The Alecta Group 2001: Stable solvency and high premium income

3/7/2002 8:10 AM EST

The Alecta Group 2001:
Stable solvency and high premium income

* The collective solvency reserve amounted to SEK 60.8 bn (2000:
71.9) at 31 December 2001. The collective solvency margin remained high
at 124 per cent (127).

* The loss for the year after tax amounted to SEK 4.4 bn (profit
3.2). This decline in earnings was mainly due to a SEK 20.5 bn decrease
in investment return, primarily caused by major falls on the stock
markets.

* Total return on investments amounted to -1.0 per cent (5.4).
The market value of investments at 31 December amounted to SEK 334.2 bn
(353.3), a decrease of SEK 19.1 bn during the year. Investments were
made in Swedish equities while net sales were made of fixed-income
securities and real estate.

* Premiums written rose by 15 per cent compared with 2000 and
amounted to SEK 19.1 bn (16.6). The main increase was in regular
premiums, up 23 per cent.

* Operating expenses in the insurance business amounted to SEK
549 m (565). The expense ratio for the year amounted to 2.9 per cent
(3.4) and the management expense ratio was 0.21 per cent (0.20).

President's comments
Alecta stands firm in uncertain times
The year was characterised by general economic unease which led to real
declines in several countries and sectors. Market values of financial
assets fell, with major fluctuations. Public confidence in the financial
systems declined and many people adopted a more pessimistic future
outlook. Towards the end of the year we could see a, possibly temporary,
upturn in these respects.

In 2001, Alecta completed the sales of SPP Liv, SPP Fonder and the SPP
brand decided by the Board in spring 2000. In my view, the sold
companies went to good owners which are well equipped to further develop
the companies they have acquired.

Since these divestments were made, Alecta has been a pure-play
occupational pensions company that only works with collective
occupational pension plans and investment management for these pension
plans. We manage larger pension assets than any other Nordic institution
and we only have one product: the ITP Plan.

The ITP Plan is standardised and therefore suitable for large-scale
application. A standard product in large volumes leads to high quality
at low costs. Other life insurance companies have other strategies and
develop customised solutions, mainly to meet high earners' wishes for
product differentiation. Everyone knows that customised products are
more expensive than standardised ones. Somewhere in the system this cost
has to be met.

The question of the level of risk which is suitable for pension assets
is important to Alecta. Unit-linked insurance's share of insurance
savings fell sharply in 2001 which indicates a greater reluctance among
individuals to make risk assessments themselves. The company's
investment return in 2001 as well was among the highest in the industry.

Alecta's solvency level is good and considerably higher than that of all
the other Swedish life insurance companies. Alecta can therefore offer
companies and insured considerable financial security. This security
will naturally continue to apply even if the ITP assignment that may be
given to us by the Confederation of Swedish Enterprise and PTK has a
different content from at present. We are concentrating on making Alecta
a company which is reliable, straight-forward and efficient in every
respect. Alecta must be the best alternative for the present ITP plan
and an unbeatable manager of a new plan.

From 1 January 2002, Alecta is reducing premiums by 15 per cent on parts
of the ITP Plan. In this way our good return and cost-effective
operations will benefit Alecta's client companies.
Lars Otterbeck,
President of Alecta

For further information, please contact:
Lars Otterbeck, President,+46 8 441 60 50, +46 70 510 00 36
Kerstin Stenberg, Senior Vice President, Finance & Administration +46 8
441 61 40, +46 70 581 61 40
Cecilia Schön Jansson, Senior Vice President, Communications, +46 8 441
93 50, +46 70 526 93 50

Alecta Group and Alecta (Parent Company), Summary Profit and Loss
Account and Balance Sheet

Profit and Loss Alecta Group Alecta (Parent
Account Company)
SEK m 2001 2000 2001 2000
Premiums written 19,146 16,608 19,146 16,608
Investment income -3,880 16,602 -3,302 15,605
Claims incurred -9,956 -7,999 -9,956 -7,999
Change in other
technical provisions -13,126 -18,801 -13,126 ,-18,801
Operating expenses -549 -565 -549 -565
Other -24 - -24 -
Balance on the
technical account, -8,389 5,845 -7,811 4,848
life insurance
business
NON-TECHNICAL
ACCOUNT
Balance on the -8,389 5,845 -7,811 4,848
technical account,
life insurance
business
Other 6,892 -44 6,661 131
Tax on result for -2,889 -2,636 -2,674 -2,600
the year
Net loss/profit for -4,386 3,165 -3,824 2,379
the year


Balance Sheet Alecta Group Alecta (Parent
Company)
SEK m
2001 2000 2001 2000
Investments 331,153 350,235 330,226 348,921
Other assets 10,576 10,880 9,521 9,808
Total assets 341,729 361,115 339,747 358,729

Untaxed reserves - - 501 501
Bonus funds 120,683 155,880 118,866 153,791
Technical provisions 214,826 198,757 214,826 198,757
Other liabilities 6,220 6,478 5,554 5,680
Total shareholders' equity, 341,729 361,115 339,747 358,729
provisions
and liabilities


Investment Income

Alecta Market Net Change in value Market value Total return
value invest 31 Dec 2001 %
31 Dec 31 Dec
2000 2001
SEK % SEK bn SEK bn % SEK bn % 2001 2000
bn
Fixed- 167.5 47.4% -6.2 -1.4 -0.9% 159.8 47.8% 4.6% 9.2%
income
excl.
direct
loans
Swedish 119.8 33.9% -3.1 -1.8 -1.6% 114.8 34.4% 4.0% 8.4%
Foreign 47.7 13.5% -3.1 0.4 1.0% 45.0 13.4% 6.4% 11.2%
Direct 4.4 1.2% -2.5 0.0 0.0% 2.0 0.6% 6.7% 7.1%
loans
Equities 146.5 41.5% 14.0 -17.9 -11.7% 142.6 42.7% -9.8% -1.9%
Swedish 80.1 22.7% 13.0 -11.9 -13.7% 81.2 24.3% -11.6% -3.0%
Foreign 66.4 18.8% 1.0 -6.0 -9.0% 61.4 18.4% -7.5% -0.6%
Real 34.9 9.9% -7.1 2.0 6.4% 29.8 8.9% 13.2% 19.4%
estate 0.0 0.0% 0.0 0.0 0.0% 0.0 0.0% -5.7% 5.5%
Borrowin
g for
investme
nts

Total 353.3 100.0% -1.8 -17.3 -5.0% 334.2 100.0% -1.0% 5.4%
investme
nts