Länsförsäkringar Alliance: Year-End Report 2008
2/18/2009 7:33 AM EST
“Earnings for 2008 show that Länsförsäkringar has remained secure and stable during the financial crisis. All core operations are profitable and we have reported earnings growth in most areas. Respect for other people’s money and active risk measures are central for us, which resulted in excellent credit quality, a strong cost/income ratio and high collective consolidation in the life-assurance operations and solvency in the non-life operations. We are correctly positioned in an uncertain financial environment,” says Håkan Danielsson, Managing Director of Länsförsäkringar AB, the Alliance’s jointly owned company.
Summary
• The Länsförsäkringar Alliance stands firm in the financial crisis. The capital situation is favorable and profitability and the Alliance’s market position strengthened during the year.
• The non-life insurance operations continued to perform strongly with high profitability, and the technical result amounted to SEK 2 437 (2 322). Solvency for non-life insurance remained strong. Solvency capital totaled SEK 25,787 M (34,140,) and the solvency margin amounted to 145% (198). The combined ratio amounted to SEK 93 M (93) and the claims ratio 72 (72). Total operating result declined to a loss of SEK 7,614 M (3,606) due to the impact of the financial crisis on investment income. The negative investment income for non-life insurance for the period amounting to SEK 7,513 M (pos: 3,660) can be compared with average investment income of SEK 2 billion per year over the past five years.
• Due to its successful risk measures, the life-assurance company preserved its solvency and financial strength despite the financial crisis. During a year in which global stock markets fell by between 30 and 50%, customers with traditional pension savings received an average bonus rate of 3.5%, before tax and fees. The total return amounted to negative 0.6% (pos: 6.7) and collective consolidation to 105% (114) at year-end.
• The position of the banking operations in the market improved and the bank is now the fifth largest in terms of deposits. Operating profit, excluding restructuring costs increased to SEK 272 M (238) and operating profit including restructuring costs increased to SEK 245 M (238). Lending to the public rose 17% to SEK 79 billion (67) and deposits from the public increased by 18% to SEK 35 billion (30). Mortgage lending rose 13% to SEK 54 billion (48).
• The jointly owned Länsförsäkringar AB focused on profitability ahead of volumes. Extensive efficiency-enhancement measures led to a reduction in operating expenses for 2009 of approximately 20%. Loss before tax in Länsförsäkringar AB Group amounted to SEK 3,392 M (profit: 1,270).
• The number of customers in the Länsförsäkringar Alliance at year-end totaled slightly more than 3,250,000, an increase of slightly more than 30,000 during the year. The trend in full-service customers in 2008 was the strongest ever.
Figures in parentheses pertain to 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.
The full report is available attached.
For further information please contact:
Håkan Danielsson, Managing Director Länsförsäkringar AB
Phone: +46 8 588 400 00
Sten Dunér, CFO Länsförsäkringar AB
Phone: +46 8 588 411 15, +46 73 964 11 15
Christer Baldhagen, Director of Corporate Communications Länsförsäkringar AB
Phone: +46 8-588 415 01, +46 70-579 70 66