(Adds analyst comment, detail)
OSLO Oct 24 Norway's biggest insurers -
Gjensidige and Storebrand - beat quarterly
earnings expectations, helped by improving returns on bond and
equity markets while claims fell.
Life insurance group Storebrand said while it had profited
from rising equity markets at home and abroad it was behind on a
plan to reach a result before profit sharing and loan losses of
2.5 billion Norwegian crowns ($436 million) by 2013.
Its third-quarter group profit was 458 million crowns,
compared with a forecast for 399 million in a Reuters poll and
after a 49 million loss in the 2011 period.
Gjensidige, a non-life insurer, said on Wednesday its
third-quarter pretax profit more than doubled to 1.61 billion
crowns, beating all estimates in a Reuters poll in which the
average was for a 1.38 billion profit.
Shares in both companies were up 2.6 percent in early
Storebrand plans to cut at least 400 million crowns costs by
2014 to meet new capital requirements without the need to raise
new equity. The plan, which includes around 300 job losses, was
on schedule, it said.
It also said while it was working to adapt to new Solvency
II regulations, the next milestone in the directive was likely
to be delayed from its Jan. 1, 2014 implementation deadline, and
the greatest challenges were linked to how insurance contracts
with long-term guarantees should be treated.
"The prospects for Storebrand remains roughly the same after
these results," Swedbank First Securities analyst Bengt Kirkoeen
said. "If the outlook is to change, it is the regulatory
framework that will change it and not the market."
Storebrand said it expected growth on its home markets in
Norway and Sweden in spite of economic uncertainties.
Gjensidige said claims fell and the return on its investment
portfolio improved on stronger bond and equity markets.
Its combined ratio, which measures general insurance costs
and claims as a percentage of premiums, fell to 82.9 percent
compared with a forecast for 86.5 percent and 87.4 percent a
"Gjensidige's result was clearly better than expected ... it
shows that the whole Nordic insurance market, and especially the
Norwegian, is really profitable," Handelsbanken analyst Matti
"Storebrand was a little better than expected, but it is
hard to evaluate exactly because of restructuring costs."
($1 = 5.7370 Norwegian crowns)
(Reporting by Victoria Klesty; Additional reporting by Camilla
Knudsen and Vegard Botterli; Editing by Dan Lalor)