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Nordea claims investment turnaround despite outflows

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  • Nordea claims investment turnaround despite outflows

SCANDINAVIA - Nordea Investment Management's assets under management shrank by €5.8bn in 2007.
This was mainly because of market depreciation in the wake of the equities downturn, Nordea said, but also due to net outflow of €1.7bn.

However, investment performance steadied late in the year, according to the firm. "Despite unfavourable financial markets in the second half year of 2007, investment performance stabilised at the end of the year...70% of investment composites outperformed their relevant benchmark in 2007," it said.

Nordea Life & Pensions reaped a 2007 result of €274m, up 13% from the year before and helped by strong corporate premium growth in Norway and Denmark.

Nordea described the fourth quarter 2007 as the "best quarter ever" for Life
& Pensions, with a product result of €91m, up 23% year-on-year. "The increase was an effect of strict cost control and active risk management," it said. Corporate premiums in Life & Pensions were up 35%.

Within the division, the removal of "Kapital Pension" and transfer rights in Sweden at the start of 2007 had decreased premiums significantly, the group said, as Kapital Pension was a major part of the Swedish business.  "However, the ban on transfer is expected to be lifted in 2008," it added.

Nordea said this setback was offset by strong development in Poland, Norway and Denmark, with corporate premiums up 35%. "Corporate premiums account for approximately 44% of total premiums," it said.

In spite of volatile equity markets and a general increase in interest rates, the full-year investment return was 3.6%, it said, which reflected its balanced asset mix.

This year, the Life & Pensions business would focus on developing "untapped sales channels…and to continue to development of the Polish Life & Pensions business," Nordea said.

At the group level, Nordea posted net profit for 2007 of €3.13bn, down from €3.15bn, on income of €7.87bn, which was up from €7.36bn, "on a comparable basis", the group said.

Meanwhile, Norway's financial services giant Storebrand reported a rise in group profit to NOK2.02bn (€253m) for 2007, up from NOK1.58bn the year before.

Within the group, Storebrand Life Insurance - which includes the group's pensions business - premium income rose to NOK3.8bn in the fourth quarter, up 23% year-on-year.

Defined benefit group pension products showed an increase of 6% in the fourth quarter, reflecting higher one-off premiums and final premium payments, it said in its annual report.

"Traditional individual endowment insurance showed an increase of 37%, and group life insurance was 45% higher," the company said.

"Individual personal annuity and pension insurance products generated a five-fold increase in premium income, and non-life lines showed a doubling of premium income relative to the same period in 2006."

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

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