Folksam Interim Report January – June 2016

Arming for the future

Folksam and its subsidiaries are continuing to report stable development. The non-life business is showing strong premium growth and premium inflows in the life business are remaining more controlled since we introduced changes on the traditional life insurance side. Our biggest challenge lies instead in achieving a return on assets under management. This is of course because of the negative interest rates and the turbulence on the stock markets. The situation became even more uncertain after the British voted to leave the European Union, in what has become known as Brexit. While it is difficult to foresee the long-term economic consequences, Folksam and its subsidiaries can, as a well-capitalised investor, withstand downturns in its investments. We should also remember that uncertainty and fluctuations in the markets can also create opportunities for long-term investors such as Folksam. Folksam General and Folksam Life reached during the year’s second quarter a relatively good return of almost three percent.

Another result of the decline in returns on assets is that operating costs come under closer scrutiny, which, too, is the case at Folksam. For our part, the past period has been characterised by the three keywords that I have talked about many times before: Efficiency, modernisation and consolidation. To promote customer benefit and hone efficiency in the organisation, we are restructuring by merging Business areas Partner and Collective Agreement and splitting Business area Private into two parts: Market & Sales and Private Business. We have also decided to continue incorporating Förenade Liv into the Folksam organisation and hope to bring this work to the finish line at the turn of the year 2018/2019. Not only will all parties gain, we will also be streamlining the Group’s corporate structure.

In this spirit of modernisation, we will continue to invest SEK 1 billion annually in development. To ensure the maximum benefits within this framework of development, we have focused on some investments. Every project must genuinely deliver benefit to our customers. One stand-out milestone among our development projects was the launch of our new folksam.se website in April.

In addition, the year’s bonus statements were sent out from early April, and bonus payments were sent to the majority of customers in May. In all, just over two million customers share in our bonus programme of around SEK 550 million. That is the ultimate evidence that Folksam is a customer-owned and successful business. Step by step, we are continuing our work to equip ourselves to meet challenges going forward, and to keep our customers satisfied. For that is our foremost task.

Jens Henriksson
President and CEO

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