The merger makes it the largest life insurance company in the Nordic region and also gives Storebrand the potential of taking on an even larger share of Handelsbanken’s occupational pensions business.

“The transaction brings leadership in Nordic life and pensions, increased scale with a continued clear strategic focus, reduced risk profile and enhanced growth prospects,” says Idar Kreutzer, CEO of Storebrand.

This is Storebrand’s first major purchase in the Nordic market. It has, however, plans to further expand in both Sweden, where SPP has a 10 per cent share of the occupational pensions market, and in the rest of the Nordic region.

“Over the last few years, Storebrand has systematically worked on building up a solid platform for its future growth and development. With the Board’s decision to acquire SPP, Storebrand is taking an important step that gives the company a more international and robust platform for profitable growth, says Leiv Nergaard, chairman of the firm.

The purchase also gives Storebrand an option to take over Handelsbanken’s occupational pensions business Handelsbanken Liv.

“We look at the whole Nordic region as our home market. SPP has a solid position within the Swedish market and it gives us the best position possible to build a strong position in Sweden,” adds Egil Thompson, Storebrand’s director of corporate communications. “But we also have plans for further growth. Strengthening our position in the Swedish market and moving into the other Nordic countries, as well as into the Baltic region, will be a natural step.”

Storebrand is following the same route with pensions as it did with the banking and insurance sector. The banking sector was the first area of Nordic consolidation and the non-life insurance part followed suit by establishing the Nordic insurance company If.

SPP has, however, been a dark cloud for Handelsbanken and has come out on the losing side in recent occupational pension tenders, most significantly the ITP tender for white collar workers’ pensions.

“Handelsbanken selling SPP is not a surprise, but it is interesting that Handelsbanken let go of an area as significant as pensions, which is a reverse trend from what we have seen among other major Swedish banks,” says Ulf Källum, partner at the Swedish consultancy Wassum.

“But SPP will now belong to a family with a major focus on pensions and a strong SPP will also vitalise the Swedish market. Being a big Nordic player, however, will not be enough to succeed – flexibility and determination will be the most important factors in a market that is becoming much more differentiated.”

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