Full-year summary 2017

2017: Progress and challenges

2017 was an intense and in many ways challenging year, but nonetheless offered a number of gleams of light for the Folksam Group.

From a world economic perspective, development has been relatively bright, and the forecasts of several analysts for 2018 and 2019 indicate a GDP growth of nearly 4 per cent. 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.

The Folksam Group’s total premium volume grew by 6 per cent to SEK 50 billion in 2017. The primary growth came from collectively agreed occupational pensions, and above all the subsidiary KPA Pension. The non-life insurance business also grew although at a rate not as high as the market. Total return for our companies was somewhat lower than the levels in the previous year.

We are still the largest in traditional life insurance and Folksam Life and KPA Pension have provided an average return at the absolute top of the industry in the past ten years. Similarly, Folksam LO Pensions and KPA Pension’s unit-linked insurance has provided the best return over the same period of time. On the non-life insurance side, we are the third largest in the market and our car, household and home owner insurance receive the best average ratings in the industry comparison by the Swedish Consumers’ Insurance Bureau. So there are indeed gleams of light.

The many regulatory frameworks that went into effect or will soon do so contributed to the intense 2017. For example, PRIIP, which regulates how advice shall be provided when we sell endowment insurance, took effect at year-end. In 2018, a steady flow of new regulations are taking effect: GDPR in May, IDD in October and then IORP. And we cannot forget money laundering issues where we are gathering forces to have proper order. We have prepared ourselves for all of this in a meritorious manner in 2017. This has required – and requires – hard work, but fundamentally concerns increasing security for the customers. As a customer-owned company, this is naturally something we like.

The year was also intense on the asset management side. With our progress in the market for green bonds, we have at the same time staked out a clear direction for how we conduct responsible asset management. Today, we own green bonds at a value of nearly SEK 15 billion and have set a new target of owning SEK 25 billion in this asset class before the end of 2018. Another notable investment was that we invested in forests for the first time during the year and thereby gained indirect access to a class of assets new to us.

Our commitment for the customers is now continuing through both large and small efforts. We will take advantage of good opportunities that 2018 brings with it. Always based on being good at pensions and insurance for the many and with the best interests of the customers in mind.

Jens Henriksson
President and CEO

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