SREDF (SREDF) Q3 2026 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen, and welcome to Storebrand's Third Quarter 2026 Results Presentation. As usual, our CEO, Odd Arild Grefstad, will present the key highlights followed by CFO, Kjetil Krøkje, who will dive deeper into the numbers. [Operator Instructions]. Details of how to join the webinar are found on the Investor Relations website. But without further ado, I give the word to our CEO, Odd Arild Grefstad.

Thank you, Johannes, and good morning, everyone. Let's start with the highlights from our strong third quarter. Healthy growth and cost discipline contributed to our record high operating results. We have seen continued growth in Kron and completed the acquisition of Knif last week. Well, our concept for [indiscernible] for Storebrand and our customers. We started early. And today, we have an industry-leading concept and a broad network of partners. When we help people [ early, ] more people stay in the [ workforce. ] This benefits the individual, the employer and the society as a whole. As AI changes how customers search, compare and buy, we are preparing for several scenarios. As a strong challenger in key markets, our ambition is clear. We aim to come out of this shift stronger than we went in. Storebrand is a data-rich company with modern digital platforms, and our approach is pragmatic. We buy proven capabilities where scale and speed matter and build where our data expertise and customer relationships create a distinctive advantage. At the same time, we are giving employees the tools and guardrails to create AI solutions close to the business while maintaining security, quality and control. Let me now take you through the numbers. Our operating result was the best on record. If we exclude performance-based income, the result grew 14%. This shows that we are able to turn revenue growth into increasing results. Higher interest rates pulled down profit sharing and the financial result this quarter, but it improves results going forward. Our result year-to-date is NOK 4.7 billion, up 12% compared to last year. Return on equity is 15% for the last 12 months. And we are well on track to reach our targets for 2028, a group result of NOK 7 billion and return on equity of 17%. Our solvency remains strong at 200%. Good results, strong solvency and a solid liquid position give me confidence that we will deliver on our plans for dividends and share buybacks. Our commitment to growing dividends remains firm. We have steadily grown our dividends per share since 2016. Based on the year-to-date performance, the Board intends to propose an ordinary dividend of around NOK 6 per share for 2026. In addition, the Board intends to propose a share buyback program of NOK 2 billion for 2027, up from the previously communicated NOK 1.5 billion. Both are subject to market conditions and necessary approvals. Now let me turn to our strategy. We continue to execute on our ambitions to lead the way in sustainable value creation. Our strategy is designed to grow capital-light business areas by taking 3 clear commercial positions. First, to be the leading provider of occupational pension in both Norway and Sweden; second, to be a Nordic powerhouse in asset management; and third, to be a fast-growing challenger in the Norwegian retail market for financial services. We are delivering on the strategy with consistent growth year after year. We are present in attractive savings market with strong long-term growth. At the same time, we are taking market share in insurance. The stronger Norwegian kroner has created some headwinds for currency effects this year, but underlying growth is strong. Let me now go through our 3 strategic positions one by one. First, occupational pensions, where we further strengthened our position as the leading provider in Norway and Sweden. Our Unit Linked reserves stand at NOK 563 billion. And since 2018, they have grown by 16% a year on average. We have seen good sales momentum with contracts worth NOK 4.4 billion won within Unit Linked pensions in Norway. These assets will be transferred to us in the coming quarters. In Sweden, I'm very pleased that the insurance brokers ranked SPP #1 for sustainability and for ease of collaboration in an independent survey. This shows that SPP has a strong position with the brokers who are an important sales channel for us. Moving to Asset Management. Our work on cost continues to pay off and operating costs are down 5% from last year and the result growth proves the scalability in our asset management business. Our position in sustainable investing are also getting stronger. This quarter, Storebrand Asset Management was named Sustainable Investment Fund Management Group of the Year by Investment Week. And our infrastructure manager, AIP, was named an ESG Equity Asset Manager of the Year in Europe. Then to our third position, the Norwegian retail market, where we keep growing as a challenger. Within retail savings, Kron now has around 150,000 customers, up 23% year-on-year. We continue to build our Kron offering step by step. P&C insurance is still one of our most important growth drivers. Portfolio premiums, retail insurance have now passed NOK 7 billion, up 18% year-on-year. Our market share in retail P&C has grown to 8.3%, up from 7.6% a year ago. With Knif, it will be around 8.6% in market share. The combined ratio improved to 82% from 85% a year ago. Let me also give a brief update on Knif triggered [indiscernible]. We completed the acquisition on 16th of October, just last week. Knif is a P&C insurer for Christian and nonprofit organizations in Norway. The acquisition is fully in line with our strategy where P&C insurance is one of our most important growth areas. Knif complements our existing setup very well with a new customer segment. I am very happy to welcome our new colleagues from Knif. They know their market and their customers very well. This will be important as we together build a leading offering in this segment. And with that, I give the word back to you, Johannes.

Thank you, Odd Arild. Now let's take a closer look at the numbers. Kjetil, please go ahead. Kjetil Krøkje: Thank you. Let me start by taking you through the key figures for the quarter. The group result for the third quarter was NOK 1.517 billion, 4% lower than the same quarter last year. Earnings from operations increased 7% to NOK 1.162 billion, the highest on record. Adjusted for NOK 20 million in nonrecurring costs, operations delivered NOK 1.182 billion, up 8%. The decline at group level concerns the financial results as higher interest rates and wider credit spreads reduced profit sharing and returns on the company capital. Net special items were NOK 34 million, a NOK 54 million gain from revaluing the earn-out liability related to AIP, less the project costs mentioned above. Earnings per share were at NOK 2.54 compared with NOK 3.08, and the annualized return on equity was 14%. Both were held back by an unusually high tax rate, which I will come back to. On a 12-month basis, return on equity was 15%. Now to solvency. The solvency ratio was 200% at the end of the quarter, stable from the second quarter. Result generation and a stronger kroner against the Swedish kroner contributed positively. This was fully offset by the second buyback tranche of NOK 1 billion, which we initiated in July and which is now included in the ratio. As the sensitivities show, the ratio stays well above our 150% target in all stress scenarios. Looking ahead, we expect the solvency ratio to strengthen from the first quarter of 2027 when the Solvency II amendments and the regulatory changes for guaranteed pension products take effect. The Solvency II amendments bring the standard model closer to our internal model and significantly reduce the risk margin. Together, we expect the 2 changes to lift the solvency ratio with more than 10 percentage points. Given our robust position today and this uplift, solvency is currently not a binding constraint for capital distribution. We continue to use and develop the internal model for our internal risk view, but we have made the decision to not submit an internal model application in the short to medium term as a consequence of the aforementioned changes. Let me now explain the main drivers of the group result before turning to the segments. Fee and administration income was NOK 2.139 billion, up 1% or 6% adjusted for currency and performance fees. Growth in assets under management and Unit Linked reserves lifted income, but this was largely offset by a stronger kroner, lower performance fees in Asset Management and a lower net interest rate margin in bank. As flagged last quarters, the transfer of a large hybrid and guaranteed pension customer now reduces income, mainly in guaranteed. The insurance result increased by 28% to NOK 895 million, driven by retail. Operational costs were NOK 1.872 billion, up 8%. Around 2/3 of the increase is in insurance, reflecting a strengthening of the organization due to high growth and increasing sales commissions. Outside insurance, costs were up 4% in the quarter and flat year-to-date. For the group, costs are up 5% so far this year, in line with our Capital Markets Day guidance of around 5% annual growth. In other words, we are on track. And for 2026, we still expect around NOK 7.3 billion to NOK 7.4 billion before currency and performance-related costs. Financial items and risk results were NOK 355 million against NOK 495 million the year before. Adjusted for special items in both quarters, the decline was from around NOK 425 million to around NOK 300 million, mainly due to lower profit sharing, especially in Sweden and also lower returns on company capital. These are mark-to-market effects and higher interest rates increase expected returns going forward. Tax was NOK 458 million with an effective tax rate of 32%. As in the first quarter, the reason is currency when the SEK is weakening around 6% against the NOK, yes. And our ownership in SPP is currently hedged to protect solvency. For tax purposes, changes in the value of shares are tax exempt under the Norwegian exemption method, whilst the gain and losses on the hedge are taxable. This tax asymmetry creates some tax volatility when the currency moves. Compared with a normal tax rate, this added around NOK 160 million. Our tax rate guidance remains 19% to 22%. At a normal tax rate, the return on equity would have been around 2 percentage points higher for the quarter. By business line, savings delivered NOK 800 million, slightly below last year due to lower financial result and lower performance fees. Insurance grew 33% to NOK 485 million. Guarantee delivered NOK 191 million against NOK 316 million, mainly due to lower profit sharing and other delivered NOK 41 million. Together, savings and insurance grew 9% to NOK 1.285 billion. Starting with savings. Earnings from operations rose 3% to NOK 744 million. Unit Linked delivered double-digit result growth in both Norway and Sweden. Income rose 16% in Norway. And in Sweden, income grew 7% in local currency, but was flat in NOK. Reserves grew 13% to NOK 563 billion or around 11%. Premiums of NOK 7.6 billion were lower than last year, mainly due to currency and the hybrid customer that left in the second quarter. In Asset Management, fee income was flat but up 10%, excluding performance fees, which were NOK 23 million against NOK 90 million Q3 last year. Costs fell 5%, helped by efficiency measures and currency. Assets under management grew 5% year-over-year in NOK and 9% in constant currencies. So far, returns of around NOK 107 billion and net inflows of NOK 3 billion have been partly offset by around NOK 86 billion in negative currency effects. The bank result was NOK 151 million, stable from the second quarter, but down NOK 208 million from last year. As we expected, the net interest rate margin rose to 1.26% from 1.17% as rate changes from -- for existing customers took effect mid-July. In insurance, the combined ratio was 87%, a 2 percentage points better than last year. Over the last 12 months, it has improved from 94% to 90%. Premiums for own account grew 17%. Portfolio premiums grew 10% to NOK 11.3 billion, driven by retail, while corporate was flat due to the customer outflow in the second quarter. In retail, the claims ratio improved to 61% from 65%, helped by runoff gains and despite the fire in Drammen, which cost around NOK 55 million net of reinsurance. Costs rose to NOK 343 million from NOK 276 million, reflecting agent commissions from stronger sales and new teams to support growth. Across the Insurance segment, higher sales through our tied agents added NOK 16 million to costs compared to the third quarter last year. As all sales costs are expensed upfront, growth shows up in the costs immediately. Corporate Insurance delivered NOK 115 million, up from NOK 92 million with a stable combined ratio of 94%. Premiums for own account grew 14%. Corporate P&C continued to grow strongly with portfolio premiums in this business, up more than 30% over the last 12 months and a solid claims ratio. We are now among the fastest-growing players in this market. Pension-related disability delivered stable results, while group life was positive but moderate with repricing and other measures implemented. Disability remains an area we watch closely. Guaranteed pensions delivered NOK 191 million against NOK 316 million last year, while the year-to-date result of NOK 912 million is close to that of last year's level. Fee income fell to NOK 364 million from NOK 387 million as growth in the public sector pensions was offset by the large customer transfer out. Net profit sharing was NOK 82 million in the quarter compared to NOK 184 million in the same quarter last year as rising interest rates and wider credit spreads reduced returns, particularly in Sweden. The risk result improved to minus NOK 7 million from minus NOK 21 million, driven by defined benefit. High rates weigh on returns in the short term, but lift expected returns. In Norway, the expected return is now 230 basis points above the average guaranteed rate. Buffer capital was at NOK 35.4 billion or 8.6% of guaranteed reserves in Norway and 31.2% in Sweden, both up from last year. Guaranteed reserves fell NOK 9.4 billion in the quarter to NOK 289 billion, mainly due to the weaker Swedish krona and account for 34% of total reserves. Then to the other segment. The other segment delivered NOK 41 million against NOK 91 million last year as higher interest rates had a negative mark-to-market effect on the company portfolios. The Norwegian portfolio returned 1.2% in the quarter and the Swedish 0.3%, also affected by wider credit spreads. As indicated last quarter, costs increased to NOK 89 million due to the Knif acquisition and nonrecurring project costs. Company portfolios totaled NOK 29 billion and liquidity in the holding company remains solid at NOK 5.7 billion. Our climate work remains on track. The emissions intensity of our listed equity and corporate bond holdings is 52% below the 2018 level against a 2030 target of 60%. 44% of these assets now have validated science-based targets above our 42% goal for 2027. And solution investments are at 20%, in line with our 2030 target. With energy security now a key structural growth driver, we continue to invest in climate solutions. Recently, our infrastructure manager, AIP, announced the acquisition of 2 operational offshore wind farms in Sweden with a combined capacity of 312 megawatts. Going forward, stable and predictable policy is key for the financial sector to reach its climate goals. And a stable EU emissions trading system remains an important driver of the transition. To round off, our Capital Markets Day ambition stand firm, a result of NOK 7 billion and cash return on equity of 17% in 2028 and growing dividends every year. By the end of the quarter, we have completed NOK 1.5 billion of this year's NOK 2 billion buyback program, with the rest to follow in the fourth quarter. And as Odd Arild mentioned, the Board intends to propose NOK 2 billion in buybacks for 2027, above the NOK 1.5 billion guided at our Capital Markets Day, increasing the total buyback ambition to at least NOK 13.5 billion by the end of 2030. With a record operating result and 12% result growth so far this year, we are well positioned to deliver on these ambitions. With that, we look forward to your questions.

Yes, Kjetil. Thank you. We are now happy to take questions from our audience. [Operator Instructions]. And we have a first question here from Ulrik in Nordea. Ulrik Zürcher: Yes. So 2 questions. The first one is on the transfer balance in the Unit Linked Norway. It's negative, but it looks like a step in the right direction. And then also, you're flagging some big corporate wins. So I'm just wondering how we should think about the direction of the transfer balance going forward? Can it turn positive?

Yes. I should start with that one. Yes, we had some big customer wins in Unit Linked Norway this quarter. A part of that will come into the booked numbers in the next -- in this quarter, the fourth quarter and also a part of it in the first quarter of 2027. And everything equal, we expect to see then positive transfer balance from the Norwegian business in these quarters. Ulrik Zürcher: Very, Great. And then just on the solvency because it seems like you're guiding a bit more specifically on the game from the regulatory changes. So I'm also wondering how we should think about -- or if you made up have anything to say about how the expected returns on the guaranteed assets will develop once you implement this? Kjetil Krøkje: Yes. No, I can start there. With the changes we see both from the new standard model coming from Europe and also the changes in product rules, we expect more than 10 percentage points increase in the solvency ratio. When it comes to expected return in the guaranteed book in Norway, we have increased the equity allocation already this year. And the discussion into next year is how to adapt the book further to reflect that. But it will be an incremental increase in expected return as most of the book is still in bonds. Ulrik Zürcher: Yes. Would you have some -- it seems like you'll have some capacity. You're telling us what you're going to distribute of capital. And it just seems like you have quite some capacity maybe to if you want to allocate to higher-yielding bonds or as you say, equities, but you haven't decided anything is what you're saying? Kjetil Krøkje: We're working on that right now, looking at the investment strategy for next year, both for the customers and for the company capital. And as you say, we will have larger risk capacity with these new rules and also with the regulatory changes. So that will be taken into account. But we will also make sure that we have a fortress balance sheet to make sure that we can withstand any volatility that may occur in the market. So it's the balance between the 2, that is important both for us, but also for the customer returns.

And I think also that the effect from the EIOPA changes in itself make us comfortable to guide for this 10%-plus increase in solvency.

Thank you, Ulrik. Next up is Nimrat Kaur from Bank of America.

I have the first one on rates. You say that the higher rates are supportive over the long term. So how quickly do they feed into the returns and profit sharing? Is the 2028 target of profit sharing for both Norway and Sweden still intact? Kjetil Krøkje: Yes. No, I think on the rate side, they will -- if they kind of stay like they are now, they will feed into the results already from next quarter on the company capital, right? So in the other segment and in the insurance segment, that will pick up again with higher running yields from the get-go. As for profit sharing, all else equal, expectations are a little bit higher than what we communicated on the Capital Markets Day, given that we are running at a somewhat higher expected return in that book of business now.

And then on the retail, what kind of repricing are you still putting in? And on the claims ratio improvement, how much of that is underlying versus runoff gains? Kjetil Krøkje: So on the retail side, what we have seen this quarter is not any kind of substantial runoff gains or losses. I don't know, Johannes, if you have any other comments on that. But what we have seen in general is a little bit lower frequency in the main lines in the Norwegian market that has been helpful on the claims ratio and of course, also the repricing that we did last year. As per forward-looking repricing, we are not really guiding on that other than that over -- in the long term, we expect this market to price at inflation plus pricing through the cycle.

Excellent. Nimrat, thank you. We have a next question from Hans Rettedal Christiansen in Danske Bank.

I want to ask a little bit about AI given that you brought it up, Odd Arild, in the beginning of the presentation, and you say you're preparing for several scenarios in customer distribution. Can you elaborate a little bit about what those scenarios are and where you see that going?

Yes, I love to. First of all, we work, of course, very heavily with AI in all different areas of Storebrand, both for more productivity, but also into the customer phase. And we see like [indiscernible] in U.S. now is also able to do agent-wise buying of financial products. I think for us, it's all about being ready for different distribution opportunities, making our data ready, making sure that our web pages is aligned to such a situation where we can be present in the best way. It's a relative game, and we are a challenger, especially in insurance as we talk about here. And I think we are well prepared in a concentrated market with our brand name to also meet the competition from more AI agents coming in, but we are preparing for that in all different ways. Kjetil Krøkje: Yes. And I think so far, we see little adoption. As you well know, these tools are not available in the Norwegian market yet. We see still that there are moats around this business with strong customer relationship, brand and trust still matter quite a bit. So we still think that is the base case going forward. But I think we're also very offensive on the offense about exploring the opportunities and thinking about scenarios where the customer front will look very different. So I think that's a very important part of how we work with this right now.

And of course, having the synergies we have in insurance, especially also aiming for a combined ratio of 90% as we do now or lower and still be able to deliver very high return on equity with such combined ratios makes me quite confident into also such a market.

And I guess staying on the same subject, but in terms of your own ambitions, since the CMD last year, what are you seeing in terms of potential cost savings? I guess you've seen DNB with some efficiency programs, LF and Sweden have also announced similar. Do you see increased potential on taking out costs going forward in terms of AI? And related to that, just on token usage, how are you sort of -- how is your token usage developing? And are you seeing some cost savings on that front as well? Kjetil Krøkje: Yes. No, I think our main thesis is that we will stick with the cost guidance from the CMD. That's kind of the starting point. But underneath that, it happens quite a lot. If you look at our capital or asset manager, it's -- we have reduced the cost base 5% from last year, and we have reinvested heavily in insurance and in digitalization and underwriting and more. So we see effects from using technology, including AI to streamline the business. But our main hypothesis right now as we're growing the business is to reinvest those cost savings in growth and keeping the cost ambition from the CMD. When it comes to some concrete examples, we also, of course, see it in the development of software. We see large time savings and productivity gains in the coding of the software, which we are also taking out in the decision and discussion about what we make ourselves and what we buy from vendors. So that is also an important aspect. And altogether now, we have done a value chain analysis of the whole business. We're looking to identify where we have both the highest potential, i.e., the largest cost base and where the technology is mature enough to start doing measures. And then we are setting the project in motion and using AI to make the business more efficient.

And just you said in the CMD that you would provide a strategic update in 2026 or 2027 on sort of the progress. When do you plan on having this, do you think? Kjetil Krøkje: I think, for sure, not in 2026. So I think we will revert during 2027 with a little bit of a broader update on how we are progressing towards the Capital Markets Day targets and kind of what have changed since we launched them.

Thank you, Hans. We have a next question from Farooq Hanif in JPMorgan.

Just going back to the comment about expected return and profit sharing rules in Norway. Now that you've got a number on the solvency impact in mind, I'm guessing it's still roughly mid-single digit for profit sharing and another mid-single-digit plus for Solvency II review. But now that you have that number, can you give us a bit of a qualitative guide to how this will support both profit sharing in Norway due to flexibility, but also remittances, I'm guessing it will help you take out cash to the holding to use for reinvesting in the group. And then secondly, going back to Nimrat's question a little bit. So your combined ratio is really good, given that you've got roughly 2 points in the quarter from Drammen. So can we unpack a little bit the detail of the runoff ratio, the Drammen loss and just kind of what is underlying here? And I know that nat cat is a big feature here, but it feels like you're doing a lot better than 90% to me. So if you could comment on that, that would be great. Kjetil Krøkje: Yes. Should we start on the solvency and the expected return? I think solvency is not a binding constraint, neither for remittance or for allocating capital to shareholders through dividends or buyback. It's more remittance, earnings and future outlook. That is the binding constraint on that. So I don't think we're going to do a lot of changes based on a some percentage points or more than 10 percentage points increase in the solvency. That said, it enables us to do changes in asset allocation that should increase expected profit sharing for customers. and for shareholders. So that is a good thing. And we can also consider risk levels in other parts of the investment portfolio, which also could support higher cash generation. So I think those are the main effects to be expected from this change. When it comes to the combined ratio, the -- when you look at the large losses in the quarter, you had the Drammen incident. But then again, we did not have a lot of other large losses. So actually, looking through the whole portfolio, large losses was actually roughly as we would think it would be. So the way we look at it is that this number is pretty close to the underlying business, but taking into account that we are growing rapidly and that has a cost.

Just if I may come back -- sorry to hog the mic, but just to come back on the first question. I think what I was trying to get at was just the profit sharing itself in the cash result. Just obviously, it gives you more flexibility. So of course, part of it is because you can take more risk, but part of it is just that you can realize more. Kjetil Krøkje: Yes. It gives the ability to take more risk and then have a higher expected return. But there's also -- these assets are per contract, and there's not so many collective buffers. So it's hard to kind of realize returns across the portfolio. So we are -- we -- the higher risk you take, the more volatility you can expect in the result line and then we need to weigh those 2 factors against each other, both thinking about customers and shareholders to find their kind of right risk level and the right profit sharing level for customers and shareholders.

But I think everything equal from Capital Markets Day, increased interest rates, quite a large buffer between the guarantee and expected return, you should expect somewhat increased opportunities for profit sharing compared to what we said at that time. Kjetil Krøkje: Absolutely.

Thank you, Farooq. We have a next question from Thomas Svendsen from SEB.

Yes. So 2 questions from my side. Just on the bank you pointed out that the net interest margin is going up, while the results are flat Q-over-Q, and this seems to be due to the higher costs Q-over-Q. So can you comment on the costs there in the bank, the move there? And the second question on dividend and the dividend guidance. You showed this graph, it's 15% CAGR historically and now you are taking it down to 10% for 2026. So what are the considerations there between buybacks and taking down sort of the growth in dividends? And what should -- how should we think about that going forward?

We can start with the dividends. We were very clear on our Capital Markets Day that we, going forward, was aiming for more than 10% growth in dividends and on top of that, share buyback. Then we have done some considerations, also talked with a lot of our shareholders about the combination of dividends and share buybacks. We feel very strongly that doing share buybacks in these conditions with the growth and opportunities we see for Storebrand going forward is value creative for our shareholders and has then focused on increasing the share buyback from NOK 1.5 billion to NOK 2 billion when we have the opportunity to increase the total payout ratio. Then we aim to have a very stable growth in dividends going forward. So we will be now focused on increasing our dividends steadily year by year. And we feel that, that growth rate of 10% plus, NOK 6 is 11% anyway. So that is what we are seeing as a mix going forward with more than 10% growth in dividends and more volatility actually around the share buybacks. When we have opportunities, we increase, but we can also reduce share buybacks. Kjetil Krøkje: And on the bank, what we see from the last quarter to this is somewhat higher costs, but also a higher operational result. I think the operational result is up by NOK 20 million. And then as you rightly point out, the total result is roughly flat as the last quarter had a positive financial result from a gain from a share we owned in a subsidiary, whilst this quarter, it's moderately negative, giving the bottom line being relatively flat between the quarters. So somewhat increased cost, often a little bit higher in this quarter, but also some cost with -- in line with the bank growing and professionalizing all functions.

Yes. And you know our bank is also the distribution channel very much for the whole retail area. We have built Kron now into the bank, developing Kron functionality coming also in now with bank functionality into the Kron gradually. We see the distribution mix altogether with also more advisers in combination with the digital solutions into a more private banking area is something we are working within the bank that has an upfront cost elements, but also huge opportunities for cross-selling and result generation going forward.

Just a small follow-up on the bank. The lending growth was also quite slow Q-over-Q. Is this something that has happened? Or has you increased prices too much in this July hike? So clients have left you? What are your targets over the next 4 quarters, for instance? Kjetil Krøkje: Yes. No, I think this is in line with what we said earlier this year that we are adapting the balance sheet to CRR3, getting some of the higher loans with high LTVs out or priced up in the balance sheet, and that has resulted in some outflow. And other than that, the guidance of somewhere around mid-single-digit growth is what we expect over the cycle.

Thank you, Thomas. We have a next question from Michele Ballatore from KBW.

Yes. So 2 questions from me. So the first is on the solvency. So in light of the, let's say, rerisking process you are doing. So what kind of impact we should expect on the solvency capital requirement? I mean, I believe if you invest more in equity or high-yielding corporates, maybe there is an impact there, if you can talk more about that and also on the sensitivity eventually? And then the second question is more about the fees in asset management. I mean, we see that -- I can see the inflows are quite low in asset management, but can you maybe talk more about the development of the fee income there, also the outlook, the competitive environment? Kjetil Krøkje: Yes. Should I start with the solvency? In expectation, we -- as you say, if you take on more risk, you will also have a higher capital charge. So we -- or I think bar that, we will still expect it to be around a 10 percentage point increase even if we increase risk somewhat in the business. I think that's the best estimate as of now. And then, of course, we will revert and update you on that as time goes by.

If I start on Asset Management, then we see quite stable overall top line fees in our asset management, and we have been able to press the cost margin down with real cost reductions, as you see from last year. So that's healthy for their results. And I think if you see their result without performance fees that has changed from one year to another, I think we have more than around 40% result increase from the same quarter last year. So that really comes through. We are also both in more conversional assets and in more private markets. And we have a very success in our private equity arm, Cubera, with more higher fees than you have, of course, in some of the other areas. Also, you see some transaction in real estate comes through now. So that is healthy for the overall fees. So altogether, quite a stable situation. And also when you mentioned transfer balance, the third quarter was a pickup in transfers when we saw NOK 11 billion in transfer in for that quarter. So it also seems to being positive development in that area. Kjetil Krøkje: And more forward-looking, we still expect between 18 to 21 basis points in top line margin in the asset managers. So that guiding stands firm.

Thank you, Michele. Next up is Simon Brun from ABG Sundal Collier. Simon Skåland Brun: Yes. Good to have you back, Kjetil. Congratulations on the new family member during the summer. Just -- and apologies if this is highlighted before. But on Knif, the acquisition of Knif. One housekeeping question. When do you sort of expect to consolidate that into your reported numbers in the insurance segment? And secondly, in terms of synergies, I know you said that there are sort of talented coworkers that you want to have with you in the future as well. But in terms of top line synergies potentially to other products from these strong owners in the past, the membership base there and also specifically on the synergies related to reinsurance. Is it too early to say anything about that? And if not, please help me out. Kjetil Krøkje: Yes. No, I think on the result contribution, we will book the result from closing, i.e., last Friday until the end of the fourth quarter. That will come into the results when we present the fourth quarter results and on a continuous basis, obviously, in the insurance segment after that. And on the synergy side, I think it's a synergy in itself that the growth journey we're funding within Insurance, we can now get help from the new colleagues we're getting from Knif, which are highly skilled specialists that can fit right into our organization, working both with the Knif portfolio, but also with the growth of the rest of the corporate P&C portfolio in Storebrand. Remember, we are the fastest growing in corporate P&C now in Norway with, I think, 33% growth over the last 12 months. So I think those new employees are very well sought after, and we look forward to welcoming them to Storebrand. And in addition, we have the capital synergies we have within Insurance. So that will, of course, be a part of it day 1.

And there will also be synergies, especially on reinsurance, but I think it's a bit early days to be too precise on that kind of numbers.

Thank you, Simon. It looks like we've covered all the questions. So that wraps up today's presentation. We look forward to seeing you again on the fourth quarter result presentation on February 10. Thank you for attending, and goodbye.