NORWAY – KLP, the mutually owned life insurance and asset management group, says its investment income in the first quarter was hit by low interest rates and weaker stock markets.

Net income from investments at Kommunal Landspensjonskasse’s fell to NOK1.59bn (€196m) from NOK2.42bn a year earlier.

“The drop in income from investments compared with last year can basically be explained by the low interest rate level and a weaker stock market than in the first quarter last year,” KLP stated.

“The decline was in line with what the company expected at the beginning of the year.” It said 2005 results were “expected to be marked by the low interest rate level”.

Profit before allocations slipped to NOK795m from NOK973m. Total assets rose 10% to NOK143.4bn.

KLP said it is making progress in the pensions market. It said: “In the first quarter, seven municipalities that had their group pension schemes with other insurance companies asked for an offer from KLP.”

Last month KLP’s members rejected a board plan to convert into a public limited company.

Management had wanted the conversion due what it termed “changes in operating parameters and market conditions in recent years” which had put the mutual structure under pressure. It had said that conversion to a limited company would enable KLP to raise equity to finance growth.

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