Folksam Interim Report January – March 2016

Stepping on the gas and the brake

Folksam and its subsidiaries began 2016 stably and according to plan. The non-life business is showing strong premium growth. The huge growth that previously characterised our life insurance business is slowing since we introduced restrictions in our traditional life insurance. The one-time premiums for the traditional life insurance continue to decrease and therefore provide lower premiums earned compared with the previous year. In the past period, KPA Pension received last year’s agreed premiums and has a growth of around 5 per cent.

At the same time, 2016 began with turbulence on the stock market, which affected the returns both for Folksam with its subsidiaries and industry actors otherwise. Together with the continued low interest rates, returns for the period are around zero for our companies. At the same time, the bonus interest rate for Folksam Life’s customers is still relatively high at 6 per cent for “old capital” and 3 per cent for “new capital”.

Our transition to the Solvency II regulations has been successful to-date, but also requires continued work in order for us to enhance efficiency and develop the procedures. Basically, this change means that we are a more modern financial company today compared with before the turn of the year. Our other development projects are also progressing in the spirit of modernisation. We are now investing SEK 1 billion per year in development. To ensure the effects, we have prioritised some of these investments over others. This is both to be able to continue while maintaining costs and so that every project will really begin to deliver benefit for the customers. One step in line with our development work is the new folksam.se. The next step in this work will be to continue to develop the customer dialogue in digital channels.

Another project I am especially proud of is our work with Folksam General’s child insurance offering. In 2014, the product shared fifth place in the comparison of child insurance by Konsumenternas Försäkringsbyrå (the Consumers’ Insurance Bureau). We saw that our surrounding world was changing and the customers wanted more. But we also knew that our mission is to provide security, that children are the most important that we have and that we have said that we would be in the top three in these kinds of independent measurements. Therefore, we began intensive development efforts. At the beginning of this year, we launched an improved child insurance policy and, in doing so, we took first place in the new comparison by Konsumenternas Försäkringsbyrå. But it is important to remember that these kinds of rankings are temporary and our goal is to remain at the top.

So we at Folksam with subsidiaries will work to provide the customers security in a sustainable world. Just as our vision advocates.

Jens Henriksson
President and CEO