1. a dynamic industry in a changing world
Idar Kreutzer, CEO, Finance Norway
Oslo,
9/17/2018

2. Finance Norway
Established January 1st 2010 by the Norwegian Savings Banks Association and the Norwegian Financial Services Association.
The organization's purpose is to strive for a strengthened Norwegian financial industry.
The legal framework is getting ever more complex and comprehensive. Thus, specialist expertise is needed, as well as a solid professional environment within the trade associations
Finance Norway employs approximately 100 highly skilled persons.
House of Finance
9/17/2018

3. Finance Norway – an employers federation
Became an employers federation January 1st 2013 when Finance Norway and Financial Services Employers Association (FA) merged.
Important to have good relations characterized by:
predictability
mutual respect
transparency
clear understanding of roles
Both employers and employees have a common interest in maintaining a robust financial industry – especially in turbulent times as this
We look forward to a fruitful cooperation

4. About Finance Norway
Finance Norway represent some 200 financial institutions operating in the Norwegian market. The institutions operate within different sectors of financial activity:
savings banks
commercial banks
life insurance companies
non-life insurance companies
finance companies
management companies for securities funds
investment firms
finance conglomerates
9/17/2018

5. Objectives Finance Norway’s objectives are:
sound working conditions for financial institutions
equal legal framework for all financial enterprises competing in the same market
equal terms and conditions for Norwegian based and international financial enterprises
a sound development of the financial industry nationally as well as internationally
high professional and ethical standards in the financial industry
a wide understanding of the importance of the financial industry in society
safeguarding interests of member companies in matters concerning wages and working conditions for their employees
to ensure that financial institutions are afforded working conditions and opportunities for further development that provide a basis for profitable and sound operation, enabling them to offer their customers the best possible service
to ensure equal legal framework for all financial enterprises competing in the same market, independent of size and ownership
to ensure that Norwegian based financial enterprises are able to operate on equal terms and conditions with their international competitors, and that these terms and conditions are adjusted to the developments in the EEA area
to promote a sound development of the financial industry nationally as well as internationally
to promote a high professional and ethical standard in the financial industry and a wide understanding of the importance of the financial industry in society
to safeguard interests of member companies in matters concerning wages and working conditions for their employees
9/17/2018

6. Increased productivity
Gross product per working hour, fixed 2005-prices
Interest rate margin
Kilde: SSB
Kilde: SSB

7. The current situation Banks: Life insurance: Non-life insurance:
Solid, minor losses, good results, strengthened financial position, improved funding profile, but is still dependant on international funding
Life insurance:
Defined benefit schemes under pressure due to low interest rates, accounting rules and new capital requirements. Significant capital requirement. Increased transition to defined contribution schemes
Non-life insurance:
Strong competition, small companies increasing their market share. Foreign companies have more than 50 per cent market share in Norway. Cost efficient

8. Legal framework in the making
New, international capital requirements for the banking sector
– CRD IV/Basel III
New, international capital requirements for the insurance sector
– Solvency II
Norwegian adaption to the new, international regulation
Pension reform - building a robust pensions system

9. The shortening adoption cycles related to innovation

10. New capital requirements in the EU/EEC (CRR/CRDIV)
What dictates stricter capital requirements?
Size of the banking sector compared to GDP
Degree of concentration risk
Cross-border activities
Norwegian banks have low risk compared to the European banking sector

11. Stricter requirements – earlier implementation Consequences for Norwegian banks
More capital, better capital and stricter requirements regarding liquidity leads to increased costs for banks
Country specific requirements will lead to higher costs for the customers in both the retail and corporate segments, compared to other countries
Stricter requirements combined with earlier implementation in Norway than in other countries, may give Norwegian Banks a competitive disadvantage

12. Consequences for life insurance
The customer will carry more of the risk
New capital requirements for the companies
Increased need for capital – balance the adjustments
Increased focus on costs and efficiency
Traditional vs. New business concepts
New business models
Source: Storebrand ASA Quarterly report Q2 2012

13. A robust pension system
National level
International level
Pensions reform, phase II
New occupational pensions product:
Employer and employees must share risk to a greater extent than in traditional DB schemes
Must be sustainable under Solvency II
Important challenges
Transitional measures - for existing pension rights
Defining the new, maximum limits of contribution in DC schemes
Implementation of Solvency II
Market value also for insurance liabilities
Falling interest rates increase the value of future liabilities
Figure year government bonds
Source: Finanstilsynet

14. A dynamic market for non-life insurance
Strong competition in non-life
Climate changes and increase in water damages
New regulatory framework
Strong growth in health insurance
Technology and changes in customer behavior are driving the changes in strategy

15. Strong competition in non-life insurance

16. Building competence - AFR
AFR - The authorization scheme for financial advisers established in 2009 and now counting139 companies – 6400 authorized financial advisors
To be authorized you have to pass:
A knowledge test in six areas
A practical examination – advising and ethics in addition to at least one year’s relevant
professional experience
To keep the authorization the financial advisors have to:
Be employed in a authorized AFR-company
Update knowledge
Adhere to good advisory practice in all financial advising
AFR hostes a directory where costumers can look up their advisers by name and find out whether they are authorized.

17. Development programs
Good advisory practices and common ethical standards in all schemes
Approved – advisers and sellers of insurance from 2009
Three new authorization schemes (studys) in insurance
Common standards under consideration for credit and insurance advisors

18. Thank you!