Länsförsäkringar Alliance: Interim review January – June 2011

 “Financial turmoil had a major impact on mainly the key figures and profitability of our life-assurance operations. The bank continued to perform favourably with growing volumes and earnings. Our stability and credit rating are high, while the risk profile is low. Our bank is strong now, in the current climate, and in a more long-term perspective. Our non-life insurance operations also maintained a very strong position in terms of both capital strength and market position.
   A business climate featuring continued low interest rates, restrained stock market trends and a general economic slowdown had a significant effect on our lifeassurance operations with traditional management. Sharply falling long-term interest rates inSwedenresulted in a gradual decline in the solvency ratio and debt coverage ratio for the life-assurance company with traditional management in 2011. The debt coverage ratio at halfyear end was 113% and the solvency ratio 127%. Interest rates have subsequently declined further, which continued to exert pressure on key figures.
   In times of uncertainty, we know that our brand and what we stand for create stability and will remain central elements in all meetings with our customers”, says Sten Dunér, Managing Director of Länsförsäkringar AB, the Alliance’s jointly owned company.

Summary
• The technical result from non-life insurance operations amounted to a profit of SEK 236 M (loss: 121). The combined ratio improved to 102 (106), although the claims cost trend remained weaker than expected. Investment income performed weakly due to the prevailing financial turmoil. Premiums earned increased and the leading market position was retained with a share of 28.9%.

• Earnings for the Länsförsäkringar Liv Group were severely affected by the weak stock-market trend and falling discount rate. Loss amounted to SEK 8 billion (loss: 8). The total return of the traditional life-assurance company amounted to 1.1%.

• Operating profit in the banking operations rose 24% to SEK 181 M (146). Net interest income rose to SEK 814 M (614). Strong growth is continuing – business volumes rose 16% to SEK 247 billion (214) and the number of customers increased to 857,000 (793,000).

• During the period July, 2010–June, 2011, Länsförsäkringar Fastighetsförmedling sold single-family homes and leisure homes that resulted in first-lien mortgages of SEK 1.6 billion in Länsförsäkringar´s mortgage institution.

Figures in parentheses pertain to 2010.

The Länsförsäkringar Alliance is neither a legal entity nor, in the legal sense of the term, a Group; it is an alliance between 23 independent regional insurance companies that jointly own Länsförsäkringar AB. Länsförsäkringar’s earnings from non-life insurance consist of the total of the earnings of the 23 regional insurance companies and of the jointly-owned Länsförsäkringar AB, excluding life assurance and banking. 

The full report is available attached.

For further information please contact:

Sten Dunér, Managing Director Länsförsäkringar AB
Phone: +46 8 588 411 15, +46 73 964 11 15

Christer Baldhagen, Director of Corporate CommunicationsLänsförsäkringarAB
Phone: +46 8-588 415 01, +46 70-579 70 66

 
The Länsförsäkringar Alliance comprises 23 local and customer-owned regional insurance companies and the jointly owned Länsförsäkringar AB. Customers are provided with a complete offering of banking and insurance services through their local, regional insurance companies. We offer animal and crop insurance through Agria Djurförsäkring and total solutions for reliable mortgage transactions are offered through Länsförsäkringar Fastighetsförmedling.