NORWAY – A move by Storebrand to move ahead of its competitors in the Norwegian group pensions market has been described as a “dawn raid” in a new research report.
Noting that compulsory group pensions will come into effect from January 2006, Merrill Lynch analyst Blair Stewart said: “Storebrand has performed a 'dawn raid' on its competitors ahead of the change, signing up a number of agreements with trade associations covering 250,000 employees.
“Consequently, we believe the company could achieve more than its 30% natural market share.”
The change would bring “high quality regular premium business and will likely flow into unit linked style products,” Stewart stated in the report. “We estimate Storebrand could increase the value of new business by 40% in 2006.”
Stewart upgraded his rating on Storebrand to buy from neutral.
And he said that explicit charging for guarantees in the group pensions segment – set to be introduced in 2007 - should allow Storebrand to charge more appropriately for risk and/or potentially reduce the levels of guarantees in the existing book of business.
Earlier this year Storebrand said it set up around 460 new defined contribution pension schemes in 2004 – taking the total number of DC client companies to more than 1,000.
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