UPDATE 1-Storebrand Q2 profits fall below consensus
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OSLO, Aug 13 (Reuters) - Norwegian insurance company Storebrand (STB.OL) reported a steeper-than-expected 68 percent drop in profits for the second quarter, hit by global financial turbulence, but said its capital buffer was robust.
Group profit fell to 193 million Norwegian crowns ($35.87 million) in the three months to the end of June from 599 million in the same quarter last year.
The result undershot an average expectation of a fall to 242 million crowns in a Reuters survey of 10 analysts, whose estimates ranged from 140 million to 436 million crowns.
Storebrand ASA said in a statement that the integration of the Swedish SPP life company, acquired last year, was proceeding according to plan.
"Simplification and increased efficiency of Storebrand's operations are a top priority," Chief Executive Idar Kreutzer said in the statement.
Earnings in the first half of the year were dented, Kreutzer said, by "significant market volatility".
"Developments in the equity markets and level of interest rates are regarded as the most important risk factors that could affect the group's profit in the next six months," the company said.
"The Storebrand group was well capitalised at the close of the first six months," the company said, adding that the solvency margin ratio of its life business rose to 150 percent by the end of the second quarter from 136 percent at end-2007.
Operating results for the life business, which accounts for most of Storebrand's earnings, fell below analysts' expectations, while banking and asset management slightly beat average estimates and losses in other business weighed.
The company, which has long been seen as a possible takeover target as it has been left outside bigger Nordic combinations, said that SPP gained market share in the quarter.
Storebrand shares closed at 42.35 crowns on Tuesday, valuing the company at about $3.54 billion. Trade on the Oslo bourse resumes at 0700 GMT. (Reporting by John Acher; Editing by Hans Peters)
