CEO comment on Full-year report 2022: Record-high return to customers

Folksam entered the year 2022 in the strongest financial position in Folksam’s modern history. This strength gives us the opportunity to be a long-term owner in our investments and thus help to transition to a more sustainable world. There were many challenges in the world arounds us in 2022. Both the pandemic and the war in Ukraine have brought unimaginable suffering for many and have affected us all. Energy prices, inflation and interest rates rose at the same time as a new refugee crisis arose.

The fact that Folksam is mutual company is a strength in testing times. The business model means that the surplus goes back to our customers and allows flexibility over time. We are particularly keen to give our customers, who are also our owners, tangible benefits and are proud to be able to offer them an attractive bonus rate in Folksam Life anda record-high bonus rate in Folksam General.

Life and General

Premium growth remains stable in both Life and General. The total premium volume amounted to SEK 64 billion, an increase of 4 per cent compared with the full year 2021. In the Folksam Life Group, premium growth amounted to 5 per cent compared to the previous year, of which the majority of premium growth took place during the first half of the year. Folksam General’s premiums grew marginally by 1 per cent.

Folksam Life’s operating expenses are burdened by the development costs related to the occupational pension regulation. The solvency ratio at Folksam Life remains strong at 185 per cent, mainly thanks to higher long-term interest rates.

Within Folksam General, the claims expense ratio increased compared to the previous year, mainly due to the high inflation. The total cost ratio amounted to 99.9 per cent, roughly 12 percentage points higher than the previous year, mainly as a result of the increased claims expense ratio. The funding ratio at Folksam General was 187 per cent.

Assets under management

Assets under management decreased to SEK 527 billion,as a result of the weak stock market trend. Since November, however, there has been a significant recovery on the stock exchanges.

In an uncertain world, stable and sustainable investments are increasingly important. Our customers’ money is invested with sustainability in focus for a better future. We want to contribute to the world’s development going in the right direction, without sacrificing good returns. During the year, we therefore invested in various projects within renewable energy, energy efficiency, biological diversity and helping with self-sufficiency in poorer countries.

For the past three years, we have tracked CO2 emissions from our own operations, our properties and our listed part of the share portfolio. The results have been very positive and show a development in line with the goals we set within the framework of the Net Zero Asset Owner Alliance.

Important events during the year

In December, the board of Folksam General decided to distribute a record-high bonus to its customers. The payment of one billion kroner will be made in the spring of 2023. We hope that the extra-large bonus can support Folksam’s customers in a troubled time, but it is also an acknowledgement of Folksam’s strong financial position and the company being well equipped for the future.

On November 1, Folksam Tjänstepension AB started operations as a subsidiary of Folksam Life with Charlotta Carlberg as CEO. The fact that the transferred business can now be conducted in an occupational pension company is the result of extensive work by dedicated employees and has required a number of approvals from the Financial Supervisory Authority.

One investment during the year that I am particularly proud of is that we invested in the first ever bond issued by the UN International Fund for Agricultural Development (IFAD). The money is expected to help reduce food shortages and increase growth in the world’s poorer countries.

Several important business relationships were initiated or deepened during the year; including with Saco and member associations, Preggers, Friskis & Svettis, CAKE,the Swedish Volleyball Association and the Swedish Tennis Association.

Unfortunately, the year ended with the news that Linn Edström Larsson, CFO, will leave Folksam in the spring. Linn has been at Folksam since 2016 and I already want to thank Linn for a job well done in the role of CFO. Her implementation power and business drive have been of great importance for the development of our business. The recruitment of a successor is ongoing.

The year 2022 demanded a lot from us all and I want to thank all customers and employees for good collaboration. We are now at the beginning of a new year where I can promise that Folksam will continue to put customers first. We must create real benefit for our customers and strive for them to feel secure in a sustainable world.

Ylva Wessén

President and CEO

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