Year-end report january–december 2005*)

FOURTH QUARTER: Good growth in all divisions • The underlying result before tax improved, to SEK 586 million (-399). • The result for the period according to IFRS, including the result for discontinued operations, was SEK -50 million (-1,406). • Revenues rose 19%, and expenses included in the underlying result decreased by 6%. • Earnings per share before dilution were SEK -0.06 (-1.34). • Cash flow from operating activities, excluding changes in lending/deposits to and from the public in banking operations, was SEK 0.3 billion (-0.4). • The calculated profit margin for unit linked assurance increase to 18.7%, compared with 17.3% during the preceding quarter, and the present value of new business amounted to SEK 544 million, compared with SEK 505 million during the preceding quarter. • The operating result according to the embedded value method increased to SEK 2,824 million (-830). Of this improvement, changes in operative assumptions for unit linked accounted for SEK 1,061 million (-504) and financial effects for SEK 853 million (515). • Net asset value per share increased during the quarter by SEK 2.38, to SEK 34.92 • The Board of Directors proposes an increased dividend of SEK 0.40 (0.35) per share. The Annual General Meeting will be held on 27 April 2006. See also page 22. Underlying result According to IFRS According to embedded value method Result Result of Operating before tax1) operations2) result2) 2005 2004 2005 2004 2005 2004 SEK million Q4 Q4 Q4 Q4 Q4 Q4 Unit linked 502 50 1,116 1,174 1,969 1,689 assurance Mutual funds 17 -34 17 -34 17 -34 Life 10 -22 64 -51 63 -82 assurance Banking 54 14 54 14 54 14 Other -22 155 -22 155 -22 155 businesses Joint 25 -562 25 -562 25 -562 functions 3) Total underlying 586 -399 1,254 696 2,106 1,180 result Write-down of goodwill and restructuring -5 -1,072 -5 -1,072 -5 -1,072 costs for Bankhall Structural -268 24 -268 24 -268 24 costs 4) Provision for restructuring -1 -308 -1 -308 -1 -308 costs Outcome compared with -69 -150 -69 -150 operative assumptions Change in operative 1,061 -504 1,061 -504 assumptions Total 312 -1,755 1,972 -1,314 2,824 -830 1) Excluding result from discontinued operations, totalling SEK -645 million as per Dec. 2005, SEK 834 million as per Dec. 2004, SEK -160 million as per Q4 2005 and SEK 0 million as per Q4 2004. 2) For definitions, see page 30. 3) Joint functions include joint-group expenses, costs for the divisions that are not distributed among the business segments, and joint-group financial result.. 4) Structural costs in 2005 are mainly related to the bid process. JANUARY–DECEMBER: Improvement in underlying IFRS result • The underlying result before tax improved to SEK 2,008 million (247). • The result for the year according to IFRS, including the result for discontinued operations and goodwill amortisation, was SEK -765 million (197), see table on page 9. • Revenues rose 16% to SEK 16,758 million (14,419). Expenses included in the underlying result increased by 4% to SEK -14,750 million (-14,172). • Earnings per share before dilution were SEK -0.76 (0.24), of which SEK -0.63 (0.81) pertains to discontinued operations and SEK -1.11 (-1.05) to the write-down of goodwill in Bankhall. The return on shareholders' equity was -1% (-4%). • Cash flow from operating activities, excluding changes in lending/deposits to and from the public in banking operations, was SEK 0.5 billion (-2.0). Underlying result According to IFRS According to embedded value method Resultbefore tax1) Result of Operating operations2) result2) 2005 2004 2005 2004 2005 2004 SEK million 12 mos. 12 mos. 12 mos. 12 mos. 12 mos. 12 mos. Unit linked 1,919 911 4,354 3,908 7,832 4,608 assurance Mutual funds 8 -122 8 -122 8 -122 Life 3 -17 55 -57 48 -88 assurance Banking 351 330 351 330 351 330 Other -22 154 -22 154 -22 154 businesses Joint -251 -1,009 -251 -1,009 -251 -1,009 functions3) Total underlying 2,008 247 4,495 3,204 7,966 3,873 result Result according to 1,028 3,795 3,795 plan 2005 Write-down of goodwill and restructuring -1,232 -1,072 -1,232 -1,072 -1,232 -1,072 costs for Bankhall Structural -489 -54 -489 -54 -489 -54 costs 4) Provision for restructuring 2 -308 2 -308 2 -308 expenses VAT -151 0 -151 0 -151 0 provisions Outcome compared with -178 -382 -178 -382 operative assumptions Change in operative , , 1,312 -295 1,312 -295 assumptions Total 138 -1,187 3,759 1,093 7,230 1,762 1) Excluding result from discontinued operations, totalling SEK -645 million as per Dec. 2005, SEK 834 million as per Dec. 2004, SEK -160 million as per Q4 2005 and SEK 0 million as per Q4 2004. 2) For definitions, see page 30. 3) Joint functions include joint-group expenses, costs for the divisions that are not distributed among the business segments, and joint-group financial result. 4) Structural costs in 2005 are mainly related to the bid process. Improvement in embedded value result • The present value of new business, unit linked (VNB) increased by 13% in local currency, to SEK 2,131 million (1,870). • The calculated profit margin for new business was level with the preceding year, at 18.6%. • The operating result according to the embedded value method increased to SEK 7,230 million (1,762). Of this improvement, changes in operative assumptions for unit linked accounted for SEK 1,312 million (-295) and financial effects for SEK 3,478 million (700). Growth in all divisions • Premiums and deposits increased by 28% during the year in local currency. New sales of unit linked assurance rose 14% in local currency. • Growth in the UK was favourable during the year, and Skandia's UK market share increased to 5.6% during the third quarter. • New sales of unit linked assurance in Sweden rose 18% during the year. Skandia's market share (unit linked) in Sweden was 18.7% on a moving twelve-month basis. • Several countries in the Europe & Latin America division are showing favourable performance. Premiums and deposits rose by over 40% compared with a year ago. • Funds under management rose 36% in local currency, to SEK 566,049 million as per 31 December 2005, thanks to a net inflow of SEK 69,973 million and good growth in value. *) Livförsäkringsaktiebolaget Skandia is not consolidated and is therefore not included in the year-end report. All comparison figures pertain to the corresponding period in 2004, unless indicated otherwise. For information on this report, please contact: Jan Erik Back, Chief Financial Officer, tel. +46-8-788 37 20 Harry Vos, Head of Investor Relations, tel. +46-8-788 36 43 Eva Groth, Assistant Head of Investor Relations, tel. +46-8-788 16 90 For information on historical disputes, please contact: Björn Björnsson, Vice Chairman, tel. +46-8-788 25 00