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OSLO, Norway-In an effort to compete with larger players in the consolidating global insurance market, Norway's largest insurer, Storebrand A/S, is seeking merger partners among Scandinavian insurance companies.The company has held discussions with Sweden's Trygg Hansa Insurance Co. and "several" other insurers throughout Scandinavia, a Storebrand spokesman in Oslo confirmed. However, he added, "We are not in negotiations with any of them."A spokesman for Trygg Hansa in Stockholm would not confirm the talks with Storebrand, which late last year shortened its name from UNI Storebrand. "We never comment on speculation," he said.Storebrand has hired Oslo stockbroker Sundall Collier & Co to assist with the search for a strategic partner.

Sundall Collier acted Storebrand's adviser in the insurer's failed attempt to merge earlier this year with the 51% state-owned savings bank, Christiania Bank og Kreditkasse. In June, about 63% of Storebrand shareholders voted in favor of the merger, short of the two-thirds majority required for such a move.

The main opposition to that merger came from two large shareholders, the Orkla A/S food and media conglomerate, and Norwegian businessman Kjell Inge Rokke, chairman of the Oslo-based diverse conglomerate Aker-RGI, who holds 10% of Storebrand. In media interviews at the time, Mr. Rokke said he opposed the merger because the Norwegian government would hold a 25.5% stake in the joint company and consequently would have too great an influence in the organization.

Storebrand now is seeking shareholders that share Chairman Age Korsvold's management strategy of expansion via mergers. One such shareholder the spokesman named was Norwegian food entrepreneur Stein Erik Hagen, who owns 10% of the insurer. Under Norwegian law, no enterprise is allowed to own more than 10% of a Norwegian financial institution without making an acquisition offer.The company also is open to interest from non-Scandinavian insurers and other investors.

"We would not exclude them; some European companies are already setting up in Norway," the spokesman said.A merger between Storebrand and another Scandinavian insurer would be welcomed by the stock market, says Rafael Villarreal, vp and senior analyst at Moody's Investors Service in London. Scandinavian insurers have little room to grow in the small domestic markets, which they dominate, and a merger would give the combined entity the capital to pursue income growth in other countries."You can write more premium from New York state than from a Scandinavian country," Mr. Villarreal said.A merger between Trygg Hansa and Storebrand could make sense, as the two companies would be able to consolidate their operations, cut costs and compete with other international insurers, he said.

"The Storebrand holding companies still have some problems, but the operating companies have a strong cash flow," he said.Mr. Villarreal said Storebrand remains highly leveraged, with a debt-to-equity ratio of about 60%. Most insurers are not leveraged higher than 30%, and Storebrand's high amount of debt could restrict its ability to write coverage.Storebrand had 1996 gross premium volume of 13.21 billion Norwegian kroner ($1.78 billion) and net income of 1.12 billion kroner ($150 million).Storebrand registered 7.5 billion Norwegian kroner ($998 million) in gross premium volume for the first six months of 1997, up 8% on the same period last year.Trygg Hansa's 1996 gross premium volume was 12.16 billion Swedish kronor ($1.56 billion), and net income of 2.37 billion kronor ($304 million). Trygg Hansa registered 6.44 billion kronor ($818 million) of gross premiums in the first half of this year, up 7.6% from the same 1996 period.