The Folksam Group Interim Report January – March 2018
Efficiency above all
We are continuing to increase the pressure on the work of efficiency improvement measures, at the same time that we are focusing on the new regulations and activities for more sales.
The Folksam Group’s total premium volume in the first quarter of the year amounted to SEK 22,207 million (22,622). The primary growth continues to come from collectively agreed occupational pensions, and above all the subsidiary KPA Pension. Within the non-life insurance business, the premiums earned were in line with last year. Total return for our companies was slightly lower than the levels the year before, mainly as a result of lower return on the equities portfolios. We recently made two investments worthy of a special mention. In February, we made our third bond investment of USD 350 million in a bond issued by a body in the World Bank. This time, it did not involve green bonds, but through the acquisition we want to highlight the UN’s 17 Global Sustainable Development Goals and direct focus on four of them. We made the other investment after the end of the quarter in April. For a vale of USD 400 million, or more than SEK 3 billion, we bought green bonds issued by the European Investment Bank. This will be the Folksam Group’s biggest single acquisition. With our continued progress in the market for green bonds, we have now surpassed SEK 20 billion in the asset class and are approaching the goal of owning SEK 25 billion in it before the end of 2018.
It feels good.
The global economic development is strong and the International Monetary Fund’s GDP forecasts of nearly 4 per cent growth for both 2018 and 2019 stand fast. The developed countries in Europe and Asia, like the U.S., have a stable economic development, even if the world is still facing many politically difficult challenges.
Within the Folksam Group, we have had continued focus on everyday activities and stability. On the customer meeting – and on efficiency improvement. Quite a bit is happening continuously, but we have now shifted into high gear for the next few years. A part of this is the streamlining of the organisation to only encompass the business areas of Life and General, which we introduced as of 1 April 2018. The change gives the business areas clearer responsibility for profit and profitability. It increases the pressure on efficiency improvement, which ultimately makes it possible for us to set lower premiums and better conditions for our customers and owners.
We also have a focus on sales, which we were not fully satisfied with in all areas. An answer in the search for more stable sales and more customers that seek us out because we can offer what they need – security – is the launch of the new product Private Pension. It is a traditional insurance mainly targeted at our more than one million customers aged 25 to 55 who currently have no savings.
All of this takes place in parallel with the introduction of the well-known regulations GDPR, PRIIP, IDD, MIFID and POG and what we do not yet know what they contain (IORP).
We have a lot of work ahead of us. But it’s basically about increasing the security for the customers. And in all of the challenges that we have ahead of us, we can find strength in the fact that the customers are satisfied with us and are staying ever longer. We are proud of this. And it gives us a clear vision of what we should continue to work towards.
President and CEO