Life and non-life insurance companies, accounts, Q3 2000

Life insurance: Increase in premiums and compensation

The weak performance of the securities markets has led to a sharp fall in the value-adjusted result of life insurance companies. The value-adjusted result, which includes changes in the securities gains and losses fund relating to the companies portfolio of unrealized securities, was NOK 12.2 billion in the first three quarters of 1999. At the same time this year the value-adjusted result was NOK 4.3 billion.

The life insurance companies result before allocations to customers and taxes was NOK 13.2 billion for the three first quarters of 2000. This accounts for 3.4 per cent of total assets. At the same time last year the result before allocations to customers and taxes was NOK 9.7 billion, or 2.8 per cent of total assets. Improvement of the result is mainly because of greater realization of capital gains.

Life insurance premium income (corrected for the effect of transfers) shows an increase of 8.4 per cent, from NOK 18.2 billion at the end of September 1999 to NOK 19.7 billion in 1st-3rd quarter 2000. Compensation during the same period rose 13.4 per cent, from NOK 12 billion to NOK 13.7 billion. Net income from financial assets in the first three quarters of 1999 was NOK 22.4 billion. At the same time this year net financial income was NOK 18.5 billion, a decline of 17.5 per cent in relation to last year.

The total assets of life insurance companies at the end of third quarter 2000 was NOK 386 billion. This is an increase of 13.5 per cent in relation to the same time last year, when total assets were NOK 339 billion.

The life insurance companies total holdings of shares, units and primary capital certificates at the end of third quarter 2000 was NOK 138 billion. The percentage of shares etc. in relation to total assets thus increased from 29 per cent at the end of third quarter 1999 to 36 per cent at the end of third quarter 2000. The percentage placed in foreign shares in relation to total investments in shares has increased from 58 to 60 per cent. Life insurance companies placed a total of NOK 161 billion of their funds in bonds. The percentage of bonds in relation to total assets is thus 42 per cent, a reduction compared with the same time last year, when the percentage was 46 per cent.

Non-life insurance: Better technical result

Non-life insurance premium income increased by 112 per cent compared with the first three quarters of 1999, from NOK 17.1 billion to NOK 19 billion. During the same period compensation costs increased by 6.4 per cent, to NOK 16 billion. The technical result improved somewhat compared with last year. At the end of September 1999 the technical result was a loss of NOK 1.5 billion, while the same figure for the same period in 2000 shows a loss of NOK 1 billion.

The result of ordinary operations was reduced by 4.6 per cent from NOK 1 547 million in 1st-3rd quarter 1999 to NOK 1 476 million in 1st-3rd quarter 2000. The reduction is mainly due to a 13.2 per cent decrease in net financial income, from NOK 4.8 billion last year to NOK 4.2 billion this year.

Total assets of non-life insurance companies increased by 21.5 per cent from the end of third quarter 1999, to NOK 102 billion at the close of third quarter 2000. NOK 29 billion or 28 per cent of the total assets of non-life insurance was placed in bonds, while 24 per cent of total assets was placed in shares, units and primary capital certificates at the end of third quarter 2000.