SWEDEN - SPP Livförsäkring AB, the Swedish pensions provider owned by Storebrand, saw its sales increase by 33% during the first quarter of this year but the firm still generated a negative return of SEK647m (€61.7m), according to its latest results.

Information released today showed the firm lost 0.97% on its investments - compared with a gain of 3.76% this time last year - as a result of falling interest rates and through what is describes as the ‘one-off effect' of its transition to a new discount rate, to leave its assets under management standing at SEK114bn.

The firm said the financial crisis has put such huge pressure on its operating position that it is now forced to cut 50 jobs and cancel contracts with a further 35 consultants, in a bid to improve efficiencies and increase automation of its administration processes, so negotiations will begin with trade union officials.

Sarah McPhee, chief executive at SPP, said in a statement: "It is burdensome to have to terminate employees, but we have identified a number of areas where we can work more efficiently and at the same time meet our customers' demands for increased service and availability, for example, by using the web.

"In a few years, the pension market has undergone drastic changes and competition has intensified. We need to reduce our costs and with these measures, we create opportunities for SPP and the potential for continued sales growth," she added.

Its solvency ratio is still within regulatory guidelines at 1.87 while its premium income in the first three months of this year was SEK2.3bn.

SPP was acquired by Storebrand in February 2007 as part of its push into the Swedish pensions market, and McPhee joined the firm in September last year, having earlier worked at AMF as chief investment officer and at AP4 prior to that. (See earlier IPE story: AMF Pension seeks news investment head)

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