Länsförsäkringar Alliance: Interim Review January-June 2020

”It has been a half-year unlike any other. Many have been severely affected by the corona pandemic and many have worked hard to manage the consequences. It is vitally important in this situation that Länsförsäkringar is available to its customers and shoulders its social responsibility. In such a volatile world, the power and stability of our federation become even clearer and demonstrate the strength found in being local and customer-owned. Delivering on our promise to customers to simplify their everyday lives and to contribute to a secure future has never been as important as it is now. The regional insurance companies have taken important initiatives across the country to support customers, local companies, the health care sector and clubs and associations that have been severely affected by the corona pandemic. Länsförsäkringar invested SEK 1.2 billion in social bonds in the first half of 2020, which contributes to financing of combating the effects of the corona pandemic and increasing access to health care.

The effects of the corona pandemic on Länsförsäkringar’s technical result were relatively limited in the first half of 2020. Primarily investment income was impacted by uncertainty in the financial markets. Operating loss for the Länsförsäkringar Alliance’s non-life insurance operations amounted to SEK -350 M, with investment income of SEK -825 M. The technical result was better, with premium growth of slightly below 6% and a combined ratio of 95%. Claims costs declined, mainly due to fewer fire-damage and natural catastrophe claims, but also as a result of the corona pandemic due to changed behaviour among customers who travelled less and stayed at home more.

The Länsförsäkringar AB Group reported operating profit of SEK 1,130 M. The non-life insurance operations brought operating profit of SEK 133 M with strong premium growth of 9% and a combined ratio of 95%. The banking operations reported a stable operating profit of SEK 876 M with a continued healthy inflow of new customers. Deposits increased 13% and lending rose 5% with continued high credit quality. We have expanded our buffer by making additional loss allowances of SEK 155 M to cover any future credit losses resulting from the corona pandemic. Operating profit for the unit-linked insurance operations amounted to SEK 333 M. Managed assets fell 5% in the first half of the year to SEK 151 billion, primarily due to stock-market uncertainty. However, managed assets were positively impacted by a strong net flow.

There is much uncertainty surrounding the pandemic and it is difficult to predict the long-term economic consequences. However, the economic downturn does not appear to be as deep as feared and there is widespread optimism about a recovery. In this context, we can state that all companies in the Länsförsäkringar Alliance have a strong capital position and are considered highly able to manage any additional effects brought about by the pandemic.”, says Fredrik Bergström, President and CEO of Länsförsäkringar AB, The Länsförsäkringar Alliance’s jointly owned company.

January-June 2020 in brief Figures in parentheses pertain to the same period in 2019.
 

• Operating profit for the Länsförsäkringar Alliance’s non-life insurance operations amounted to SEK –350 M (6,494), with investment income of SEK –825 M (7,033).
• The technical result for the Länsförsäkringar Alliance’s non-life insurance operations increased to SEK 1,107 M (323). Premiums earned after ceded reinsurance rose 6% to SEK 14,428 M (13,675). The combined ratio fell to 94.9% (100.4).
• The Länsförsäkringar AB Group’s operating profit was SEK 1,130 M (1,453). The return on equity amounted to 7% (10).
• Länsförsäkringar Sak Group´s operating profit was SEK 133 M (375). Premiums earned after ceded reinsurance rose 9% to SEK 3,288 M (3,015). The combined ratio declined to 94.5% (96.1).
• The Länsförsäkringar Bank Group’s operating profit was SEK 876 M (958). Net interest income rose to SEK 2,423 M (2,272).
• Länsförsäkringar Fondliv’s operating profit amounted to SEK 333 M (375). Premium income increased to SEK 5,529 M (4,719). Commission and fee income increased to SEK 884 M (848).
• Loss for Länsförsäkringar Liv amounted to SEK –2,069 M (2,280).

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Länsförsäkringar Alliance Interim Review January-June 2020

For further information, please contact:
Fredrik Bergström, President and CEO Länsförsäkringar AB
fredrik.bergstrom@lansforsakringar.se, +46 (0)8-588 414 25, +46 (0)73-964 14 25

Malin Rylander Leijon, CFO Länsförsäkringar AB
malin.rylander-leijon@lansforsakringar.se, +46 (0)8-588 408 64, +46 (0)73-964 08 64

Anna Glennmar, Investor Relations Länsförsäkringar AB
anna.glennmar@lansforsakringar.se, +46 (0)8-588 417 42, +46 (0)72-141 44 08

Fanny Wallér, Director of Communication and Sustainability Länsförsäkringar AB
fanny.waller@lansforsakringar.se, +46 (0)8-588 414 69, +46 (0)70-692 77 79

The Länsförsäkringar Alliance is comprised of 23 local and customer-owned regional insurance companies and the jointly owned Länsförsäkringar AB. Customers are provided with a complete offering of banking and life and non-life insurance services through their local, regional insurance companies. We offer animal and crop insurance through Agria Djurförsäkring, total solutions for reliable mortgage transactions through Länsförsäkringar Fastighetsförmedling, and financing services such as leasing, instalment payments, and loans through Wasa Kredit.