STOCKHOLM, Sweden, March 7, 2002 (PRIMEZONE) - Alecta Group:
-- The collective solvency reserve amounted to SEK 60.8 bn (2000:
71.9) at 31 December 2001. The collective solvency margin
remained high at 124 percent (127).
-- The loss for the year after tax amounted to SEK 4.4 bn (profit
3.2). This decline in earnings was mainly due to a SEK 20.5 bn
decrease in investment return, primarily caused by major falls
on the stock markets.
-- Total return on investments amounted to -1.0 percent (5.4).
The market value of investments at 31 December amounted to SEK
334.2 bn (353.3), a decrease of SEK 19.1 bn during the year.
Investments were made in Swedish equities while net sales were
made of fixed-income securities and real estate.
-- Premiums written rose by 15 percent compared with 2000 and
amounted to SEK 19.1 bn (16.6). The main increase was in
regular premiums, up 23 percent.
-- Operating expenses in the insurance business amounted to SEK
549 m (565). The expense ratio for the year amounted to 2.9
percent (3.4) and the management expense ratio was 0.21 percent
(0.20).
President's comments:
Alecta stands firm in uncertain times The year was characterized by general economic unease which led to real declines in several countries and sectors. Market values of financial assets fell, with major fluctuations. Public confidence in the financial systems declined and many people adopted a more pessimistic future outlook. Towards the end of the year we could see a, possibly temporary, upturn in these respects.
In 2001, Alecta completed the sales of SPP Liv, SPP Fonder and the SPP brand decided by the Board in spring 2000. In my view, the sold companies went to good owners, which are well equipped to further develop the companies they have acquired.
Since these divestments were made, Alecta has been a pure-play occupational pensions company that only works with collective occupational pension plans and investment management for these pension plans. We manage larger pension assets than any other Nordic institution and we only have one product: the ITP Plan.
The ITP Plan is standardized and therefore suitable for large-scale application. A standard product in large volumes leads to high quality at low costs. Other life insurance companies have other strategies and develop customized solutions, mainly to meet high earners' wishes for product differentiation. Everyone knows that customized products are more expensive than standardized ones. Somewhere in the system this cost has to be met.
The question of the level of risk which is suitable for pension assets is important to Alecta. Unit-linked insurance's share of insurance savings fell sharply in 2001 which indicates a greater reluctance among individuals to make risk assessments themselves. The company's investment return in 2001 as well was among the highest in the industry.
Alecta's solvency level is good and considerably higher than that of all the other Swedish life insurance companies. Alecta can therefore offer companies and insured considerable financial security. This security will naturally continue to apply even if the ITP assignment that may be given to us by the Confederation of Swedish Enterprise and PTK has a different content from at present. We are concentrating on making Alecta a company, which is reliable, straightforward and efficient in every respect. Alecta must be the best alternative for the present ITP plan and an unbeatable manager of a new plan.
From January 1, 2002, Alecta is reducing premiums by 15 percent on parts of the ITP Plan. In this way our good return and cost-effective operations will benefit Alecta's client companies. Lars Otterbeck, President of Alecta
Alecta Group and Alecta (Parent Company), Summary Profit and Loss Account and Balance Sheet
Profit and Loss Alecta Group Alecta (Parent
Account Company)
SEK m 2001 2000 2001 2000
Premiums written 19,146 16,608 19,146 16,608
Investment income -3,880 16,602 -3,302 15,605
Claims incurred -9,956 -7,999 -9,956 -7,999
Change in other
technical provisions -13,126 -18,801 -13,126 ,-18,801
Operating expenses -549 -565 -549 -565
Other -24 - -24 -
Balance on the
technical account, -8,389 5,845 -7,811 4,848
life insurance
business
NON-TECHNICAL
ACCOUNT
Balance on the -8,389 5,845 -7,811 4,848
technical account,
life insurance
business
Other 6,892 -44 6,661 131
Tax on result for -2,889 -2,636 -2,674 -2,600
the year
Net loss/profit for -4,386 3,165 -3,824 2,379
the year
Balance Sheet Alecta Group Alecta (Parent
Company)
SEK m
2001 2000 2001 2000
Investments 331,153 350,235 330,226 348,921
Other assets 10,576 10,880 9,521 9,808
Total assets 341,729 361,115 339,747 358,729
Untaxed reserves - - 501 501
Bonus funds 120,683 155,880 118,866 153,791
Technical provisions 214,826 198,757 214,826 198,757
Other liabilities 6,220 6,478 5,554 5,680
Total shareholders' 341,729 361,115 339,747 358,729
equity,provisions
and liabilities
The full report along with all financial tables can be found at the following URLs: www.waymaker.net/bitonline/2002/03/07/20020307BIT00720/wkr0001.doc www.waymaker.net/bitonline/2002/03/07/20020307BIT00720/wkr0002.pdf
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