Full-year report 2021: A financially strong 2021 creates confidence for Folksam’s customers
During the second year of the pandemic, Folksam’s customers have indicated that they are still satisfied with us, which is our main focus. At the same time, we have continued to consolidate our financial position. It is also pleasing to see that our employees have given Folksam its best result in the annual employee survey since it began in 2009.
Folksam’s long-term perspective and strong financial key ratios provide good opportunities to contribute to climate transition as an asset owner. We take on the sustainability challenges that the companies we invest in face, rather than selling our equity holding. As an example, in 2021 Folksam increased its ownership in SSAB to take responsibility for the company’s important transition to fossil-free steel production. During the year, Folksam and KPA Pension also adopted new milestones to reduce emissions in their investment portfolios by 2025, the first stop on the road towards the final target of net zero emissions by 2050.
The Folksam Group’s premiums for the full year exceed SEK 61 billion, with premium growth of 12 per cent, which corresponds to just over SEK 6.7 billion. The premium increase was largest at Folksam Life, which rose by almost 50 per cent compared with the previous year. This is particularly evident in savings in endowment insurance, which increased sharply during the year, thanks to a combination of competitive bonus interest rates, increased productivity within Folksam’s team of advisers and good cooperation with partners and insurance intermediaries. All this means that both new and existing customers have been able to get a good return on their savings in a secure, traditional insurance policy, while their capital has helped to create a more sustainable world!
Assets under management grew by SEK 72 billion, or 15 per cent, during the year, to SEK 556 billion. In addition, unit-linked insurance assets grew by 25 per cent to SEK 243 billion.
Folksam Life’s solvency ratio was 194 per cent and FolksamGeneral’s funding ratio was 203 per cent. The balance sheets have mainly been strengthened by the strong performance of the stock market, combined with higher interest rates.
Folksam’s financial strength hit record levels in 2021. We have provided our customers with security, while at the same time ensuring competitive returns on their capital.
The return on capital during the year has been high, driven mainly by the positive development on the stock markets. The total return in Folksam Life’s Occupational Pension portfolio was 13.0 per cent, while Folksam Life’s Other Life portfolio achieved a total return of 10.8 per cent. KPA Pensionsförsäkring achieved a return of 13.7 per cent and Folksam General 7.8 per cent.
A number of important investments were made during the year to ensure that our customers receive competitive returns on their savings, while at the same time their capital contributes to a more sustainable world. One example here is that Folksam has increased its ownership in Volvo Cars ahead of the company’s IPO. The company’s transition work to electrify the vehicle fleet is also fully in line with our sustainability goals.