Länsförsäkringar Alliance: Annual Review in summary 2020
- 2020 will long be remembered. The COVID-19 pandemic affected us all, and our thoughts go to all those who fell ill and experienced financial difficulties. That is why it was more important than ever for Länsförsäkringar to be available and shoulder its social responsibility during the year. It is pleasing to see that Länsförsäkringar succeeded in ensuring that operations functioned well and continued to deliver high customer service, says Fredrik Bergström, President and CEO of Länsförsäkringar AB, The Länsförsäkringar Alliance’s jointly owned company.
Social responsibility is a given for Länsförsäkringar. Länsförsäkringar has taken important initiatives across the country to support customers, local companies, the health care sector and clubs and associations, all of which have been severely affected by the COVID-19 pandemic. The risk of contagion was minimised by offering more digital customers meetings, increasing telephone banking staff and employees working remotely. Social responsibility also means that sustainability must be incorporated throughout the business. In 2020 Länsförsäkringar’s contributions to the UN Sustainable Development Goals continued. The interest of Länsförsäkringar’s unit-linked insurance customers in sustainability-focused funds increased markedly during the year.
In 2020, Länsförsäkringar AB launched an efficiency programme to ensure a long-term, sustainable cost level for its operations, which in turn benefits the regional insurance companies and their competitiveness. The local regional insurance companies are customer-owned and hence want to not only meet customer expectations,but surpass them.
The effects of the COVID-19 pandemic on Länsförsäkringar Alliance’s earnings were relatively limited in 2020, mainly because the stock markets recovered strongly during the year after the very negative trend in the first quarter. The Länsförsäkringar Alliance’s total operating profit amounted to SEK 9.9 billion. Operating profit in the non-life insurance operations amounted to SEK 7.5 billion, benefiting from both strong investment income and a strong technical result. Continued solid premium growth of almost 6% and lower claims costs resulted in a combined ratio of 93%. Based on 2020 earnings, the regional insurance companies will pay back a total of at least SEK 1.8 billion in bonuses and discounts to their owners – the customers. The banking operations reported a stable operating profit of SEK 1.8 billion with continued healthy growth in business volumes – deposits increased strongly by 14% and lending was up 11%. Operating profit in the unit-linked insurance operations amounted to SEK 0.7 billion. Premium income increased 29% with sales rising in all sales channels.
- I sincerely hope that 2021 will be the year when we can return to some sort of normality that will allow us to meet our customers and employees without the current restrictions. In 2020 Länsförsäkringar’s local commitment was more relevant than ever before, but our social commitment will not gradually disappear in pace with the pandemic – quite the opposite! At Länsförsäkringar we believe in the power of being part of something bigger than ourselves. Supporting each other and working together toward common goals. Our unique business model makes it possible to combine sustainability, social commitment and business value, says Fredrik Bergström.
2020 in brief Figures in parentheses pertain to the full-year 2019.
- Operating profit for the Länsförsäkringar Alliance’s non-life insurance operations was SEK 7,473 M (12,001), with investment income of SEK 7,090 M (13,199). Bonuses and discounts to customers amounted to SEK 1,756 M (1,893).
- The technical result for the Länsförsäkringar Alliance’s non-life insurance operations increased to SEK 2,877 M (1,824). Premiums earned after ceded reinsurance rose 6% to SEK 29,399 M (27,856). The combined ratio declined to 92.9% (96.3).
- The Länsförsäkringar AB Group’s operating profit was SEK 2,726 M (3,003). The return on equity amounted to 8% (10).
- The Länsförsäkringar Sak Group’s operating profit was SEK 516 M (851). Premiums earned after ceded reinsurance rose 9% to SEK 6,781 M (6,211). The combined ratio was unchanged at 95.8% (95.8).
- The Länsförsäkringar Bank Group’s operating profit amounted to SEK 1,844 M (1,893). Net interest income rose 5% to SEK 4,845 M (4,617).
- Länsförsäkringar Fondliv’s operating profit amounted to SEK 702 M (738). Premium income increased to SEK 12,228 M (9,478). Commission and fee income increased to SEK 1,809 M (1,779).
- Länsförsäkringar Liv’s profit amounted to SEK 1,586 M (5,567).
For further information, please contact:
Fredrik Bergström, President and CEO Länsförsäkringar AB
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Malin Rylander Leijon, CFO Länsförsäkringar AB
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Anna Glennmar, Investor Relations Länsförsäkringar AB
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Lena Hedlund, Head of Communications Länsförsäkringar AB
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