Gjensidige CEO says to focus on Nordic expansion

By Victoria Klesty and Terje Solsvik

OSLO (BestGrowthStock) – Norwegian insurer Gjensidige (GJFS.OL: ) aims to grow its business outside of Norway and is preparing to take part in a Nordic consolidation when the time is right, its top executive said on Friday.

Shares in Gjensidige were listed on the Oslo Stock Exchange on Friday after launching the Nordic country’s largest initial public offering since 2001.

Chief Executive Helge Leiro Baastad told Reuters in an interview that growing the firm’s business outside Norway’s borders would create economies of scale, and that the public listing would be make it easier to take part of a possible consolidation in the region.

“Non-life insurance in the Nordics is fairly consolidated and so this (further consolidation) could take time. So the most important thing for us right now is to create value on our existing platform,” he said.

Gjensidige, with a strong position on its home market i Norway, currently has a miniscule market share of 1.2 percent in Sweden and a 6.2 percent share in Denmark, while it estimates its overall share of the Baltic market is just above 9 percent.

“We don’t believe in organic growth from that 1.2 percent in Sweden, so we believe we will grow with the gross domestic product from our platform,” Leiro Baastad said.

“We know there are synergies across the borders,” he added, and said Gjensidige’s expansion in Denmark had proven that point to investors.

“When the consolidation happens we will be able to participate. But that doesn’t mean it will happen next year or the year after that,” he said, adding one should not expect Gjensidige to announce any revolutionary plans or deals within the coming six months.

“What we are focusing on right now is to deliver on the goal we have communicated, that is, to ensure there is a good operation and solid results.”

Some see the Gjensidige IPO as a way to a tie-up with Norwegian life insurer Storebrand (STB.OL: ). Leiro Baastad stressed however that Gjensidige’s IPO was not related to Storebrand, where it has held a 24.3-percent stake since 2006.

“We have had this stake for a long time. I cannot comment on this further more than saying that it is there and has been defined as a strategic holding,” Leiro Baastad said. “But the listing is not about near-term transactions that media speculates in.”

Gjensidige CEO says to focus on Nordic expansion