Q4 2022 Interim report

KLP Group

Report for the fourth quarter of 2022

Strong financial strength and a good quarter for KLP and its subsidiaries, but weak financial markets have marked the year as a whole.

The return in the fourth quarter of 2022 was 1.5 per cent; for the whole year it was minus 1.1 per cent.
Risk result of NOK 558 million for the year.
NOK 3.2 billion is transferred to the premium fund.

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 2022, the Group had total assets of NOK 901.6 billion, an increase of NOK 0.4 billion for the year.

The Group’s total comprehensive income was NOK 913 (490) million in 2022.

Kommunal Landspensjonskasse

Pension schemes within the public sector are offered and administered by the Group’s parent company, Kommunal Landspensjonskasse. Out of KLP’s total assets of NOK 710.3 billion, NOK 654.3 billion is linked to insurance obligations within public-sector occupational pensions.

Results for the fourth quarter of 2022

Investment result

KLP achieved an investment result – the return in excess of that guaranteed by the company to its customers – totalling NOK -20.0 (14.9) billion for the year. The return on the common portfolio was 1.5 per cent for the fourth quarter and minus 1.1 per cent for the year.

Risk result

The risk events in the stock have been within expectations throughout the year and will vary from quarter to quarter. Net income was NOK -405 million in the fourth quarter and NOK 558 million for the year. The risk result was sharply reduced in the fourth quarter. This development is particularly related to disability, where a significant increase in provisions was observed from 2021 to 2022. The increase in provisions for disability must be seen in the context of changes in the regulations for work assessment allowances in 2021 and 2022. There are also accrual effects through the year which normally result in large provisions for disability in the fourth quarter.

Administration result

The Company’s administration result shows a loss of NOK 17 (35) million in 2022. Insurance-related operating costs came to NOK 1.5 (1.4) billion for the year.

Total profit/loss

Total profit/loss to the Company stands at NOK 897 (469) million for the year. The customer result is NOK -19.3 (15.5) billion for the year.

NOK millions	Customers	Company	Total
Investment result	-19 957	-50	-20 007
Risk result	651	-93	558
Interest guarantee premium		266	266
Administration result		-17	-17
Net income from investments in the corporate portfolio and other income/expenses in non-technical accounts		811	811
Tax		-115	-115
Other profit/loss elements		94	94
Profit/loss after Q4 2022	-19 306	897	-18 409
Profit/loss after Q4 2021	15 446	469	15 915

Financial strength and capital-related matters

KLP’s total assets increased by NOK 3.5 billion in the year, but decreased by NOK 10.5 billion in the fourth quarter in isolation, and now amount to NOK 710.3 billion. The premium reserve increased by NOK 31.8 billion to NOK 516.5 billion at year-end.

The Board of Directors will propose to the general meeting a transfer of NOK 2.6 billion from the buffer fund to the premium fund, in addition to the risk result. The buffer fund will decrease by NOK 22.6 billion through the year, ending on NOK 102.2 billion at year-end. KLP has solid financial buffers which allow it to achieve good long-term returns.

Without applying transitional rules, the Company’s capital adequacy is 337 per cent. KLP’s target is a capital adequacy of at least 150 per cent without applying transitional rules. Capital adequacy is well over this target and reflects the Company’s good financial strength.

Key figures

Per cent	At 31.12.2022	At 31.12.2021
Return on the common portfolio	-1,1	8,4
Return incl. value changes in hold-to-maturity bonds and lending	-3,9	6,7
The returns figures apply to the common portfolio
Capital adequacy, Solvency II	337	316
Capital adequacy, Solvency II, with transitional measures	337	345

Premium income

Premium income excluding premium reserves received on transfers in amounted to NOK 50.1 (50.2) billion at the end of the fourth quarter.

Claims/benefits

Pensions paid and other claims, excluding ceded premium reserves, amounted to NOK 23.9 (22.1) billion at the end of the fourth quarter.

Management of the common portfolio

The assets in the common portfolio totalled NOK 660.4 (659.3) billion and were invested as shown below. The return is given for the year as a whole.

Assets	At 31.12.2022		At 31.12.2021
All figures in per cent	Proportion	Return	Proportion	Return
Equities	30,2 %	-8,0 %	30,9 %	22,8 %
Short-term bonds	12,2 %	-9,9 %	13,8 %	-0,7 %
Long-term/HTM bonds	29,0 %	3,3 %	27,7 %	3,5 %
Lending	12,0 %	2,5 %	11,9 %	1,7 %
Property	14,7 %	7,1 %	13,8 %	10,2 %
Other financial assets	1,9 %	1,6 %	1,9 %	0,7 %

Equities

Total exposure in shares and alternative investments, including equity derivatives, was 30.2 per cent at the end of the fourth quarter. The total return on shares and alternative investments was 4.1 per cent in the fourth quarter. KLP’s global exchange-listed equity portfolio produced a return of 5.3 per cent in the quarter, while the Norwegian equity portfolio had a return of 8.6 per cent.

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. During this period, the Norwegian krone has appreciated against the US dollar, and currency hedging had a positive effect on the return on shares this quarter. For the year as a whole, the Norwegian krone depreciated against the US dollar and the euro, among other currencies. In 2022, currency hedging made a negative contribution to the return on shares.

Short-term bonds and the money market

Short-term bonds accounted for 12.2 per cent and money-market instruments 1.9 per cent of the assets in the common portfolio as at 31 December. KLP’s global government bond index achieved a currency-hedged return of minus 1.2 per cent in the fourth quarter, while the return on the Norwegian government bond index was 1.0 per cent. Lower global credit margins contributed to a quarterly return of 2.7 per cent on KLP’s global credit bond index. In total, short-term bonds achieved returns of 1.1 per cent in the fourth quarter. The money market return was also 1.1 per cent for this quarter.

Held-to-maturity bonds

Investment in long-term bonds and bonds held to maturity made up 29.0 per cent of the common portfolio at 31 December. Unrecognised decreases in value in the portfolio rose in the first quarter and amounted to NOK 10.9 billion at the end of the fourth quarter. The portfolio is well diversified and consists of securities issued by creditworthy borrowers. The return measured at amortised cost was 0.8 per cent in the fourth quarter and 3.3 per cent for the year.

Property

Property investments, including Norwegian and international property funds, accounted for 14.7 per cent of the common portfolio. Property values in the common portfolio were adjusted upwards by NOK 2.2 billion in the fourth quarter. The total write-up so far this year is NOK 3.2 billion, partly due to the fact that shopping centres and hotels are seeing a high level of activity after two years of pandemic and that rental prices for offices remain good. Property investments in the common portfolio achieved a return of 7.1 per cent in 2022.

Lending

Lending in the common portfolio totals NOK 78.5 billion. This is split between NOK 67.5 billion in loans to the public sector, NOK 0.7 billion in loans with government guarantees and NOK 2.9 billion in secured mortgage loans, with the remaining NOK 7.4 billion made up of other secured loans. 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 after the fourth quarter. The return for the year was 2.5 per cent.

Returns on the corporate portfolio

The corporate portfolio covers the placement of 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 1.4 per cent in the fourth quarter, and 2.8 per cent for the year.

Business areas of the subsidiaries

Non-life insurance

The results at 31 December show a pre-tax operating profit of NOK 9.8 (397.7) million. Profit growth in the fourth quarter was positive, mainly due to an improved financial result and a positive insurance result. Operating costs are lower than expected and the Company has continued to reverse previous years’ reserves, although the Company increased its reserves in the third quarter to cover delayed effects of Covid-19. For the fourth quarter in isolation, the profit was NOK 59.6 (53.8) million.

Premium volume stood at NOK 2 294 million at the end of the fourth quarter, an increase of NOK 273 million from the position at 31.12.2021. Premiums due have increased by 14.5 per cent, or NOK 292 million, compared with 2021. There is solid growth in all segments.

The insurance result was NOK 444 (426) million at 31 December. No major claims were reported during the fourth quarter. Reversal of previous years’ claims is still positive, and NOK 104 (109) million has been taken to income this year, equivalent to 5.4 (5.5) per cent of the reserves at the beginning of the year.

Key figures for the Company

	At 31.12 2022	At 31.12 2021
Claims ratio	80,8	76,4
Cost ratio	14,5	15,8
Combined ratio	95,4	92,1

Waste disposal is an important social responsibility for the municipalities. So it is a priority for KLP Skadeforsikring to support this by offering the necessary insurance. Despite longstanding efforts to prevent fires, there is still a level of insurance risk that could be unacceptable in the long term. The Company has initiated discussions with key stakeholders in this area, and will continue this dialogue in the future.

Net financial income at year-end was NOK -97.6 (254.8) million, representing a return of minus 1.7 (5.0) per cent. Returns for the fourth quarter in isolation were NOK 40.6 (80.9) million, or 0.8 (1.6) per cent. This year, the equity portfolio has returned minus 12.6 (24.6) per cent. At the end of the year, the Company’s investments in interest-bearing funds had a return of minus 5.7 (0.0) per cent, while long-term bonds returned 3.3 (3.2) per cent. The return on real estate investments was 5.2 (10.5) per cent, after a write-up of NOK 7.3 million. The fourth quarter in isolation saw a return of 4.3 per cent on equities, 2.0 per cent on interest-bearing investments, and a 0.8 per cent on long-term bonds.

The Company’s financial position is satisfactory, with a solvency capital requirement (SCR) of 204 per cent at the end of the year, compared to 224 per cent at the end of 2021 and 219 per cent after the third quarter of this year. The reduction is due to increased deductibles and reinsurance premiums for 2023.

Asset and fund management

KLP Kapitalforvaltning provides securities management in the KLP Group. It had a total of NOK 640 billion under management at the end of the year, of which NOK 134 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 funds were NOK 900 million 2022. External customers had net new subscriptions of NOK 13 billion in 2022.

KLP Kapitalforvaltning had pre-tax income of NOK 24 million in the fourth quarter and NOK 5 million for the year.

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.

The KLP Banken Group’s total lending as of 31 December amounted to NOK 42.4 (39.9) billion. The split between the retail market and the public sector was NOK 23.3 (22.1) billion and 19.1 (17.8) billion respectively.

KLP Banken manages NOK 2.9 (3.0) billion in mortgage loans and NOK 73.4 (72.7) 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. KLP Banken had a mortgage growth of NOK 1.2 (1.5) billion through the year. Disbursements of new loans show a lower volume than at the same time last year, but the proportion of redemptions has also decreased. The public-sector market has experienced somewhat higher overall lending growth than last year.

The KLP Banken Group had a pre-tax operating profit of NOK 180.5 (116.1) million at the end of the fourth quarter. Operating revenues as a whole were strengthened in 2022 compared to 2021, especially in the public-sector market. Costs and impairments of financial instruments also affected this year’s accounts less than last year’s, and commission income from banking services increased. Broken down by area, profits were NOK 107.7 (87.6) million in the retail market and NOK 72.8 (28.5) million in the public-sector market. After tax and estimate deviations, the KLP Banken Group’s total profit at the end of the fourth quarter was NOK 174.3 (121.0) million.

Corporate social responsibility

More sustainable and renewable energy is crucial to addressing both the climate crisis and the nature crisis. KLP contributes to this through its investments. In the fourth quarter, for example, KLP invested in a Norwegian fund which aims to install solar panels on Norwegian roofs, and in a new investment partnership with Norfund to construct more power lines in India. KLP placed a total of NOK 805 million in climate-friendly investments in the quarter. In the year as a whole, KLP placed NOK 8.6 billion in such investments. The total market value of climate-friendly investments has now risen to more than NOK 61 billion. KLP’s investments have helped to finance renewable energy projects worldwide, and by the end of the year KLP had helped finance the construction of more than 50 renewable energy power plants.

In the last quarter of the year, there were two major events with a bearing on international cooperation on climate and nature. The climate summit highlighted the role of the financial markets and the importance of increasing climate finance and contributing to a restructuring of the global economy. During the climate summit, the UN launched a report with ten recommendations that companies should follow when designing their climate strategies and targets. KLP supports the 1.5-degree target, and was present at the climate negotiations. The UN Nature Summit was held in Canada in December. A new global nature framework for managing nature was agreed, containing specific goals for the protection of land and sea, and sustainable management of nature. Companies were also required to monitor and report publicly on their impact on nature and biodiversity. The finance industry is again highlighted as an important part of the solution for redirecting flows of money where they make a positive contribution to nature. KLP supports the new nature agreement, and places expectations on companies we invest in related to nature and biodiversity. KLP is participating in a project which started in the fourth quarter with Sabima and PwC, concerned with nature risk and mapping of environmental impact for Norwegian companies.

Future prospects and events after the end of the quarter

The year 2022 was marked by the war in Ukraine, along with rising inflation, interest rates and energy prices. This resulted in substantial movements in the financial markets. KLP has solid financial buffers which safeguard customers’ pension capital in periods of negative market movements. High interest rates are good for the management of pension capital in the period ahead.

Income statement KLP Group

NOTE	NOK MILLIONS	Q4 2022	Q4 2021	01.01.2022 -31.12.2022	01.01.2021 -31.12.2021
3	Premium income for own account	10 436	9 478	52 601	52 001
	Current return on financial assets	4 603	3 639	18 128	14 813
	Net interest income banking	111	76	371	309
	Net value changes on financial instruments	13 384	18 187	-47 383	48 365
8	Net income from investment properties	-1 876	3 673	6 282	8 543
4	Other income	367	345	1 684	1 547
	Total net income	27 025	35 398	31 682	125 577
	Claims for own account	-5 660	-6 170	-29 348	-31 855
	Change in technical provisions	-34 154	-6 354	-32 223	-31 253
	Net costs subordinated loan and hybrid Tier 1 securities	201	28	-169	103
6	Operating expenses	-692	-767	-2 476	-2 278
7	Other expenses	-349	-335	-1 377	-1 292
	Unit holder's value change in consolidated security funds	-4 604	-7 805	15 001	-19 802
	Total expenses	-45 259	-21 403	-50 591	-86 377
	Operating profit/loss	-18 234	13 995	-18 910	39 200
	To/from securities adjustment fund – life insurance	0	-8 623	0	-21 646
	To supplementary reserves – life insurance	21 828	-6 031	24 063	-5 420
	Assets allocated to insurance customers - life insurance	-2 915	-505	-3 501	-11 107
	Pre-tax income	679	-1 165	1 652	1 027
	Cost of taxes ¹	-135	108	-801	-748
	Income	544	-1 056	851	279
19	Actuarial loss and profit on post employment benefit obligations	57	350	132	84
	Adjustments of the insurance obligations	-13	-46	-21	-16
	Tax on items that will not be reclassified to profit or loss	-5	-54	-17	-12
	Items that will not be reclassified to profit or loss	40	250	94	56
	Revaluation real property for use in own operation	-207	68	-43	206
8	Currency translation foreign properites	-561	-531	148	-1 314
	Adjustments of the insurance obligations	561	531	-148	1 314
	Tax on items that will be reclassified to profit or loss	52	-17	11	-52
	Items that will be reclassified to income particular specific conditions are met	-156	51	-32	155
	Total other comprehensive income	-116	301	62	211
	Total comprehensive income	427	-755	913	490
	¹ Unit holders share of taxes in consolidated security funds	-71	-75	-359	-296

Financial position statement KLP Group

NOTE	NOK MILLIONS	31.12.2022	31.12.2021
	Deferred tax assets	48	52
	Other intangible assets	1 049	797
	Tangible fixed assets	2 633	2 714
	Investments in associated companies and joint venture	5 456	4 934
8,11	Investment property	93 992	89 535
9,14	Debt instruments held to maturity	24 225	25 985
9,14	Debt instruments classified as loans and receivables	174 530	164 484
9,11,14	Lending local government, enterprises & retail customers at fair value through profit / loss	0	79
9,14	Lending local government, enterprises and retail customers	121 360	118 024
9,11,14	Debt instruments at fair value through profit or loss	181 815	188 172
9,11	Equity capital instruments at fair value through profit/loss	282 399	294 476
9,11,14	Financial derivatives	6 820	3 253
9	Receivables	3 989	5 377
14	Cash and bank deposits	3 321	3 388
	TOTAL ASSETS	901 636	901 270
	Owners’ equity contributed	21 388	19 831
	Retained earnings	21 482	20 901
	TOTAL OWNERS’ EQUITY	42 870	40 732
9,10	Hybrid Tier 1 securities	1 428	1 604
9,10	Subordinated loan capital	3 147	3 000
19	Pension obligations	815	870
15	Technical provisions - life insurance	652 618	653 551
	Premiums, claims and contingency fund provisions - non-life insurance	3 782	3 023
9,10	Covered bonds issued	32 430	31 015
9,10	Debt to credit institutions	6 683	4 199
9,10	Liabilities to and deposits from customers	13 779	12 901
9,11	Financial derivatives	3 158	4 740
	Deferred tax	1 143	1 387
16	Other current liabilities	4 951	6 808
	Unit holders`s interest in consolidated securites funds	134 831	137 440
	TOTAL LIABILITIES	858 766	860 538
	TOTAL EQUITY AND LIABILITIES	901 636	901 270
	Contingent liabilities	31 083	28 754

Changes in owners’ equity KLP Group

2022 NOK MILLIONS	Owners' equity contributed	Retained earnings	Total equity contributed
Owners’ equity 31 December 2021	19 831	20 901	40 732
Change recognized directly in equity		243	243
Owners’ equity 1 January 2022	19 831	21 144	40 975
Income	576	275	851
Items that will not be reclassified to income		94	94
Items that will be reclassified to income later when particular conditions are met		- 32	- 32
Total other comprehensive income		62	62
Total comprehensive income	576	338	913
Owners' equity contribution received (net)	982		982
Total transactions with the owners	982		982
Owners’ equity 31 December 2022	21 388	21 482	42 870

2021 NOK MILLIONS	Owners' equity contributed	Retained earnings	Total equity contributed
Owners’ equity 1 January 2021	18 194	21 222	39 416
Income	811	- 532	279
Items that will not be reclassified to income		56	56
Items that will be reclassified to income later when particular conditions are met		155	155
Total other comprehensive income		211	211
Total comprehensive income	811	- 321	490
Owners' equity contribution received (net)	826		826
Total transactions with the owners	826		826
Owners’ equity 31 December 2021	19 831	20 901	40 732

Statement of cashflowKLP Group

NOK MILLIONS	01.01.2022 -31.12.2022	01.01.2022 -30.09.2022	01.01.2022 -30.06.2022	01.01.2022 -31.03.2022	01.01.2021 -31.12.2021
Net cash flow from operational activities	36 211	42 855	40 710	-1 917	-24 289
Net cash flow from investment activities¹	-346	-250	-173	-82	-278
Net cash flow from financing activities ²	-35 932	-42 493	-40 153	1 583	25 182
Net changes in cash and bank deposits	-66	113	385	-417	616
Holdings of cash and bank deposits at start of period	3 388	3 388	3 388	3 388	2 772
Holdings of cash and bank deposits at end of period	3 321	3 500	3 773	2 971	3 388
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 01.01.2022 – 31.12.2022. 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 same accounting principles and calculation methods have been used in the interim financial statements as in the last annual financial statements, unless stated otherwise.

The interim financial statements do not contain all the information required of complete financial statements, and this interim financial report should be read in the context of the annual financial statements for 2021. The annual financial statements are available at KLP’s website klp.no.

Accounting estimates

In preparing the interim financial statements, management has exercised discretion and used estimates and assumptions that affect the accounting figures. Actual figures may deviate from estimates used.

Note 2 Segment information

NOK MILLIONS	Group pensions pub. sect. & group life		Non-life insurance		Banking		Asset management		Other		Eliminations		Total
	01.01.2022 -31.12.2022	01.01.2021 -31.12.2021	01.01.2022 -31.12.2022	01.01.2021 -31.12.2021	01.01.2022 -31.12.2022	01.01.2021 -31.12.2021	01.01.2022 -31.12.2022	01.01.2021 -31.12.2021	01.01.2022 -31.12.2022	01.01.2021 -31.12.2021	01.01.2022 -31.12.2022	01.01.2021 -31.12.2021	01.01.2022 -31.12.2022	01.01.2021 -31.12.2021
Premium income for own account from external customers ¹	50 523	50 161	2 105	1 865	0	0	0	0	0	0	-27	-25	52 601	52 001
Net financial income from investments	-7 013	50 228	-91	259	345	277	0	2	0	0	-15 844	21 263	-22 602	72 029
Other income	1 784	1 999	7	2	84	78	607	608	12	12	-811	-1 151	1 684	1 547
Total income	45 294	102 388	2 021	2 125	429	355	607	610	12	12	-16 682	20 086	31 682	125 577
Claims for own account	-27 663	-30 438	-1 685	-1 417	0	0	0	0	0	0	0	0	-29 348	-31 855
Insurance provisions for own account	-32 207	-31 246	-16	-7	0	0	0	0	0	0	0	0	-32 223	-31 253
Costs borrowing	-169	103	0	0	0	0	0	0	0	0	0	0	-169	103
Operating costs excluding depreciation	-1 329	-1 147	-305	-298	-241	-229	-595	-548	-11	-10	107	182	-2 373	-2 050
Depreciation	-81	-162	-5	-5	-2	-5	-7	-6	0	0	-8	-50	-103	-228
Other expenses	-1 507	-1 425	0	0	-6	-5	0	0	0	0	136	138	-1 377	-1 292
Unit holder's value change in consolidated security funds											15 001	-19 802	15 001	-19 802
Total expenses	-62 956	-64 315	-2 011	-1 728	-249	-239	-602	-554	-11	-10	15 237	-19 531	-50 591	-86 377
Operating profit/loss	-17 662	38 074	10	398	180	116	5	56	2	2	-1 445	555	-18 910	39 200
Funds credited to insurance customers ²	18 580	-37 786	0	0	0	0	0	0	0	0	1 982	-388	20 562	-38 173
Pre-tax income	918	288	10	398	180	116	5	56	2	2	537	167	1 652	1 027
Cost of taxes	-115	125	-22	-68	-14	0	-2	-13	0	0	-647	-791	-801	-748
Income	803	413	-13	329	166	116	3	43	1	1	-109	-624	851	279
Change in other comprehensive income	94	56	14	8	8	5	11	2	0	0	-65	140	62	211
Total comprehensive income	897	469	1	337	174	121	14	45	2	2	-175	-484	913	490
Assets	710 268	706 748	6 571	5 976	50 511	47 482	635	636	11	9	133 641	140 419	901 636	901 270
Liabilities	667 468	666 070	4 302	3 710	47 544	44 961	241	256	3	3	139 206	145 537	858 766	860 538
¹ Premium income covers premiums earned for own account including savings premium and transferred premium reserves from other companies.
² Funds transferred to the insurance customers include transfers to the premium fund, provisions to the securities adjustment fund, provisions to supplementary reserves and other provisions of surplus funds to the insurance customers.

The KLP Group’s business is divided into the six areas: public sector occupational pension/group life, enterprise (defined benefit) and defined contribution pension, 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 offer 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 Premium income for own account

NOK MILLIONS	Q4 2022	Q4 2021	01.01.2022 -31.12.2022	01.01.2021 -31.12.2021
Contribution service pension	10 460	9 497	52 312	52 075
Reinsurance premiums ceeded	-24	-19	-97	-75
Transfer of premium reserves from others	0	0	386	0
Total premium income	10 436	9 478	52 601	52 001

Note 4 Other income

NOK MILLIONS	Q4 2022	Q4 2021	01.01.2022 -31.12.2022	01.01.2021 -31.12.2021
Supplement contractual early retirement scheme (ERS)	345	331	1 354	1 265
Other income¹	21	14	330	282
Total other income	367	345	1 684	1 547
¹ Other income includes investment from associated and joint ventures companies, so the results can be both negative and positive.

Note 5 Subordinated loans and perpetual hybrid tier 1 securities

NOK MILLIONS	Q4 2022	Q4 2021	01.01.2022 -31.12.2022	01.01.2021 -31.12.2021
SUBORDINATED LOANS
Interest costs ¹	-32	-31	-131	-124
Value changes	48	26	-143	132
Net costs subordinated loans	15	-5	-274	8
PERPETUAL HYBRID TIER 1 SECURITIES
Interest costs	-16	-16	-72	-64
Value changes	201	49	176	159
Net costs perpetual hybrid tier 1 securities	186	33	104	96
Net costs subordinated loan and hybrid Tier 1 securities	201	28	-169	103
¹ Besides pure interest costs, this includes recognition through profit/loss of a discount on one subordinated loan.
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 6 Operating expenses

NOK MILLIONS	Q4 2022	Q4 2021	01.01.2022 -31.12.2022	01.01.2021 -31.12.2021
Personnel costs	400	364	1 401	1 248
Depreciation and writedowns	39	112	149	228
Other operating expenses	254	291	926	802
Total operating expenses	692	767	2 476	2 278

Note 7 Other expenses

NOK MILLIONS	Q4 2022	Q4 2021	01.01.2022 -31.12.2022	01.01.2021 -31.12.2021
Supplement contractual early retirement scheme (ERS)	345	331	1 354	1 265
Other expenses	4	4	23	27
Total other expenses	349	335	1 377	1 292

Note 8 Investment property

NOK MILLIONS	Q4 2022	Q4 2021	01.01.2022 -31.12.2022	01.01.2021 -31.12.2021
Net rental income	736	785	2 944	3 040
Net value adjustment	-2 613	2 829	3 338	5 444
Realised gains	0	59	0	59
Net income from investment properties	-1 876	3 673	6 282	8 543
Currency translate foreign subsidiaries (taken to other comprehensive income)	-561	-531	148	-1 314
Net income from investment properties included currency translate	- 2 437	3 142	6 430	7 229

NOK MILLIONS	31.12.2022	31.12.2021
Investment property 01.01.	89 535	81 485
Value adjustment, including currency translation	3 486	4 130
Net additions	991	3 913
Other changes	- 20	7
Investment property	93 992	89 535

Note 9 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.

This note contains information on the three different categories of financial instruments: balance sheet classification, accounts classification and type of instrument. For the latter information is also provided on how fair value is derived.

FINANCIAL INSTRUMENTS MEASURED AT AMORTISED COST

This category includes:

Investments held to maturity
Bonds classified as loans and receivables
Other loans and receivables
Liabilites to and deposits from customers (liabilities)
Subordinated loan capital (liabilities)
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
Debt instruments at fair value
Derivatives (assets and liabilites)
Debt to credit institutions (liabilites)

Below is a list of which types of financial instrument come under the various accounts categories, and how fair value is calculated.

INVESTMENTS HELD TO MATURITY
BONDS CLASSIFIED AS LOANS AND RECEIVABLES
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. Prices are compared with prices from Bloomberg in order to uncover any errors.

c) Norwegian fixed-income securities – other than government ones

Norwegian fixed-income securities except government are mainly priced directly based on prices from Nordic Bond Pricing. Securities that are not covered by Nordic Bond Pricing are priced theoretically. The theoretical price is based on the assumed present value on the sale of the position. A zero-coupon curve is used for discounting. The zero-coupon curve is adjusted upwards by means of a credit spread, which is to take account of the risk the bond entails. The credit spread is calculated on the basis of a spread curve taking into account the duration of the bond. Nordic Bond Pricing is the main source of spread curves. They provide company-specific curves and curves for Norwegian savings banks, municipalities and energy. Savings banks have various spread curves based on total assets.

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. In addition 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: The last price traded has key priority. If the last price traded is outside of the bid/offer price in the market, the price is adjusted accordingly. This means that if the last price traded is below the offer price, the price is adjusted upward to the offer price. If it is above the bid price, it is adjusted downward to the bid price.

In cases where there is very little information about the shares, a discretionary assessment is carried out, such as a fundamental analysis of the company, or a broker assessment.

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 based 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 priced based 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	31.12.2022		31.12.2021
	Book value	Fair value	Book value	Fair value
DEBT INSTRUMENTS HELD TO MATURITY - AT AMORTIZED COST
Norwegian hold-to-maturity bonds	3 180	3 199	4 071	4 477
Foreign hold-to-maturity bonds	21 045	20 376	21 915	23 289
Total debt instruments held to maturity	24 225	23 575	25 985	27 766
DEBT INSTRUMENTS CLASSIFIED AS LOANS AND RECEIVABLES– AT AMORTIZED COST
Norwegian bonds	62 681	59 555	53 339	54 373
Foreign bonds	111 841	104 898	111 136	115 067
Other receivables	8	8	9	9
Total debt instruments classified as loans and receivables	174 530	164 461	164 484	169 448
LENDING LOCAL GOVERNMENT, ENTERPRISES & RETAIL CUSTOMERS AT FAIR VALUE THROUGH PROFIT/LOSS
Loans to local government sector or enterprises with local government guarantee	0	0	79	79
Total loans to local government, enterprises & retail customers	0	0	79	79
LENDING TO LOCAL GOVERNMENT, ENTERPRISES & RETAIL CUSTOMERS – AT AMORTIZED COST
Loans secured by mortgage	26 107	24 701	25 078	25 085
Loans to local government sector or enterprises with local government guarantee	89 743	88 342	86 486	86 629
Loans abroad secured by mortage and local government guarantee	5 352	5 352	6 413	6 413
Loans creditcard	44	44	44	44
Other loans	115	115	3	3
Total loans to local government, enterprises & retail customers	121 360	118 553	118 024	118 174
DEBT INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
Norwegian bonds	58 922	58 922	56 354	56 354
Norwegian certificates	7 648	7 648	7 805	7 805
Foreign bonds	72 565	72 565	87 026	87 026
Foreign certificates	420	420	405	405
Investments with credit institutions	42 259	42 259	36 582	36 582
Total debt instruments	181 815	181 815	188 172	188 172
EQUITY CAPITAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
Shares	238 730	238 730	260 001	260 001
Equity funds	37 155	37 155	30 328	30 328
Property funds	6 514	6 514	4 147	4 147
Total equity capital instruments	282 399	282 399	294 476	294 476
RECEIVABLES
Receivables related to direct business	1 908	1 908	1 725	1 725
Receivables related to reinsurance agreements	704	704	304	304
Receivables related to securites	900	900	2 727	2 727
Prepaid rent related to real estate activites	55	55	245	245
Other receivables	422	422	374	374
Total other loans and receivables including receivables from policyholders	3 989	3 989	5 377	5 377
FINANCIAL LIABILITIES - AT AMORTIZED COST
Hybrid Tier 1 securities	1 428	1 428	1 604	1 586
Subordinated loan capital	3 147	3 093	3 000	3 310
Debt to credit institutions	1 055	1 055	897	897
Covered bonds issued	32 430	32 402	31 015	31 088
Liabilities and deposits from customers	13 779	13 779	12 901	12 901
Total financial liabilities	51 839	51 757	49 417	49 781
FINANCIAL LIABILITIES - AT FAIR VALUE THROUGH PROFIT OR LOSS
Debt to credit institutions	5 628	5 628	3 302	3 302
Total financial liabilities	5 628	5 628	3 302	3 302

NOK MILLIONS	31.12.2022		31.12.2021
	Assets	Liabilities	Assets	Liabilities
FINANCIAL DERIVATIVES - AT FAIR VALUE THROUGH PROFIT OR LOSS
Forward exchange contracts	5 024	1 570	2 019	3 077
Interest rate swaps	1 077	194	223	1 664
Interest rate and currency swaps	583	1 393	732	0
Share option	135	0	279	0
Total financial derivatives	6 820	3 158	3 253	4 740

Note 10 Borrowing

NOK MILLIONS	Nominal in NOK	Currency	Interest	Due date	Book value 31.12.2022	Book value 31.12.2021
FIXED - TERM SUBORDINATED LOAN
Kommunal Landspensjonskasse	2 530	EUR	Fixed ¹	2045	3 147	3 000
Total subordinated loan capital	2 530	-	-	-	3 147	3 000
HYBRID TIER 1 SECURITIES
Kommunal Landspensjonskasse	984	JPY	Fixed ²	2034	1 428	1 604
Total hybrid Tier 1 securities	984	-	-	-	1 428	1 604
COVERED BONDS
KLP Kommunekreditt AS	0	NOK	Floating	2022	0	1 999
KLP Kommunekreditt AS	2 968	NOK	Floating	2023	2 985	5 009
KLP Kommunekreditt AS	5 000	NOK	Floating	2024	5 021	5 006
KLP Kommunekreditt AS	5 000	NOK	Floating	2025	5 010	5 003
KLP Kommunekreditt AS	5 000	NOK	Floating	2026	5 036	1 002
KLP Kommunekreditt AS	1 000	NOK	Fixed	2027	1 012	508
KLP Kommunekreditt AS	700	NOK	Fixed	2029	706	0
KLP Boligkreditt AS	0	NOK	Floating	2022	0	1 904
KLP Boligkreditt AS	1 600	NOK	Floating	2023	1 603	2 501
KLP Boligkreditt AS	2 500	NOK	Floating	2024	2 501	2 500
KLP Boligkreditt AS	2 500	NOK	Floating	2025	2 501	2 500
KLP Boligkreditt AS	3 500	NOK	Floating	2026	3 521	2 504
KLP Boligkreditt AS	2 500	NOK	Floating	2027	2 512	501
Other					22	78
Total covered bonds	32 268	-	-	-	32 430	31 015
DEBT TO CREDIT INSTITUTIONS
KLP Banken AS	0	NOK	Floating	2022	0	300
KLP Banken AS	300	NOK	Floating	2023	300	300
KLP Banken AS	450	NOK	Floating	2024	450	300
KLP Banken AS	300	NOK	Floating	2025	303	0
KLP Fond	0	NOK	Floating	2022	0	385
KLP Fond	0	NOK	Fixed	2022	0	1 241
KLP Fond	1 302	NOK	Floating	2023	1 302	0
KLP Fond	1 540	NOK	Fixed	2023	1 540	0
Kommunal Landspensjonskasse	0	NOK	Floating	2022	0	1 651
Kommunal Landspensjonskasse	2 678	NOK	Floating	2023	2 678	0
Other		NOK	Floating		110	21
Total liabilities to credit institutions	6 570	-	-	-	6 683	4 199
LIABILITIES AND DEPOSITS FROM CUSTOMERS ³
Retail	11 722	NOK	-	-	11 722	11 212
Business	2 021	NOK	-	-	2 021	1 650
Foreign	37	NOK	-	-	37	39
Liabilities to and deposits from customers	13 779	-	-	-	13 779	12 901
Total financial liabilities	56 130	-	-	-	57 467	52 719
¹The loan has an interest change date in 2025.
²The 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 11 Fair value hierarchy

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	23 459	835	0	24 294
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	278 342	139 285	147 399	565 026
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
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 1 055 million per 31.12.2022.

31.12.2021 NOK MILLIONS	Level 1	Level 2	Level 3	Total
ASSETS BOOKED AT FAIR VALUE
Land/plots	0	0	983	983
Buildings	0	0	88 552	88 552
Investment property	0	0	89 535	89 535
Lending at fair value	0	79	0	79
Certificates	2 046	6 164	0	8 210
Bonds	24 164	102 021	0	126 186
Fixed-income funds	17 199	7 431	6 227	30 858
Bonds and other fixed-income securities	43 410	115 616	6 227	165 253
Loans and receivables	21 472	1 447	0	22 919
Shares	246 170	10 962	2 869	260 001
Equity funds	2 316	0	50	2 366
Property funds	0	1 133	3 013	4 147
Special funds	0	0	0	0
Private Equity	0	0	27 962	27 962
Shares and units	248 486	12 096	33 895	294 476
Financial derivatives	0	3 253	0	3 253
Total assets at fair value	313 367	132 491	129 657	575 515
LIABILITIES BOOKED AT FAIR VALUE
Financial derivatives	0	4 740	0	4 740
Debt to credit institutions ¹	2 061	1 241	0	3 302
Total financial liabilities at fair value	2 061	5 981	0	8 042

Changes in Level 3, Investment Property	Book value 31.12.2022	Book value 31.12.2021
Opening balance 1 January	89 535	81 485
Sold	-148	-723
Bought	1 139	4 636
Unrealised changes	3 486	4 130
Other changes	-20	7
Closing balance 31.12.	93 992	89 535
Realised gains/losses	0	59

Changes in Level 3, Financial Assets	Book value 31.12.2022	Book value 31.12.2021
Opening balance 1 January	40 122	23 420
Sold	-5 749	-4 627
Bought	14 524	13 867
Unrealised changes	4 510	7 463
Closing balance 31.12.	53 407	40 122
Realised gains/losses	2 322	2 242
Closing balance 31.12.	147 399	129 657

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 7 370 million as of 31.12.2022.

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.

In the 4th quarter, NOK 442 million in stocks moved from Level 1 to Level 2, NOK 23 million moved from Level 1 to Level 3, NOK 921 million moved from level 2 to level 1, NOK 27 million moved from level 3 to level 2 and NOK 1 million moved from level 2 to level 3 This is due to changes in liquidity.

Note 12 Liquidity risk

The table below specifies the company’s financial obligations ranked by maturity. The amounts given are non-discounted contractual flows of cash.

31.12.2022 NOK MILLIONS	Within 1 month	1-12 months	1-5 years	5-10 years	Over 10 years	Total
Subordinated loan ¹	0	131	608	690	4 815	6 245
Perpetual hybrid Tier 1 securities ¹	0	72	287	359	1 215	1 933
Debt to and deposits from customers (without defined maturity)	13 779	0	0	0	0	13 779
Covered bonds issued	0	5 542	28 862	940	0	35 343
Payables to credit institutions	1 499	339	778	0	0	2 616
Financial derivatives	3 370	2 085	670	751	612	7 488
Accounts payable	36	0	0	0	0	36
Contingent liabilities (without defined maturity)	31 083	0	0	0	0	31 083
Total	49 766	8 170	31 204	2 740	6 642	98 523
If the minority interests are taken out of account, derivatives maturing within one month are reduced with NOK 72 million and derivatives maturing between 1 to 12 months are reduced with NOK 140 million. In addition, payables to credit institutions maturing within one month are reduced with NOK 23 million. Derivatives maturing within between 1 to 5 years increase by NOK 12 million. Total amount of the financial liabilities for the Group are after these adjustments NOK 98 299 million.

31.12.2021 NOK MILLIONS	Within 1 month	1-12 months	1-5 years	5-10 years	Over 10 years	Total
Subordinated loan ¹	0	125	573	658	4 725	6 082
Perpetual hybrid Tier 1 securities ¹	0	64	257	321	1 298	1 941
Debt to and deposits from customers (without defined maturity)	12 901	0	0	0	0	12 901
Covered bonds issued	0	3 921	26 930	1 003	0	31 855
Payables to credit institutions	1 685	312	608	0	0	2 605
Financial derivatives	3 739	3 366	248	295	216	7 864
Accounts payable	42	0	0	0	0	42
Contingent liabilities (without defined maturity)	28 754	0	0	0	0	28 754
Total	47 121	7 788	28 616	2 277	6 240	92 043
If the minority interests are taken out of account, derivatives maturing within one month are reduced with NOK 754 million, payables to credit institutions maturing within one month are reduced with NOK 335 million and derivatives maturing between 1 to 12 months are reduced with NOK 237 million. Total amount of the financial liabilities for the Group are after these adjustments NOK 90 716 million.
¹ Some of the hybrid capital are perpetual. Estimated cash flows are based on expected maturity at the interest adjustment date.

The table above shows financial liabilities the Group has grouped by interest payments and repayment of principal, based on the date payment is due. Banking contains the largest proportion of the financial liabilities in the Group.

Liquidity risk is the risk that the Group will not be able to meet the financial obligations that it has. The risk that the Group would not have adequate liquidity to meet its current liabilities and current operations is very small since a major part of the Group’s assets is liquid. The Group has significant funds invested in the money market, bonds and shares that can be sold in the event of a liquidity requirement. The Group’s liquidity strategy involves the Group always having adequate liquid assets to meet the Group’s liabilities as they fall due without accruing significant costs associated with releasing assets.

Asset composition in the Group’s portfolios should be adequately liquid to be able to cover other liquidity needs that may arise. KLP Kapitalforvaltning manages the Group’s liquidity. Internal parameters have been established for the size of the liquidity holding. The Group’s risk management unit monitors and reports developments in the liquidity holding continuously. The Group Board determines an asset management and liquidity strategy annually. The liquidity strategy includes parameters, responsibilities, risk measurement and an emergency plan for liquidity management.

The major liabilities in the Group are insurance related and are mostly linked to pension obligations. These liabilities are fully funded and liquidity management are handled in the same manner as other liabilities.

Note 13 Interest rate risk

31.12.2022 NOK MILLIONS
	Up to 3 months	From 3 months to 12 months	From 1 year to 5 years	From 5 years to 10 years	Over 10 years	Changes in cash flow 01.01.2022 -31.12.2022	Total	Adjusted for the unit holders' interests in consolidated securities funds
ASSETS
Financial derivatives classified as assets	29	-1	8	63	-153	5	-48	-32
Debt instruments classified as loans and receivables – at amortised cost	0	0	0	0	0	13	13	13
Bonds and other fixed-return securities	-44	-76	-1 223	-1 578	-1 339	282	-3 979	-3 101
Fixed income fund holdings	0	0	0	0	0	0	0	0
Lending and receivables	0	0	0	0	0	197	197	178
Lending	0	0	0	0	0	884	884	884
Cash and bank deposits	0	0	0	0	0	0	0	0
Contingent liabilities ¹	0	0	0	0	0	37	37	37
Total assets	-15	-77	-1 215	-1 516	-1 492	1 418	-2 897	-2 022
LIABILITIES
Deposit	0	0	0	0	0	-142	-142	-142
Liabilities created on issue of securities	0	0	0	0	0	-335	-335	-335
Financial derivatives classified as liabilities	-3	0	-15	1	0	-8	-25	-24
Hybrid capital, subordinated loans	0	0	0	34	57	0	91	91
Debt to credit institutions	0	0	0	0	0	-52	-52	-52
Total liabilities	-3	0	-15	35	57	-536	-463	-462
Total before tax	-18	-77	-1 230	-1 481	-1 435	882	-3 359	-2 484
Total after tax	-14	-58	-922	-1 111	-1 076	661	-2 520	-1 863

¹ Contingent liabilities are lending agreements that are not yet materialized.
31.12.2021 NOK MILLIONS
	Up to 3 months	From 3 months to 12 months	From 1 year to 5 years	From 5 years to 10 years	Over 10 years	Changes in cash flow 01.01.2021 -31.12.2021	Total	Adjusted for the unit holders' interests in consolidated securities funds
ASSETS
Financial derivatives classified as assets	33	-1	-1	53	-209	2	-122	-99
Debt instruments classified as loans and receivables – at amortised cost	0	0	0	0	0	16	16	0
Bonds and other fixed-return securities	-46	-55	-1 128	-1 553	-2 018	293	-4 508	-3 780
Fixed income fund holdings	-1 321	0	0	0	0	0	-1 321	-1 321
Lending and receivables	0	-1	0	0	0	85	84	187
Lending	0	0	0	0	0	819	819	819
Cash and bank deposits	0	0	0	0	0	34	34	34
Contingent liabilities ¹	0	0	0	0	0	41	41	41
Total assets	-1 334	-57	-1 129	-1 501	-2 227	1 290	-4 957	-4 119
LIABILITIES
Deposit	0	0	0	0	0	-133	-133	-133
Liabilities created on issue of securities	0	0	0	0	0	-318	-318	-318
Financial derivatives classified as liabilities	1	1	20	26	0	14	62	48
Hybrid capital, subordinated loans	0	0	0	43	77	0	119	119
Debt to credit institutions	0	0	0	0	0	-41	-41	-41
Total liabilities	1	1	20	69	77	-479	-311	-325
Total before tax	-1 334	-55	-1 109	-1 432	-2 150	811	-5 268	-4 444
Total after tax	-1 000	-41	-831	-1 074	-1 612	609	-3 951	-3 333

The note shows the effect on profits if market interest rates were to increase by one percent, for fair value risk and variable interest risk.

Change in fair value (fair value risk) is shown in the first five columns and is calculated by the change in fair value of interest bearing instruments if interest rates had been one percent higher at the end of the period. The column change in cash flow shows the change in cash flows if the interest had been one percent higher over the year being reported on. The sum of these results reflects the overall effect that the scenario had given the group during the period being reported on.

The fair value risk applies to fixed interest securities were the market value of the securities is affected by market interest rates. Floating rate risk applies to securities with floating interest rates, where a change in market interest rates affects the cash-flow from the interest bearing securities.

The following securities are included in the note; securities measured at fair value through profit or loss (floating and fixed interest rates), investments held to maturity (only those with floating interest rates) and loans and receivables (only those with floating interest rates). The group has no securities classified as available for sale.

The Groups total interest rate risk is limited as a significant portion of the investments are bonds with fixed interest rates that are classified as held to maturity and loans and receivables, or fixed rate lending, measured at amortized cost. A change in market interest rate does not affect profit or loss for these assets.

Insurance contracts with guaranteed return does not change the accounting value even if interest rates change. Changes in interest rates also has no impact on the guaranteed return, but will have an impact on the achieved return to cover the guaranteed return. This is because the insurance funds are partly invested in debt instruments whose cash flows should help to meet the guaranteed return.

Note 14 Credit risk

31.12.2022 NOK MILLIONS
	Investment grade AAA to BBB	Lower rating	Public sector guarantee	Bank and finance	Mortgage < 80% ¹	Mortgage > 80% ¹	Other	Total	Adjusted for the unit holders' interest in consolidated securites funds
Debt instruments held to maturity at amortized cost	22 828	0	0	0	0	0	1 396	24 225	24 225
Debt instruments classified as loans and receivables at amortized cost	159 435	0	551	2 784	0	0	11 761	174 530	174 530
Debt instruments at fair value - fixed-return securities	124 085	2 688	6 755	4 813	0	0	9 346	147 686	122 448
Fixed-income funds	0	0	0	0	0	0	9 835	9 835	9 835
Loans and receivables	22 971	0	0	1 323	0	0	0	24 294	20 582
Financial derivatives classified as assets	6 820	0	0	0	0	0	0	6 820	5 501
Cash and bank deposits	3 248	0	0	73	0	0	0	3 321	3 321
Lending	0	0	92 617	0	25 055	1 623	2 066	121 360	121 360
Total	339 388	2 688	99 923	8 992	25 055	1 623	34 403	512 071	481 801

SPECIFICATION OF INVESTMENT GRADE NOK MILLIONS	AAA	AA	A	BBB	Total Investment grade
Debt instruments held to maturity at amortized cost	10 600	2 843	6 352	3 033	22 828
Debt instruments classified as loans and receivables at amortized cost	29 894	22 160	62 752	44 628	159 435
Debt instruments at fair value - fixed-return securities	31 336	13 962	38 088	40 699	124 085
Fixed-income funds	0	0	0	0	0
Loans and receivables	0	13 269	8 216	1 486	22 971
Financial derivatives classified as assets	0	3 541	3 266	13	6 820
Cash and bank deposits	0	2 802	446	0	3 248
Lending	0	0	0	0	0
Total	71 830	58 577	119 121	89 860	339 388

¹ These two columns provide information on the proportion of loans with mortgage security within 80% of base value and loans that exceed 80% mortgage of base value.
31.12.2021 NOK MILLIONS
	Investment grade AAA to BBB	Lower rating	Public sector guarantee	Bank and finance	Mortgage < 80% ¹	Mortgage > 80% ¹	Other	Total	Adjusted for the unit holders' interest in consolidated securites funds
Debt instruments held to maturity at amortized cost	24 553	36	0	0	0	0	1 396	25 985	25 985
Debt instruments classified as loans and receivables at amortized cost	142 017	0	377	1 683	0	0	20 406	164 484	164 484
Debt instruments at fair value - fixed-return securities	117 047	1 454	5 295	3 835	0	0	14 196	141 827	116 454
Fixed-income funds	0	0	0	0	0	0	23 426	23 426	23 426
Loans and receivables	21 934	0	0	985	0	0	0	22 919	15 955
Financial derivatives classified as assets	3 253	0	0	0	0	0	0	3 253	2 908
Cash and bank deposits	3 320	0	0	67	0	0	0	3 388	3 388
Lending	-	0	90 582	0	23 025	2 329	2 167	118 103	118 103
Total	312 124	1 490	96 253	6 570	23 025	2 329	61 592	503 384	470 702

SPECIFICATION OF INVESTMENT GRADE NOK MILLIONS	AAA	AA	A	BBB	Total Investment grade
Debt instruments held to maturity at amortized cost	11 168	2 797	6 989	3 598	24 553
Debt instruments classified as loans and receivables at amortized cost	20 632	25 034	60 915	35 437	142 017
Debt instruments at fair value - fixed-return securities	33 523	14 839	34 861	33 823	117 047
Fixed-income funds	0	0	0	0	0
Loans and receivables	0	9 433	11 881	621	21 934
Financial derivatives classified as assets	0	706	2 545	2	3 253
Cash and bank deposits	0	2 672	648	0	3 320
Lending	0	0	0	0	0
Total	65 323	55 481	117 840	73 480	312 124

Credit risk is the risk of financial loss due to the Group's counterparties not being able to meet their obligations. The table above displays the credit risk based on rating agencies estimates of the creditworthiness of the various counterparties. Non-rated assets are placed in the category that best reflects the credit risk based on sector, guarantees etc.

Emphasis is placed on diversification of credit exposure to avoid concentration of credit risk against individual debtors. To monitor credit risk in lending and investments a special credit committee has been established, meeting regularly. The limits for credit risk against the individual debtor are set by the committee. Changes in debtors’ credit assessments are monitored and followed up by KLP Kapitalforvaltning AS.

The Group has good balance between Norwegian bonds and international bonds and has a portfolio of exclusively good credit notes. The Group can be said to have a high concentration of debt instruments directed at the Norwegian public sector, however this does not imply concentration risk in the ordinary meaning since the counterparty risk is considered to be minimal.

The rating above are gathered from Standard & Poor's, Moody's, Fitch, Scope Ratings and Nordic Credit Rating. The rating is converted to S&P's rating table, where AAA is linked to securities with the highest creditworthiness. The lowest rating of the five is used and all five rating agencies are equal as the basis for investments in fixed income securities. "Other" is mainly securities issued by power companies and other corporate bonds. KLP Group has strict guidelines for investments in fixed-income securities, which also apply to investments falling into the "Other" category.

The lines in the note coincide with the financial position statement layout. The exceptions are debt instruments at fair value, which are divided into three categories in the note and lending which is shown combined in the note, but is shown in two lines in the financial position statement (fair value and amortized cost).

The consolidated accounts includes all the units that KLP Group is considered to have control over. This gives an impression of a higher risk than the actual one, since the risk that the Group does not actually carry appears in the accounts. The outer column includes actual ownership and credit risk of the Group companies and investment funds held by KLP Group at the end of the period.

NOK MILLIONS	31.12.2022		31.12.2021
	Consolidated	Adjusted for the unit holders' in consolidated securites funds	Consolidated	Adjusted for the unit holders' in consolidated securites funds
10 LARGEST COUNTERPARTIES
Counterparty 1	14 317	12 155	15 032	11 995
Counterparty 2	13 605	11 215	14 514	11 891
Counterparty 3	9 332	9 007	10 578	7 482
Counterparty 4	8 095	8 296	8 586	6 660
Counterparty 5	7 689	6 734	7 828	6 377
Counterparty 6	6 844	6 061	7 706	5 830
Counterparty 7	6 764	5 549	6 377	5 548
Counterparty 8	6 461	4 698	5 878	4 928
Counterparty 9	6 061	4 403	5 548	4 698
Counterparty 10	5 549	4 361	4 698	4 506
Total	84 718	72 480	86 745	69 916

The table above shows the 10 largest counterparties to which the KLP Group has exposure. The amounts stated are book value. "Adjusted for the minority holding" includes only that which is in the Group’s ownership and where the Group retains actual credit risk. The majority of the 10 largest counterparties are either finance institutions or counterparties covered by a public sector guarantee (central or local government guarantee).

Note 15 Technical provisions in life insurance

NOK MILLIONS	31.12.2022	31.12.2021
Premium reserves - ordinary tarif	521 773	486 276
Premium funds, buffer funds and pensioners’ surplus funds	130 845	41 268
Supplementary reserves	0	48 812
Securities adjustment fund	0	77 194
Other provisions	0	1
Technical provisions in life insurance	652 618	653 551

Note 16 Other current liabilites

NOK MILLIONS	31/12/2022	31/12/2021
Short-term payables trade in securities	1 699	3 645
Incurred not assessed taxes	727	560
Advance tax-deduction pension scheme	522	491
Accounts payable	240	226
Pre-called contribution to insurance	516	699
Other current liabilities	1 248	1 187
Total other current liabilities	4 951	6 808

Note 17 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 304 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 304 per cent.

	31.12.2022	31.12.2021
Solvency II - SCR ratio	304%	287%

NOK BILLIONS	31.12.2022	31.12.2021
Simplified Solvency II Financial Position Statement
Assets, book value	713	710
Added values - hold-to-maturity portfolio/loans and receivables	-13	6
Added values - other lending	-2	0
Other added/lesser values	0	0
Deferred tax asset	0	0
Total assets - solvency II	699	716

NOK BILLIONS	31.12.2022	31.12.2021
Simplified Solvency II Financial Position Statement
Best estimate	632	649
Risk margin	11	13
Hybrid Tier 1 securities/Subordinated loan capital	5	5
Other liabilities	8	12
Deferred tax liabilities	0	1
Total liabilities - solvency II	656	679
Excess of assets over liabilities	43	36
- Deferred tax asset	0	0
- Risk equalization fund (tier 2 own funds starting 30.09.2022)	-5	0
+ Hybrid Tier 1 securities	1	2
Tier 1 basic own funds	39	38
Total eligible tier 1 own funds	39	38
Subordinated loans	3	3
Risk equalization fund (tier 2 own funds starting 30.09.2022)	5	0
Tier 2 basic own funds	8	3
Ancillary own funds	13	12
Tier 2 ancillary own funds	13	12
Deduction for max. eligible tier 2 own funds	-14	-8
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	46	45
Solvency capital requirement (SCR)	15	16
Solvency II- SCR ratio	304%	287%

Note 18 Presentation of assets and liabilities that are subject to net settlement

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

31.12.2021 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	3 253	0	3 253	-2 375	-1 753	-709	281	281
Repos	1 200	0	1 200	-1 200	0	0	0	0
Total	4 453	0	4 453	-3 575	-1 753	-709	281	281
LIABILITIES
Financial derivatives	4 740	0	4 740	-2 375	-367	-669	1 363	1 301
Repos	1 241	0	1 241	0	0	0	1 241	41
Total	5 982	0	5 982	-2 375	-367	-669	2 605	1 342

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 19 Pension obligations

NOK MILLIONS	31.12.2022	31.12.2021
Capitalized net liability 01.01.	870	934
Capitalized pension costs	215	192
Capitalized financial costs	19	20
Actuarial gains and losses	-132	-84
Premiums / contributions received	-157	-191
Capitalized net liability 31.12.	815	870

Assumptions	31.12.2022	31.12.2021
Discount rate	3.00%	1.90%
Salary growth	3.50%	2.75%
The National Insurance basic amount (G)	3.25%	2.50%
Pension increases	2.60%	1.73%
Social security contribution rate	14.10%	14.1%
Capital activity tax	5.00%	5.00%
The effect of changes in pension assumptions reduces the pension liability for employees with NOK 132 million as of 31.12.2022. The change is recognized in other comprehensive income in the income statement.

Key figures – Accumulated

NOK MILLIONS	Q4 2022	Q3 2022	Q2 2022	Q1 2022	Q4 2021	Q3 2021	Q2 2021	Q1 2021
KLP GROUP
Profit before tax	1 652	973	464	213	1 027	2 192	1 325	693
Total assets	901 636	913 434	917 593	902 911	901 270	872 465	870 548	813 514
Owners' equity	42 870	42 524	41 217	41 449	40 732	41 439	40 154	39 742
Solvency SCR ratio	304%	306%	304%	299%	287%	264%	257%	258%
Number of employees in the Group	1 093	1 095	1 081	1 060	1 048	1 032	1 017	1 021
KOMMUNAL LANDSPENSJONSKASSE
Profit before tax	918	461	216	71	288	1 699	965	566
Premium income for own account	50 523	40 248	33 081	7 503	50 161	41 163	33 634	7 041
- of which inflow of premium reserve	386	386	386	376	0	0	0	0
Insurance customers' funds incl. acc. profit	28 517	22 453	16 367	10 642	30 438	24 690	19 100	13 754
- of which funds with guaranteed returns	4 659	4 658	4 658	4 875	8 346	8 346	8 346	8 419
Net investment common portfolio	660 366	671 095	660 834	662 500	659 281	644 160	626 280	603 076
Net investment choice portfolio	2 609	2 602	2 665	2 588	2 199	2 156	2 215	2 081
Insurance funds incl. earnings for the year	654 324	641 805	654 482	644 226	652 444	634 112	633 579	595 680
- of which funds with guaranteed interest	552 101	542 820	548 891	526 324	526 235	513 186	515 787	490 936
Solvency capital requirement (SCR)	46 267	46 307	44 901	44 809	45 190	44 536	43 473	41 580
Solvency SCR ratio	337%	341%	340%	332%	316%	289%	282%	287%
Riskprofit	558	963	550	105	589	625	293	191
Return profits	-20 006	-27 421	-20 374	-7 894	15 134	9 347	7 232	4 688
Administration profit	-17	56	-22	-9	35	159	61	41
Solvency capital	140 958	129 556	138 338	151 201	196 049	176 437	174 816	160 647
Value-adjusted return on common portfolio	-1,1 %	-2,6 %	-2,1 %	-2,3 %	8,4 %	5,6 %	4,4 %	1,5 %
Return on unit-linked portfolio	-2,5 %	-4,2 %	-3,5 %	-1,2 %	8,9 %	5,8 %	5,0 %	1,9 %
Return on corporate portfolio	2,8 %	1,4 %	0,9 %	0,6 %	3,4 %	2,5 %	1,7 %	0,8 %
KLP SKADEFORSIKRING AS
Profit before tax	10	-50	3	-24	398	344	226	72
Gross premium due	2 201	1 627	1 061	516	1 939	1 436	941	460
Premium income for own account	2 105	1 554	1 012	492	1 865	1 381	904	442
Owners' equity	2 269	2 234	2 273	2 281	2 266	2 348	2 294	2 179
Claims ratio	80,8 %	80,3 %	73,4 %	79,6 %	76,4 %	73,6 %	74,5 %	72,8 %
Combined-ratio	95,4 %	94,5 %	88,7 %	95,1 %	92,1 %	85,1 %	90,3 %	89,2 %
Return on assets under management	-1,7 %	-2,5 %	-2,1 %	-0,9 %	5,0 %	3,4 %	2,6 %	0,6 %
Solvency capital requirement (SCR)	2 204	2 250	2 273	2 329	2 278	2 290	2 267	2 193
Solvency SCR ratio	204%	219%	225%	222%	224%	267%	252%	238%
Annual premium in force – retail market	954	933	918	893	871	847	829	807
Annual premium in force – public sector market	1 341	1 325	1 318	1 210	1 149	1 135	1 128	1 080
Net new subscriptions (accumulated within the year)	121	123	113	7	91	76	65	17
KLP BANKEN GROUP
Profit/loss before tax	181	98	43	18	116	94	54	49
Net interest income	369	258	159	72	309	233	153	76
Other operating income	85	63	43	20	79	59	39	19
Operating expenses and depreciation	-247	-181	-123	-64	-239	-174	-119	-61
Net realized/unrealized changes in financial instruments to fair value	-26	-43	-36	-10	-33	-24	-19	15
Contributions	13 779	13 607	13 465	13 372	12 901	12 774	12 643	12 103
Housing mortgages granted	23 258	23 369	23 042	22 635	22 090	21 365	21 409	20 894
Loan(s) with public guarantee(s)	19 117	18 718	18 321	17 974	17 844	16 842	16 752	16 734
Defaulted loans	44	43	46	46	36	32	34	57
Borrowing on the issuance of securities	33 485	32 613	32 444	31 862	31 918	29 536	29 195	27 147
Total assets	50 511	49 370	48 704	47 954	47 482	44 980	45 216	43 200
Average total assets	48 996	48 426	48 030	47 718	45 085	43 834	43 952	42 944
Owners' equity	2 966	2 897	2 555	2 548	2 521	2 490	2 474	2 470
Net interest rate	0,75%	0,53%	0,33%	0,15%	0,68%	0,53%	0,35%	0,18%
Profit/loss from general operations before tax	0,90%	0,20%	0,09%	0,04%	0,26%	0,21%	0,12%	0,11%
Return on owners’ equity before tax	7,16%	5,15%	3,37%	2,91%	4,78%	5,15%	4,47%	8,02%
Capital adequacy	20,7 %	19,7 %	17,7 %	18,1 %	18,7 %	18,6 %	18,4 %	19,3 %
Number of private customers	48 804	48 216	47 759	47 123	46 463	47 750	46 872	46 116
Of this members of KLP	32 988	32 681	32 226	31 973	31 587	32 615	31 664	32 183
KLP KAPITALFORVALTNING AS
Profit/loss before tax	5	-19	-30	-21	56	53	25	21
Total assets under management	640 183	615 589	621 080	646 213	668 855	647 995	627 599	602 400
Assets managed for external customers	134 215	126 187	126 193	134 367	136 792	123 811	121 308	111 821