Alecta 2002: Satisfactory solvency despite negative total return

Alecta 2002: Satisfactory solvency despite negative total return * Collective solvency reserve on December 31, 2002 amounted to SEK 31.7 billion (2001: 60.8). The collective solvency margin was 113 percent (124) and the solvency ratio was 6.8 (13.1). Due to the considerable downturn in stock markets, a number of actions were taken in October to improve the company's solvency. These actions resulted in an immediate increase of approximately SEK 15 billion in solvency reserve and are expected to make an annual contribution of SEK 5 billion. * Premium income rose 16 percent to SEK 22.2 billion (19.1). Single premiums rose by 31 percent. * A loss of SEK 31.3 billion (loss: 4.4) was reported after tax. The weaker earnings were due mainly to return on capital, which deteriorated by SEK 31.9 billion to a loss of SEK 35.7 billion. * The total return on investments was minus 11.0 percent (minus 1.0). The market value of investments on December 31, 2002 was SEK 285.7 billion (334.2), corresponding to a decrease of SEK 48.5 billion during the year. Cash repayments of client company funds totaling SEK 10.0 billion adversely affected the value of assets. Net investments were made in Swedish fixed-income securities, while net divestments were made in other types of assets, particularly foreign shares. * As of 2003, the discount on premiums for retirement and family pensions was removed, as were premium reductions on risk policies. * Operating expenses for insurance operations amounted to SEK 592 million (549). The expense ratio was 2.7 percent (2.9) and the administrative expense ratio was 0.25 percent (0.21). * Of the provisions for repayments of client company funds of SEK 66 billion that were posted as a result of the surplus solvency that arose during 1994-1998, SEK 11 billion remained for allocation to client companies at the end of December. For more information: Lars Otterbeck, President, +46 8-441 66 60, 070-510 00 36 Kerstin Stenberg, Senior Vice President, Finace & Administration, +46 8-441 61 40, 070-581 61 40 Cecilia Schön Jansson, Senior Vice President, Corporate Communications, +46 8-441 93 50, 070-526 93 50 ------------------------------------------------------------ This information was brought to you by Waymaker The following files are available for download: The full report The full report

About Us

Alecta offers the occupational pension ITP – a pension that is paid for by the employer. We manage assets of almost SEK 420 billion. Our clients and owners are 27,000 companies and 1.6 million private individuals. Alecta’s assignment comes from the Confederation of Swedish Enterprise and the Federation of Salaried Employees in Industry and Services (PTK). Our cost-effective solutions and service allow employers to provide their employees with financial security both during and after their working lives. Through the disability insurance that is included in ITP, we can also increase client companies’ awareness of the correlation between health and profitability. We offer a financial security benefit that suits most people and seek to set the standard for high returns and low costs.