Swedish roundup: Swedbank, Nordea, Alecta, Mercer
EUROPE - The insurance arm of Swedbank, the banking and financial services provider, is following in Länsförsäkringar’s footsteps and closing its traditional guaranteed pension product to new customers.
The company cites turbulent market conditions as the reason for the closure, making it very expensive for providers to offer guaranteed products, as interest rates remain low and equity returns are falling.
The Swedish regulatory authority, Finansinspektionen, has in recent days urged all pension insurance providers to look over their guarantees due to ongoing market turbulence.
Swedbank’s product has approximately 85,000 customers and SEK5bn (€543m) in assets.
Swedbank said it had not ruled out new guaranteed products in future, but that any new offering would be “radically different” from current ones.
In other news, the total average return for Swedish life and pension providers was 0.7% for the three quarters to the end of September.
According to statistics from Svensk Försäkring, the Swedish Insurance Association, the best performer year to date was Nordea Livsförsäkring Trad, which returned 13.5%, while the worst performer was Alecta Optimal Pension, falling 11.5%.
Some companies do not show an average number for all their products, instead showing performance of individual products.
Handelsbanken Liv has four products, which have returned between 8.7% and -5.9%.
Nordea, apart from being the top-performing fund, also had an emerging markets fund returning -6.4%.
Länsförsäkringar Liv Trad Liv returned 5.3%, whereas its New World (Nya Världen) fund fell by 8.7%.
SEB Trygg Liv’s products returned between 6.1% and 7.8%.
SPP Liv’s closed defined contribution fund returned 7.6%, while its open fund returned 0.5%.
Swedbank’s guaranteed product, which closed for new business earlier in the week, fell by 4.9%.
Lastly, Sandvik, the Swedish technology engineering conglomerate, has appointed Mercer to provide multiple global pensions, benefits and actuarial services for its 40,000 employees globally.
Thomas Nilsson Rofes, vice-president of compensation and benefits at Sandvik, said the firm had been looking for a single provider for its global benefits package to enhance governance and manage costs across the organisation.
Mercer will develop Sandvik’s global pension risk management strategy in 15 countries.
It will also work as a defined benefit administrator in the UK, Germany, Canada and the US and manage the company’s benefits globally.
Mercer will also support Sandvik in the initial phases of global defined contribution plan management.