March sales SEK 13.7 billion

March sales SEK 13.7 billion1) Skandia's sales through March amounted to SEK 38.7 billion (61.0). In addition to sales of SEK 38.7 billion, paid-in premiums to Skandia Liv totalled SEK 4.2 billion (3.3), and discretionary management inflows for Skandia Asset Management totalled SEK 0.7 billion. Of total sales, SEK 25.8 billion (40.1) pertain to unit linked assurance, SEK 10.7 billion (18.6) to mutual fund savings products, and SEK 1.5 billion (1.7) to direct sales of funds. Worldwide new sales2) of unit linked assurance - excluding the USA - increased, due to strong development for unit linked assurance with annual premium. The decline in total new sales, including the USA, was thereby limited to 18 per cent. Sales of single-premium unit linked assurance and mutual fund savings products fell considerably, mainly due to the continued stock market decline. Customer withdrawals of unit linked savings remained at a low level in relation to assets under management at the start of the year. In the USA, sales of variable annuities amounted to USD 1.1 billion (2.7), and sales of mutual funds totalled USD 0.8 billion (1.6). In the UK, sales totalled GBP 0.8 billion (1.0), and in Sweden, sales by SkandiaLink totalled SEK 3.4 billion (3.0). Sales in New Markets totalled SEK 4.1 billion (5.0). New sales of unit linked assurance increased by 3 per cent in the UK, by 20 per cent in Sweden, and by 11 per cent in New Markets. Recalculated to average exchange rates, sales were favourably affected by currency movements in the amount of SEK 2.7 billion. In order to achieve accurate recognition of income and expenses, Skandia has been using the embedded value method since 1989 for business control as well as for external reporting purposes according to the group overview. Skandia's result measurement is described in the 2000 Annual Report, which also includes a sensitivity analysis describing the impact of various factors on the result. The trend in the stock markets is significant for the result. Since contracts in force span long periods of time, sharp swings in the financial markets during short periods of time have a major impact on the present value of future profits. The sensitivity analysis presented in the Annual Report shows that a one per cent increase or decrease in the stock market affects the result by +/- SEK 176 million, respectively. The negative trend in the stock markets during the first quarter entails that the trend for the indexes that are relevant for Skandia is expected to be in the range of minus 19-21 per cent, including assumed fund growth of 1.5 per cent. The negative result effect of the above is an expression of the impact of the stock market during the first quarter in relation to Skandia's assumptions for fund growth, and will be permanent only under the condition that the stock market does not recover. According to Skandia's Annual Report, p. 11, Skandia's long-term assumption for fund growth is approximately 6 per cent per year. On 23 March it was announced that Skandia is carrying out an operating expense reduction programme to better align its operating infrastructure in the USA with the current market situation. The planned cost reduction will exceed USD 38 million on a yearly basis, which will have a result impact starting with the second quarter. During the first quarter of 2001, the level of costs in the US operation exceeded the cost assumptions that applied for the price-setting of new sales during the quarter by slightly more than USD 20 million. The interim report for the first quarter of 2001 will be released on 27 April 2001. For further information, please contact: Harry Vos, Head of Investor Relations, tel +46-8-788 3643 Appendix: Sales per month and exchange rates in 2001 and 2000 Sales per month 1) 2001 2000 (SEK billion) January: Insurance and mutual funds 12.3 16.7 Direct sales of funds 0.7 0.7 Total January 13.0 17.4 February: Insurance and mutual funds 11.6 18.7 Direct sales of funds 0.4 0.4 Total February 12.0 19.1 March: Insurance and mutual funds 13.3 23.9 Direct sales of funds 0.4 0.6 Total March 13.7 24.5 Insurance and mutual funds April 18.5 May 17.4 June 15.3 July 14.1 August 14.6 September 14.0 October 15.5 November 14.9 December 14.0 1) Sales pertain to paid-in premiums and deposits in funds from Skandia's customers. Therefore, sales also include direct sales of funds. The comparison figures for January, February and March 2000 have been adjusted for direct sales of funds. Sales per month SEK billion [REMOVED GRAPHICS] Exchange 2001 2001 2001 2000 2000 2000 2000 rates 31 28 31 31 31 Mar. 28 31 Mar. Feb. Jan. Dec. Feb. Jan. SEK EUR Closing 9.15 9.07 8.85 8.86 8.30 8.42 8.58 rate EUR Average 9.00 8.93 8.90 8.45 8.50 8.55 8.60 rate GBP Closing 14.82 14.22 13.89 14.22 13.82 13.87 14.21 rate GBP Average 14.22 14.08 14.01 13.86 13.82 13.87 13.89 rate USD Closing 10.39 9.85 9.50 9.54 8.67 8.72 8.76 rate USD Average 9.74 9.59 9.47 9.17 8.61 8.56 8.47 rate JPY Closing 0.083 0.085 0.082 0.083 0.082 0.079 0.082 rate JPY Average 0.083 0.082 0.081 0.085 0.080 0.080 0.081 rate ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/04/18/20010418BIT00600/bit0002.doc http://www.bit.se/bitonline/2001/04/18/20010418BIT00600/bit0002.pdf