0
Closing balance ECL 31.12.2023
139
320
1 048
1 507
Changes (01.01.2023 - 31.12.2023)
-5
113
626
734
This includes provisions for losses on loans and receivables - unused credit on mortgages
4
Expected credit loss (ECL) – public lending
NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
stage 1
stage 2
stage 3
Total stage 1-3
Opening balance ECL 01.01.2023
184
0
0
184
Transfer to stage 1
0
0
0
0
Transfer to stage 2
0
0
0
0
Transfer to stage 3
0
0
0
0
Net changes
-13
0
0
-13
New losses
27
0
0
27
Write-offs
-19
0
0
-19
Change in risk model
0
0
0
0
Closing balance ECL 31.12.2023
180
0
0
180
Changes (01.01.2023 - 31.12.2023)
-4
0
0
-4
Expected credit loss (ECL) – credit card
NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
stage 1
stage 2
stage 3
Total stage 1-3
Opening balance ECL 01.01.2023
2 040
1 883
516
4 440
Transfer to stage 1
866
-650
-216
0
Transfer to stage 2
-28
28
0
0
Transfer to stage 3
-2
-74
76
0
Net changes
-2 259
-1 222
-381
-3 861
New losses
235
106
17
358
Write-offs
0
0
0
0
Change in risk model
1 214
1 937
284
3 436
Closing balance ECL 31.12.2023
2 067
2 008
297
4 372
Changes (01.01.2023 - 31.12.2023)
27
125
-220
-67
This includes provisions for losses on loans and receivables - unused credit on credit card
3 025
Expected credit loss (ECL) loans to customers – senior loans
NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
stage 1
stage 2
stage 3
Total stage 1-3
Opening balance ECL 01.01.2023
21
0
0
21
Transfer to stage 1
0
0
0
0
Transfer to stage 2
0
0
0
0
Transfer to stage 3
0
0
0
0
Net changes
-2
0
0
-2
New losses
5
0
0
5
Write-offs
0
0
0
0
Change in risk model
0
0
0
0
Closing balance ECL 31.12.2023
24
0
0
24
Changes (01.01.2023 - 31.12.2023)
3
0
0
3
This includes provisions for losses on loans and receivables - unused credit on senior loans
0
Expected credit loss (ECL) loans to customers – overdrafts deposit accounts
NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
stage 1
stage 2
stage 3
Total stage 1-3
Opening balance ECL 01.01.2023
0
0
60
60
Transfer to stage 1
0
0
0
0
Transfer to stage 2
0
0
0
0
Transfer to stage 3
0
0
0
0
Net changes
0
0
42
42
New losses
0
0
22
22
Write-offs
0
0
0
0
Change in risk model
0
0
0
0
Closing balance ECL 31.12.2023
0
0
124
124
Changes (01.01.2023 - 31.12.2023)
0
0
64
64
Note 14 Other current liabilites
NOK MILLIONS
31.12.2023
31.12.2022
Short-term payables trade in securities
3 357
1 699
Incurred not assessed taxes
900
671
Accounts payable
301
256
Public fees
691
629
Other current liabilities
1 114
979
Total other current liabilities
6 364
4 233
Key figures – Accumulated
NOK MILLIONS
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
Q2 2022
Q1 2022
KLP GROUP
Total assets
1 016 813
972 345
956 311
948 061
900 068
913 144
900 199
902 413
Equity
-2 650
-3 555
-3 623
-3 630
8 395
12 823
9 800
2 293
Solvency SCR ratio
317 %
332 %
297 %
282 %
288 %
306 %
304 %
299 %
Number of employees in the Group
1 133
1 120
1 099
1 091
1 093
1 095
1 081
1 060
KOMMUNAL LANDSPENSJONSKASSE
Profit before tax
1 245
1 136
774
539
918
461
216
71
Premium income for own account
70 326
60 032
51 102
7 663
50 523
40 248
33 081
7 503
- of which inflow of premium reserve
92
91
91
91
386
386
386
376
Insurance customers' funds incl. acc. profit
28 261
21 501
14 840
8 331
28 517
22 453
16 367
10 642
- of which funds with guaranteed returns
2 139
2 125
2 121
2 125
4 659
4 658
4 658
4 875
Net investment common portfolio
734 337
718 214
701 944
690 902
660 366
671 095
660 834
662 500
Net investment choice portfolio
2 830
2 730
2 833
2 683
2 609
2 602
2 665
2 588
Insurance funds incl. earnings for the year
724 553
704 815
715 239
668 235
654 324
641 805
654 482
644 226
- of which funds with guaranteed interest
616 351
586 941
592 053
552 840
552 101
542 820
548 891
526 324
Solvency capital requirement (SCR)
49 692
49 918
47 317
46 768
46 158
46 307
44 901
44 809
Solvency SCR ratio
350 %
368 %
330 %
316 %
318 %
341 %
340 %
332 %
Riskprofit
648
364
270
71
558
963
550
105
Return profits
29 466
15 822
21 243
13 232
-20 006
-27 421
-20 374
-7 894
Administration profit
144
176
62
54
-17
56
-22
-9
Solvency capital
164 487
147 893
151 993
151 550
140 958
129 556
138 338
151 201
Value-adjusted return on common portfolio
6,4 %
3,9 %
4,2 %
2,5 %
-1,1 %
-2,6 %
-2,1 %
-2,3 %
Return on unit-linked portfolio
8,3 %
4,8 %
5,6 %
3,4 %
-2,5 %
-4,2 %
-3,5 %
-1,2 %
Return on corporate portfolio
3,0 %
2,1 %
1,5 %
0,9 %
2,8 %
1,4 %
0,9 %
0,6 %
KLP SKADEFORSIKRING AS
Profit before tax
273
255
189
99
111
49
88
57
Insurance income
2 505
1 863
1 230
630
2 200
1 629
1 071
546
Owners' equity
2 594
2 589
2 543
2 446
2 369
2 339
2 367
2 370
Claims ratio
86,3 %
83,6 %
87,6 %
91,7 %
80,8 %
80,3 %
73,4 %
79,6 %
Combined-ratio
14,0 %
13,0 %
13,9 %
13,9 %
14,5 %
14,2 %
15,3 %
15,5 %
Return on assets under management
5,5 %
3,3 %
3,6 %
2,7 %
-1,7 %
-2,5 %
-2,1 %
-0,9 %
Solvency capital requirement (SCR)
2 446
2 514
2 377
2 309
2 222
2 250
2 273
2 329
Solvency SCR ratio
227 %
246 %
222 %
215 %
222 %
219 %
225 %
222 %
Annual premium in force – retail market
1 068
1 042
1 013
982
954
933
918
893
Annual premium in force – public sector market
1 517
1 533
1 521
1 474
1 341
1 325
1 318
1 210
Net new subscriptions (accumulated within the year)
72
61
43
20
121
123
113
7
KLP BANKEN GROUP
Profit/loss before tax
285
203
122
53
181
98
43
18
Net interest income
465
340
221
110
369
258
159
72
Other operating income
89
67
44
21
85
63
43
20
Operating expenses and depreciation
-271
-201
-134
-71
-247
-181
-123
-64
Net realized/unrealized changes in financial instruments to fair value