Nordic roundup: Nordea, AMF, Varma, Veritas, Sweden’s SAF-LO
Nordea’s life and pensions business saw profits surge 52% in the third quarter, as unit-link product volumes grew and traditional with-profits products shrank.
Operating profit for the division of the Nordic and Baltic banking group rose 52% to €76m in the three months to the end of September from €50m reported for the same period last year. Profit was 17% from the second quarter.
Assets under management climbed 6% over the last 12 months, rising to €52.1bn by the end of September from €49.3bn.
Nordea said unit-link, or market return, and risk products accounted for 84% of total gross written premiums in its life and pensions division in the third quarter – 9 percentage points more than in third quarter of last year.
The strong net inflow into market-return products continued in the third quarter, rising by €800m, while a net €100m flowed out of traditional products, the group said.
The profit contribution from market return or unit-link products climbed by €10m or 33% from the third quarter of last year.
Meanwhile, Swedish pensions provider AMF reported an investment return of 5.9% from January to September, with results supported by strong equities growth in the third quarter.
The return is just less than the 6.1% produced in the same period last year.
Peder Hasslev, deputy managing director and head of investment at AMF, said: “The last quarter was marked by continued strong development on global equity markets.”
The company’s managing director Johan Sidenmark said AMF’s focus was on continuing improvement for its savers and to reduce costs where possible.
Overall group profit climbed to SEK43.5bn (€4.97bn) from SEK15.2bn, helped by the changes in the discount rate used to calculate liabilities.
This change alone contributed SEK19.9bn to the result in the period.
Premium income rose to SEK15.8bn from SEK15.2bn, and the solvency ratio increased to 221% from 183%.
Assets under management grew to SEK436bn from SEK399bn.
In other results news, Finland’s Varma produced a 6.1% return in the first nine months of this year compared with 5.7% in the same period last year.
All asset classes gave positive returns, while assets under management rose to €36.9bn.
Varma’s president and chief executive Matti Vuoria said: “Despite the economic uncertainty, Varma recorded a strong result for the financial period, and the return trend was at a good level.”
Equities produced the highest returns, returning 14.9% in the nine-month period, up from 10.8% last year.
Within this, unlisted equities returned 19.9%.
Fixed income investments gave a return of just 0.8%, down from 3.5%, Varma said, noting it had reduced the share of these assets in its portfolio during the year.
Meanwhile, Finland’s Veritas saw a drop in returns from last year, producing 4.7% on investments between January and September compared with 8% last year.
Finnish equities produced a 23.3% return in the period.
Niina Bergring, investment director at Veritas, said: “Of all asset classes, equities gave the best return, at 11.7%.”
She forecast the stock market upturn would continue for the last few months.
“The growth cycle is now back on track, and liquidity is supporting risk taking,” she said. “Stimulus measures will continue in both Europe and the US, and this is creating confidence in the market,” she said.
Veritas’ return on its fixed income investments dropped to 0.1% from 8.6%.
The company’s asset mix has shifted in the last 12 months towards equities and property.
Fixed income investments shrank to 44.3% of the portfolio at the end of September from 52.3%, while equities expanded to 35.5% from 28.7% and property grew to 18.2% from 16.1%.
Lastly, 13 pensions and investment firms have formally applied to provide pensions within Sweden’s SAF-LO occupational pension system for blue-collar workers, according to Fora, the company administering the system.
Providers applying to offer traditional insurance products are Alecta, AMF and Folksam Liv, Fora said.
Those applying to offer unit-linked pensions are AMF, Danica Pension, Folksam-LO fondförsäkring, Handelsbanken Liv, Länsförsäkringar Fondliv, Movestic Liv & Pension, Nordea Liv & Pension, SEB Trygg Liv, SPP Liv Fond and Swedbank Insurance.
The pension board, which comprises representatives from the Swedish Trade Union Confederation (LO) and the Confederation of Swedish Enterprise (Svenskt Näringsliv), will now evaluate the applications.
According to the conditions for inclusion in the system, pension products must offer savers a high pension with low charges in a financially stable insurance company, Fora said.
Products from the new list of providers will be available in the SAF-LO system from 2014.
The approval process is expected to be completed by the end of November.