We reflect the past as we embrace the future

(1)

BUT EVEN PROUDER OF WHAT WE WILL

ONE DAY BE.

WITH A LONG TRADITION OF BEING CLOSE

TO CUSTOMERS, GJENSIDIGE IS LOOKING TO

TOMORROW.

WE AIM TO GET EVEN BETTER AT HELPING

CUSTOMERS, WHEREVER AND WHENEVER

THEY NEED US.

TIME PASSES, GJENSIDIGE ENDURES

– THAT’S WHY!

We reﬂ ect the past

as we embrace the future

Main ofﬁ ce

GJENSIDIGE

Drammensveien 288

Postboks 276

1326 Lysaker

Telefon 222 96 80 00

Regions

GJENSIDIGE

Øst

Stortorvet 1

1607 Fredrikstad

Telefon 03100

Edvard Storms gate 3

0166 Oslo

Telefon 03100

GJENSIDIGE

Innlandet

Tjuvholmen

Postboks 488

2304 Hamar

Telefon 03100

GJENSIDIGE

Syd

Holbergs gt 14

Postboks 288

3701 Syd

Telefon 03100

GJENSIDIGE

Vestlandet

Sandviksboder 66

Postboks 7235

5020 Bergen

Telefon 03100

GJENSIDIGE

Nord

Munkegaten 22

7469 Trondheim

Telefon 03100

A N N U A L R E P O R T G J E N S I D I G E 2 0 0 4

(2)

ACCOUNTS AND NOTES

The consolidated accounts include Gjensidige NOR Forsikring and subsidiaries in which Gjensidige NOR Forsikring has a controlling inﬂ uence. Normally these will be companies where Gjensidige NOR Forsikring, either directly or indirectly through sub-sidiaries, holds more than 50 per cent of the voting shares. Subsidiaries are consolidated from the time that control is obtained. The consolidated accounts have been prepared using the purchase method, and present the group as a single economic entity. All balances and transactions between companies in the group are eliminated in the consolidated accounts. Material gains and losses arising from transactions between companies in the group are also eliminated.

The cost of shares in a subsidiary is offset against its equity at the time of acquisition. Any excess over the underlying equity of the subsidiary is assigned to the balance sheet items to which it re-lates. Any amount that cannot be assigned to spe-ciﬁ c assets or liabilities is reported as goodwill. The length of time over which goodwill is amortised is based on an assessment of future earnings of the company acquired. The book value of goodwill is written down if its market value falls below their book value and this situation is not deemed to be temporary.

Where a subsidiary’s equity exceeds its cost, the difference is included in revaluation reserves. Where a subsidiary’s equity is less than its cost, the difference is included in the equity fund.

Associates

Holdings in companies in which the group has a signifi cant but not a controlling infl uence are reported using the equity method. Normally these will be companies where the group has a stake of between 20 and 50 per cent, the group has a signifi cant infl uence, and the holding is a long-term investment. This means that the group’s share of the year’s earnings, amortisation and write-downs of goodwill, capital gains and losses is reported on a separate line in the profi t and loss account. In the consolidated balance sheet, investments in associates are reported as the group’s share of the companies’ equity adjusted for goodwill. In the parent company accounts for Gjensidige NOR Forsikring, investments in subsidiaries and

associates are reported using the equity method. The special rules applying to general insurance companies are also taken into account when preparing the consolidated accounts.

RECOGNITION OF REVENUE AND EXPENSES

Insurance premiums are recognised over the term of the policy. Expenses are recognised as they are incurred.

Prepaid income and unpaid expenses at the end of the year are accrued and reported as a liability in the balance sheet. Unpaid income at the end of the year is accrued and reported as a receivable in the balance sheet. Dividends are recognised in the year they are received.

Foreign exchange

Proﬁ t and loss transactions in foreign currencies which relate to the insurance operation are con-verted into NOK at the average rate of exchange during the month in which the transaction took place. Receivables and liabilities denominated in foreign currencies are converted into NOK at the year-end rate of exchange.

Profi t and loss transactions which relate to the purchase and sale of securities and fi nancial instruments denominated in foreign currencies are converted into NOK at the rate of exchange at the time of the transaction. Holdings of foreign securities and fi nancial instruments are converted into NOK at the year-end rate of exchange. Liquid assets are also converted into NOK at the year-end rate of exchange. The exchange rate risk asso-ciated with foreign securities is mainly eliminated through hedging transactions.

Allocated return on investments

The allocated return on investments is calculated on the basis of average total technical provisions during the year, using the average yield during the year on government bonds with a remaining matu-rity of three years. Kredittilsynet has calculated the average technical yield for 2004 and 2003 to be 2.97 and 4.31 per cent respectively. The allocated return on investments is transferred from the non-technical account to the non-technical account.

VALUATION AND CLASSIFICATION OF ASSETS AND LIABILITIES

Assets for long-term ownership or use are clas-sifi ed as fi xed assets. Other assets are clasclas-sifi ed as current assets. Bonds held as fi xed assets are classifi ed as fi xed assets until maturity, while other receivables maturing within a year are classifi ed as current assets. Corresponding criteria are applied when classifying liabilities.

Fixed assets are carried at cost and written down to market value if the diminution in value is not expected to be temporary. Tangible ﬁ xed assets are reported net of depreciation. Current liabilities are reported at their historical nominal value. In accordance with the Norwegian Financial Repor-ting Act and Financial ReporRepor-ting Regulations for Insurance Companies, some items are subject to special valuation rules. Reference should be made to the following sections.

REAL ESTATE

Real estate is recorded at cost adjusted for previ-ous years’ write-ups and write-downs, and net of depreciation. All real estate is subject to straight-line depreciation to reﬂ ect normal wear and tear and ageing.

Real estate is valued on a portfolio basis. Its market value is reviewed and assessed annually by internal experts. This review is based on a long-term evaluation of the properties’ standard, location, cash ﬂ ows, development potential and potential realisable value.

If the excess of market value over book value for the remaining portfolio is sufﬁ cient, individual pro-perties will not be written down if their estimated market value falls below their book value. If the market value of the portfolio falls below its book value, and this is not deemed to be temporary, the portfolio is written down.

Properties due to be sold are excluded from the overall valuation and valued individually, and are written down if their estimated market value falls below their book value.

FINANCIAL FIXED ASSETS Shares and similar interests

Investments in cooperating companies and strategic investments intended to be long term are recorded at cost. Write-downs are made on an individual basis if their market value falls below their book value and this situation is not deemed to be temporary.

Investments in general partnerships and limited partnerships are included in the accounts using the equity method. Income from these investments is reported net under income from ﬁ nancial assets.

Bonds held to maturity

Bonds to be held to maturity are accounted for in accordance with the Financial Reporting Regulations for Insurance Companies. These bonds are recorded at cost at the time of purchase. The difference between cost and nominal value is amortised over the bond’s remaining time to maturity and recogni-sed as interest using the effective yield method.

ACCOUNTING POLICIES 1

NOTES

GJENSIDIGE NOR FORSIKRING AND CONSOLIDATED

NOK million

(9)

Loans

Loans are included in the balance sheet at their nominal value net of speciﬁ c and general provisions for credit losses. Speciﬁ c provisions for losses are made on the basis of an evaluation of each non-performing loan. General provisions for losses are made on the basis of experience, economic outlook and portfolio structure.

Interest and commission cease to be recognised as income once a loan has been in default for more than 60 days. Interest and fees in respect of non-performing loans credited to the proﬁ t and loss account in the current ﬁ nancial year are reversed if they have not been paid. Interest and fees from previous years that have not been paid are recorded as losses.

Loans are granted on market terms. Interest-free loans are issued to ﬁ nance ﬁ re alarm systems in agriculture for loss prevention purposes. These loans are repaid using the discount granted on the main policy when the alarm system is installed. FINANCIAL CURRENT ASSETS

Certiﬁ cates and bonds not held to maturity, and shares and similar interests not intended for long-term ownership, are carried at market value. Financial derivatives

Financial derivatives are used in the management of the company’s exposure to equities, bonds and foreign exchange in order to achieve the desired level of risk and return. These instruments are used both for trading purposes and for hedging balance sheet items. All trading of ﬁ nancial derivatives is subject to strict limits. The instruments are clas-siﬁ ed as current assets and carried at market value.

Options

Options are used for equities, bonds, futures, forward rate agreements, interest rate swaps and foreign exchange. The premium is capitalised when the contract is entered into, and recognised in the proﬁ t and loss account when the option expires or is exercised. Market value and exercise price are used to calculate gains/losses.

Equity and interest rate futures

Norwegian and foreign equity and interest rate futures are reconciled daily and recognised im-mediately in the proﬁ t and loss account.

Interest rate-, equity- and currency swaps

These contracts are valued at the year-end. Ac-crued interest is recognised directly in the proﬁ t and loss account.

Forward rate agreements (FRA)

FRAs are valued at the year-end and recognised in the proﬁ t and loss account on the settlement date.

Foreign exchange contracts

Foreign exchange contracts are used in the port folio management of foreign securities and technical provisions in foreign currency. The con-tracts are carried at their year-end market value, and unrealised values are recognised in the proﬁ t and loss account.

Reinsurance deposits

Some reinsurers retain cash reinsurance deposits equivalent to the value of outstanding claims provi-sions in respect of reinsurance accepted. These deposits are adjusted in line with changes in these provisions, and these adjustments are recognised as income and expense. The deposits themselves are reported in the balance sheet as receivables. TANGIBLE FIXED ASSETS OTHER

THAN BUILDINGS AND REAL ESTATE Tangible fi xed assets for the company’s own use are classifi ed as other assets in the balance sheet and recorded at cost less accumulated depreciation and write-downs. Depreciation is calculated on the basis of cost and distributed on a straight-line basis over the asset’s estimated life. Gains and los-ses on the disposal of tangible fi xed assets for own use are recognised in the profi t and loss account as ordinary income and expenses.

TECHNICAL PROVISIONS

Technical provisions are valued in accordance with section 8-6 of the Norwegian Insurance Act and associated regulations. Kredittilsynet has set sepa-rate minimum requirements for the various types of provision. Technical provisions comprise provi-sions for unearned premiums (premium proviprovi-sions), claims provisions, security provisions, reinsurance provisions and administration provisions. With the premium and claims provisions, the minimum requirements must also be met by each sector; with the security provisions, they must be met by each sector group.

Premium provisions

These provisions reﬂ ect the accrual of insurance premiums and comprise the unearned portion of premiums written during the year. No deduction is made for any expenses before the premium due is accrued.

In the case of group life business, the premium provisions also include provisions for fully paid whole-life cover (after payment of disability capital) and option funds (provisions for the right to renew without supplying a new health certiﬁ cate). Claims provisions

These provisions comprise provisions for anticipated future claims payments in respect of losses incurred but not fully settled at the end of the year. These

include both losses that have been reported to the company and those that have not yet been reported. Provisions for known losses are assessed individu-ally by the claims organisation, while provisions for unknown losses are based on the company’s empi-rical data and actuarial methods. Claims provisions are not discounted.

Provision for insufﬁ cient premium level These provisions are intended to cover insufﬁ cient premium levels, and are amortised in line with reductions in the underlying risks.

Security provisions

The premium and claims provisions are intended to cover the company’s anticipated future claims payments under current insurance contracts. The security provisions are intended to protect the company’s ﬁ nances against unforeseen increases in claims payments. The premium, claims and security provisions together must, with at least 99 per cent probability, cover all of the company’s commit-ments at the year-end.

The security provision for one-year risk insurances must exceed a statutory minimum, and is included in the security provisions for business insurances. Reinsurance provisions

The purpose of these provisions is to cover expenses incurred if one or more of the company’s reinsurers cannot meet their share of total claims payments.

Administration provisions

The purpose of these provisions is to cover admi-nistration expenses incurred in settling claims in the event of the company being wound up. Natural perils fund

The operating surplus from mandatory natural perils insurance must be allocated to separate natural perils fund, which may be used only in respect of claims related to natural perils. Natural perils denote losses directly associated with natural disasters such as landslides, storms, ﬂ oods, earth-quakes and volcanic eruptions.

Guarantee scheme provisions

The purpose of these provisions is to guarantee that claims submitted under direct insurance con-tracts entered into in Norway are settled in full. PENSIONS

The company and the group account for pensions in accordance with the Norwegian Accounting Standard for pension costs. The pension schemes are deﬁ ned-beneﬁ t schemes. Pension liabilities are calculated on the basis of linear accrual and assumptions for length of service, discount rate,

(10)

ANNUAL ACCOUNT 53

2 THE CONSOLIDATED ACCOUNTS INCLUDE THE FOLLOWING COMPANIES

Gjensidige NOR Forsikring Registered Interest Proﬁ t/ Share capital Book

Subsidiaries ofﬁ ce held Cost loss Acquired* 31.12.03 31.12.04 value

Gjensidige Marine & Energy Insurance AS Oslo 100 % 365.6 33.0 365.6 171.1 331.3 331.3 Gjensidige NOR Forsikring Eiendom AS Oslo 100 % 0.1 0.3 0.1 0.3 0.6 0.6 Gjensidige NOR Kredittforsikring AS Oslo 100 % 137.9 14.5 68.3 22.3 22.7 22.7 Gjensidige NOR Sikkerhetspartner AS Oslo 100 % 0.9 (0.4) 0.9 0.4 0.4 Glitne Invest AS Oslo 100 % 500.1 (18.4) 500.1 491.4 468.5 468.5

GNF Eiendom AB Stockholm 100 % 0.1 0.5 0.1 0.6 0.6

Samtrygd Eigedom AS Førde 100 % 3.0 (0.2) 3.0 3.1 2.9 2.9

Storgata 90 AS Tromsø 100 % 15.7 0.0 1.3 0.1 0.1 0.1

Strandtorget Drift AS Lillehammer 100 % 0.1 0.1 0.1 0.1 0.2 0.2 Strandtorget Eiendom AS Lillehammer 100 % 0.1 0.0 0.1 0.1 0.1 0.1

Total shares in subsidiaries 1,023.6 29.4 939.6 688.5 827.4 827.4

Registered Interest Proﬁ t/ Share capital Book

Associates ofﬁ ce held Cost loss Acquired* 31.12.03 31.12.04 value

Bilskadeinstituttet AS Oslo 30 % 0.4 0.1 0.4 1.3 1.3 1.3

Forsikring og Finans Sandnes AS Sandnes 34 % 0.0 0.1 0.0 0.1 0.2 0.2 Forsikringskontoret Johansen og Torkelsen AS Sandnes 34 % 0.0 0.0 0.0 0.2 0.2

Fossmark Assuranse AS Stavanger 34 % 0.0 0.0 0.0 0.1 0.1

Gjensidige NOR DriftsPartner AS Oslo 50 % 7.5 7.5 7.0 Gjensidige NOR Markedsstøtte AS Oslo 50 % 5.0 5.0 5.0

IT Drift AS Steinkjer 50 % 0.5 0.0 0.5 0.3

Norsk Assistansesentral AS Oslo 50 % 3.0 6.5 3.0 3.5

Tindved Kulturhage AS Verdal 25 % 0.1 0.1 0.1 0.1

Vervet AS Tromsø 25 % 0.1 0.0 0.1 0.3 1.3 1.3

Total shares in associates 16.6 6.8 16.6 17.4 3.2 3.2

Total shares in subsidiaries and associates 1,040.2 36.1 956.2 706.0 830.6 830.6

NOK million

future return on scheme assets, and future growth in wages, pensions and social security beneﬁ ts, as well as actuarial assumptions for mortality, staff turnover etc.

Pension funds are carried at market value, and are deducted from liabilities in the net pension liabili-ties ﬁ gure in the balance sheet. Any overfunding is capitalised if it is likely that it can be put to use.

DEFERRED TAX, INCOME TAX EXPENSE

The calculation of deferred tax in the proﬁ t and loss account and balance sheet has been perfor-med using the provisional Norwegian Accounting Standard for the treatment of taxes.

The tax charge in the proﬁ t and loss account consists of tax payable and changes in deferred tax assets/liabilities. Tax payable is calculated on the basis of the taxable proﬁ t for the year. Deferred tax assets/liabilities are calculated on the basis of temporary differences between accounting and tax values, and of the tax effects of losses carried forward. The nominal rate of tax is used for these calculations. Positive and negative differences within the same period are offset.

Deferred tax assets arise when temporary diffe-rences can be offset against tax in the future, and are capitalised as intangible assets in line with the general valuation principles.

RELATED PARTY TRANSACTIONS Commissions

The mutual fi re insurers perform a number of functions on behalf of Gjensidige NOR Forsikring, for which commissions are paid. Correspondingly, refunds are received for those services that Gjen-sidige NOR Forsikring provides for the mutual fi re insurers. Due to the fi re policy reinsurance scheme, Gjensidige NOR Forsikring also manage assets on behalf of the mutual fi re insurers, in respect of which interest is paid to the mutual fi re insurers.

Related party purchases and sales

Related party purchases and sales are carried out on commercial terms.

(11)

3

2 THE CONSOLIDATED ACCOUNTS INCLUDE THE FOLLOWING COMPANIES (CONT.)

Subsidiaries of Glitne Invest Registrered Interest Profi t/ Share capital Goodwill/ Book (Share of profi t/loss incl. in parent company) offi ce held Cost loss Aquired* 31.12.03 31.12.04 surp.value value

BoTrygt Fetsund AS Oslo 100 % 0.1 (0.1) 0.1 0.1 0.1 0.1

BoTrygt Prinsegården AS Oslo 50 % 0.3 0.2 0.3 2.8 0.6 0.6

Gjensidige Nor Sikkerhetspartner AS Oslo 100 % 6.1 (3.7) 6.1 4.6

Glitne Eiendom AS Oslo 100 % 1.0 (0.0) 1.0 1.0 1.0 1.0

Hjelp 24 Glitne AS Oslo 100 % 32.0 (2.7) 32.0 13.1 26.4 26.4 Lindorff Group AB Stockholm 19.5 % 129.9 (21.3) 129.9 65.4 40.5 105.9

Glitne 2 AS Oslo 100 % 6.6 (0.8) 6.6 4.0 3.3 3.3

Hjelp 24 Trygghetsalarmer AS Oslo 50 % 37.5 (2.7) 37.5 4.9 4.5 20.3 24.7

Lokal Forsikring AS Oslo 100 % 1.0 (0.0) 1.0 4.2 5.5 5.5

Total shares in Glitne Invest 214.5 (31.0) 214.5 34.8 106.7 60.8 167.5

Equity movements in subsidiaries

Equity as at 01.01. 688.5

Group contributions / Dividend paid (Speciﬁ ed in note 3) (47.1) Group contributions paid net of tax / Dividend (Speciﬁ ed in note 3) 160.2

Profit for the year 29.4

Net equity paid 1.0

Sold companies 0.0

Adjustments for previous years (4.6) Conversion/rounding errors (0.0)

Equity in subsidiaries as at 31.12. 827.4

Equity movements in associates

Equity as at 01.01. 17.4

Dividend paid (1.5)

Dividend received

Profit for the year 6.8

Net equity paid 1.3

Sold companies (22.4)

Adjustments for previous years 1.6 Conversion/rounding errors (0.0)

Equity in associates as at 31.12. 3.2

Goodwill and intangible assets in sub-groups

Book value as at 01.01. 25.3

Additions/disposals 49.1

Amortisation (13.7)

Book value as at 31.12. 60.8

Amortisation period 5 - 7 years

Amortisation method Straight-line

* Equity at time of acquisition adjusted for any new issues. The equity in companies that have been acquired indirectly when buying another company, is valued at its original cost.

In all cases the percentage of votes held is the same as the percentage of shares held.

RELATED PARTY TRANSACTIONS AND BALANCES WITHIN THE GROUP AND COOPERATING COMPANIES*)

A GROUP CONTRIBUTIONS AND DIVIDENDS 2004 2003

Gjensidige NOR Forsikring Additions Disposals Additions Disposals

Contributions by subsidiaries

Gjensidige NOR Kredittforsikring 14.0 3.7

Glitne Invest 63.7

Gjensidige Marine & Energy Insurance 222.5

BoTrygt Fetsund 0.1

Dividends received

Gjensidige Marine & Energy Insurance 33.0 12.3

Lindorff Holding 190.0

Total group contributions and dividends 47.1 222.6 269.7 0.0

Cooperating companies – dividends received

Gjensidige NOR ASA 613.8

DnB NOR 155.0

Total cooperating companies – dividends received 155.0 613.8

(12)

RELATED PARTY TRANSACTIONS AND BALANCES WITHIN THE GROUP AND COOPERATING COMPANIES (CONT.) B ADDITIONS AND DISPOSALS OF ASSETS

2004 2003

Gjensidige NOR Forsikring Additions Disposals Additions Disposals

Subsidiaries Asset Type

Glitne Invest Gjensidige NOR Sikkerhetspartner AS Shares (100 % share) 0.9 Gjensidige NOR Sikkerhetspartner Inventories, receiveables and liabilities 2.6

Cooperating companies Asset

Norsk Automobil Forbund Norsk Assistansesentral AS Shares (50 % share) 10.0 DnB NOR Gjensidige NOR DriftsPartner AS Shares (50 % share) 7.0 DnB NOR Gjensidige NOR Markedsstøtte AS Shares (50 % share) 5.0 DnB NOR (Vital Forsikring ASA) Insurance portfolio 200.0

DnB NOR Admiral Hotel AS Shares (25 % share) 0.0

DnB NOR Admiral Hotel Real estate 54.8

DnB NOR Gjensidige NOR Næringseiendom AS Shares (20 % share) 1.7

DnB NOR Royal Christiania Hotel AS Shares (25 % share) 0.0

DnB NOR Royal Christiania Hotel Real estate 215.3

DnB NOR Sandvika Torg AS Shares (25 % share) 0.0

DnB NOR Leif Tronstads Plass. Sandvika Real estate 50.5

DnB NOR Storbyen Drift AS Shares (35 % share) 0.2

DnB NOR Storbyen Eiendom AS Shares (35 % share) 0.0

DnB NOR Storbyen Kjøpesenter Real estate 156.9

DnB NOR Strandtorget Drift AS Shares (35 % share) 0.1

DnB NOR Strandtorget Eiendom AS Shares (35 % share) 0.1

DnB NOR Strandtorget Kjøpesenter Real estate 250.4

DnB NOR Kipervikgt. 13, Ålesund Real estate 2.6

DnB NOR Storgt. 32, Dokka Real estate 5.7

DnB NOR Stortorget 1 c, Fredrikstad Real estate 5.4

DnB NOR Valdresvegen 13, Fagernes Real estate 4.0

C RELATED PARTY BALANCES

Gjensidige NOR Forsikring 2004 2003

Within the group Receivable Payable Receivable Payable

Gjensidige Marine & Energy Insurance 188.6 55.1

Samtrygd Eigedom 2.0

Gjensidige NOR Kredittforsikring 14.0 3.7

Glitne Invest 1.8 58.7

Total due for payment of less than one year 17.9 188.6 62.4 55.1

Gjensidige NOR Forsikring Eiendom 4.4 4.4

GNF Eiendom AB 323.9

Total due for payment of more than one year 328.2 0.0 4.4 0.0

Total related party balances within the group 346.1 188.6 66.8 55.1

Cooperating companies

DnB NOR – Bank deposits 599.2 578.3

DnB NOR – Trading balances 48.2 8.0

Fire mutuals 138.8 144.1

D GUARANTEES

Within the group

Gjensidige NOR Forsikring guaranteed full settlement for existing policyholders in connection with the transfer of the marine and energy business to Gjensidige Marine & Energy Insurance (GME). For practical reasons Gjensidige NOR Forsikring handles reinsurance for GME. The subsidiary is responsible at all times for any losses associated with the business transferred.

Cooperating companies

Gjensidige NOR Forsikring is responsible externally for any insurance claim arising from the mutual ﬁ re insurers’ ﬁ re insurance business.

ANNUAL ACCOUNT 55

(13)

4 UNDERWRITING RESULT AND TECHNICAL PROVISIONS A UNDERWRITING RESULT

Private insurances

Combined Of which Motor Of Of Yachts & Accident Travel Other Total

legal which which pleasure private

expenses liability other craft

Premiums written

Gross premiums written 1,554.9 97.7 3,450.4 1,781.2 1,669.2 162.2 372.0 317.7 79.6 5,936.8 Outward reinsurance premiums (36.2) 0.0 (36.8) 0.0 (36.8) (1.9) (3.8) (0.2) (2.0) (80.9)

Premiums written, net of reinsurance 1,518.7 97.7 3,413.6 1,781.2 1,632.4 160.3 368.2 317.5 77.6 5,855.9

Gross business Premiums earned 1,468.4 90.5 3,160.6 1,643.5 1,517.1 151.1 369.2 305.5 76.8 5,531.6 Claims incurred (829.7) (65.7) (2,383.8) (1,153.8) (1,230.0) (79.3) (253.2) (227.5) (50.9) (3,824.4) Operating expenses (329.6) (20.4) (749.7) (375.3) (374.4) (39.1) (88.9) (77.2) (19.2) (1,303.7) Underwriting result 309.1 4.4 27.1 114.4 (87.3) 32.7 27.1 0.8 6.7 403.5 Reinsurers’ share Premiums earned (36.2) 0.0 (36.8) 0.0 (36.8) (1.9) (3.8) (0.2) (2.0) (80.9) Claims incurred (0.0) 0.0 (3.9) 0.0 (3.9) 0.1 0.0 0.0 0.0 (3.8) Operating expenses 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Commission received 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Underwriting result (36.2) 0.0 (40.7) 0.0 (40.7) (1.8) (3.8) (0.2) (2.0) (84.7)

Underwriting result, net of reinsurance 272.9 4.4 (13.6) 114.4 (128.0) 30.9 23.3 0.6 4.7 318.8

Gross claims incurred

Incurred during the year (856.5) (52.6) (2,332.9) (1,056.7) (1,276.2) (77.6) (298.0) (235.2) (52.3) (3,852.5) Incurred in previous years 26.8 (13.1) (50.9) (97.1) 46.2 (1.7) 44.8 7.7 1.4 28.1

Total for the accounting year (829.7) (65.7) (2,383.8) (1,153.8) (1,230.0) (79.3) (253.2) (227.5) (50.9) (3,824.4)

Claims incurred, net of reinsurance

Incurred during the year (856.5) (52.6) (2,335.5) (1,056.7) (1,278.8) (77.6) (298.0) (235.2) (52.4) (3,855.2) Incurred in previous years 26.8 (13.1) (52.2) (97.1) 44.9 (1.6) 44.8 7.7 1.5 27.0

(14)

ANNUAL ACCOUNT 57

4 A UNDERWRITING RESULT (CONT.)

Industry and commercial insurances

Industrial Com- Of Motor Of Of Liability Workers Collective Live- Fish- Trans- Annual Total bined which which which and compen- disease stock farms port pure Industry

legal liability other guaran- sation and insur-

expense tees accident ance

Premiums written

Gross premiums written 942.0 1,221.0 24.4 724.9 267.7 457.2 185.8 841.3 495.7 81.6 93.5 71.7 1,471.7 6,129.2

Outward reinsurance premiums (51.9) (31.2) 0.0 (7.8) 0.0 (7.8) (12.2) (14.3) 0.0 (6.2) (13.6) (4.5) (6.8) (148.5)

Premiums written, net of reinsurance 890.1 1,189.8 24.4 717.1 267.7 449.4 173.6 827.0 495.7 75.4 79.9 67.2 1,464.9 5,980.7 Gross business Premiums earned 1,003.5 1,126.7 12.7 841.2 273.4 567.8 166.9 907.9 520.8 76.1 95.4 70.9 1,529.6 6,339.0 Claims incurred (383.3) (612.2) (43.8) (595.5) (268.1) (327.4) (113.6) (863.7) (578.1) (54.0) (35.7) (32.7) (1,221.5) (4,490.3) Operating expenses (193.1) (250.3) (4.9) (158.0) (57.8) (100.2) (40.5) (74.0) (99.6) (19.4) (21.3) (13.4) (247.2) (1,116.9) Underwriting result 427.1 264.2 (36.0) 87.7 (52.5) 140.2 12.8 (29.8) (156.9) 2.7 38.4 24.8 60.9 731.8 Reinsurers’ share Premiums earned (54.6) (31.2) 0.0 (7.8) 0.0 (7.8) (12.0) (14.3) 0.0 (6.2) (13.6) (4.5) (8.8) (153.0) Claims incurred (15.3) (2.9) 0.0 0.0 0.0 0.0 0.3 35.4 13.9 (0.0) 0.1 (5.7) 1.4 27.2 Operating expenses (1.9) (2.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (0.1) 0.0 (0.1) (4.1) Commission received 2.5 2.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.0 0.2 5.9 Underwriting result (69.3) (33.3) 0.0 (7.8) 0.0 (7.8) (11.7) 21.1 13.9 (6.2) (13.2) (10.2) (7.3) (124.0) Underwriting result, net of reinsurance 357.8 230.9 (36.0) 79.9 (52.5) 132.4 1.1 (8.7) (143.0) (3.5) 25.2 14.6 53.6 607.8

Gross claims incurred

Incurred during the year (463.9) (664.0) (13.8) (568.4) (242.3) (326.1) (54.8) (774.2) (515.2) (51.5) (39.4) (34.0) (1,186.7) (4,352.1)

Incurred in previous years 80.6 51.8 (30.0) (27.1) (25.8) (1.3) (58.8) (89.5) (62.9) (2.5) 3.7 1.3 (34.8) (138.2)

Total for the accounting year (383.3) (612.2) (43.8) (595.5) (268.1) (327.4) (113.6) (863.7) (578.1) (54.0) (35.7) (32.7) (1,221.5) (4,490.3)

Incurred during the year (462.7) (662.9) (13.8) (568.4) (242.3) (326.1) (54.6) (774.2) (515.2) (51.5) (39.4) (34.0) (1,186.7) (4,349.6)

Incurred in previous years 64.1 47.8 (30.0) (27.1) (25.8) (1.3) (58.7) (54.1) (49.0) (2.5) 3.8 (4.4) (33.4) (113.5)

(15)

4

B TECHNICAL PROVISIONS

Private Industry Marine Energy Re- Other Total Subsidiaries Total

insur- and insur- insur- Pool Gj. NOR GME GNK Gj. NOR

ance comm. ance ance schemes Forsik- Energy/ Credit Forsikring

insurance ring Marine Hull Consolid.

Technical provisions, net of reinsurance

Premium provisions 2,917.4 1,974.8 44.3 0.0 0.0 146.4 5,082.9 (5.2) 0.4 5,078.1

Provision for insufﬁ cient premium level 9.9 9.9

NFSA minimum requirement 2,917.4 1,974.8 44.3 0.0 0.0 146.4 5,082.9 4.7 0.4 5,088.0 Claims provisions 3,586.3 8,154.7 89.7 0.0 38.7 72.0 11,941.4 138.2 1.7 12,081.3 NFSA minimum requirement 3,203.9 7,537.2 87.3 0.0 38.7 72.0 10,939.1 60.1 1.7 11,000.9 Security provision 864.7 909.6 19.7 0.0 5.8 0.0 1,799.8 12.0 5.5 1,817.3 NFSA minimum requirement 864.7 909.6 19.7 0.0 5.8 0.0 1,799.8 12.0 5.5 1,817.3 Reinsurance provision 0.1 9.2 0.3 1.3 0.0 0.0 10.9 10.7 0.0 21.7 NFSA minimum requirement 0.1 9.2 0.3 1.3 0.0 0.0 10.9 4.6 0.0 15.5 Administration provision 349.2 389.0 7.6 0.0 2.2 0.0 748.0 3.8 0.4 752.2 NFSA minimum requirement 349.2 389.0 7.6 0.0 2.2 0.0 748.0 3.8 0.4 752.2

A UNDERWRITING RESULT (CONT.)

Marine insurance Energy Inward reinsurance Other Total Subsidiaries Total

Costal/ Propor- Non- Total Avia- Pool Gjensidige GME GNK Gjensidige NOR

ﬁ shing tional*) _propor- _inward _tion _schemes _NOR _Energy/ _Credit _Elimin- _Forsikring

vessel tional*) _reinsur. _{Forsikring Marine Hull} _ations _consolidated

Premiums written

Gross premiums written 194.9 0.4 10.9 2.0 12.9 0.0 406.3 12,680.5 (9.9) 1.4 (0.4) 12,671.6

Outward reinsurance premiums (33.3) (0.4) 0.0 (1.5) (1.5) 0.0 (114.3) (378.9) 7.8 (0.3) 0.4 (371.0)

Premiums written, net of reinsurance 161.6 0.0 10.9 0.5 11.4 0.0 292.0 12,301.6 (2.1) 1.1 0.0 12,300.6

Gross business Premiums earned 178.2 0.8 10.9 2.0 12.9 0.0 447.6 12,510.1 (6.1) 1.4 (0.8) 12,504.6 Claims incurred (122.7) 26.1 (7.2) (0.2) (7.4) 0.0 (32.3) (8,451.0) 78.5 1.4 (26.1) (8,397.2) Operating expenses (35.6) (0.1) (0.4) (0.1) (0.5) 0.0 0.7 (2,456.1) (6.6) (2.5) 0.1 (2,465.1) Underwriting result 19.9 26.8 3.3 1.7 5.0 0.0 416.0 1,603.0 65.8 0.3 (26.8) 1,642.3 Reinsurers’ share Premiums earned (33.3) (0.8) 0.0 (1.5) (1.5) 0.0 (114.5) (384.0) (3.7) (0.3) 0.8 (387.2) Claims incurred 15.1 (26.1) 0.0 0.0 0.0 0.0 0.0 12.4 (55.3) 0.6 26.1 (16.2) Operating expenses (0.2) 0.0 0.0 0.0 0.0 0.0 0.0 (4.3) (0.5) (0.1) 0.0 (4.9) Commission received 0.2 0.1 0.0 0.0 0.0 0.0 0.0 6.2 (0.4) 0.0 (0.1) 5.7 Underwriting result (18.2) (26.8) 0.0 (1.5) (1.5) 0.0 (114.5) (369.7) (59.9) 0.2 26.8 (402.6) Underwriting result, net of reinsurance 1.7 0.0 3.3 0.2 3.5 0.0 301.5 1,233.3 5.9 0.5 0.0 1,239.7 Gross claims incurred

Incurred during the year (122.7) 26.1 (1.1) 0.0 (1.1) 0.0 (28.5) (8,330.8) (6.9) 0.0 (26.1) (8,363.8)

Incurred in previous years 0.0 0.0 (6.1) (0.2) (6.3) 0.0 (3.8) (120.2) 85.4 1.4 0.0 (33.4)

Total for the accounting year (122.7) 26.1 (7.2) (0.2) (7.4) 0.0 (32.3) (8,451.0) 78.5 1.4 (26.1) (8,397.2)

Incurred during the year (122.7) 0.0 (1.1) 0.0 (1.1) 0.0 (28.5) (8357.1) (2.2) 0.0 0.0 (8,359.3)

Incurred in previous years 15.1 0.0 (6.1) (0.2) (6.3) 0.0 (3.8) (81.5) 25.4 1.9 0.0 (54.2)

Total for the accounting year (107.6) 0.0 (7.2) (0.2) (7.4) 0.0 (32.3) (8,438.6) 23.2 1.9 0.0 (8,413.5)

*) Premiums written this year 3.4 0.5 3.9

(16)

ANNUAL ACCOUNT 59

5

6

SALES AND OPERATING EXPENSES

2003 2004 2004 2003

581.1 630.6 Salaries 630.6 581.1

336.1 286.9 Commission 286.9 336.1

542.1 585.1 Other sales expenses 585.6 543.7

1,459.3 1,502.5 Total sales expenses 1,503.0 1,460.9

917.8 957.8 Other operating expenses 967.0 927.0

2,377.1 2,460.4 Total operating expenses 2,470.0 2,387.9

FINANCIAL FIXED ASSETS

A SHARES AND SIMILAR INTERESTS Number Cost Book

of shares value

DNB NOR 70,472,696 2,193.2 2,193.2

Fjord Invest 8,570 8.7 8.7

Forum Hotellbygg, 10% share 4.1 4.1

Grenland Investeringsfond 3,000 3.0 3.0 Helgeland Vekst 40,000 4.0 4.0 Marin Vekst 150,000 15.0 15.0 Norinnova 578 3.0 3.0 Sikon Øst 112,760 22.6 20.0 Såkorninvest Innlandet 17,500 7.0 3.5 Såkorninvest Sør 12,500 5.0 5.0 Trøndelag Vekst 20,252 3.1 3.1

Tun Media (Landbrukets Medieselskap) 1,553,872 3.7 3.7

Viking Venture 94,544 8.4 8.4

Viking Venture II 50,000 5.0 5.0

Other shares and similar interests 14.4 11.4

Total shares and similar interests Gjensidige NOR Forsikring 2,300.0 2,291.0

Shares – Subsidiaries

Bo Trygt Prinsegården 250 0.3 0.6

Lindorff Group 798,042 129.9 105.9

Energy Ventures 50 9.1 9.1

Hjelp 24 Trygghetsalarmer (previously Lev Vel Helse) 1,515 37.5 24.7

SOS International 4,603 4.2 4.2

Scalepoint International 802 5.5 5.5

Total shares and similar interests Gjensidige NOR Forsikring consolidated 2,486.5 2,441.1

The book value of shares held as ﬁ xed assets are considered to be equal to marked value, with the exception of the investment in DnB NOR. The market value of this investment at the year-end was NOK 4,193.1 million. Since the year-end 41 million of these 70.5 million shares have been sold, as discussed in the report of the board of directors.

Book value as at 01.01. 2,435.4 Additions 10.6 Disposals (1.3) Capital return (155.8) Reclassiﬁ cation 6.5 Reversal of write-downs 1.5 Actual loss (2.8) Write-downs (3.1) Book value as at 31.12. 2,291.0

(17)

6 FINANCIAL FIXED ASSETS (CONT.) B BONDS HELD TO MATURITY

Gjensidige NOR Forsikring Surplus/

Par Book Market deﬁ cit

Cost value value value value

Norwegian bonds

Public listed

Government and state guaranteed bonds 1,300.7 1,192.3 1,305.6 1,323.0 17.4 Bonds issued by counties and municipalities 371.4 358.8 371.1 380.6 9.5 Bonds issued by ﬁ nancial institutions 702.4 693.0 703.4 712.7 9.3 Bonds issued by industrial institutions 348.2 325.0 347.7 346.8 (0.9) Unlisted

Government and state guaranteed bonds 250.0 250.0 250.0 274.2 24.2 Bonds issued by counties and municipalities 140.7 138.0 140.7 141.8 1.1 Bonds issued by ﬁ nancial institutions 310.6 305.0 309.4 319.6 10.2

Bonds issued by industrial institutions 5.0 5.0 5.0 5.1 0.1

Total Norwegian bonds 3,429.1 3,267.1 3,433.0 3,503.8 70.8

Foreign bonds

Public listed

Government and state guaranteed bonds 221.5 215.0 221.5 223.6 2.1 Bonds issued by industrial institutions 495.6 142.0 492.6 463.2 (29.4) Unlisted Bonds issued by counties and municipalities 100.0 100.0 100.0 101.9 1.9 Bonds issued by ﬁ nancial institutions 500.0 500.0 500.0 524.6 24.6

Total foreign bonds 1,317.1 957.0 1,314.1 1,313.3 (0.8)

Total bonds held to maturity 4,746.3 4,224.1 4,747.1 4,817.1 70.0

Foreign bonds by country

Sweden 416.0 415.0 416.0 440.0 24.0

Denmark 105.5 100.0 105.5 105.5 (0.0)

Netherlands 358.8 174.0 357.8 357.7 (0.2)

USA 286.8 118.0 284.7 257.8 (26.9)

Cayman Islands 150.0 150.0 150.0 152.3 2.3

Total foreign bonds 1,317.1 957.0 1,314.1 1,313.3 (0.8)

The effective yield on foreign and Norwegian bonds held to maturity has been calculated as 3.38% and 3.45% respectively based on their market value, and 4.28 % and 4.14 % respectively when calculation is made on book value. The calculation method is the same as is used for bonds in the trading portfolio.

Book value as at 01.01. 2,156.0

Acquisitions 2,593.1

Write-ups/-downs (2.0)

(18)

ANNUAL ACCOUNT 61

7 SHARES AND SIMILAR INTERESTS HELD AS CURRENT ASSETS

NORWEGIAN SHARES Gjensidige NOR Forsikring and Gjensidige NOR Forsikring consolidated

Number Cost Market

of shares value

Energy

Aker Kværner 67,291 9.1 10.8

Fred Olsen Energy 113,500 7.3 9.9

Norsk Hydro 137,706 47.5 65.7 Statoil 385,226 28.7 36.6 TGS-NOPEC Geophysical 61,204 6.6 9.5 Materials Norske Skog A 77,964 10.0 10.2 Yara International 258,074 13.8 20.6 Industry Kverneland 58,762 5.2 4.9 Tomra Systems 318,874 9.4 10.6 Wilh Wilhelmsen A 83,892 6.0 13.2 Consumer discretionary Ekornes 37,792 4.1 5.0 Schibsted 55,100 6.9 9.5

Troms Fylkes Dampskibsselskap 56,397 10.4 5.0

Consumer staples

Lerøy Seafood Group 87,234 2.9 3.2

Orkla 177,812 25.9 35.4

Financials

Storebrand 67,870 2.8 4.0

Information technology

EDB Business Partner 213,244 8.2 10.6

Fast Search and Transfer 657,844 7.7 8.7

NextGenTel Holding 131,861 4.6 5.3 Software Innovation 146,300 4.0 3.1 Tandberg 266,776 16.0 20.1 Telecommunication services Telenor 696,640 32.4 38.3 Unlisted shares

Ofotens og Vesterålens Dampskipsselskap 335,700 7.2 18.5

Whitecliff 100,000 5.1 3.2

Other Norwegian shares and similar interests 31.0 19.2

Total Norwegian shares and similar interests 312.7 380.9

DnB NOR Global (V) 6,453,993 650.0 652.4

Total Norwegian equity funds 650.0 652.4

MSCI Basket 40.5 104.6

Total Norwegian equity options 40.5 104.6

(19)

7 SHARES AND SIMILAR INTERESTS HELD AS CURRENT ASSETS (CONT.)

FOREIGN SHARES Gjensidige NOR Forsikring and Gjensidige NOR Forsikring consolidated

Number Cost Market

of shares value

Bermuda

Frontline 14,500 2.4 3.9

Liberia

Royal Caribbean Cruises 54,040 14.2 18.0

Luxembourg Stolt-Nielsen 144,904 16.9 25.2 Stolt-Offshore 215,994 5.3 8.5 Sweden SAS 90,176 4.5 5.1 Unlisted Eldon-Enclosures A 1,685 0.1 0.0 Eldon-Enclosures B 6,615 1.2 0.1 Findus A 111,907 0.1 0.6 Findus B 451,292 3.9 2.3 Hemocue Holding A 3,705 0.1 0.8 Hemocue Holding C 12,488 1.7 2.5 IHI Holding A 156,585 1.7 3.3 Labs2 Group 48,270 2.0 0.0 Salcomp A 2,528 0.1 0.5 Salcomp C 8,597 1.7 1.6 Tradex Converting A 7,542 0.0 0.2 Tradex Converting B 27,235 1.1 0.9 USA Unlisted CEREP 56.0 52.5

Total foreign shares 112.9 126.1

Genesis Investment Fund 138.8 189.6

Total foreign shares and similar interests 251.6 315.7

Total shares and similar interests 1,254.9 1,453.6

The company’s foreign shares is managed using a set of “MSCI World Net Dividends Index “ as benchmarks. Norwegian shares are managed using “OSEBX” deducting the effect of DnB NOR.

(20)

ANNUAL ACCOUNT 63

8 BONDS AND OTHER FIXED INTEREST SECURITIES

Cost Market Cost Market

value value

Norwegian bonds

Public listed

352.7 366.7 Government and state-guaranteed bonds 484.5 498.5 789.6 779.7 Bonds issued by banks and ﬁ nancial institutions 789.6 779.7 1,298.2 1,298.3 Bonds issued by counties and municipalities 1,490.7 1,490.5 145.7 145.9 Bonds issued by industrial companies 145.7 145.9 Unlisted

360.2 360.4 Bonds issued by banks and ﬁ nancial institutions 360.2 360.4 317.8 319.8 Bonds issued by counties and municipalities 317.8 319.8

3,264.1 3,270.7 Total Norwegian bonds 3,588.4 3,594.7

Norwegian certiﬁ cates

Public listed

6,047.1 6,049.7 Government and state-guaranteed bonds 6,067.0 6,069.6 50.0 50.0 Bonds issued by banks and ﬁ nancial institutions 50.0 50.0 20.0 20.0 Bonds issued by counties and municipalities 20.0 20.0 Unlisted

325.0 324.9 Bonds issued by banks and ﬁ nancial institutions 325.0 324.9

20.0 20.0 Bonds issued by industrial companies 20.0 20.0

6,462.1 6,464.5 Total Norwegian certiﬁ cates 6,482.0 6,484.4

Foreign bonds

Public listed

18.4 18.4 Government and state-guaranteed bonds 56.4 52.1

42.2 41.3 Bonds issued by banks and ﬁ nancial institutions 42.2 41.3

60.6 59.7 Total foreign bonds 98.6 93.4

Foreign certiﬁ cates

Unlisted

2,674.3 2,667.0 Government and state-guaranteed certifi cates 2,674.3 2,667.0 100.0 100.0 Certifi cates issued by banks and fi nancial institutions 100.0 100.0

2,774.3 2,767.0 Total foreign certiﬁ cates 2,774.3 2,767.0

12,561.1 12,561.8 Total bonds and certiﬁ cates 12,943.3 12,939.5

Foreign commodity indexed bonds

Public listed

160.9 138.1 Issued by banks and ﬁ nancial institutions 160.9 138.1

160.9 138.1 Total foreign commodity indexed bonds 160.9 138.1

Funds and ﬁ nancial derivatives

1,009.9 972.0 Hedge funds 1,009.9 972.0

554.4 549.5 Bond funds 596.2 591.0

(23.0) Norwegian ﬁ nancial derivatives (24.1)

1.7 28.3 Foreign ﬁ nancial derivatives 1.7 28.3

1,566.0 1,526.8 Total funds and ﬁ nancial derivatives 1,607.8 1,567.3

(21)

8

9 FINANCIAL DERIVATIVES

Principal Principal Market Principal Principal Market

31.12.04 average value 31.12.04 average value

2004 31.12.04 2004 31.12.04

Interest-related contracts

Maturity of less than one year

800.0 FRA options 800.0

7,225.0 3,509.5 (25.4) FRA 7,225.0 3,509.5 (25.4)

25.6 Bond options 25.6

2,836.7 IRF options 2,836.7

(1,582.5) (1,238.3) 342.4 Interest rate SWAP (1,582.5) (1,238.3) 342.4

(274.1) (422.8) Bond futures (274.1) (422.8)

(3.0) IRF (3.0)

Maturity of more than one year

288.0 FRA 288.0

(343.0) (6.2) (338.6) Interest rate SWAP (343.0) (6.2) (338.6)

Currency-related contracts

638.1 904.1 1.2 Currency options 638.1 904.1 1.2

1,174.3 641.5 (1.4) Forward contracts 1,194.2 644.2 (1.6)

3,347.7 3,232.4 26.4 Currency SWAP 3,470.4 3,323.2 25.7

Equity-related contracts

150,000.0 161,808.6 104.6 Equity options 150,000.0 161,808.6 104.6

10.3 Equity SWAP 10.3

(312.9) (156.5) Equity futures (312.9) (156.5)

Commodity-related contracts

1.0 Commodity options 1.0

BONDS AND OTHER FIXED INTEREST SECURITIES (CONT.)

Cost Market Cost Market

value Foreign bonds and certiﬁ cates by currency value

1,132.4 1,131.2 NOK 1,132.4 1,131.2 1,028.6 1,031.4 DKK 1,028.6 1,031.4 674.0 664.0 EUR 674.0 664.0 160.9 138.1 USD 198.8 171.8 2,995.7 2,964.7 Total 3,033.7 2,998.4 Effective yield

When calculating the effective yield, the portfolio has been weighted and the yield is calculated from 31.12.04 until maturity. The calculation is based on US dollar duration and standard Norwegian interest rate convention.

Effective yield on Norwegian bonds/certiﬁ cates 2,50 % Effective yield on foreign bonds/certiﬁ cates 2,86 %

(22)

ANNUAL ACCOUNT 65

FINANCIAL DERIVATIVES (CONT.)

Derivatives are used in accordance with Norwegian regulations on the use of derivatives in insurance to make asset and risk management more effi cient. In each asset class the individual asset managers use derivatives suited to that class, and most of the types of fi nancial derivatives mentioned below are used regu-larly. The use of derivatives is restricted by the agreement with the individual asset manager, and requirements are made for approved product lists and suffi cient expertise and systems on the part of the asset manager. Short positions, in other words undertakings to sell securities that the company does not already own, or to purchase securities without having suffi cient liquid funds to complete the transaction, are not normally permitted. The asset manager in each asset class may never expose the company to a greater amount than specifi ed in the asset management mandate.

The company’s overall foreign exchange risk is hedged almost entirely using forward contracts. The overall level of risk in the equity portfolio was reduced during the year by buying options on broad indices rather than buying shares. Interest rate risk in respect of foreign corporate bonds was reduced by selling interest rate futures.

Interest-related contracts mainly consists of:

– Interest swaps, which are agreements to exchange interest terms on nominal amounts with customers or banks. – FRA’s, which are agreements that set an interest rate on a nominal amount for a future period.

– Interest rate futures (IRF), which are agreements that secure the buyer a speciﬁ ed interest rate on an amount for a future period. – Bond options, which are agreements to purchase or sell bonds at a ﬁ xed price on or before a particular future date.

– Bond futures, which are agreements to purchase or sell bonds at a ﬁ xed price on a particular future date. Currency-related contracts mainly consists of:

– Forward contracts, which are agreements to purchase or sell a particular amount of currency at a particular exchange rate and to pay interest on these amounts for an agreed period.

– Foreign exchange swaps, which are agreements to swap particular amounts of different currencies at a future date at a particular exchange rate. – Foreign exchange options, which are agreements that secure the buyer the right to purchase or sell a particular amount of currency at a future day at a particular exchange rate.

Equity-related contracts mainly consists of:

– Equity options, which are agreements that secure the buyer the right or duty to buy or sell equities at a particular price on or before a particular future date. – Equity futures, which are agreements to buy or sell equities at a particular price on a particular future date.

– Equity swaps, which are agreements to swap equities at a future date at a particular price. Commodity-related contracts mainly consists of:

– Commodity options, which are agreements to buy or sell commodity futures at a particular price on or before a particular future date.

These transactions are mainly carried out with banks as counterparties and the credit risk from these activities is considered to be marginal. Both interest-related and currency-related transactions are conducted within established position limits.

9

10 FINANCIAL RISK A LIQUIDITY RISK

Duration of balance sheet components Less than Over No

1 year 1 year maturity Total

Bank deposits trading 240.8 825.5 1,066.3

Bank deposits operation / cash 510.9 510.9

Foreign bonds and certiﬁ cates 3,322.7 956.1 4,278.8

Norwegian bonds and certiﬁ cates 10,068.5 3,099.7 549.5 13,717.6

Foreign equities 315.8 315.8

Norwegian equities 3,324.3 3,324.3

Hedge funds 972.0 972.0

Foreign interest-related derivatives 27.1 1.2 28.3

Norwegian interest-related derivatives 315.6 (338.6) (23.0)

Norwegian equity derivatives 104.6 104.6

Foreign subordinated loans 61.9 61.9

Norwegian subordinated loans 76.5 25.7 102.2

(23)

10 FINANCIAL RISK (CONT.) B INTEREST RATE RISK

Interest rate decrease 1 % Fixed interests Derivatives Total

Interest rate risk % Norway 0.71 % (0.12 %) 0.58 %

Abroad 5.22 % (4.58 %) 0.64 %

Total 0.93 % (0.23 %) 0.70 %

Interest rate risk in NOK million Norway 94.8 (16.5) 78.3

Abroad 17.8 (15.6) 2.2

Total 112.6 (32.1) 80.5

Interest rate increase 1 %

Interest rate risk % Norway (0.71 %) 0.12 % (0.58 %)

Abroad (5.22 %) 4.58 % (0.64 %)

Total (0.93 %) 0.23 % (0.70 %)

Interest rate risk in NOK million Norway (94.8) 16.5 (78.3)

Abroad (17.8) 15.6 (2.2)

Total (112.6) 32.1 (80.5)

Interest rate by maturity 0-1 year 1-2 year 2-3 year 3-5 year 5-7 year 7-10 year Total

Decrease 22.8 44.8 4.8 3.9 0.5 3.8 80.5

Increase (22.8) (44.8) (4.8) (3.9) (0.5) (3.8) (80.5)

Interest rate risk is kept within limits. A 1% decrease in interest rates will increase the value of the portfolio by NOK 80.5 million, while a 1% increase in interest rates will decrease the value of the portfolio by NOK 80.5 million.

C EXCHANGE RATE RISK

Foreign exchange transactions are conducted within strictly defi ned limits and used both for trading purposes and to hedge fi nancial assets. The table specifi es the gross as well as the net currency positions within the major currencies and total. Net currency position is stated according to defi nitions by the Bank of Norway and consists of net assets less debt and purchase/sale of foreign exchange derivates.

Foreign exchange exposure as at 31.12.

Exposure (NOK) Assets Liabilities Net

currency position AUD 21.0 19.8 1.3 CAD 21.2 19.3 1.9 CHF 14.1 13.3 0.8 DKK 2.6 2.4 0.2 EUR 234.8 223.8 11.0 GBP 85.4 81.5 3.9 JPY 59.6 55.9 3.8 SEK 361.2 360.6 0.6 USD 1,484.1 1,410.4 73.7 Other currencies 9.5 8.7 0.8 Total 2,293.6 2,195.7 97.9

(24)

ANNUAL ACCOUNT 67

12

LOSSES AND PROVISIONS FOR LOSSES ON LOANS AND GUARANTEES

2003 2004 2004 2003

3.9 2.2 Speciﬁ c provisions as at 01.01. 2.2 3.9

0.8 (0.9) Realised losses for which provisions were previously made (0.9) 0.8 2.6 New speciﬁ c provisions during the period 2.6

(2.5) (0.2) Reversal of speciﬁ c provisions during the period (0.2) (2.5)

2.2 3.7 Speciﬁ c provisions as at 31.12 3.7 2.2

1.4 2.4 General provisions as at 01.01. 2.4 1.4

1.1 5.0 Provisions made during the period 5.0 1.1

2.4 7.4 General provisions as at 31.12 7.4 2.4

2001 2002 2003 2004 2004 2003 2002 2001

5.1 Loans no longer recognised as income 5.1

0.2 Accrued non-recognised interest for the period 0.2

2.5 4.3 5.0 6.3 Non-performing loans incl. interest before prov. for losses 6.3 5.0 4.3 2.5 1.9 0.4 1.2 2.6 Non-performing loans incl. interest after prov. for losses 2.6 1.2 0.4 1.9

11

LOANS AND GUARANTEES A LOANS

2003 2004 2004 2003

2.1 1.2 Mortgage loans 1.2 2.1

487.8 738.5 Other loans 869.6 487.8

101.7 164.1 Subordinated loans 164.1 101.7

591.7 903.7 Total loans before general provisions for losses 1,034.8 591.7

(2.4) (7.4) General provisions for losses (7.4) (2.4)

589.2 896.3 Total loans 1,027.4 589.2

Other loans consist almost entirely of interest-free loans to agricultural customers granted exclusively for the installation of ﬁ re alarm systems by these custo-mers. The loans are not secured, and the term varies from three to more than 20 years. Applications for these loans undergo normal credit assessment before being granted. The default rate is around 0.6 per cent. The consolidated ﬁ gures also include a convertible loan from Glitne Invest to Lindorff Group which can be converted into shares if the company becomes public listed. The loan is not interest-bearing.

B SUBORDINATED LOANS Gjensidige NOR Forsikring

Par value Cost Market

Names value

Bolig og Næringsbanken 25.0 25.0 25.5

Four Seasons Venture II 1.3 1.3 1.3

Four Seasons Venture III 2.4 2.4 1.8

Lindorff Group 60.0 60.0 61.9 Offshore Union 0.1 0.1 0.1 Sparebanken Midt-Norge 20.0 20.0 20.6 Sparebanken Møre 28.0 28.0 28.6 Vervet 24.0 24.0 24.0 Vision Invest 0.4 0.4 0.4 Total 161.1 161.1 164.1

The loans to Bolig og Næringsbanken, Lindorff Group, Sparebanken Midt-Norge and Sparebanken Møre are all interest-bearing and have a term of ten years. The loan to Vervet is currently interest-free.

We reflect the past as we embrace the future

BUT EVEN PROUDER OF WHAT WE WILL

ONE DAY BE.

WITH A LONG TRADITION OF BEING CLOSE

TO CUSTOMERS, GJENSIDIGE IS LOOKING TO

TOMORROW.

WE AIM TO GET EVEN BETTER AT HELPING

CUSTOMERS, WHEREVER AND WHENEVER

THEY NEED US.

TIME PASSES, GJENSIDIGE ENDURES

– THAT’S WHY!

We reﬂ ect the past

as we embrace the future

Main ofﬁ ce

GJENSIDIGE

Drammensveien 288

Postboks 276

1326 Lysaker

Telefon 222 96 80 00

Regions

GJENSIDIGE

Øst

Stortorvet 1

1607 Fredrikstad

Telefon 03100

Edvard Storms gate 3

0166 Oslo

Telefon 03100

GJENSIDIGE

Innlandet

Tjuvholmen

Postboks 488

2304 Hamar

Telefon 03100

GJENSIDIGE

Syd

Holbergs gt 14

Postboks 288

3701 Syd

Telefon 03100

GJENSIDIGE

Vestlandet

Sandviksboder 66

Postboks 7235

5020 Bergen

Telefon 03100

GJENSIDIGE

Nord

Munkegaten 22

7469 Trondheim

Telefon 03100

A N N U A L R E P O R T G J E N S I D I G E 2 0 0 4

ACCOUNTS AND NOTES

CONTENTS

NOTES

GJENSIDIGE NOR FORSIKRING AND CONSOLIDATED

NOK million