Year- End Report 2000

3/6/2001 3:58 AM EST

Premium income increased 6 percent

· Premium income of Alecta pensionsförsäkring, ömsesidigt (formerly
Försäkringsbolaget SPP, ömsesidigt) increased 6.4 percent, to SEK 16,608 M
(1999: 15,615).
· The collective reserve increased to SEK 71.9 billion (66.5), and
the solvency margin was 127 percent (124).
· The expense ratio amounted to 3.4 percent (2.9) and management
expense ratio to 0.20 percent (0.19).
· As of December 31, 2000, investments had a market value of SEK
353.3 billion (355.0). The total return on investments was 6.2 percent
(20.0). Alecta seeks long-term, orderly growth in value, with a good risk-
adjusted return on investments; at year-end it had approximately 48
percent (invested) in interest-bearing assets, 42 percent in equity, and
10 percent in real estate.
· Profit for the year amounted to SEK 3.2 billion (49.3). The
decline in profit was due primarily to the fact that the return of capital
decreased by SEK 42.5 billion. The return on equity was negative and
amounted to -1.9 percent (50.4), while the return on interest-bearing
investments was 9.2 percent (-1.5 percent), and the return on real estate
was 19.4 percent (16.2). Profit was charged with a special provision of
SEK 6.7 billion to the premium reserve, for the reduced premium reserve
interest rate approved by the Financial Supervisory Authority in 1999. The
new Swedish Insurance Business Act, adopted in 2000, does not permit
continuing allocations based on so-called "transition grounds," as Alecta
had earlier decided to apply over a ten-year period. The remaining
provision of SEK 18.1 billion will be recognized as income not later than
December 31, 2001.
· Alecta paid out SEK 8.0 billion (8.1) in insurance payments, and
bonuses amounted to SEK 7.5 billion (7.9). During 2000 customer companies
claimed SEK 17 billion from the 1994-1998 excess consolidation funds for
pensions of SEK 78 billion. An additional SEK 48 billion remains for the
same purpose. Insured persons will receive SEK 12 billion from the surplus
consolidation, and SEK 5 billion will remain for future pension
improvements.
· The capital gain as a result of the sale of SPP Liv, SPP Fonder
and the SPP brand name to Handelsbanken amounted to SEK 6.9 billion and
will be included in Alecta's accounts for 2001.



Comment by the president
Increased efficiency and focusing
make me optimistic

Since February 1, 2001, Alecta pensionsförsäkring, ömsesidigt has been the
name of the former Försäkringsbolaget SPP, ömsesidigt. We are the largest
pension fund manager in the Nordic region and we have a single objective:
to offer customers the best collective-agreement pension plans. The
rapidly growing operations in the competitive market have a new owner that
is taking over the old brand name.

Alecta has about four fifths of the assets managed in the old SPP Group,
about half of the employees and approximately 60 percent of the premium
income. We manage the ITP pension plan for SAF and PTK and thus do not
compete with the market's life insurance and pension insurance companies.

On March 7, Handelsbanken is taking over SPP Liv, SPP Fonder and the SPP
brand name. SPP Liv will thereby be able to continue its special concept
that focuses on the workplace as a marketplace. The bank is being provided
with a sales channel that is rather unique in the Swedish market. SPP's
successes in premium pension selection showed the strength of the brand
name and of the market position that SPP Liv has established.

Alecta will conduct a large-scale homogeneous business with a high degree
of efficiency, and is in a position to become highly cost-effective. We
will be suppliers of defined-benefit collective-agreement pension plans,
with our core business in ITP. There are important challenges for us in
the new agreement that the parties are negotiating, also when there is a
need for a central coordinating organ.

I am very optimistic about the future for Alecta. The key to success in
the years immediately ahead lies in our ability to maintain a return on
capital that is above average, and in our gradually becoming even more
efficient in managing the ITP plan. In this way Alecta can position itself
to play a distinct role in the new ITP agreement that will probably be the
result of the current negotiations.

Lars Otterbeck
President of Alecta

For further information please contact:
Lars Otterbeck, President and CEO, +46 (0) 8 441 60 50
Kerstin Stenberg, Senior Vice President, Corporate Accounting, Control and
Administration, +46 (0)8 441 61 40
Cecilia Schön Jansson, Senior Vice President, Corporate Communications,
+46 (0)8 441 69 75