The Folksam group interim report: January – June 2021 Folksam’s investments are accelerating a green reset

Folksam’s vision is for customers to feel safe in a sustainable world. This vision guides us to do business that creates fi­nancial security for our customers and to push for a sustain­able transformation of society.

A strong financial position is a prerequisite for our continued ability to influence, and therefore we are proud to report that Folksam Life’s solvency ratio and Folksam General’s con­solidation capital reached historic highs during the second quarter. As of 30 June, the solvency ratio in Folksam Life was 185 percent, and the consolidation ratio in Folksam General was 185 percent. The total premium volume in­creased by 3 percent during this period.

The biggest companies in Sweden account for a significant portion of turnover in the business sector. As employers, or through their enterprises, companies operate and are respon­sible for various sustainability matters on a daily basis. When Folksam and other responsible owners in these companies can be involved and influence the level of ambition and re­sults of this sustainability work, we are thus also involved and influence the development of the Swedish business communi­ty and contribute to restructuring society as a whole.

In recent years, Folksam has made several profitable invest­ments for our customers with the aim of also accelerating climate change reversal efforts through e.g. green bonds, Northvolt and Volvo Cars. We are involved and we take long-term responsibility for a sustainable world. This perspective is an important reason why Folksam increased its ownership in the steel company SSAB to 5.2 percent of the votes and 2.1 percent of the capital over the course of the quarter.

SSAB is currently one of the largest emitters in the Nordic region. The company is simultaneously on a major trans­formation journey towards fossil-free steel production. This is a long-term investment for Folksam, where we have the opportunity to support real, positive change in SSAB, while the investment is expected to eventually have good potential to provide attractive returns to Folksam’s cus­tomers. Our belief is that we can do more good by support­ing, rather than excluding, the conversion work in compa­nies that have large carbon dioxide emissions.

Although the investment in SSAB increases Folksam’s car­bon footprint by 5 percent, our target of reducing the carbon footprint of equities, corporate bonds and real estate by 29 percent by 2025 remains fixed.

Asset management – high return to customers

Total Q1 returns were good, amounting to 6.5 per cent for Folksam Life, 3.0 per cent for Folksam General, and 7.2 per cent for KPA Pension. The returns were primarily driven by strong stock market performance. The good returns had a positive impact on bonuses for our customers. The return rate is now 11 per cent for occupational pensions as of 1 May, and 8 per cent for other life insurance as of 1 July, and customers in Folksam Sak received a record return in May.

Life and General

The life insurance business has continued to achieve premi­ums comparable to those of the previous year. Sales have increased within individual savings and decreased some­what within collectively agreed occupational pensions.

The non-life insurance business remains strong with premi­ums of SEK 7,590 million. The continued low damage costs contribute to a total cost percentage of 92.5 percent in Folk­sam General.

Over the course of the quarter, Folksam General continued to build close collaborations with sports stakeholders which has resulted in agreements with the Swedish Football Association and the Parasports Federation. This has resulted in an exten­sion of two partner agreements held by Folksam for approx­imately 50 years. With these agreements, Folksam strength­ens its role as the insurance company of the sports world.

At the Annual General Meeting of Folksam General, on 15 April, Susanna Gideonsson was elected as new Chair of the Board. Johanna Frelin, CEO of Riksbyggen; Therese Svan­ström, Chair of TCO; and Mikael Ahlström, CEO and Chair of Sprout Park AB were elected as new board members. At the Annual General Meeting of Folksam Life, Lars Ericson, CEO of Stockholm Consumer Cooperative Society, was re-elected Chair of the Board and Kerstin Wallentin, Vice Chair of Stockholm Consumer Cooperative Society, was elected as a new member of the Board.

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