NORWAY - Strong sales of mandatory occupational pensions were not enough to counter the downturn in Norwegian and international equity markets in the second quarter, seeing Storebrand Life Insurance post a value-adjusted investment return of minus 0.4%.
However over the first six months of 2006, the firm posted a value-adjusted return of 2.4%.
So far this year, the life insurer has booked a net inflow of pension reserves of NOK3.5bn, of which Q2 accounted for NOK0.7bn. From 1 January this year all companies with at least two employees were required by law to offer a mandatory pension scheme.
Around 100,000 employees are now members of mandatory occupational pension schemes arranged through Storebrand, representing 20% of the overall market.
In March this year the Confederation of Norwegian Enterprise appointed Storebrand as its preferred mandatory pension scheme provider for its member companies. At the time, a spokesman for NHO said the deal, which involved 2500 companies with 55,000 employees, was expected to double in size within 12 months.
“The second quarter confirmed the strength of Storebrand’s position in the pensions market,” commented Idar Kreutzer (pictured), group CEO.
In its Q2 report, Storebrand noted: “The market for mandatory occupational pensions is characterised by intense competition and a high level of activity. Storebrand is achieving good sales of occupational pensions to the corporate market through its agreements with the Confederation of Norwegian Enterprise, a large number of trade organisations and major companies such as Manpower and Norgesgruppen.”
The NHO represents approximately 16,000 companies and 440,500 employees within crafts, manufacturing, the service sector and knowledge and technology based enterprises. Together these represent 40% of the economic value-creation of Norway’s private sector.
Storebrand reported group profit of NOK811m for the first six months, up from NOK706m for the same period last year.
Storebrand’s asset management activities reported a pre-tax profit of NOK52m in the first half, compared to NOK22m in the first half of 2005.
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