Handelsbanken Liv's results for 2005: Highest yield - for the third year running
In 2005, the policyholders in Handelsbanken Liv received a considerably higher yield than customers of any of the major Swedish life insurance companies. This was the case for the third year running. In 2005, customers' assets rose in value by 10.49 percent. The closest competitor gave a bonus rate of 6.59 percent for the same period. The average for the insurance industry was 3.56 percent*.
"Our competitors are run on mutual principles and do not report how much individual customers actually receive on their accounts in the same way as we do. Instead they publish their bonus rates, which actually are only forecasts. But at the end of the year it is possible to compare what the customers really received. In 2005, our customers received most - again," says Hans Hagman, chief executive of Handelsbanken Liv.
Handelsbanken Liv is the first non-mutual life insurance company in Sweden to offer traditional life insurance. This means that the company offers private customers full rights to move the insurance capital to other companies and also full rights to move to a different type of insurance saving. This applies to both old and new policies. Handelsbanken Liv also guarantees every individual customer at least 90 percent of the company's total return each year. If the yield is lower than that which is guaranteed, and there is thus a deficit in the guaranteed capital, the company pays the difference to the customer. If the yield is higher, the company receives 10 percent and the customer 90 percent.
"This means that our charges depend on our expertise. If we have a lower yield than promised, we have to pay the customers. And if - like this year - we have a higher yield than the guaranteed rate, we have to share it. But for every krona we receive, the customer receives nine," says Hans Hagman.
Handelsbanken Liv's total return for traditional insurance was 11.65 percent for the whole of 2005. This is higher than the guaranteed yield, which is between three and five percent, depending on the year the policy was taken out. This means that the profit will be shared. For a customer with SEK 100,000 in insurance capital, the increase in value is SEK 10,490 before charges and tax. In this case, the company receives SEK 1,165.
Last year, Handelsbanken Liv increased the proportion of shares and reduced the proportion of fixed income instruments. The investments were broken down as follows, as at 31 December 2005:
Equities: 34 percent
Fixed income instruments: 58 percent
Property: 6 percent
Other: 2 percent
For further information, please contact:
Hans Hagman, chief executive, Handelsbanken Liv +46 8 701 72 84
Johan Lagerström, asst. head of corporate communications, Handelsbanken +46 8 701 10 00
mobile: +46 70-265 80 14
*Source: Swedish Insurance Federation statistics: Average bonus rates 2005
The press release can be downloaded from the following link: