Folksam Interim Report January – September 2016
We stand firm
This most recent period has brought both successes and reminded us of the challenges we face. The low interest rates continue to impact on the Folksam Group’s existence. Add to that Brexit, the worries for certain banks in Europe, the decreasing world trade, stagnation in China, and the emergence of populistic and nationalistic politicians around the world, and the overall global picture becomes negative.
But meanwhile, Sweden is heading in a different direction, with high growth and falling unemployment. Also developments for the Folksam Group are stable. Our non-life business is showing strong premium growth and premium inflows in the life business remain more controlled.
We are approaching a total of SEK 400 billion in assets under management, which is more than ever before. If we include our unit-linked insurance assets as well, our customers’ total assets amount to SEK 500 billion. This is a show of confidence in us, and we need to manage these assets successfully.
It is a challenge to achieve a return on managed capital, but we have been successful in this as well during the past period. All asset classes are making a contribution, but it is primarily the equity portfolios and the interest-bearing securities that have performed stronger than earlier this year. We are now placing a considerable focus on investment in green bonds, which is entirely consistent with Folksam’s vision that our customers should feel secure in a sustainable world. These investments offer a secure return and at the same time contribute towards building an environmentally-sound and lowcarbon Sweden. This is to everyone’s advantage. In just a few months, we have invested SEK 5 billion in green bonds and have thus become a dominating player on the market.
Our ongoing modernisation efforts within various parts of the business have continued during the period. We have seen much progress on the IT side with among other things a new, modern website and a number of cloud solutions.
On the regulation side, the heat is still on. Much points to the fact that even more is to come. At the beginning of October, the government also announced a policy decision on the issue of occupational pension regulation. Although many issues still remain to be resolved, we now have confirmation that we can establish occupational pension companies with their own regulation. This is consistent with what the Folksam Group has been working for, and we believe it is the best solution for our customers.
I have ever since I became CEO talked about modernisation, efficiency, and consolidation. Focus has so far been on modernisation. Now we are starting to consolidate yet another company, Förenade Liv, that will be incorporated into Folksam. And together with the falling interest rates, focus is shifting even mor towards efficiency.
Step by step, we are continuing with our long-term efforts to manage future challenges, and to have the most satisfied customers in the industry.
President and CEO