GJENSIDIGE AGREES DEAL FOR VARDIA’S SWEDISH INSURANCE PORTFOLIO

Norway-based insurer Gjensidige has agreed a deal to acquire Vardia’s Swedish insurance portfolio, with the deal expected to complete in the second quarter. According to Berenberg analyst Iain Pearce, the deal is in line with expecations that Gjensidige would deploy excess capital through strategic M&A, and would help the group achieve its profit targets for its Swedish division by 2017. Pearce said it is likely Gjensidige got a good price for its acquisition, “given the capital strife of the seller”. Pearce said the acquisition adds scale to to Gjensidige’s Swedish business. “Vardia has a very high cost ratio, mainly relating to acquisition costs, so we forecast significant scope to take costs out of the business by integrating it onto Gjensidige’s platform,” he said. Pearce said further bolt-on acquisition activity was likely with Gjensidige still having NOK500m remaining in its strategic buffer.