DENMARK – Swedish financial services provider SEB has announced the planned acquisition of Denmark’s fourth largest life and pensions company, Codan, for an estimated €400m.
Codan Liv & Pension has a market share of 9% with 230,000 retail and 1,500 corporate clients with 65,000 employees enrolled in pension schemes. SEB will pay DKK2.7bn (€360.2m) and then any profits from January until the deal is completed, which is expected by the end of September. Codan in 2003 had gross written premiums of DKK3,434m and net profit of DKK341m, although there were one-off additions to this figure so the expected additional payment is likely to be about €40m.
SEB through its UK, Ireland, Sweden and Danish life business, SEB Trygg Liv, has 1m clients already and will promote its unit-linked and corporate pension experience to Codan’s clients. Codan has mainly concentrated on traditional, defined-guarantee life products, although a joint venture on unit-linked sales with SEB has made little headway so far.
Anders Mossberg, chief executive of SEB Trygg Liv, said: “An increasing share of savings is going towards pensions and insurance and it is, therefore, of strategic importance for the SEB Group to expand its life insurance business. Denmark is about to experience a similar development to the one SEB Trygg Liv encountered so successfully in Sweden, ie a change towards corporate pension schemes and unit-linked products.
“The acquisition of Codan adds a strong distribution platform to the SEB Group in Denmark as a complement to its existing operations, which include merchant banking, SEB Kort, asset management, retail and private banking and Enskilda Securities.”
However, Sweden has had more of an equities culture than Denmark, which has concentrated on fixed income, which could affect the development of unit-linked life sales.
Last week, SEB also acquired Eurocard Denmark and along with Codan while also promote its banking products.