Länsförsäkringar Alliance: Interim report January-June 2008
8/26/2008 6:45 AM EST
- The finances of the Länsförsäkringar Alliance are strong. Key figures in all operations are among the best in the industry. The technical result in non-life insurance improved and solvency is at a very high level. The negative investment income in non-life insurance can be compared with an average of nearly SEK 4 billion per year for the past five years. We have one of Sweden’s strongest life-assurance companies. Although the investment income was negative, it was favorable compared with other players in the industry. Growth in the banking operations is continuing, with improved profitability. The bank’s liquidity is healthy and financing through covered bonds has been successful. Overall, the Länsförsäkringar Alliance is retaining its strong financial position. However, in a market with increased price competition and pressure on margins, lower costs and higher efficiency are generally required says Håkan Danielsson, President of Länsförsäkringar AB, the Alliance’s jointly owned company.
Summary:
• The technical result for non-life insurance remained strong and amounted to SEK 1,200 M (1,162). The operating result declined to a loss of SEK 3,404 M (profit: 4,664) due to negative investment income.
• The negative investment income for non-life insurance can be compared with an average return of SEK 3,972 M per year over the past five years.
• Solvency for non-life insurance remained strong. Solvency capital totaled SEK 30,210 M (35,807) and the solvency margin amounted to 174% (218).
• The life-assurance operations remained strong and reported some of the industry’s best key figures. The solvency ratio was 152% (155) and the collective consolidation level was 102% (119). New sales rose by 25% to SEK 18,300 M (14,690).
• The return on investment assets in Länsförsäkringar Liv (life assurance) was negative 5.8% (7.2). Although this reflected the negative trend in global financial markets, this result is favorable compared with the industry. Despite the negative total return for the period, customers received a bonus rate of 4%, which was one of the highest rates in the industry.
• The strong growth in the banking operations continued. Operating profit totaled SEK 123 M (112). Lending to the public rose 20% to SEK 73 billion (61) and deposits from the public increased by 19% to SEK 32 billion (27). Mortgage lending rose 20% to SEK 51 billion (42).
• The number of customers in the regional insurance companies at mid-year totaled slightly more than 3,240,000, an increase of 20,000 during the period. The strongest ever trend for full-service customers was reported during the period.
Figures in parentheses pertain to the same period in 2007.
The Länsförsäkringar Alliance is neither a legal entity nor, in the legal sense of the term, a Group; it is an alliance between 24 independent regional insurance companies that jointly own Länsförsäkringar AB. Länsförsäkringar’s earnings from non-life insurance consist of the total of the earnings of the 24 regional insurance companies and of the jointly-owned Länsförsäkringar AB, excluding life assurance and banking.
For further information please contact:
Håkan Danielsson, President Länsförsäkringar AB
Phone: +46 8 588 400 00
E-mail:
Christer Baldhagen, Senior Vice President Corporate Communications, Länsförsäkringar AB
Phone: +46 8 588 415 01, +46 70 579 70 66
E-mail: