Storebrand ASA, Norway’s second-largest insurer, climbed the most in almost two weeks in Oslo trading as improving returns on its investments bolster its earnings outlook.
The Oslo-based insurer rose as much as 3 percent, the biggest intraday gain since Sept. 20, and traded 2.6 percent higher at 34.47 kroner as of 1 p.m. in the capital. That makes Storebrand the biggest gainer on the Oslo stock exchange’s OBX index of 25 most-traded stocks. More than 877,000 shares have been traded, about 60 percent of the average daily volume during the last three months.
“Storebrand’s third-quarter numbers should be supported by high equity returns and tightening credit spreads,” Pareto Securities AS analyst Vegard Eid Mediaas said in a note to clients today. Storebrand’s financial result in SPP, its Stockholm-based unit, will amount to about 100 million kroner ($16.6 million) in the quarter, “while the results in its Norwegian operations will continue to be used to strengthen longevity reserves,” Pareto said.
Storebrand is seeking to transfer customers from pension products with guarantees to non-guaranteed based policies as low interest rates make it harder to generate returns. It’s also planning to strengthen its balance sheet ahead of the introduction of capital rules known as Solvency II.
Implementation of those regulations has been delayed until 2016 or 2017 from 2014 because of objections from insurers about how much capital is required to back long-term guaranteed products such as annuities.
Gjensidige Forsikring ASA, Norway’s largest insurer, owns 24 percent of Storebrand.