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Financial strategy

Gjensidige shall have a capitalisation that is adapted to the Group's strategic targets and risk appetite at all times. The Group shall maintain its financial flexibility and at the same time exercise a stringent capital discipline that supports the return on equity target and dividend policy.

The capitalisation of the Group will be based on a solvency margin target of 125 – 175 per cent for the Partial Internal Model (PIM). This applies both for the regulatory approved model (Legal Perspective) and the model with own calibration (Own Partial Internal Model). This target range applies for the period through 2018.

Assuming that Gjensidige Bank will be excluded from the Group from early 2019, following the sale to Nordea, the solvency margin target for the Legal Perspective and Own Partial Internal model will be 135 - 200 per cent. If for some reason the bank sale was to be cancelled, the target range of 125 – 175 per cent will continue to apply after 2018.

The solvency margin level should remain in the upper half of the range among other things to support an ‘A’ rating, to stabilise regular dividends over time, to ensure financial flexibility for smaller acquisitions and organic growth not financed through retained earnings, as well as providing a buffer for regulatory changes.

All subsidiaries will be capitalised in line with the respective regulatory requirements, while capital in excess of the requirements will, as far as possible, be held in the parent company Gjensidige Forsikring ASA.
The Group will make use of all forms of Tier 1 and Tier 2 capital, including subordinated debt, in a responsible and value-optimising manner and within the limits set by regulators and rating agencies.

The financial strategy for Gjensidige Bank can be found here .