Annual and sustainability report 2019

2019 – a strong year but with challenges ahead

The Folksam Group is in a strong position, thanks to our committed employees, good business relations and strong finances. The Folksam Group has worked with an eye towards the future during the year, with a focus on sustainability, digitisation and cost reductions.

The Folksam Group is our customers’ company, offering insurance policies, pensions and long-term savings for the many. We shall be the obvious insurance partner and create mutual added value through collaboration. In a changing environment, a higher pace of change is required in the business. Movement areas have been identified and together we will bring about the change.

During the year, we have concluded agreements for expanded or new cooperation with the trade unions IF Metall, Fackförbundet ST and the newly formed SACO federation Akavia, as well as continuing the launch of Folksam’s legal insurance for members of trade unions. We work closely with our partners and will continue this work to ensure that the members get the best insurance and pension solutions on the market.

We create the conditions for better customer experiences and work on digital customer contact is being intensified. Being a Folksam customer should be easy.

A major initiative for the Folksam Group is a new system for risk insurance. We are doing this to future-proof Folksam, create better conditions for digitisation and shorten the time between first idea and the launch of products and offers. A first technical production launch took place in February.

Together with our efforts for the future, we need to continue to reduce our operating costs. By reducing operating costs, we increase our competitiveness and can create customer benefits through what we offer. Work to reduce operating costs continues through changes in the way we work and changes in the office structure. The goal is that by the end of 2022 we will be down to a cost level equivalent to SEK 5.3 billion, excluding commissions.

Through our work in the Net-Zero Asset Owner Alliance, we are steadily increasing the pressure on companies in our investment portfolios to achieve net zero greenhouse gas emissions by 2050 at the latest.

Sustainability work is, and always will be, central to our investments and our business.

A financially strong year is over. The Folksam Group’s total premium volume grew by SEK 1.7 billion, compared with the same period the previous year, and on 31 December 2019 it amounted to SEK 56 billion. Assets under management increased to SEK 455 billion. The total return ratio at Folksam Life was 10 per cent and at KPA Pensionsförsäkring was 11 per cent.

Our customers’ money, the capital that we manage, shall provide good returns so as to ensure good pensions and low insurance premiums in the future. The distribution of capital between different types of assets is important for reconciling good returns with a balanced level of risk. In recent years, the FolksamGroup has therefore invested heavily in property and in 2019 this strategy resulted in the acquisitions of the Trygg Hansa building in Kungsholmen, an office property in the Globen area and shares in Heimstaden Bostad AB. Other important investments in the past year have been preference shares in Volvo Cars and a bond issued by the World Bank to reduce food waste.

The coronavirus epidemic is troubling and is generating significant volatility on the financial markets. The Folksam Group is financially stable, however, and we are able to withstand a considerable amount of turbulence. In relation to the very strong upward stock trends of 2019, which saw price increases of around 30 per cent on most stock markets, this development has so far had limited impact on our companies. Naturally, we are following developments extremely closely.

I am pleased and proud to be the CEO of the Folksam Group and, together with my strong group management and our competent employees, I will drive the work towards our vision that our customers should feel secure in a sustainable world. Together we are strong!

Ylva Wessén
President and CEO