Storebrand has acquired the Norwegian activities of Danica Pension for NOK 2.01bn, subject to the approval of the Norwegian Financial Supervisory Authority and the Norwegian Competition Authority, which is expected in the first half of 2022.

Danica Pension in Norway has around 29,000 agreements on personal pension schemes and more than 60,000 personal insurance policies. The company has approximately 14,000 business customers, 100 employees and NOK 30.4bn assets under management.

The Norwegian market for defined contribution (DC) pensions amounts to approximately NOK 420bn in assets under management and NOK 36bn in annual premiums, according to Finans Norge. Market growth has been strong over the past 10 years and Storebrand expects the market to continue to grow more than 10 per cent annually in the coming years. Danica Pension, which is a subsidiary of Danske Bank, is the sixth largest provider of DC pensions in Norway with a 5 per cent market share.

As part of the agreement, Storebrand will offer attractive solutions and terms and conditions to Danske Bank’s customers, and a long-term partnership agreement between Storebrand and Danske Bank will ensure the continuation of product development and product offerings to Danske Bank customers in Norway.

Commenting on the deal, Storebrand CEO, Odd Arild Grefstad, said: “With Danica on board, we are strengthening our presence in occupational pensions in the market for small and medium-sized companies, and our position in personal risk. These are strategically prioritised growth areas for Storebrand. We look forward to combining our expertise and good technical solutions with Danica's partners and Danske Bank's strong and professional distribution system. This combination will help customers get market-leading products and services, and we look forward to welcoming Danica's customers to Storebrand.”

Storebrand Livsforsikring AS will pay NOK 2.01bn for the shares in Danica (adjusted for the change in the value of Danica's net assets in the period from 30 September 2021 to 31 December 2021). The transaction will be financed by available funds in the company portfolio, which amounts to NOK 24bn. The transaction is expected to affect the group's solvency ratio by minus 5 percentage points immediately.

Furthermore, it is expected that the transaction will strengthen the group's solvency generation and dividend capacity in the future - supported by capital, cost and distribution synergies - in addition to increasing the return on equity. The transaction will not affect Storebrand's ordinary dividend capacity for the financial year 2021.

Danica Pension said the sale will allow it to focus on developing its pension solutions in Denmark. Danica Pension CEO, Ole Krogh Petersen, said: "Our customers in Denmark will benefit from an even more focused pension provider, and our Norwegian customers will now get a new owner to further boost the development of the company. Combined with the fact that the deal is strategically the right choice for Danica Pension, we believe that this is a very good solution for all parties," says Ole Krogh Petersen, CEO of Danica Pension.

In recent years, Danica Pension’s Norwegian business has seen significant growth and delivered strong financial results.

"We are proud of the growth and the results we have created in the Norwegian pension market and the strong foundation, our colleagues in Norway have laid. Danica Pension in Norway is reaching the end of a successful strategy period, and this led us to reconsider our presence in Norway and whether we are the right owners to bring the company forward in its development. We came to the conclusion that both our customers and Danica Pension will be better off with a new owner,” Krogh Petersen said.

The deal is expected to result in a one-off gain for Danske Bank A/S of approximately DKK 400m. This is not expected to impact the net profit of Danske Bank A/S in 2021, as the payment of the purchase price awaits completion of the transaction.

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