CEO comment on Full-year report 2023: Good returns for our customers in a challenging year

It has been a challenging year and many of us are worried about
developments in the world around us. Our customers have been
struggling with personal finances that are worse than they have
been in a long time and many have been affected by the climaterelated
damage that has unfortunately become increasingly
common. Storm Hans struck last summer, and over 1,500 of our
customers were affected by flooded cellars and leaking roofs. Not
only that, 150 of our customers became caught up in something
they could never have imagined – gang-related bombings. In the
midst of these turbulent times, we at Folksam have stood firm
and been there for our customers when they needed us most –
and we will continue to do so.
There has also been turbulence on the financial markets. High
inflation, major geopolitical unrest and rapidly increasing
interest rates have created volatility. Despite this, the stock
market has been favourable in several regions, driven by falling
inflation rates and resilient growth. Heading into 2024, we are
taking a cautiously positive view of the market because interest
rates should fall as inflation continues to slow.

Financially strong for our customers
Folksam has successfully managed our customers’ assets and
generated a good return. During the year, customers received
a good, competitive return on capital in Folksam Life’s parent
company of 8.2 per cent, in Folksam Tjänstepension of 8.1 per
cent and in KPA Tjänstepensionsförsäkring of 7.6 per cent. Total
assets under management, including unit-linked insurance
assets, amounted to SEK 823 billion, an increase of 12 per cent
compared with the previous year.
The financial position of both the Life Group and the General Group
remains very strong. The funding ratio in the parent company
Folksam General was further strengthened during the quarter
and amounted to 192 per cent at year-end. The fall in long-term
interest rates had an impact on the discounting of pension provisions,
however, resulting in a negative impact on the solvency
of life companies during the quarter. The solvency ratio was 190
per cent for the parent company Folksam Life, 204 per cent for
Folksam Tjänstepension and 232 per cent for KPA Tjänstepensionsförsäkring.

Our route to having the industry’s most satisfied
A cohesive customer experience, profitable growth and everyday
efficiency are important cornerstones in our efforts to have the
industry’s most satisfied customers – and we have made major
strides towards this during the year. One example is the merger
of occupational pension companies within KPA. Folksam has also
been entrusted once again with ITP. A number of partnerships
have been entered into or strengthened, such as those with Vision,
Saco and the Swedish Equestrian Federation. Together with the
Swedish Trade Union Confederation (LO), we have been able to
launch an improved health and survivor’s insurance policy and
a new child insurance policy for all unions.
This helped the Folksam Group’s total premium volume grow by
13 per cent compared with the previous year, amounting to SEK
72 billion.
The premium volume for the Folksam Life Group amounted to SEK
56 billion. The Folksam Group’s growth has come mainly from
collectively agreed occupational pensions, while we have seen
a reduction in customers’ savings capacity for private savings.
The profitability of the Folksam General Group has been affected
by rising inflation and high claims expenses, including as a
result of fires and increased climate-related damage such as that
caused by Storm Hans. Premiums, which were not adjusted in line
with rising inflation, increased by 3 per cent compared with the
previous year, to SEK 16 billion. Portfolio growth during the year
came primarily from animal insurance, home insurance and the
accident and illness business.

Focus for 2024
This year, the Folksam Group will continue to focus on a number of
major business and infrastructure changes that will both contribute
to long-term efficiency and facilitate increased digitisation
and customer benefit. Improving profitability and reducing our
claims expenses will be further areas of focus in 2024.
We are currently recruiting a new Head of Marketing and Sales
following Anna-Karin Laurell’s departure from Folksam. This is an
important recruitment process as we need to continue to enhance
the cohesive customer experience.
During the year, the Folksam Group will switch to reporting our
financial results every six months instead of quarterly. This is one
way of streamlining operations and is in line with how most other
companies in the industry report.


Ylva Wessén
President and CEO

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