SWEDEN – Handelsbanken Liv has announced that it will not follow mutually-owned life insurers and cut pensions – at a cost of more than 25 million euros.

The company has announced that “pensions being disbursed will not be reduced and the deposit fee will not be charged for customers moving their pensions from other companies”.

Instead, the parent Handelsbanken Group will meet the commitment to savers, in spite of a decrease in profits of 229 million Swedish crowns (25.6 million euros) for 2003.

In Sweden at the moment, several companies, mutually-run or with similar principles, such as Volksam, have opted to lower pensions disbursements as a result of deficits, caused by the fall in markets.

“We want to show the differences between demutualised Handeslbanken Liv and other mutual life insurance companies and who pays what. In companies run on mutual principles, there is only the savers’ money,” says Lars Gronstedt, group chief executive of Handelsbanken.

A spokesman for the company added that, it is hoped that the decision will result in more customers. “We hope people will realise it is better to be with a demutualised insurance company with a strong parent, and the aim is to attract more policyholders.” The bank has said it views the move as a market investment, with “mores satisfied customers being a condition for better growth.”

The spokesman added that it is also hoped that, in the not too distant future, there could be a law passed to facilitate the transition of policies from one insurer to the other.