FOR
DAYS
TO
COME
KLP ANNUAL REPORT
KLP’S DEvELOPMENT OvER ThE LAST 5 YEARS
KEY RATIOS 2006 2005 2004 2003 2002
1) Return on capital I 6.6 % 5.7 % 6.0 % 6.9 % 3.0 %
2) Return on capital II 7.6 % 8.0 % 6.9 % 8.2 % 3.0 %
3) Return on capital III 5.2 % 7.5 % 7.7 % 10.7 % 3.7 %
Average interest rates 6.6 % 5.7 % 6.0 % 7.0 % 3.0 %
Capital adequacy 14.1 % 12.1% 14.0 % 16.2 % 17.2 %
Solvency margin capital/solvency margin requirement as at 31.12 220% 181% 175% 171% 160% Total administration costs
as a % of premium income (excluding transfers in) 3.9% 4.0% 3.6% 3.4% 2.9%
as a % of average total assets 0.36% 0.35% 0.36% 0.36% 0.37%
as a % of average customer reserves 0.40% 0.38% 0.38% 0.38% 0.40%
Operating costs group pensions
as a % of premium income (excluding transfers in) 3.8 % 4.0 % 3.5 % 3.4 % 2.9 %
as a % of average customer reserves 0.39% 0.37% 0.38% 0.37% 0.38%
KEY FIgURES – MNOK 2006 2005 2004 2003 2002
Profit/loss
Premiums excluding transfers in 15 294 12 800 13 485 12 433 13 595
Net transfers in/out -1 928 -914 -1 029 -1 282 -2 651
Net revenues from financial assets 11 676 11 260 8 796 9 171 3 058 Claims excluding transfers out -6 056 -5 866 -5 297 -4 956 -4 558 Change in technical provisions -11 329 -9 673 -10 470 -10 193 -9 170 Insurance and finance-related administration costs -591 -516 -479 -425 -400 4) Other insurance-related income and expenses -2 -5 -611 -970 -56
To (-)/from (+) securities adjustment fund -1 977 -3 361 -1 212 -1 384 - operating profit/loss 5 086 3 726 3 183 2 395 -182
Extraordinary items - - - - -
Profit/loss before allocation/coverage 5 086 3 726 3 183 2 395 -182 To (-)/from (+) supplementary reserves -1 349 -1 278 -1 121 -1 750 182 Assets transferred to insurance customers -3 568 -2 310 -1 919 -469 -
Pre-tax profit 169 138 143 177 0 Tax expense - -1 - 0 0 Profit/loss for the year 169 137 143 177 0 PROFIT/LOSS ANALYSIS Interest gain/loss 4 663 3 262 3 396 3 544 -212 Risk profit/loss 99 77 28 54 69 Other items -160 -24 -23 -598 -200 Management profit/loss -66 -9 - 43 23 ASSETS
Buildings and other real estate 13 738 12 089 10 576 9 609 9 503
Bonds held to maturity 59 346 52 767 52 766 59 525 37 304
Loans 14 677 15 331 16 324 17 594 17 698
Short-term shareholdings 39 682 28 643 18 036 10 281 4 775
Bonds 34 196 28 696 23 122 16 124 23 113
Certificates 1 877 7 234 7 298 3 035 9 770
Other financial assets 8 850 8 619 8 044 4 899 4 926
total financial assets 172 366 153 379 136 166 121 066 107 089
Other assets 3 795 3 192 5 307 5 342 5 577
total assets 176 160 156 571 141 473 126 408 112 666
OwNERS’ EqUITY AND LIABILITIES
Equity 5 836 5 094 4 408 3 868 3 712
Perpetual subordinated notes (tier 1 capital) 641 744 675 - -
Subordinated loan capital 3 780 1 344 1 385 2 352 2 081
Securities adjustment fund 7 934 5 957 2 595 1 384 -
Technical provisions 156 582 142 593 131 597 118 047 105 647 – of which supplementary provisions 6 572 5 288 4 031 2 924 1 174
Liabilities 1 387 839 813 757 1 226
total equity and liabilities 176 160 156 571 141 473 126 408 112 666
1) Return on capital I: Book financial income for the year after transfers for the year to/from securities adjustment fund 2) Return on capital II: Book financial income for the year before transfers for the year to/from securities adjustment fund 3) Return on capital III As for Return on capital II plus unrealised value changes during the accounting period to hold-to-maturity bonds 4) Income and costs related to special agreement for payment of contractual early retirement pensions (AFP) and net profit/loss from reinsurance
NUMBER OF 2006 2005 2004 2003 2002
Active members 291 290 291 796 289 449 282 142 278 441
Pensioners 140 024 135 776 130 466 127 680 123 269
Employees in the life company 328 318 305 297 292
KLP ANNUAL REPORT
KLP 2006
Pensions and insurance are about people’s welfare. Financial security is one
of the most important prerequisites for a good life for the days to come.
KLP is a listening and dialogue-oriented cooperative partner and
provide safe and competitive financial and insurance services.
we are to assure for employees and pensioners the financial security
that can provide good quality of life when elderly, when sick,
injured or invalided. It is a matter of administering a sustainable
pension system. KLP aims to meet the clients’ needs, deliver
quality operate profitably. Our ambition is to be a source of
inspiration and a constructive collaborator for all our
customers and collaborators.
FOR
DAYS
TO
KLP ANNUAL REPORT
CONTENTS
2006
KEY FIGURES
COVER
FOR DAYS TO COME
COVER
GROUP CHIEF EXECUTIVE’S LETTER
3
THIS IS KLP
4
KLP PENSIONS AND LIFE INSURANCE
6
SUBSIDIARIES
8
STRATEGY FOR SOCIAL RESPONSIBILITY
10
GROWTH IN KLP
12
SOLID RETURNS FOR AN OWNER OF KLP
14
GOOD REPUTATION
16
A HEALTHIER WORKING LIFE WITH KLP
18
KLP’S GOVERNANCE STRUCTURE
20
2006 REPORT
ANNUAL REPORT OF THE BOARD OF DIRECTORS FOR 2006
24
ACCOUNTS
PROFIT AND LOSS ACCOUNT
39
BALANCE SHEET
40
PROFIT AND LOSS ACCOUNT
42
BALANCE SHEET
43
CASH FLOW ANALYSIS
44
NOTES
46
AUDITOR’S REPORT FOR 2006
94
STATEMENTS
95
INTERNATIONAL ACCOUNTING STANDARDS (IFRS/IAS)
96
KLP ANNUAL REPORT
KLP ANNUAL REPORT
GROUP CHIEF EXECUTIVE’S LETTER
PROFITABLE
GROWTH FOR
CUSTOMERS
AND OWNERS
KLP is delivering very satisfactory results for 2006. We can point to good returns, good growth and good
market prospects. In addition KLP continues to have markedly lower operating costs than other life
companies. This combination means that KLP is offering the best pension product in the market. KLP is
continuing to build its solvency and we are returning the largest sum in KLP’s history to the customers’
Premium Fund. It is highly satisfying that, after several years of strong financial results, KLP now stands
in the front rank of Norwegian life and pension companies in regard to financial solidity.
Things are going well for KLP. Transfer activity in the municipal pensions market is the lowest for 11 years. KLP has gained
many new corporate customers during the year and the health enterprises act as stable and good customers.
Our new subsidiary KLP Pensjonsforsikring, operative in October 2006, has had a good reception in the market. Many
of our core customers have activities or subsidiaries outside the collective pay agreement area. We want to be able to offer
them good and cost effective products. This we can do, especially with defined contribution pensions where our index
tracking funds give us a competitive advantage.
Customer-friendly solutions and good customer service procedures are important for KLP. We have therefore invested major
resources in product development and customer service systems. In 2006 we introduced the ‘My Pension Page’ (Min Side
Pensjon) service, which provides our members with an internet-based insight into their own pension accumulation.
KLP and the industry face new, major challenges in 2007. The new Norwegian Insurance Act, which comes into force on
1 January 2008, requires substantial changes and system improvements. The changes to legislation mean that a clear
separation is to be established between the insurance companies’ assets and the customers’ assets. The actual costs
associated with municipal pension schemes will be clearer. It will be our results in regard to returns, low administration
costs and good service that will characterise the results of competition more and more. KLP welcomes the new rules.
KLP’s Group Chief Executive Officer, Bjørn Kristoffersen, is on leave of absence for medical reasons. The board has
consid-ered it correct to constitute the undersigned in that position with effect from 1 March. Bjørn Kristoffersen headed up the
Group very well in 2006 and deserves his share of the credit for the good results.
Iver Lund
THIS IS KLP
KLP ANNUAL REPORT
KLP 2006
KOMMUNAL LANDSPENSJONSKASSE
Kommunal Landspensjonskasse (KLP) provides insurance
and financial services to municipalities, health enterprises
and businesses associated with the public sector. The
biggest product area is group pensions insurance. Within
pension insurance KLP offers municipal service pensions,
corporate pensions and defined contribution pensions.
Furthermore KLP offers group life and non-life insurance,
loans, funds- and investment management. With total
assets of more than BNOK 176 as at 31 December 2006
Kommunal Landspensjonskasse is one of Norway’s largest
life insurance companies. The company has offices in Oslo
and Bergen. KLP Eiendom AS has offices in Oslo, Trondheim
and Copenhagen.
Besides the parent company Kommunal
Landspensjons-kasse, the Group also comprises the wholly-owned
subsidiaries KLP Skadeforsikring AS, KLP Eiendom AS,
KLP Fondsforvaltning, KLP Kapitalforvaltning ASA,
KLP Pensjonsforsikring AS and KLP Forsikringsservice AS.
VISION, VALUES AND BUSINESS CONCEPT
KLP’s vision: “The best partner for the days ahead” is
the guiding strand for the Company’s dialogue with its
customers.
The dialogue between the Company and its customers
should be characterised by KLP’s values: open, clear,
responsible, committed.
OPEN
• We share knowledge and information
• We listen to what is happening and take it seriously
• We are tolerant to each other
CLEAR
• We simplify where necessary and are easy
to understand
• We act consistently
• We prioritise and are businesslike in our actions
RESPONSIBLE
• We are dependable
• We create confidence
• We think and act holistically
COMMITTED
• We manage to delight our customers and each other
• We build relationships
KLP ANNUAL REPORT
KLP 2006
Asset Management Aage E. Schaanning Acting CEO Iver Lund CommunicationOle Jacob Frich
CFO Mari Thjømøe
Non-life insurance Hans Martin Hovden
Life and Pension insurance Sverre Thornes
Property investments Steinar Manengen
KLP GROUP MANAGEMENT
BUSINESS CONCEPT
KLP is to be a finance group that delivers safe and
competitive financial and insurance services to the public
sector and undertakings associated with it.
AIMS
KLP aims to meet our customers’ needs, operate profitably
and deliver quality in all services. The Company’s
over-arching aim is to create value for the Company’s
custom-ers and owncustom-ers in an economically good and socially
responsible way.
MARKET POSITION
KLP is the market leader in the public sector pension
market. At present the company is owned by
municipali-ties, county muncipalimunicipali-ties, health enterprises and
compa-nies. At the end of 2006, 337 municipalities and county
municipalities had their pension schemes with the
Company. The same applies to about 2 300 companies and
31 health enterprises. The Company’s pension schemes
cover more than 292 000 occupationally active individuals
and 140 000 pensioners. In addition more than 111 000
members have a pension entitlement from previous
employment.
KLP’s customer promise In consultation with our
custom-ers we shall deliver long term and effective solutions,
involves a duty to see our customers’ needs in a long-term
perspective. KLP will always deliver solutions that are best
for our customers. This is a natural aspect of the mutual
ownership model, where the customer is also the owner of
KLP.
HISTORY
KLP was formed in 1949. The Company experienced
particularly large growth in the 1960s at the same time
as the number of municipal employees increased by
50 per cent. In 1974, KLP started as a dedicated insurance
company. Particularly over the last 10-15 years KLP has
expanded its services and products spectrum to meet
demand from our customers and in the marketplace
generally.
KLP PENSIONS AND
LIFE INSURANCE
DEVELOPMENT IN PENSIONER AND
MEMBERSHIP NUMBERS WITHIN KLP
PUBLIC SERVICE OCCUPATIONAL
PENSIONS
The development in the number
of individuals receiving pension
benefits shows a steady increase.
During the period the number of
individuals receiving pensions benefits
has increased from 123 269 in 2002
to 140 038 in 2006.
The number of pensioners by benefits 2002 2003 2004 2005 2006
*Age-related pension 57 933 60 442 63 053 66 028 68 487 Spouse pension 12 859 13 218 13 606 14 212 14 426 Child’s pension 1 363 1 363 754 961 1 044 Disability pension 45 285 46 873 47 181 48 371 49 282 AFP 62-64 år 2 839 2 791 2 976 3 317 3 833 AFP 65-66 år 2 984 2 993 2 896 2 887 2 966 Total 123 269 127 680 130 466 135 776 140 038 2002 2003 2004 2005 2006
Number of working members 278 441 282 142 289 449 291 796 291 295
Number of members with
entitlements 99 071 107 671 109 172 111 531
At the end of 2006, 337 municipalities and county administrations had their
employees’ pension schemes with KLP. In addition most of health enterprises
had their pension schemes with KLP.
KLP is the market leader in service pensions for entities
organisations associated with the public sector. At the
end of 2006, three out of four municipalities and county
municipalities had their employees’ pension schemes with
KLP. The same applies to 31 of a total of 32 state health
enterprises, as well as about 2 300 companies in the public
sector. In addition government-employed hospital doctors
have their pension schemes with KLP. KLP administers a
separate pension scheme for public sector-employed
nurses.
During 2006 one municipality decided to reinstitute its
employees’ pension scheme with KLP. Two municipalities
have cancelled their pension schemes with KLP. Almost
100 companies have established public service pension
schemes with KLP whereas about 20 companies cancelled
their pension scheme with KLP during 2006. KLP is the
dominant market leader in group life insurance as well.
200 000 public sector employees were covered by KLP
group life insurance at the end of 2006.
Through its wholly-owned subsidiary, KLP Forsikrings-
service AS, KLP gives consultancy and advisory services
to a majority of the remaining market in the pensions
area within the municipal sector.
PENSIONS AND LONG-TERM SAVING
The annual saving sum, which is a part of the premium,
is to attract interest up until retirement age through an
annual basic interest rate so that sufficient assets will
be saved up to finance the annual pension payments.
Different calculation methods in different companies can
mean that the annual saving sum is assessed differently.
In addition comes the saving resulting from KLP’s
cost-effective operation. Measured as a proportion of total
assets KLP has a costs percentage that lies at about half
that our customers are able to show.
KLP ANNUAL REPORT
NUMBER OF INSURED IN DIFFERENT SEGMENTS IN KLP AND
KLP PENSJONSFORSIKRING AS
0 50 000 100 000 150 000 200 000 PRIVATE HOSPITALS COUNTY ADMINISTRATIONS COMPANIES STATE HEALTH ENTERPRISES MUNICIPALITIES 161 245 82 293 28 458 13 769 5327Kommunal Landspensjonskasse is a mutual company. This
means that municipalities, county administrations, health
enterprises and other employers who have entered into
pension agreements with the company are owners. That
provides a range of advantages. All surpluses created and
returns go back to the members either as pension
custom-ers or as owncustom-ers. There are no external owncustom-ers who have
to be paid for making capital available to operate the
pensions saving. That part of the returns that does not go
into building up pension funds or other customer funds, or
is transferred to the customers’ premium fund to be able
to finance future premium payments, is channelled to the
owners in the form of strengthening their equity in the
company.
COMING INTO FORCE OF
CHANGES IN THE NORWEGIAN INSURANCE ACT
During 2006 work is also being carried out on adaptation to
the changes in the Insurance Act that comes into force on
1 January 2008. The changes to legislation mean that
a clear separation is to be established between the
insurance companies’ own assets and the customers’
assets (principally pension assets). The Act requires that
all prices, including those for servicing equity, are set
and paid in advance. Companies thus lose the facility to
charge their own costs against customers’ returns as has
been the case until now. Customers will also have
opportunities to choose between different capital
management solutions, whereas the current arrangement
is that all customers’ assets are managed together in one
portfolio. The changes in legislation will not mean any
change for the individual pensioner. Their pensions will
be just as secure as they are today. KLP is looking
forward to the new rules coming into effect as the
advantages of KLP’s business model and management
will become more apparent. The important task of
tailoring KLP’s products and services is continuing in
2007.
KLP ANNUAL REPORT
SUBSIDIARIES
KLP ANNUAL REPORT
KLP 2006
Market position
About 375 of the country’s municipalities and about 1 780
companies and institutions in varying degrees have chosen
to buy non-life insurance products from KLP
Skadefor-sikring. The company is increasingly investing in risk
management and prevention with its customers. Our aim
as a non-life insurance company is naturally to reduce both
the number of claims and their consequences both in
property and in personal claims. As specialists in the
Norwegian municipalities we keep ourselves continuously
updated on the relevant legislation, regulations, standards
and directives with which the municipalities must comply.
Through Føre Var (Better Safe than Sorry), our accident
prevention programme, we tailor recommendations for
profitable measures for Norwegian municipalities.
KLP FONDSFORVALTNING AS
KLP Fondsforvaltning offers a broad spectrum of
invest-ment-funds with different investment mandates and risk.
The company has funds in active and index tracking
management that are suitable for institutions’, companies’
and private clients’ investments. The entire securities
management operation complies with KLP’s ethical
require-ments. KLP Fondsforvaltning is responsible for the market
activity in KLP’s investment management operations.
Market position
At the end of 2006 KLP Fondsforvaltning’s equity-based
trust funds and fixed-interest funds had total assets of NOK
26 billion, against NOK 9 billion the year before. In total,
20 securities funds are under management. Seven of these
funds invest in Norwegian securities and the remainder
invest in the global securities market. The company was
the investment management company in Norway with the
highest net new business in 2006 and the company is now
the country’s second-largest investment manager for
institutional customers with a market share of 15 per cent.
Within equity-based trust funds for institutional customers
the company has a market share of 20 per cent.
KLP SKADEFORSIKRING AS
KLP Skadeforsikring AS offers accident, workmen’s
compensation and property insurance to municipalities
and other operations associated with the municipal sector.
The company also offers non-life insurance products for
bus companies, housing associations, property
co-ownership schemes/condominiums and companies with
operations in the public sector. For several years property
insurance activity has been growing considerably and the
company is now the market leader in both personal
accident and property insurance in the municipal sector
with over half of the municipalities.
KLP KAPITALFORVALTNING ASA
KLP Kapitalforvaltning is one of Norway’s largest
invest-ment manageinvest-ment operations. The company offers a broad
spectrum of investment and management services to
public sector operations and businesses associated with
it. In its investment process KLP systematically applies
ethical requirements based on international norms for such
things as human rights, employee rights and the
environ-ment.
Market position
KLP Kapitalforvaltning ASA manages NOK 147 billion for
the Group and external customers in the Norwegian and
international investment market. The company is the
leader in Norway in managing index tracking portfolios.
KLP Kapitalforvaltning and its sister company KLP
Fonds-forvaltning work together to assist customers in their
strategies relating to securities management and risk
management. The aim is to provide the investors with
a competitive yield within the customers’ pre-defined
risk framework.
KLP EIENDOM AS
KLP Eiendom manages all of KLP’s real estate interests
regardless of whether they are owned directly by
Kommunal Landspensjonskasse or through subsidiaries.
The company manages properties in Oslo, Trondheim,
Stavanger and Copenhagen to a value of about NOK 13.9
billion. In 2006 KLP Eiendom had leasing income of NOK
980 million, which is an increase of about NOK 37 million
over the previous year.
Market position
KLP Eiendom AS is one of Norway’s largest property
companies. KLP Eiendom AS manages a total built area of
775 000 m², and owns a site portfolio totalling 40 hectares
in Oslo. KLP Eiendom has a varied property portfolio.
53 per cent of the portfolio comprises office or public
buildings, the rest is divided between shopping centres,
hotels, educational buildings, housing and leased sites.
KLP is a substantial property developer in Oslo,
Copenhagen and Trondheim.
KLP PENSJONSFORSIKRING AS
KLP Pensjonsforsikring AS was established on 1 October
2006 to meet new requirements in the business market.
The company offers pension schemes to businesses both
in the public and the private sectors. The company offers
public service pensions, corporate pensions and defined
contribution pensions to the business market. With this
start-up the KLP Group acts as a full-service supplier of
service pension products.
Market position
A small administrative base and solid capital products
make the Company a very competitive supplier in the
pension market. 27 companies signed agreements on
defined contribution pensions with KLP Pensjonsforsikring
towards the end of 2006.
KLP FORSIKRINGSSERVICE AS
Ever since its formation in 1967, KLP Forsikringsservice has
been the market leading service provider to the
independ-ent pension funds in the municipal sector. The company is
able to offer varying degrees of professional insurance
services, all according to what the individual pension fund
wants.
Market position
At the end of 2006, about 70 per cent of all municipal and
county municipal pension funds were using KLP Forsikrings-
service AS as their professional insurance consultants. In
addition two out of a total of eight power companies with
pension funds in the municipal sector had agreements on
professional insurance services in 2006.
KLP ANNUAL REPORT
KLP 2006
Market position
About 375 of the country’s municipalities and about 1 780
companies and institutions in varying degrees have chosen
to buy non-life insurance products from KLP
Skadefor-sikring. The company is increasingly investing in risk
management and prevention with its customers. Our aim
as a non-life insurance company is naturally to reduce both
the number of claims and their consequences both in
property and in personal claims. As specialists in the
Norwegian municipalities we keep ourselves continuously
updated on the relevant legislation, regulations, standards
and directives with which the municipalities must comply.
Through Føre Var (Better Safe than Sorry), our accident
prevention programme, we tailor recommendations for
profitable measures for Norwegian municipalities.
KLP FONDSFORVALTNING AS
KLP Fondsforvaltning offers a broad spectrum of
invest-ment-funds with different investment mandates and risk.
The company has funds in active and index tracking
management that are suitable for institutions’, companies’
and private clients’ investments. The entire securities
management operation complies with KLP’s ethical
require-ments. KLP Fondsforvaltning is responsible for the market
activity in KLP’s investment management operations.
Market position
At the end of 2006 KLP Fondsforvaltning’s equity-based
trust funds and fixed-interest funds had total assets of NOK
26 billion, against NOK 9 billion the year before. In total,
20 securities funds are under management. Seven of these
funds invest in Norwegian securities and the remainder
invest in the global securities market. The company was
the investment management company in Norway with the
highest net new business in 2006 and the company is now
the country’s second-largest investment manager for
institutional customers with a market share of 15 per cent.
Within equity-based trust funds for institutional customers
the company has a market share of 20 per cent.
KLP SKADEFORSIKRING AS
KLP Skadeforsikring AS offers accident, workmen’s
compensation and property insurance to municipalities
and other operations associated with the municipal sector.
The company also offers non-life insurance products for
bus companies, housing associations, property
co-ownership schemes/condominiums and companies with
operations in the public sector. For several years property
insurance activity has been growing considerably and the
company is now the market leader in both personal
accident and property insurance in the municipal sector
with over half of the municipalities.
KLP KAPITALFORVALTNING ASA
KLP Kapitalforvaltning is one of Norway’s largest
invest-ment manageinvest-ment operations. The company offers a broad
spectrum of investment and management services to
public sector operations and businesses associated with
it. In its investment process KLP systematically applies
ethical requirements based on international norms for such
things as human rights, employee rights and the
environ-ment.
Market position
KLP Kapitalforvaltning ASA manages NOK 147 billion for
the Group and external customers in the Norwegian and
international investment market. The company is the
leader in Norway in managing index tracking portfolios.
KLP Kapitalforvaltning and its sister company KLP
Fonds-forvaltning work together to assist customers in their
strategies relating to securities management and risk
management. The aim is to provide the investors with
a competitive yield within the customers’ pre-defined
risk framework.
KLP EIENDOM AS
KLP Eiendom manages all of KLP’s real estate interests
regardless of whether they are owned directly by
Kommunal Landspensjonskasse or through subsidiaries.
The company manages properties in Oslo, Trondheim,
Stavanger and Copenhagen to a value of about NOK 13.9
billion. In 2006 KLP Eiendom had leasing income of NOK
980 million, which is an increase of about NOK 37 million
over the previous year.
Market position
KLP Eiendom AS is one of Norway’s largest property
companies. KLP Eiendom AS manages a total built area of
775 000 m², and owns a site portfolio totalling 40 hectares
in Oslo. KLP Eiendom has a varied property portfolio.
53 per cent of the portfolio comprises office or public
buildings, the rest is divided between shopping centres,
hotels, educational buildings, housing and leased sites.
KLP is a substantial property developer in Oslo,
Copenhagen and Trondheim.
KLP PENSJONSFORSIKRING AS
KLP Pensjonsforsikring AS was established on 1 October
2006 to meet new requirements in the business market.
The company offers pension schemes to businesses both
in the public and the private sectors. The company offers
public service pensions, corporate pensions and defined
contribution pensions to the business market. With this
start-up the KLP Group acts as a full-service supplier of
service pension products.
Market position
A small administrative base and solid capital products
make the Company a very competitive supplier in the
pension market. 27 companies signed agreements on
defined contribution pensions with KLP Pensjonsforsikring
towards the end of 2006.
KLP FORSIKRINGSSERVICE AS
Ever since its formation in 1967, KLP Forsikringsservice has
been the market leading service provider to the
independ-ent pension funds in the municipal sector. The company is
able to offer varying degrees of professional insurance
services, all according to what the individual pension fund
wants.
Market position
At the end of 2006, about 70 per cent of all municipal and
county municipal pension funds were using KLP Forsikrings-
service AS as their professional insurance consultants. In
addition two out of a total of eight power companies with
pension funds in the municipal sector had agreements on
professional insurance services in 2006.
KLP cooperates with the Norwegian
Blue Cross on the project “Children
in the Danger Zone”, focusing on
preventive measures relating to the
area of drug abuse among children
and young adults.
KLP ANNUAL REPORT
KLP 2006
KLP’s business concept is linked to an important social
commitment – to secure “safe and competitive pensions,
finance and insurance services for the public sector and
businesses associated with it”. The public sector in itself
comprises institutions whose principal objective is to
contribute to the development of the Norwegian welfare
society. With customer relationships with all of the
country’s municipalities, county administrations and
health enterprises; and with pension liabilities for more
than 500 000 Norwegians, the requirements for socially
responsible performance are obvious. This is reinforced
by KLP’s mutual form of ownership. In developing new
business areas and products KLP will make clear its
fundamental beliefs about socially responsible behaviour.
Both the vision “the best partner for the days ahead”
and the behavioural values “Open, Clear, Responsible
and Committed” give articulation to a long-term, holistic
perspective and a listening approach to customers, staff,
suppliers and other interested parties in society as a
whole. These are important pillars in a binding strategy
for a socially responsible business.
In 2002 KLP signed up to the principles of the Global
Compact. This involves a commitment to take account
of human rights, employee rights, environmental matters
and business ethics.
Global Compact is a UN initiative, in which each
partici-pant has committed to taking responsibility at a global,
regional and local level. For KLP it is important to link this
responsibility to the way in which we do our daily business.
At the end of 2006 39 companies were excluded from
KLP’s investment portfolios. These companies were
excluded due to breach of UN norms, as well as companies
in the tobacco industry. Furthermore KLP complies with
the ethical recommendations of the Government Pension
Fund-International.
A comprehensive strategy for socially responsible
behav-iour has business implications. A holistic perspective must
take into account what creates long-term profitability. It
is not unimportant who one collaborates with in adding
value. It is a matter of analysing developments from an
expanded perspective and the ability to see both risks and
business opportunities. It is at the core of our relationships
with our stakeholders and collaborators.
GLOBAL COMPACT’S 10 PRINCIPLES
Support and respect the protection of inter-
national human rights
Ensure that the company is not complicit
in human rights abuses
Acknowledge the freedom of association
and the right to collective bargaining
Elimination of all forms of forced labour
Elimination of child labour
Elimination of discrimination against employees
in regard to employment and work
Support a precautionary approach to
environ-mental challenges
Take initiatives to promote greater
environ-mental responsibility
Encouraged the development and diffusion
of environmentally friendly technologies
Oppose all forms of corruption, including
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
OVERALL SOCIAL RESPONSIBILITY
STRATEGY
Through socially responsible performance KLP is
to contribute to sustainable social development
Socially responsible performance means that all
parts of KLP’s activity are to reflect a high
standard in human rights, employee
relation-ships, the environment and business ethics
Social development here means locally,
nationally and globally
Concrete targets and measures are to be closely
linked to KLP’s activity and to be developed
through a close dialogue with those who have
an interest in us
•
•
•
•
STRATEGY FOR SOCIAL
RESPONSIBILITY
During 2006 KLP took an important step to develop itself further as a company that
behaves in a socially responsible way within all business areas. An overarching strategy
was developed, putting social responsibility into a strategic and operational context.
KLP ANNUAL REPORT
GROWTH
IN KLP
Kommunal Landspensjonskasse (KLP) was formed nearly
60 years ago to offer good municipal service-pensions.
Public sector service pensions clearly remain KLP’s largest
business area. The mix of customers has changed in recent
years. Whereas municipalities and county municipalities
previously comprised the principle part of the customer
base, today about 40 per cent of KLP’s occupationally
active members are employed in health enterprises or
companies in public ownership. KLP has developed from
being a pure pension and life company to being a provider
of a broad spectrum of financial services. Today, KLP has
competitive business in lending, investment management,
property management and non-life insurance.
The market for public service pensions in the municipal
sector is more stable than it was some years ago and the
Company is finding that former municipal customers are
choosing to return to KLP. KLP is growing steadily in the
health sector and the corporate sector and its total assets
have increased. In the middle of the 1990s total assets
were NOK 60 billion, five years ago more than NOK 110
billion, and now KLP is managing more than NOK 176
billion on behalf of its customers. If one looks at the
number of occupationally active members in KLP’s
pension schemes, over five years this figure has increased
from 275 000 to 292 000. A large and increasing number
of employees are also covered by group life insurance
with KLP. Over the last five years the increase has been
sharp: the number of people with group life insurance
with KLP has increased from 138 000 to 200 000, an
increase of 45 per cent.
But it is not only the assets and the number of members
that are increasing. KLP’s services and solutions have
expanded during 2006 to meet the wishes of its
custom-ers. Last year a new subsidiary was established, KLP
Pensjonsforsikring AS. The company has already managed
to establish itself in the market for defined contribution
pensions and corporate pensions. KLP’s catchment area
has thus expanded.
13 years after its start-up KLP Skadeforsikring AS has
more municipal customers than the parent company KLP.
Its growth over the last five years was a full 90 per cent,
measured in total assets. At the same time the market
for non-life insurance is developing. KLP is delivering
more and more services and solutions, to the private
customer as well. For example private housing co-owners
and housing associations can buy insurance from KLP
Skadeforsikring AS.
KLP Eiendom AS has developed into one of Norway’s
largest property managers with over a million square
metres in total in the portfolio. The company is well run
and provides a financial contribution to KLP’s customers.
The property portfolio includes valuable properties such
as the SAS hotel in Oslo, Byporten shopping centre, Glas-
Magasinet, Paléet, the police station in Trondheim and
business properties in Copenhagen. In addition KLP
Eiendom has town halls, offices, businesses and university
colleges.
KLP Fondsforvaltning AS is experiencing ever greater
demand after good results and good reports in the
financial press. At the end of 2006 KLP Fondsforvaltning’s
equity-based trust funds and fixed-interest funds had
total assets of NOK 26 billion, against NOK 9 billion the
year before. The company was the investment
manage-ment company in Norway with the highest net new
business in 2006 and the company is now the country’s
second-biggest investment manager for institutional
customers with a market share of 15 per cent. KLP
Fondsforvaltning today has six fixed-interest funds and
nine equity-based trust funds, whilst KLP
Kapitalfor-valtning ASA manages the KLP funds and tailored
portfo-lios for Norwegian and international shares and
interest-bearing securities.
This means that KLP is growing in several areas at the
same time as the company manages to maintain low
costs.
KLP ANNUAL REPORT
PROFITABLE
TO BE AN
OWNER IN KLP
In 2006 the book return on the customer funds was 6.6 per
cent. The owner’s equity in the company is administered
together with the customer funds. The paid-up equity has
therefore had the same good returns as the customer
funds. The return belongs to the customers and is not sent
to external owners. The risk to the paid-up equity capital
is low because over the years KLP has developed good
solvency and furthermore the company has an investment
strategy that shields the equity capital.
In addition the direct return there is yet another
profit-ability aspect of having equity in KLP. The alternative to
being an owner in the mutual company, KLP, is to pay a
substantial sum to “hire” shareholders’ equity in a limited
company. This hire fee is paid through deduction from the
return (the interest) from the customers’ pension funds,
and usually amounts to about 0.4 per cent of the customer
funds.
The saving through not having to pay external shareholders
for equity capital corresponds to about 19 per cent
measured in relation to the investment in equity capital in
KLP. In addition, as mentioned, the equity capital receives
its own share of the Company’s total return, which last year
was 6.6 per cent. In sum this means that the total financial
gain associated with the investment in equity capital for
customers/owners of KLP amounted to about 25.6 per cent
in 2006. On average over the last four years this gain has
been just over 25 per cent. To be a customer and owner of
KLP therefore produces a solid financial return.
The financial gain associated with the saving of this rental
cost is not visible through the results. But it benefits the
customer through a higher allocation to the premium fund
than the customer would otherwise have received.
The return on the equity capital investment in KLP is
allocated to the customers’ premium fund. The premium
fund may be used to pay pension premiums. This model
also means that KLP’s customers save on tax. The required
equity capital growth is partly secured through ordinary
profits and partly obtained as paid-up equity capital. The
Board of Directors of KLP has a policy that annual calls on
equity should not exceed the sum the customers have
allocated to their premium fund, i.e. that all growth in
KLP’s equity capital is generated from the business itself.
KLP is run profitably and is growing. This way the value of the company is increasing.
KLP’s customers themselves provide the equity capital and are therefore also the owners
of the company. To be a customer and an owner of the mutual company, KLP produces
good returns.
KLP ANNUAL REPORT
KLP ANNUAL REPORT
GOOD
REPUTATION
In November 2006 KLP had a major reputation survey
carried out among customers and in the population. The
survey was carried out by TNS Gallup – November 2006
and confirms KLP’s strong position.
In the municipal sector KLP’s reputation is very strong.
An index of 73 is well above the average for Norwegian
companies (55). But KLP is also above average in the
business market and in the health enterprises. However
the same survey revealed that KLP is not so well known
amongst the general public, but those that know the
company give KLP a high score.
The reputation survey collected an assessment of the
content of the KLP brand from a range of target groups.
KLP is assessed as very strong in the characteristics
“Strong position in the industry” and “Behaves correctly”.
Over the last five years KLP has placed great emphasis
on building up financial buffers. The survey shows that
customers and other interested parties perceive financial
solidity as one of KLP’s strongest aspects. The survey
confirms that customers and the population as a whole
generally perceive KLP as socially responsible. Subjects
such as ethical investments, climate change, human rights
and corruption have received major attention in the media.
A population-wide survey carried out by Perduco (February
2007) shows that 75.1 of those asked believe it would have
decisive significance in the choice of pension provider that
the company takes account of ethical considerations in its
investments. This feedback harmonises with the emphasis
placed on this work in KLP’s asset management.
THE PENSIONER SURVEY
A survey carried out by TNS Gallup in January-February
2007 among KLP’s pensioners showed that the pensioners
generally are very well pleased with KLP. Over 80 per cent
of those asked state that they are pleased or very pleased
with the treatment of their pension application.
The majority of pensioners, about 70 per cent, feel
confident that they are receiving a correct pension. Two
out of three pensioners think information received was
simple or very simple to understand. This is a positive
result, since the pension regulations are fundamentally
relatively complicated.
The survey also shows that a large majority think it is easy
to get through to KLP by telephone. The pensioners think
that the way their enquiries are dealt with is very courte-
ous and they believe that to a great extent they receive
the help they need.
Has strong position in the industry Is socially responsible Behaves correctly Is financially strong 2 1 0 Health enterprises General population 4 3 Municipalities/counties
Public-sector owned companies CONTENT OF THE KLP BRAND
5
KLP ANNUAL REPORT
A HEALTHIER WORKING
LIFE WITH KLP
KLP ANNUAL REPORT
THEME ARTICLE
KLP’s objective is to contribute with advice and
compe-tency that can prevent people being forced out of working
life and contribute to retaining more employees at work.
At the end of the 3rd quarter of 2006 there were 326 000
registered disability pensioners in Norway. The
corre-sponding figure for KLP is 49 200 people. 10.9 per cent
of KLP’s members of occupationally active age received
disability/rehabilitation pensions in 2006. Average
retirement age for employees in the municipal sector
(age/“AFP” contractual early retirement/disability
pension) is now 57. Whereas the health of the population
continuously improves there are more and more that are
considered unfit for work.
KLP is one of many collaborative partners customers meet
in their efforts to create a more inclusive working life.
Through preparation of statistics and reports over many
years, KLP has been involved in increasing awareness and
knowledge of the particular challenges our customers
encounter in their workplace. This has given these
organisations opportunities to select targeted input areas
and implement practical measures and projects in pre-
ventive work.
Over the last ten years KLP has assisted employers in
municipalities, health enterprises and companies by
conducting a range of HES (health, working environment
and safety) activities targeted at staff. In 2006 KLP
collaborated with 125 customers all of whom have a
common goal of creating an improved working
environ-ment and a healthier working life.
Many of KLP’s customers make major efforts in the areas
of Inclusive Workplace work and health, environment and
safety. Notwithstanding this we see that sickness absence
fluctuates and the trend in 2006 has moved in a negative
direction. In our experience, employers that succeed in this
work, managed to create roots, ownership and co-operation
throughout the business as well as acknowledge that
resources must be allocated. Preventive work costs time,
money and energy. KLP believes that the good solutions are
to be found within one’s own organisation and that
employees and managers often know best what is needed to
create security and job satisfaction on an everyday basis.
Therefore KLP acts as adviser and good helper, while also
offering project support.
Good solutions in relation to a group can have transfer
value for others in the business. It is the employees that
represent the most important resources and dominant
costs. It is therefore important to design the work and the
working environment to provide the basis for good working
effort and to create contentedness and job satisfaction for
employees in different phases of life.
By putting the spotlight on the costs associated with sickness absence, invalidity and
early retirement it is possible to highlight the advantage of an inclusive working life for
the individual employee, the company and society.
KLP’S INPUT AREAS HAVE BEEN:
Improvement of the working
environment – focus on presence
factors
Seniors policy and life-phase
oriented personnel policy
Stress-related illnesses and
psycho-social working environments
Prevention through physical activity
in the workplace
Helping customers to analyse the
challenges in their own business
Raising competency, influencing
attitudes and network-building
through seminars and courses
Support to research projects on
working environment and preventive
efforts
•
•
•
•
•
•
•
KLP ANNUAL REPORT
KLP 2006
GOVERNANCE
STRUCTURE
As a mutual company, KLP is owned by customers with
public service pensions with the Company. These are
municipalities, county municipalities and health
enter-prises as well as companies associated with the public
sector.
The Norwegian recommendation for owners’ control and
corporate management (corporate governance) was
adopted in December 2004 and revised in 2005. The
recommendation is relevant for KLP both as a company
and as an institutional investor in the Norwegian
secu-rities market.
The recommendation is primarily aimed at companies
whose shares are listed on the Oslo Stock Exchange but the
principles and guidelines recommended will also generally
apply to other kinds of company with wide ownership. KLP
aims to fulfil the recommendations as far as they are
compatible with the company’s mutual form of
organisa-tion and will continuously assess its compliance with the
recommendations.
THE GOVERNING BODIES:
The General Meeting
The Company’s highest authority is its General Meeting
which comprises elected representatives of the Company’s
owners. The General Meeting for 2006 and 2007 comprises
160 delegates. These are elected by a total of 24
constitu-encies of which 18 comprise the county municipalities and
the municipalities in each county. Oslo forms part of the
Akershus constituency. The five regional health enterprises
and their subsidiaries each comprise a constituency. The
companies together make up one constituency. In each
constituency an election meeting is held to elect delegates
to the General Meeting. At the election the owners have
voting rights in proportion to the individual constituency’s
premium base.
The General Meeting is to adopt the annual accounts, the
annual report and the allocation of profits or coverage of
losses. The General Meeting is also to elect the Control
Committee and 24 of the 45 members of the Supervisory
Board, as well as set the remuneration for the Supervisory
Board, the Control Committee and the auditors. The
General Meeting shall further consider other matters that
are subject to its authority statutorily or as provided by
the Articles of Association.
The Supervisory Board
The Supervisory Board comprises 45 members with
deputies. The General Meeting elects 24 of these. Six are
nominated by the employee organisations proportionate
to the numbers of their members with pension rights in the
Company. Fifteen representatives are elected from and by
the staff in the Group.
The Supervisory Board is to meet at least twice a year.
In general terms the Supervisory Board has the
responsi-bilities of a corporate assembly in accordance with the
Public Limited Companies Act, including supervising the
Board of Directors and the Group Chief Executive’s
administration of the Company. The Supervisory Board is
also to provide a statement to the General Meeting on the
accounts proposed by the Board of Directors and on the
allocation of profits or provision for loss proposed by
the Board of Directors.
The Supervisory Board members elected by the General
Meeting elect five members with deputies to the Board
of Directors, whereas the full Supervisory Board elects
the Chair and Deputy Chair of the Board of Directors.
The Election Committee
The Supervisory Board elects an election committee of
three members and a deputy member. This committee
is elected for two years at a time and the members can
be reelected only twice. The members of the Board
of Directors are not eligible for election. The Election
Committee is to put forward proposed candidates for:
• Those members of the Supervisory Board that are
elected by the General Meeting as well as the Super-
visory Board’s Chair and Deputy Chair.
• The members of the Board of Directors to be elected
by the Supervisory Board members elected by the
General Meeting as well as the Chair of the Board
of Directors and the Deputy Chair.
• The Control Committee
The Board of Directors
The Board of Directors has eight members who are elected
for a term of two years, so that half are up for election
each year. Five members and deputies are elected by the
members of the Supervisory Board who were elected by
the General Meeting. Two members are elected from and
by the KLP staff. One member is nominated by the
employee organisation or negotiating alliance with most
members in the pension schemes. In addition two obser-
vers are appointed from those organisations that are
second and third in regard to the number of members.
The Group Chief Executive Officer is not a member of
the Board of Directors.
The Board of Directors conducts an annual assessment of
its own work and competency as well as a similar
assess-ment of the Group Chief Executive Officer and the senior
management. Instructions for the Board of Directors and
the Group Chief Executive Officer are set up and reviewed
annually together with the Company’s ethical guidelines.
The Board of Directors has considered the need for
separate subcommittees for remuneration and audit but
has not established them for the present.
Internal and external control bodies
The Control Committee supervises the company’s
activi-ties. The work is carried out in accordance with the
Norwegian Insurance Activity Act and instructions given
by the Supervisory Board.
The Group Internal Audit carries out independent and
unbiased assessments of whether the Company’s most
important risks are adequately managed and controlled.
Internal Audit also evaluates the appropriateness and
effectiveness of the Group’s management and control
processes. Internal Audit works in accordance with
instructions laid down by the Board of Directors and
reports to the Board.
KLP’s ambition is to create constructive harmony between the Company’s owners,
governing bodies and other interested parties.
KLP ANNUAL REPORT
KLP 2006
As a mutual company, KLP is owned by customers with
public service pensions with the Company. These are
municipalities, county municipalities and health
enter-prises as well as companies associated with the public
sector.
The Norwegian recommendation for owners’ control and
corporate management (corporate governance) was
adopted in December 2004 and revised in 2005. The
recommendation is relevant for KLP both as a company
and as an institutional investor in the Norwegian
secu-rities market.
The recommendation is primarily aimed at companies
whose shares are listed on the Oslo Stock Exchange but the
principles and guidelines recommended will also generally
apply to other kinds of company with wide ownership. KLP
aims to fulfil the recommendations as far as they are
compatible with the company’s mutual form of
organisa-tion and will continuously assess its compliance with the
recommendations.
THE GOVERNING BODIES:
The General Meeting
The Company’s highest authority is its General Meeting
which comprises elected representatives of the Company’s
owners. The General Meeting for 2006 and 2007 comprises
160 delegates. These are elected by a total of 24
constitu-encies of which 18 comprise the county municipalities and
the municipalities in each county. Oslo forms part of the
Akershus constituency. The five regional health enterprises
and their subsidiaries each comprise a constituency. The
companies together make up one constituency. In each
constituency an election meeting is held to elect delegates
to the General Meeting. At the election the owners have
voting rights in proportion to the individual constituency’s
premium base.
The General Meeting is to adopt the annual accounts, the
annual report and the allocation of profits or coverage of
losses. The General Meeting is also to elect the Control
Committee and 24 of the 45 members of the Supervisory
Board, as well as set the remuneration for the Supervisory
Board, the Control Committee and the auditors. The
General Meeting shall further consider other matters that
are subject to its authority statutorily or as provided by
the Articles of Association.
The Supervisory Board
The Supervisory Board comprises 45 members with
deputies. The General Meeting elects 24 of these. Six are
nominated by the employee organisations proportionate
to the numbers of their members with pension rights in the
Company. Fifteen representatives are elected from and by
the staff in the Group.
The Supervisory Board is to meet at least twice a year.
In general terms the Supervisory Board has the
responsi-bilities of a corporate assembly in accordance with the
Public Limited Companies Act, including supervising the
Board of Directors and the Group Chief Executive’s
administration of the Company. The Supervisory Board is
also to provide a statement to the General Meeting on the
accounts proposed by the Board of Directors and on the
allocation of profits or provision for loss proposed by
the Board of Directors.
The Supervisory Board members elected by the General
Meeting elect five members with deputies to the Board
of Directors, whereas the full Supervisory Board elects
the Chair and Deputy Chair of the Board of Directors.
The Election Committee
The Supervisory Board elects an election committee of
three members and a deputy member. This committee
is elected for two years at a time and the members can
be reelected only twice. The members of the Board
of Directors are not eligible for election. The Election
Committee is to put forward proposed candidates for:
• Those members of the Supervisory Board that are
elected by the General Meeting as well as the Super-
visory Board’s Chair and Deputy Chair.
• The members of the Board of Directors to be elected
by the Supervisory Board members elected by the
General Meeting as well as the Chair of the Board
of Directors and the Deputy Chair.
• The Control Committee
The Board of Directors
The Board of Directors has eight members who are elected
for a term of two years, so that half are up for election
each year. Five members and deputies are elected by the
members of the Supervisory Board who were elected by
the General Meeting. Two members are elected from and
by the KLP staff. One member is nominated by the
employee organisation or negotiating alliance with most
members in the pension schemes. In addition two obser-
vers are appointed from those organisations that are
second and third in regard to the number of members.
The Group Chief Executive Officer is not a member of
the Board of Directors.
The Board of Directors conducts an annual assessment of
its own work and competency as well as a similar
assess-ment of the Group Chief Executive Officer and the senior
management. Instructions for the Board of Directors and
the Group Chief Executive Officer are set up and reviewed
annually together with the Company’s ethical guidelines.
The Board of Directors has considered the need for
separate subcommittees for remuneration and audit but
has not established them for the present.
Internal and external control bodies
The Control Committee supervises the company’s
activi-ties. The work is carried out in accordance with the
Norwegian Insurance Activity Act and instructions given
by the Supervisory Board.
The Group Internal Audit carries out independent and
unbiased assessments of whether the Company’s most
important risks are adequately managed and controlled.
Internal Audit also evaluates the appropriateness and
effectiveness of the Group’s management and control
processes. Internal Audit works in accordance with
instructions laid down by the Board of Directors and
reports to the Board.
Supervisory Board
45 delegates
Board of Directors
8 members
2 observers
Group CEO
Election Committee
4 members
Control Committee
5 members
Kommunal Landspensjonskasse, governing bodies
General Meeting
160 delegates
elected in 24
constituencies
KLP ANNUAL REPORT
KLP 2006
In addition to the Company’s internal control bodies the
Company is also subject to professional supervision by the
Financial Supervisory Authority of Norway. The Supervisory
Authority checks that the financial institutions are run
responsibly and in accordance with legislation.
The KLP Group’s external auditors are elected by the
General Meeting.
Internal management and control
The Board of Directors has laid down Board Directives and
instructions for the Group Chief Executive Officer. The
CEO’s instructions regulate the exercising of day-to-day
management of KLP. KLP’s Group CEO is the Chair of the
Board of Directors of the most important subsidiaries in
the Group (KLP Skadeforsikring, KLP Kapitalforvaltning,
KLP Eiendom AS, KLP Pensjonsforsikring AS). Otherwise
these subsidiaries’ boards comprise senior KLP managers
and external board members with special qualifications in
relation to the particular company.
The Board of Directors has laid down ethical guidelines for
employees and employee-elected representatives in the
Group. The Group CEO has laid down separate regulations
for personal trading in securities. The regulations are of
particular importance to employees of KLP
Kapitalfor-valtning and employees of KLP with particular insight into
the investment operation.
Balanced scorecard
During 2006 KLP introduced the balanced scorecard in the
organisation. The balanced scorecard is a central part of
KLP’s strategic management and should contribute further
to develop KLP as a value-driven and vision-driven
organisation that is market and business oriented.
The balanced scorecard should strengthen the connection
between strategy, business processes, management and
actions, and contribute to improving profits by
underpin-ning the Company’s high level objectives on increased
competitive power, business growth and profitability.
Balanced scorecard management is a report and
develop-ment tool and KLP is utilising the following four
manage-ment perspectives:
• Finance
• Customer
• Internal processes
• Learning and Growth
By breaking down the balanced scorecard into unit
scorecards it has been possible to translate the Group’s
strategy into operational plans and thereby provide the
basis for continuous review and development. The
scorecard is intended to build on an understanding of what
adds value in the unit concerned and will be used actively
to develop and monitor units and employees throughout
the organisation.
Balanced scorecard in the Group is in continual
develop-ment and has already become an effective tool for
preparing the individual unit’s prioritised objectives.
If the parameter shows a low level of objective
achieve-ment, corrective measures will be identified and
imple-mented.
Attention is also drawn to the Company’s website
www.klp.no for additional information. This includes the
Company’s Articles of Association, organisation chart and
schedule for publication of important financial news.
Acting CEO
Iver Lund
Organisation- and management structure in the KLP Group
Group Services
Iver Lund
Communication
Ole Jacob Frich
Asset Management
Aage E Schaanning
Property Investments
Steinar Manengen
Non-life insurance
Hans Martin Hovden
Life and Pension insurance
