Alecta 2002: Satisfactory solvency despite negative total return

3/5/2003 3:17 AM EST

Alecta 2002:
Satisfactory solvency despite negative total return

* Collective solvency reserve on December 31, 2002 amounted to
SEK 31.7 billion (2001: 60.8). The collective solvency margin was 113
percent (124) and the solvency ratio was 6.8 (13.1). Due to the
considerable downturn in stock markets, a number of actions were taken
in October to improve the company's solvency. These actions resulted in
an immediate increase of approximately SEK 15 billion in solvency
reserve and are expected to make an annual contribution of SEK 5
billion.

* Premium income rose 16 percent to SEK 22.2 billion (19.1).
Single premiums rose by 31 percent.

* A loss of SEK 31.3 billion (loss: 4.4) was reported after tax.
The weaker earnings were due mainly to return on capital, which
deteriorated by SEK 31.9 billion to a loss of SEK 35.7 billion.

* The total return on investments was minus 11.0 percent (minus
1.0). The market value of investments on December 31, 2002 was SEK 285.7
billion (334.2), corresponding to a decrease of SEK 48.5 billion during
the year. Cash repayments of client company funds totaling SEK 10.0
billion adversely affected the value of assets. Net investments were
made in Swedish fixed-income securities, while net divestments were made
in other types of assets, particularly foreign shares.

* As of 2003, the discount on premiums for retirement and family
pensions was removed, as were premium reductions on risk policies.

* Operating expenses for insurance operations amounted to SEK 592
million (549). The expense ratio was 2.7 percent (2.9) and the
administrative expense ratio was 0.25 percent (0.21).

* Of the provisions for repayments of client company funds of SEK
66 billion that were posted as a result of the surplus solvency that
arose during 1994-1998, SEK 11 billion remained for allocation to client
companies at the end of December.

For more information:
Lars Otterbeck, President,
+46 8-441 66 60, 070-510 00 36
Kerstin Stenberg, Senior Vice President, Finace & Administration,
+46 8-441 61 40, 070-581 61 40
Cecilia Schön Jansson, Senior Vice President, Corporate Communications,
+46 8-441 93 50, 070-526 93 50