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Magny Øvrebø, CIO Nordea Liv 5th. of September 2012

New regulatory framework What about Private Equity?. Magny Øvrebø, CIO Nordea Liv 5th. of September 2012. Nordea Liv Solvency II Impact on asset allocation. Nordea Bank & Nordea Life & Pension. Nordea. Nordea Liv. The Nordic’s leading financial provider.

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Magny Øvrebø, CIO Nordea Liv 5th. of September 2012

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  1. New regulatory framework What about Private Equity? Magny Øvrebø, CIO Nordea Liv 5th. of September 2012

  2. Nordea Liv • Solvency II • Impact on asset allocation

  3. Nordea Bank & Nordea Life & Pension Nordea Nordea Liv The Nordic’s leading financial provider 3rd largest private life insurer in Norway The Nordic’s leading pensions provider 15.000 corporate customers 190.000 retail customers Rated Norway’s most solvent bank Asset under management: EUR 187 Bn Assets under management: NOK 63 Bn 240 employees 33.000 employees

  4. Nordea Liv • Solvency II • Impact on asset allocation

  5. Solvency II • Common regulatory framework for European insurers • Implementation by 1st of January 2014 or 2015 • Goal : • Ensure sufficient financial resources to meet liabilities • Capture different risk types • Ensure sufficient risk focus and control • What’s happening: • Both asset and liabilities are marked to market. • Increased focus on risk and control • Adverse shock test

  6. The required solvency capital will increase.What to do? • Inject more capital • Reduce exposure in guaranteed insurance products • Reduce risk on the asset side

  7. Nordea Liv • Solvency II • Impact on asset allocation

  8. Solvency II - Bonds & Real Estate Bonds & money market: Rating and duration set the shock levels Real Estate: Base shock 25%

  9. Solvency II – Quoted equity and Private equity • Quoted equity: Base shock 39% • Private Equity: Base shock 49% • For both Quoted equity and Private Equity there is a symmetric adjustmentof +/- 10 percentage points.

  10. Asset Allocation Nordea Life & Pension Nordic

  11. Allocation Private Equity

  12. Thank you!

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