​Nordea gears up for Norway reform with €395m pension portfolio deal

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Nordea has signed a deal to take on NOK4.2bn (€395m) of defined contribution (DC) pensions from Frende Forsikring in Norway, as the Nordic bank positions itself ahead of the “own pension account” reform set to re-shape the private sector occupational pensions market.

Nordea said it has agreed to acquire the occupational and individual pension portfolios from the insurer’s Frende Livsforsikring unit, with the intention of combining the new business with its Norwegian insurance subsidiary Nordea Liv Norge.

As part of the deal, the Nordea unit will also sign a long-term pact to distribute pension products to the Norwegian savings banks that own Frende.

The portfolios Nordea is taking on have total unit-linked assets of approximately NOK4.2bn. These stem from the workplace schemes of some 5,600 corporate customers representing around 32,000 individual policyholders, with some private pension savings also included, according to Nordea and Frende.

Snorre Storset, head of Nordea’s asset and wealth management unit, said: “Nordea Liv is growing fast in Norway and we look forward to offering Frende’s pension customers and customers of owner banks of Frende a wide range of pension products and modern digital solutions.”

The banks that own Frende have a solid position in the Norwegian market, he said.

A spokesman for Nordea said Nordea Liv Norge had been growing rapidly over the last two to three years, having increased its market share in that period to 14.2% from 12.8%.

“The acquisition of Frende’s occupational and individual pension portfolios fits well with Nordea’s growth strategy, and will position Nordea Liv AS as one of the main players in run-offs to the ‘own pension account’ reform to be implemented in the Norwegian life and pension market in 2021,” he said.

The “own pension account” (egen pensjonskonto) reform was proposed in late 2018, and its details are currently out for consultation until 3 August.

The idea is for employees with DC pension schemes to gather and manage all these pension assets together with their active pension earnings in a single pension account – which can be managed in their current employer’s pension scheme or with a provider of their choice.

The aim, the government has said, is to give Norwegian employees more pension for each krone saved by making the management of it more efficient, while giving them a better overview of their pension.

A year ago, Nordea said in an interim report that it was approaching growth across the occupational pension markets in Norway and Sweden “through increased leverage of Nordea Group’s distribution channels, new partnerships and acceleration of value propositions”.

On top of that, the company said there was “continued strategic positioning and management of the transition into the ‘own pension account’ structure in the Norwegian market”.