Nordea Liv & Pensions buys Alka Liv
DENMARK - Nordea Liv & Pension, the life and pensions arm of the Nordic finance group, has bought Alka Liv - a life insurer with DKK1bn (€134m) in assets under management.
The deal was another step towards its goal of achieving an ever stronger market position, Nordea said in a statement.
"With the purchase of Alka Liv, we are strengthening Nordea Liv & Pension's earnings and are reaping efficiency gains," said Steen Michael Erichsen, managing director of the Nordea division.
"This means that all our customers will enjoy lower costs in the long-term, and at the same time our new customers will get better conditions on their pension savings," he added.
Nordea said the parties had agreed not to disclose the price paid for Alka Liv.
Alka Liv's customers would stay on existing conditions in the transition phase, Nordea said. But in a couple of years, when the company had been integrated into the administrative systems of Nordea Liv & Pension, they would be on the same terms as the Nordea division's current customers, it said, including the account yield of 7%.
Alka Liv has around 10,500 customers but in 2001, the company decided to stop writing new business.
It still has DKK1bn in assets under management while Nordea Liv & Pension has 315,000 customers and DKK105bn under management.
Søren Schock Petersen, pensions insurance director at Alka Liv, said the sale to Nordea Liv & Pension was a good solution for both customers and staff.
"It has become more and more difficult for small pension companies to secure profitable business and competitive conditions for customers, and in the long-term it would not be possible to continue as a pensions provider with such a small customer base," he said.
The deal does not affect Alka's other business including group life, accident insurance, auto insurance etc, he added, and Alka Liv's five members of staff are being offered jobs at the Nordea division.
Separately in Denmark, commercial pensions provider PFA has launched an online tool allowing customers to gauge the costs they were paying for their pension. This follows a similar move by Danske Bank-owned Danica in March.
Danica said at the time it was the first Danish pension provider to reveal both direct and indirect costs associated with a pension.
"A costs measure like the one we are launching today on pfa.dk is a good step towards more transparency, but we don't think it is of interest to talk about costs on their own," said Nina Christensen, actuary at PFA.
"It should be seen in the context of the value that one gains as a PFA customer. A good example of that is the individual advice that customers receive."
Using a customer's individual details, the new measurement tool shows costs both as a total and divided into direct and indirect costs, as ‘annual cost in kroner' (ÅOK) and ‘annual costs in percent' (ÅOP).
Danish pension providers have been under public pressure to be more open about the costs ultimately paid by customers for running pensions. Last month, the Competition Commission said the pensions industry was one of the least transparent sectors, and customers needed information enabling them to compare institutions.
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