2006 was SPP's first year as a demutualised company. For its customers, it was a year when traditional pension insurance showed considerably higher value growth than previously. 
    Customers' assets rose in value by 6.08%. For this period, the sector average for life insurance companies offering traditional savings was 5.83%.
    Thus, both Handelsbanken's life insurance companies, SPP and Handelsbanken Liv, achieved a higher than average yield rate for their customers.

 

"We have delivered significantly stronger results than previously. We have also converted SEK 160m into guaranteed bonus - that is, parts of customers' assets that were non-guaranteed when SPP was run as a mutual company are now guaranteed by us," says Michael Zell, chief executive of SPP. 

 

For the 2006 full year, SPP's total return for traditional insurance with individual calculation of bonus was 6.76%. This is higher than the guaranteed rate of interest, which is between 2.5% and 5.2%. This means that the yield will be split, with customers receiving 90% of the total return, and SPP 10%.

This will mean an upward adjustment of customers' assets by 6.08%. Thus, for a customer with SEK 100,000 in insurance capital, the increase in value before charges and tax is SEK 6,080.

 

At the time of the demutualisation, SPP also assumed all risks for operating and risk results, as well as for securing the company's guaranteed commitments from policyholders. Handelsbanken contributed a total of SEK 13bn to guarantee this.

 

"Previously, policyholders alone had to share all the risks and deficits. This changed completely when we were demutualised. Now the company's money and the individual policyholder's savings capital are kept separate," says Michael Zell.

 

SPP also has insurance holdings which use collective calculation of surpluses. These are company-owned pension schemes with defined benefit insurance solutions. In these holdings, the total return for 2006 was 6.83%. This was also higher than the guaranteed yield, and thus the yield will be split in accordance with the insurance terms and conditions.

 

Other key figures and results for SPP will be presented in conjunction with Handelsbanken's annual report, to be published on 20 February.

 

 

* All life insurance companies' bonus rates were included in the calculations for the sector average. However, companies with traditional insurance which instead report a yield rate (i.e. KPA, Nordea Liv) were not included, as they have not yet reported full-year figures. Source: Swedish Insurance Federation statistics, 2 January 2007: Average bonus rate, 2006.