Länsförsäkringar Alliance: Interim Review January – June 2012

– Länsförsäkringar AB reports strong earnings but the financial markets are characterised by uncertainty. Five years have passed since the profound economic crisis that we are still experiencing first started. And this crisis is far from over. At times during the summer, pressure increased significantly on the debt-laden, large countries of Italy and Spain. Unlike many parts of Europe, Sweden has healthy government finances and a high credit

rating that can be clearly seen in the low Swedish government bond rates and the strong SEK. Länsförsäkringar Liv has pursued a cautious strategy aimed at strengthening earnings and key figures, says Sten Dunér, President of Länsförsäkringar AB, the Alliance’s jointly owned company.

– The growth in the banking operations continued during the first six months of the year and market shares were strengthened, particularly in deposits. Business volumes rose almost 10% and we gained more than 60,000 new bank customers during the period. Profitability in the bank was also strengthened and earnings increased by approximately 50%.

– In non-life insurance, we had a more favourable claims situation and lower operating expenses, which resulted in an improved combined ratio. The combination of the implemented premium increases and healthy growth led to higher earnings in non-life insurance operations. In the market, Länsförsäkringar retained and strengthened its leading position.

– Following the restructuring of the life-assurance operations, the intense focus on offering unit-linked insurance solutions to both corporate customers and private individuals is continuing. Sales through Länsförsäkringar’s own sales force were strong and, with Sweden’s most satisfied occupational pension customers, the future appears undeniably bright.

The period in brief

• The technical result strengthened to SEK 631 M (236). The combined ratio improved to 97 (102), an effect of a more favourable claims situation and premium increases.
• Solvency capital in non-life insurance strengthened to SEK 33,832 M (32,754).
• Operating profit in the banking operations rose 49% to SEK 270 M (181). Net interest income rose to SEK 1,003 M (814). Strong growth is continuing – business volumes rose 8% to SEK 266 billion (247) and the number of customers increased to 921,000 (857,000).
• Länsförsäkringar Fondliv is Sweden’s third largest unit-linked insurance company and manages SEK 56 billion. Profit amounted to SEK 61 M (102). The decline was due to a positive tax effect in the preceding year and higher nonrecurring operating expenses.
• Profit for Länsförsäkringar Liv rose as the result of positive investment income and lower technical reserves. Profit amounted to SEK 3.1 billion (loss: 8.2). The total return in traditional management was 2.0%.

For further information, please contact:

Sten Dunér, President, Länsförsäkringar AB
+46 8 588 411 15

Malin Rylander Leijon, CFO Länsförsäkringar AB,
+46 (0)8-588 408 64

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.