The skilful prediction of climatic conditions on a forecast horizon of months to decades into the future remains a main scientific challenge of large societal benefit. Here we assess the hindcast skill of the Norwegian Climate Prediction Model (NorCPM) – for sea surface temperature (SST) and sea surface salinity (SSS) in the Arctic-Atlantic region – focusing on the impact of different initialization methods. We find the skill to be distinctly larger for the Subpolar North Atlantic than for the Norwegian Sea, and generally for all lead years analyzed. For the Subpolar North Atlantic, there is furthermore consistent benefit in increasing the amount of data assimilated, and also in updating the sea ice based on SST with strongly coupled data assimilation. The predictive skill is furthermore significant for at least two model versions up to 8-10 lead years with the exception for SSS at the longer lead years. For the Norwegian Sea, significant predictive skill is more rare; there is relatively higher skill with respect to SSS than for SST. A systematic benefit from more complex data assimilation approach can not be identified for this region. Somewhat surprisingly, skill deteriorates quite consistently for both the Subpolar North Atlantic and the Norwegian Sea when going from CMIP5 to corresponding CMIP6 versions. We find this to relate to change in the regional performance of the underlying physical model that dominates the benefit from initialization.