Länsförsäkringar Alliance · Strong earnings and continued market successes Comments. The Länsförsäkringar Alliance can sum up another successful year of strong earnings and

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Länsförsäkringar Alliance

Länsförsäkringar Alliance comprises 23 local and customer-owned regional insurance companies and the jointly owned Länsförsäk-ringar AB with subsidiaries. Customers are provided with a complete offering of banking, insurance, pension and real-estate brokerage services through the regional insurance companies. The starting point is local pres-ence and decision-making. Experience shows that local decision-making authority com-bined with joint strength creates substantial added value for customers. The regional insurance companies are owned by the insurance customers – there are no external shareholders and meeting customer needs and requirements is always the primary task. The Länsförsäkringar Alliance has 3.8 million customers and 6,400 employees.

About us

Rating Company Agency Long-term rating Short-term rating

Länsförsäkringar AB S&P Global Ratings A–/Stable –

Länsförsäkringar AB Moody’s A3/Stable –

Länsförsäkringar Bank S&P Global Ratings A/Stable A–1 (K–1)

Länsförsäkringar Bank Moody’s A1/Stable P–1

Länsförsäkringar Hypotek1) S&P Global Ratings AAA/Stable –

Länsförsäkringar Hypotek1) Moody’s Aaa –

Länsförsäkringar Sak S&P Global Ratings A/Stable –

Länsförsäkringar Sak Moody’s A2/Stable –

1) Pertains to the company’s covered bonds.

Länsförsäkringar AB

The Länsförsäkringar Alliance is not a Group in the legal sense of the term. Most of the non-life insurance business in the Läns-försäkringar Alliance is underwritten in the regional insurance companies. The business conducted by Länsförsäkringar AB’s non-life insurance group primarily comprises health, pet and crop insurance. The Länsförsäkringar AB Group also manages the Länsförsäkringar Alliance’s reinsurance cover and assumed international reinsurance. Earnings from the Länsförsäkringar

Alliance’s non-life insurance operations consist of the total earnings of the 23 regional insurance companies and the Läns-försäkringar AB Group, excluding Länsförsäkringar Fondliv and the Länsförsäkringar Bank Group. Länsförsäkringar Liv is oper-ated according to mutual principles and is not consolidated in Länsförsäkringar AB. Transactions between the regional insur-ance companies and Länsförsäkringar AB Group are eliminated.

Länsförsäkringar Sak Försäkrings ABSupplements the regional insurance companies’ non-life insurance offering with specialist products, serves as an engine for new business and is responsible for joint reinsurance.

Länsförsäkringar Bank ABOffers a broad range of banking services to the regional insur-ance companies’ customers through Länsförsäkringar Hypotek, Länsförsäkringar Fond-förvaltning and Wasa Kredit.

Länsförsäkringar Fondliv Försäkrings ABOffers pension savings with fund management and guarantee management and personal-risk insurance to the regional insur-ance companies’ customers.

Länsförsäkringar Liv Försäkrings ABManages traditional life assurance taken out before Sep-tember 2011 when the company closed for new sales.

3.8 million customers

23 local regional insurance companies

Offering

Non-life insurance

Bank

Life assurance and pension insurance

Real-estate brokerage

23 local companies 3.8 million customers

The 2017 fiscal year

Länsförsäkringar Alliance’s combined ratio

Bonuses and discounts to customers

Results 2017 for Länsförsäkringar Alliance • Operating profit for the Länsförsäkringar Alliance’s non-life

insurance operations increased to SEK 7.1 billion (4.6), after bonus-es and discounts to customers amounting to SEK 1.8 billion (1.2).

• Premiums earned after ceded reinsurance rose to SEK 25.5 billion (24.1).

• The technical result for the Länsförsäkringar Alliance’s non-life insurance operations increased to SEK 2.5 billion (1.8).

• Investment income increased to SEK 7.0 billion (5.0).

Five-year summary

Länsförsäkringar Alliance 2017 2016 2015 2014 2013

Total capital, SEK M 72,442 63,390 55,562 48,188 41,518

Länsförsäkringar Alliance’s non-life insurance

Solvency capital, SEK M 66,149 57,956 51,628 46,493 40,458

Solvency margin, % 253 236 222 209 206

Return on equity, % 11 8 8 11 10

Premiums earned after ceded reinsurance, SEK M 25,504 24,073 22,705 21,550 20,067

Technical result, SEK M 2,529 1,813 2,700 2,266 1,247

Operating profit, SEK M 7,078 4,626 4,365 5,209 3,863

Combined ratio, % 92 95 91 93 98

Länsförsäkringar AB, Group1)

Operating profit, SEK M 2,825 2,286 2,155 1,469 923

Total assets, SEK M 473,773 421,816 384,595 355,933 322,550


Own funds for the group (FRL)2) 44,172 40,602 36,9054), – –

Capital requirement for the group (FRL)2) 33,441 30,121 28,2334) – –

Own funds for the financial conglomerate3) 44,172 40,352 – – –

Capital requirement for the financial conglomerate3) 33,441 30,121 – – –

Länsförsäkringar Sak, Group


Technical result, SEK M 977 435 821 611 434

Operating profit, SEK M 1,028 644 908 791 427

Solvency ratio, % (Läns-försäkringar Sak Försäkrings AB) 221 260 2354) – –

Länsförsäkringar Bank, Group

Deposits from the public, SEK M 99,404 91,207 83,925 76,790 69,220

Loans to the public, SEK M 261,444 226,705 201,964 179,424 162,003

Operating profit, SEK M 1,599 1,467 1,175 935 647

Return on equity, % 10,0 10,1 8,9 8,3 6,7

Common Equity Tier 1 capital ratio, % 24,3 24,8 23,7 16,2 –

Länsförsäkringar Fondliv AB

Premium income, SEK M 9,133 8,637 8,645 8,543 9,473

Net profit for the year, SEK M 604 516 519 368 246

Managed assets, SEK M 128,140 114,450 102,807 93,610 77,438

Solvency ratio, % 152 150 1414) – –

Länsförsäkringar Liv, Group

Premium income, SEK M 1,533 1,720 1,919 2,639 3,388

Net profit for the year, SEK M 2,363 2,682 5,089 1,903 5,174

Solvency ratio, % 207 195 1824) – –

1) Excluding Länsförsäkringar Liv Försäkrings AB. The company is operated in accordance with mutual principles.

2) According to Swedish Insurance Business Act (FRL), the Solvency II directive in Swedish law.3) The financial conglomerate comprises Länsförsäkringar AB, all insurance companies

in the Group, Länsförsäkringar Bank AB with subsidiaries and Länsförsäkringar Liv Försäkrings AB.

4) Opening balance on 1 January 2016 according to Solvency II.

Result for the regional insurance companies

Technical result1)Operating profit/

loss1)

SEK M 2017 2016 2017 2016

Länsförsäkringar Norrbotten 57 22 124 113

Länsförsäkringar Västerbotten 87 39 335 267

Länsförsäkringar Jämtland 27 12 215 127

Länsförsäkringar Västernorrland –1 7 100 67

Länsförsäkringar Gävleborg 30 7 166 96

Dalarnas Försäkringsbolag 110 126 772 640

Länsförsäkringar Värmland 36 64 158 182

Länsförsäkringar Uppsala 26 –53 316 188

Länsförsäkringar Bergslagen 35 –22 705 462

Länsförsäkringar Stockholm 106 115 463 441

Länsförsäkringar Södermanland 50 –3 349 252

Länsförsäkringar Göteborg och Bohuslän 77 202 895 723

Länsförsäkringar Skaraborg 119 52 315 170

Länsförsäkringar Östgöta 157 99 820 690

Länsförsäkringar Älvsborg 228 210 930 736

Länsförsäkringar Gotland 54 11 137 89

Länsförsäkringar Jönköping 58 128 407 438

Länsförsäkringar Halland 99 106 380 323

Länsförsäkring Kronoberg 49 28 217 168

Länsförsäkringar Kalmar län 60 68 338 291

Länsförsäkringar Blekinge 25 –8 154 118

Länsförsäkringar Göinge-Kristianstad 53 24 278 248

Länsförsäkringar Skåne 211 75 1 167 711

1) Before bonuses and discounts.

SEK bn

Contents

1 The year in brief

2 Comments by the President

4 About Länsförsäkringar

6 Offering

8 Our business environment

10 The brand

12 Sustainability

20 Non-life insurance

28 Banking

35 Life assurance and pension insurance

40 Real-estate brokerage

41 Länsförsäkringar Alliance in figures

52 About Länsförsäkringar AB

53 Definitions

54 Financial calendar 2018

55 Addresses

It is gratifying that we can report continued strong earn-

ings for the Länsförsäkringar Alliance for 2017. Based on these strong earn-ings, the regional insurance companies pay back a total of SEK 1.8 billion in bonuses and discounts to their cus-tomers. In 2017, Länsförsäkringar once again topped the Swedish Quality Index’s customer satisfaction survey in banking, private non-life insurance and real-estate brokerage, won the Swedish Brand Award, and the Red Dot Award and Web Service Award for its app. The Länsförsäkringar Global Hållbar sustainability fund was given the green light by Söderberg & Partners and placed in its list of top ten Swedish sustainable funds.”

Sören WestinPresident and CEO of Länsförsäkringar ABThe Länsförsäkringar Alliance’s jointly owned company

The Länsförsäkringar Alliance’s annual review of 2017 contains information about Länsförsäkringar’s operations in non-life insurance, banking, life assur-ance and pension insurance and real-estate brokerage. The sustainability sec-tion contains information about Länsförsäkringar’s work on sustainability in its customer offering, operations and social commitment. The combined earnings of the Länsförsäkringar Alliance’s non-life insurance operations are presented on pages 41-51. This will be followed by key figures from each of the 23 regional insurance companies.

The year in brief

Excellent capital situationThe regional insurance companies are very well-capitalised with an average solvency ratio of 215% on 31 December 2017. The Länsförsäkringar AB Group and its subsidiaries continued to have a healthy capital situation in 2017.

Continued strong earningsThe Länsförsäkringar Alliance is reporting another year of strong earnings for 2017. Operating profit for non-life insurance operations increased to SEK 7.1 billion, after bonuses and discounts to custom-ers amounting to SEK 1.8 billion. Investment income increased to SEK 7.0 billion and the technical result strengthened to SEK 2.5 billion, with growth in pre-miums of 6% and a combined ratio of 92%.

Bonuses and discounts to customers Based on the healthy earnings, the regional insurance companies pay back a total of SEK 1.8 billion in bonuses and discounts to their owners – the customers.

Satisfied customers and awards Länsförsäkringar confirmed its position as one of the strongest brands in Sweden. The 2017 Swedish Quality Index again revealed that Läns-försäkringar has Sweden’s most satisfied customers in a number of categories in banking, insurance and real-estate brokerage services. For the fourth consecutive year, Länsförsäkringar won the Swedish Brand Award for best brand in the industry and, according to Universum, Länsförsäkringar is the best employer in the industry. The mobile app won the international design competition Red Dot Award in the cate-gory of “apps and finance” and a Web Service Award.

Agria in FranceAgria is growing. A partnership with the French Kennel Club was initiated during the year. Operations will begin in spring 2018 with an office in Paris, meaning that Agria will then be represented in six countries: Sweden, Norway, Denmark, Finland, the UK and France.

Solvency ratio on 31 December 2017

%

0

50

100

150

200

250

300

Länsförsäkringar Sak

Länsförsäkringar Fondliv

Länsförsäkringar Liv

23 regional insurance companies

Top ten sustainable fundSöderberg & Partners named the Läns-försäkringar Global Hållbar fund one of Sweden’s top ten sustainable funds in May 2017. For this fund, the sustainability analy-sis is equally as important as the financial analysis. The companies in which the fund invests are companies that are already, or are on their way to becoming, highly promi-nent in the field of sustainability and can document clear, positive changes.

Bank’s business volumes: SEK 520 billion

Non-life insurance, premiums earned: SEK 26 billion

Managed assets in unit-linked insurance: SEK 128 billion

SEK bn

1Länsförsäkringar Alliance 2017 The year in brief

Strong earnings and continued market successesComments. The Länsförsäkringar Alliance can sum up another successful year of strong earnings and continued market successes. Based on the year’s healthy earnings, the regional insurance companies pay back SEK 1.8 billion in bonuses and discounts to their owners – the customers.

Economic optimism in a time of political instabilityIn general, the global economy was surpris-ingly stable in 2017, particularly in light of the political risks that dominated the news. The largest surprise was Europe’s performance where the economy clearly surged and growth exceeded expectations. The US econ-omy also trended positively, particularly the strong labour market. The fixed-income mar-ket reported no major fluctuations during the year and stock mar-kets generally posted a favourable trend, led by emerging markets. This was reflected both in the Länsförsäkringar Alliance’s strong investment income of SEK 7.0 billion and Länsförsäkringar’s high investment return for managed pension insurance and life assurance.

The Swedish economy also performed strongly during the year; growth was sur-prisingly positive, the labour market contin-ued to improve and inflation rose. Never theless, the Riksbank decided to wait out interest rate increases, and the repo rate has been negative for almost three years. Continued expansive signals from the Riks-bank, a stronger EUR and a degree of con-cern regarding the Swedish housing market underpinned this trend. The risks regarding housing prices and household indebtedness were behind the decision by the Swedish Financial Supervisory Authority to introduce stricter mortgage repayment requirements for households with a high level of debt.

Housing prices were considerably weaker than normal and excluding seasonal variations fell 5.3% in the second half of the year. Stricter repayment requirements combined with a temporarily high number

of new-builds may have accelerated this scenario. An increase in the number of households repaying their mortgages and a correction to housing prices are healthy developments. However, further action is needed to improve turnover in the housing market and to make it easier for those groups that face difficulties in entering the market. Even if households have favourable

conditions to pay their loans, the risk that households with a high level of loans may cut back on consumption in a major economic downturn is seen as a macro-economic risk looking forward.

Continued strong earnings and healthy growthThe Länsförsäkringar Alliance continued to report strong earnings for 2017. The Group’s total operating profit amounted to SEK 8.4 billion.

Länsförsäkringar continued to dominate the Swedish non-life insurance market in 2017, and its market share grew further to 31%. Operating profit for non-life insurance operations increased to SEK 7.1 billion, after bonuses and discounts of SEK 1.5 billion and SEK 0.3 billion, respectively, from regional insurance companies to customers. Invest-ment income strengthened to SEK 7.0 bil-lion and the technical result increased to SEK 2.5 billion, with growth in premiums of 6% and a combined ratio of 92%. Non-life insurance operations within the Länsförsäk-ringar AB Group contributed an operating

profit of SEK 1.0 billion, where both Agria and health business continued to make pos-itive contributions to the earnings trend. During the year, Agria initiated a partner-ship with the French Kennel Club and when operations are established in France in spring 2018, Agria will be represented in five countries outside Sweden.

Operating profit for the banking opera-tions increased 9% to SEK 1.6 billion due to a contin-uously rising customer inflow. Mortgage lending increased 17% with con-tinued high credit quality.

Operating profit for the unit-linked insurance operations increased to

SEK 0.6 billion and managed assets increased 12% to SEK 128 billion, benefiting from both a positive net inflow and healthy value growth trend.

Since the Länsförsäkringar AB Group’s capital situation has strengthened in recent years in relation to the Group’s capital targets, the Board of Länsförsäkringar AB proposes a dividend of SEK 300 M to the owners.

Alongside healthy growth and strong earnings, we saw additional signs of the strength of our brand in 2017. Surveys placed Länsförsäkringar among the most reputable brands in Sweden and the Swedish Quality Index showed that we have Swe-den’s most satisfied customers in banking, private non-life insurance and real-estate brokerage.

Long-term plan to deliver local customer promisesThe regional insurance companies jointly own Länsförsäkringar AB, which is tasked with offering the companies the best possi-

Continuous improvements in customer satisfaction are vital to our success.

2 Länsförsäkringar Alliance 2017Comments by the President

ble conditions to develop their offering close to their customers.

A new long-term business plan for Läns-försäkringar AB was produced in 2017. The plan aims to define how Länsförsäkringar AB can become even better at helping each regional insurance company to best leverage the strength of the entire Länsförsäkringar Alliance in an increasingly digitised world. For the regional insurance companies, Läns-försäkringar AB is the partner that supports them in realising the customer promise and delivering the offering expected by custom-ers. Experience shows that Länsförsäkring-ar’s local business model combined with joint strength creates substantial added value for customers. Our success lies in the balance between these two.

Our shared strategic objectives were drawn up based on the Länsförsäkringar Alliance’s strategies, plans and targets. Both our processes and what we develop must be based on the expectations and requirements of the regional insurance companies’ customers. To continue to address customer needs in a rapidly changing business environment, we have to

raise our sights – we must create the pre-requisites for customer experiences that are among the very best, regardless of industry. Only then can each regional insur-ance company deliver its customer promise – simplifying everyday lives for people and contributing to a secure future.

UN Sustainable Development Goals part of sustainability activitiesIn 2017, we started to review how Läns-försäkringar’s operations can contribute to the UN Sustainable Development Goals (SDGs). Much of what we currently do is already well-aligned with these goals. Claims-prevention measures for people, animals and property and responsible repairs are important parts of reducing the impact on the climate and environment. Another contribution is making the research financed and conducted through Länsförsäkringar’s Research Fund available to all. We can also make a positive contribu-tion through our investing activities and in our role as a lender. Engaging with policy -makers, customers, employees and other players in society and working together

towards the goals are important for achiev-ing the SDGs and we can see here that we continue to have an important role to fill. Work on the SDGs will continue in 2018.

Our efforts on responsible investments led to high ratings from external advisors such as Söderberg & Partners and Max Matthiessen. Our global sustainability fund was named one of Sweden’s most sustain-able funds.

The regional insurance companies and Länsförsäkringar AB will continue to develop from a position of strength and together build an even stronger federation.

Stockholm, March 2018On behalf of the 23 regional insurance companies

Sören WestinPresident and CEO of Länsförsäkringar AB

On 2 February 2018, Johan Agerman left his position as President and CEO of Länsförsäkringar AB. In connection with this, Sören Westin was appointed President and CEO of Länsförsäkringar AB.

3Länsförsäkringar Alliance 2017 Comments by the President

Success lies in the balance between local and sharedAbout Länsförsäkringar The 23 customer-owned regional insurance companies cooperate and combine the ability of a small company to understand customers with the advantages of economies of scale generated by an alliance. Everything is based on the experience that local decision-making authority combined with joint resources create added value for customers.

Länsförsäkringar’s position in the Swedish insurance and banking market is the result of the development of a company group that for more than two centuries has not had any other principal than its own cus-tomers. Closeness, simplicity and local cus-tomer ownership have built up the success of the non-life insurance operations over two centuries and been transferred to the financial and real-estate brokerage ser-vices.

A complete range of banking and insur-ance services is offered through 23 inde-pendent and customer-owned regional

insurance companies. The leading position in the non-life insurance market has been strengthened during the year. Länsförsäk-ringar holds more than 30% of the non-life insurance market in Sweden. The life-assur-ance operations have a distinct focus on being the best pension partner for corpo-rate customers and private individuals. Banking operations are growing consider-ably, particularly among existing insurance customers. Real-estate brokerage has gone from zero to the third largest brokerage in Sweden in only a few years – a good exam-ple of the strength of the brand.

Strong brand and satisfied customersThe strengthening of the Länsförsäkringar brand is the result of consistent and long-term work on brand and values. The brand remains extremely strong compared with its competitors in the banking, insurance and pension industry. Kantar Sifo’s 2017 reputa-tion survey showed that Länsförsäkringar has the highest reputation in the insurance industry and the sixth highest reputation of all Swedish companies, with Volvo and Ikea topping the list. Länsförsäkringar has held a high ranking in the Swedish Quality Index survey for many years, which measures how

million customers/owners regional insurance companies

Owner controlLänsförsäkringar AB is a limited liability company and also the Parent Com-pany of a financial Group, which is individually owned in various holdings by the 23 regional insurance companies and 16 local insurance companies, which in turn are owned by a total of 3.8 million insurance customers. The Boards of Directors of the regional insurance companies are formally responsible for owner control. Based on the federal organisation and the purpose of the ownership of Länsförsäkringar AB, these companies have together created joint forms for owner control that comply both with the requirements usually imposed on owner control and with the federal conditions.

Owner control at Länsförsäkringar AB has clear advantages compared with the owner control of many larger financial groups. This is because all

of the regional insurance companies have the same clear purpose for their ownership, conduct active operations and collectively hold sufficient finan-cial capacity to ensure long-term ownership.

Owner control logicThe logic behind owner control centres mainly on the relationship between the Boards of the regional insurance companies, the Länsförsäkringar AB Board of Directors, Länsförsäkringar AB’s General Meeting and the regional insurance companies’ owner consortium. Formal owner control takes place through the General Meeting, although the regional insurance companies’ owner consortium and their representation on Länsförsäkringar AB’s Board are also important components. The duties of the General Meeting are formally governed by law and the Articles of Association. The duties of the

BankInsurance

PensionReal-estate brokerage

ADVICE AND SALES

CLAIMS ADJUSTMENT AND CLAIMS PREVENTI

ON

4 Länsförsäkringar Alliance 2017About Länsförsäkringar

satisfied customers are with their bank and insurance company. The most recent survey showed that Länsförsäkringar has highest customer satisfaction in banking, private non-life insurance and real-estate broker-age services in the country.

Local customer-owned companies Each individual regional insurance company is owned by its non-life insurance custom-ers, which means that the company’s capital belongs to its customers. With the cus-tomer as owner and the only principal, there are no external shareholder interests to be

served and instead all surpluses can be returned to customers in the form of bonuses and discounts.

Balance between local and sharedCooperation between the regional insur-ance companies takes place through Läns-försäkringar AB and its subsidiaries, whose task is to create the necessary prerequi-sites for the regional insurance companies to be successful in their respective markets by conducting business, service and devel-opment operations, and to assume respon-sibility for the Länsförsäkringar Alliance’s

joint strategies. Together, the Länsförsäk-ringar Alliance has developed a balance between the small and the large-scale. Cooperation through Länsförsäkringar AB has emerged from a decentralised perspec-tive, not the other way round. The local companies decided to cooperate to achieve economies of scale and to concentrate on the most important issue: meetings with customers. The basis for cooperation in the Länsförsäkringar Alliance is that as much of the operations as possible are conducted by the local companies and essentially all customer contact take place with them.

Owner control of Länsförsäkringar AB Länsförsäkringar AB

* The company is operated according to mutual principles and is not consolidated in Länsförsäkringar AB.

Länsförsäkringar Fondliv Försäkrings AB

Länsförsäkringar Liv Försäkrings AB*

Länsförsäkringar Sak Försäkrings AB

Länsförsäkringar Bank AB

consortium are governed in the regional insurance companies’ consortium agreement. The Chairman of the consortium is appointed by the regional insurance companies.

Länsförsäkringar AB’s Board is elected by the General Meeting, which comprises representatives of all shareholders. The Board is elected based on a process controlled by the owners through a Nomination Committee appointed by the General Meeting. The Nomination Committee’s composi-tion, mandate period and so forth are governed in the Articles of Associ-ation. The Chairman of the consortium is responsible for the process of renewing the Nomination Committee.

The task delegated by the owners to the Nomination Committee is documented in a separate instruction adopted by the General Meeting. It is important that there is a clear boundary between the Nomination Commit-

tee and the Board. The Nomination Committee works independently from the Board on behalf of the owners.

Länsförsäkringar AB’s Board serves as the representative of the owners in the framework of the owners’ intentions. Länsförsäkringar AB’s Board pursues the strategies and targets that the owners agree on, thus perform-ing the owners’ assignments. At the same time, Länsförsäkringar AB’s Board has a major responsibility for safeguarding the capital invested in Läns-försäkringar AB by the regional insurance companies. The regional insurance companies’ assignment to Länsförsäkringar AB’s Board is decided in the consortium and is documented in the Länsförsäkringar Alliance’s gover-nance documents. Länsförsäkringar AB’s Board decides on the direction and scope of the operations based on its assignment from the owners.

Länsförsäk - ringar AB

LÄNSFÖRSÄKRINGAR AB’s

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LÄNSFÖRSÄKRINGAR AB’s REGIONAL I

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5Länsförsäkringar Alliance 2017 About Länsförsäkringar

Quick guide to our offering

Non-life insuranceLänsförsäkringar is the market leader in non-life insurance in Sweden with a market share of 31%, with a market leading position in commercial, homeowner, motor and pet insurance lines. Most of the Länsförsäkringar’s non-life insur-

ance business is underwritten locally by the regional insurance companies. Länsförsäkringar AB is responsible for the non-life insurance operations, as assigned by the regional insur-ance companies to be operated jointly to complement the companies’ offering with specialist products to meet customer needs, to start new business that can be channelled out to the regional insurance companies, and to manage the Länsförsäkringar Alliance’s joint reinsurance cover. Pet-insurance operations are conducted in the subsidiary Agria Djurförsäkring. Read more on pages 20-27.

BankingLänsförsäkringar Bank offers banking services to private individuals, agricul-tural customers and small businesses. Sales, advisory services and customer service are carried out through the branches of the regional insurance compa-

nies and via digital channels and by telephone. Deposits and certain lending operations are conducted in Länsförsäkringar Bank, while most of the lending and funding operations are conducted through the subsidiary Länsförsäkringar Hypotek. The subsidiary Länsförsäk-ringar Fondförvaltning offers mutual funds. The subsidiary Wasa Kredit offers financing services to corporate customers and private individuals – primarily leasing, renting and hire purchase. Länsförsäkringar Bank is the fifth largest retail bank in Sweden. Read more on pages 28-34.

Life assurance and pension insuranceLänsförsäkringar offers pension savings, primarily occupational pensions. Fund management, guarantee management and personal-risk insurance are offered through Länsförsäkringar Fondliv. Länsförsäkringar Fondliv is a leader

in the unit-linked insurance market for individual occupational pensions, commanding a market share of 19%. No new policies are underwritten in Länsförsäkringar Liv, but the company manages traditional life assurance that was taken out before it was closed in 2011. Länsförsäkringar Liv is operated according to mutual principles and is not consolidated in Länsförsäkringar AB. Read more on pages 35-39.

Real-estate brokerageLänsförsäkringar offers real-estate brokerage though Länsförsäkringar Fastig-hetsförmedling. The operations are conducted in franchise form, whereby the regional insurance companies act as franchisers for the 160 local branches

across Sweden. This means that Länsförsäkringar Fastighetsförmedling differs from other national estate-agent chains by always being locally based. Länsförsäkringar Fastighets-förmedling is the fastest-growing estate-agent chain in Sweden and is today the third largest company with a market share of 12%. Read more on page 40.

Business area

Market shares Non-life insurance, premiums paidSource: Insurance Sweden

Länsförsäkringar 30.8%

If 18.5%

Folksam 15.7%

Trygg-Hansa 14.6%

Moderna 3.2%

Dina Federation 2.7%

Captive companies 2.3%

Other 12.2%

Market shares Retail mortgagesSource: Statistics Sweden


Swedbank 24.4%

Handelsbanken 22.7%

SEB 14.2%

Nordea 14.2%

Danske Bank 3.5%

SBAB 8.0%

Other 6.7%

Market shares Unit-linked insurance, individual occupational pensions, premium income. Source: Insurance Sweden


SEB 16.8%

SPP 12.9%

Skandia 12.8%

Movestic 9.0%

Handelsbanken 7.2%

Swedbank Försäkring, 6.8%

Danica 5.6%

Nordea Liv 4.9%

Folksam 2.6%

Market shares Real-estate brokerage, single-family homes. Source: Värderingsdata

Länsförsäkringar Fastighets-förmedling 11.5%

Fastighetsbyrån 25.7%

Svensk Fastighetsförmedling 14.6%

Mäklarhuset 4.8%

SkandiaMäklarna 3.9%

Bjurfors 3.2%

HusmanHagberg 3.1%

Mäklarringen 1.5%

Hemverket 1.4%

ERA 1.3%

Other brokers and private 29.0%

6 Länsförsäkringar Alliance 2017Offering

Earnings 2017

A total of 21,801 (19,938) properties were brokered in 2017, of which 11,896 (10,923) tenant-owned apartments and 8,816 (7,998) single-family homes.

Operating profit amounted to SEK 7,078 M (4,626). Premiums earned after ceded rein-surance rose 6% to SEK 25,504 M (24,073).

Operating profit increased 9% to SEK 1,599 M (1,467). The return on equity totalled 10% (10).

Managed assets in unit-linked insurance and traditional life assurance amounted to SEK 128 billion and SEK 115 billion, respectively.

Combined ratio

Increase in business volumes to SEK 520 billion

Increase in premium income for unit-linked insurance to SEK 9,133 M

Total sales value

A Länsförsäkringar customer

Far away yet always close at handEntrepreneur Jakob Martinsson is a satisfied customer of Länsförsäkringar Jämtland - despite his nearest bank branch being 60 km away and his business advisor 170 km away.

I do most of my banking myself online or get good help via telephone banking. We chose this bank because we had the best contact with the personnel at the branch in Åre. Länsförsäkringar

has a fantastic Internet bank that I’m very happy with. I also have my insurance with Länsförsäkringar and do everything via the app. I recently used it to report a claim for my car. I prefer to talk to someone in person to discuss loans or investments. Our bank contact is always the same person who knows us so we don’t need to start from scratch every time,” says Jakob.

SEK bn

7Länsförsäkringar Alliance 2017 Offering

Drivers and trends in our business environment Our business environment Drivers and trends in our business environment affect future customer requirements and thereby Länsförsäkringar’s operations, business model and devel-opment needs. This presents many challenges but Länsförsäkringar has favourable conditions to best meet changed needs, primarily based on its broad customer base, local knowledge and highly skilled employees.

CustomersMore and more customers are seeking security from a supplier that they have confidence in, making the brand a key cornerstone of the customer experience. To deliver products and services that meet customer expectations, the supplier must understand customer needs and behaviour, and base development activities and customer contact on customer insight.

On the customer’s termsCustomer requirements for banking and insurance services are continuing to intensify since they presume that progress is just as advanced as in other industries. 24/7 availability, a high level of ser-vice, skilled personnel and personal service are important to cus-tomers who want to be able to choose where, when and how they do their banking and insurance.

The sharing economy that is emerging involves using resources sustainable and economically. There is also a desire to remove “the middle man” and technology is enabling new consumption models. Sharing a taxi, home, car, ideas and borrowing what you can, are becoming increasingly common to maximise comfort and flexibility at minimal cost. These new arising needs present new business opportunities for banking and insurance.

TechnologyRapid technological progress brings with it new insurance solutions and new business opportunities. Traditional competition is being continuously challenged by new and innovative fintech companies.

Internet of ThingsStrong growth is predicted for sales for the Internet of Things over the next few years. More and more objects are becoming con-nected, and new business opportunities arise with telematics in the car, at home, at work and with people. The possibilities for using data include greater relevance, improved risk assessment, individu-alised products, claims prevention and predictive analysis for pre-venting claims. However, the risk of cyber crime is on the rise since the large number of connected devices increases data exposure.

New technology could also make insurance unnecessary. The conditions for motor insurance are changing. Surveillance systems to make Swedish homes burglar, fire and waterproof are becoming more affordable. The development of fireproof materials can signifi-cantly reduce the need for fire insurance.

Länsförsäkringar’s response

Länsförsäkringar has favourable conditions to best meet customer needs, primarily founded on our broad customer base, local knowl-edge and our unique business model that supports both local and digital customer meetings. The award-winning bank app adds signif-icant customer value. The starting point is always the customer and we base communication on customer data and thus on knowledge. We must be innovative and find the right balance and forms of cooperation within the Länsförsäkringar Alliance; while the cus-tomer experience must always be local and close, developments can be made together.


Development activities must be innovative with fast product devel-opment and testing operations to deliver new services quicker andat a lower cost and then continuously test and fine-tune them. Part-nerships and investments in innovation companies supplement such development efforts. Länsförsäkringar will continue to develop robotics and automation to enhance efficiency. New technology also allows customer data to be processed together with social data to learn more about customers and the market, with Länsförsäk-ringar’s broad customer base and product offering providing a major advantage.

8 Länsförsäkringar Alliance 2017Our business environment

Climate changeClimate change – the result of higher carbon emissions – causes global warming. A warmer climate will have major socio-economic consequences, and lead to extreme weather conditions such as hurricanes, torrential rain and drought.

Long-term environmental responsibilityThe consequences of climate change for the insurance industry are obvious since global warming can lead to significant claims costs. That is why claims-preventing environmental work is increasingly important.

It is a hygiene factor for a rising number of investors that the companies they invest in comply with internal conventions on human rights, labour, the environment and anti-corruption. Fossil fuel has a negative effect on the climate through its high carbon emissions. There is a risk that oil, coal and gas companies are overvalued since it is unlikely that a large amount of the fossil reserves will be extracted from the ground due to legislation to limit global warming. Overvalued holdings are a financial risk and have led to many inves-tors starting to phase out fossil fuels from their investments. Pres-sure has mounted on investors to move over to investments that help reduce climate risks. The Swedish Financial Supervisory Authority expects the finance industry to develop scenario analyses for how climate change will impact business operations. The govern-ment’s target is for Sweden to become fossil-free by 2030.

RegulationsRegulatory development will continue to have a significant impact on banks and insurance companies over the next few years. Exam-ples of major regulations are the Fourth Anti-Money Laundering Directive, the Mortgage Credit Directive, MiFID II, the General Data Protection Regulation (GDPR) and the Insurance Distribution Direc-tive (IDD).

Rapid regulatory developments continueNew EU regulations on data privacy and processing personal data will be introduced to all companies and institutions in 2018 with the GDPR. Reviews of the group rules for banks and regulations for cri-sis management in banks are being conducted. In life assurance and pension insurance, discussions are continuing on regulating trans-fer rights and introducing new rules on occupational pension busi-ness and taxation of occupational pensions as well as new informa-tion requirements for investment products within the framework of insurance. The government has also referred a proposal to the Council on Legislation for consideration on fringe-benefit taxation for health care insurance, which is expected to come into effect on 1 July 2018.

Harmonising legislation within the EU also adds to complexity. Extensive rules are often implemented in the form of both directives and EU regulations. In addition, guidelines are published by Euro-pean supervisory authorities and the Swedish Financial Supervisory Authority issues regulations and general guidelines.


Climate risk is the area of sustainability that presents the greatest challenge for Länsförsäkringar. We strive to limit and reduce the risk of climate impact through our activities by way of dialogue and investments in the area of responsible investments, claims-preven-tion activities and sustainability requirements on damage repair in the insurance offering, sustainability requirements on suppliers, financing research into climate impact, engagement and prevention activities in the aspects of long-term environmental efforts and social commitment.


Länsförsäkringar believes that it is well-positioned to meet the changes under the regulations. It is vitally important that consum-ers are protected but the regulations between banking and insur-ance must also be harmonised, which is particularly important for a group like Länsförsäkringar. Health care insurance supports employers’ health and safety activities and serves as a health- promoting and rehabilitating measure and should therefore be taxed like similar measures. More than half of Länsförsäkringar’s total number of health care insurance policyholders belong to the low or middle-income bracket.

9Länsförsäkringar Alliance 2017 Our business environment

A simpler everyday life and a more secure futureThe brand Länsförsäkringar is one of the strongest brands in Sweden. Based on a brand promise, which is to simplify everyday life and contribute to a secure future, the 23 regional insurance companies use a shared brand platform to live up to this promise.

PromiseWe simplify your every day life and contribute to a secure future

Länsförsäkringar makes a promise to its customers to contribute to a simpler everyday life and a more secure future. With local presence, the regional insu-rance companies can understand their customers’ situation and can meet their needs, using channels

chosen by the customers. By being locally owned by the customers, and not having any other interests, the regional insurance compa-nies promise long-term stability.

MissionCustomer value first

The regional insurance companies are owned by their customers. Accordingly, customers are the main driving force. Any value created is returned to the customers and the society in which they live and work.

Core valuesClose, committed and simple

Länsförsäkringar is to be close to the customer by always reflecting and acting from a customer perspective. Länsförsäkringar’s commitment for greater customer value sets us apart from our competitors. Länsförsäkringar is to be uncomplicated,

unbureaucratic and easy to understand. Länsförsäkringar stands for what its says and ensures its promises are implemented – we are on the customer’s side.

PositionMost customer friendly

Being a customer with Länsförsäkringar is simple and easy. Länsförsäkringar shall be accessible and offer services that are easy to understand and use, in the channels chosen by the customer.

10 Länsförsäkringar Alliance 2017The brand

We make and keep a joint promise in 23 regional accents.

11Länsförsäkringar Alliance 2017 The brand

12 Länsförsäkringar Alliance 2017Sustainability

Secure business for customers and a sustainable society Sustainability Länsförsäkringar’s mission dates back more than 200 years. The basis of this mission is respect for customers’ security. Länsförsäkringar firmly believes that a respon sible banking, insurance, pension and real-estate brokerage offering enhances value for customers and contributes to the sustainable development of society.

Local and long-term responsibility

The starting point of Länsförsäkringar’s sustainability efforts is local and long-term responsibility in society since the regional insurance companies are local and customer-owned. Claims-prevention activ-ities are a priority for both customers and local society. Länsförsäk-ringar AB has various partnerships and conducts research that leads to a sustainable society. Maintaining a strong, local commitment not only benefits Länsförsäkringar’s own customers but also society as a whole.

The local regional insurance companies’ social commitment is extensive. Länsförsäk-ringar’s long-term work in society mainly takes place in the areas of claims-prevention activities, claims adjustment, social commit-

ment and research. Preventing claims involv-ing people, animals, property, forests and land and offering optimal sustainable damage repairs is inherent in environmental and social responsibility. Other activities are car-

ried out in addition to Länsförsäkringar’s more long-term social initiatives in claims prevention and damage repairs, such as part-nerships with sports associations, civil soci-ety organisations, schools, colleges and uni-versities, municipalities, etc. These initiatives are often long-term efforts undertaken in the local community to encourage construc-tive leisure time for both young and old peo-ple, ensure a secure local environment and improve customers’ and local communities’ awareness in order to maintain a safe and sustainable environment. Contributing to a safe and secure environment and surround-ings is fundamental to Länsförsäkringar.

13Länsförsäkringar Alliance 2017 Sustainability

The regional insurance companies actively support various types of social commitment throughout Sweden. A brief selection is pre-sented below.

1. Länsförsäkringar Norrbotten • Sponsors House of Heroes – accommodation for fami-

lies of critically ill children receiving care far from home. • Climate compensates through two international proj-

ects with ZeroMission.

2. Länsförsäkringar Västerbotten • Works together with Västerbotten Football Association

to introduce green cards. • Sponsors House of Heroes – accommodation for fami-

lies of critically ill children receiving care far from home.

3. Länsförsäkringar Jämtland • Awards the prize of children’s rights champion of the

year together with Save the Children. • Works together with Parasport to create opportunities

for disabled children to participate in sports. • Awards the prize of sustainable company of the year

and involved in the Enterprise Agency.

4. Länsförsäkringar Västernorrland • Supports businesses and universities, such as Junior

Achievement Sweden, Enterprise Agency and Mid Swe-den University.

• Sponsors sports for children and young people, and teams playing in the highest division.

• Sponsors House of Heroes – accommodation for fami-lies of critically ill children receiving care far from home.

5. Länsförsäkringar Gävleborg • Works together with associations that promote exer-

cise and leisure activities for children and young peo-ple, inclusion and the value of being a friend.

• Partners with Brynäs IF ice hockey team and Unicef on social activities to create internships for young people.

6. Dalarnas Försäkringsbolag • Supports Dalarnas Spelmansförbund, which educates

young people about local music traditions. • Supports Glimma, which helps change family lifestyles

focusing on obesity among children and young people. • Initiated Young Referee for empowering young referees

and highlighting their role.

7. Länsförsäkringar Värmland • Awards the prize of food entrepreneur of the year. • Safe Way to Sports – offering sports clubs training in

road safety for children aged 11–13.

8. Länsförsäkringar Uppsala • Sponsors floorball training for children and young

people with disabilities. • Sponsors Ronjabollen which supports girls living under

honour-related norms and restrictions. • Works to prevent bullying, drugs and racism among

12 year olds through Schysst framtid. • Equal sponsoring initiative and Fair Play certification.

9. Länsförsäkringar Bergslagen • Sponsors leisure activities for children and young peo-

ple through Bergslagslyftet. • Awards prizes with LRF Konsult for food entrepreneur

of the year in Örebro and Västmanland counties.

10. Länsförsäkringar Stockholm • Partners with Stockholm Football Association and

sponsors the S:t Eriks Cup’s Fair Play green card. • Supports Fryshuset. Employees have joined the Lugna

Gatan street crime prevention project on the under-ground and arranged a Christmas present event for the Children of Single Mothers initiative.

• Participates in Sustainable Sea for the Baltic Sea to raise Stockholmers’ environmental awareness.

11. Länsförsäkringar Södermanland • Supports initiatives through Jubileumsfonden to

increase security and integration among children. • Supports activities through Omtanke Sörmland to cre-

ate meaningful recreation for children and young people. • Holds safety days for children together with the police

and emergency services.

12. Länsförsäkringar Göteborg och Bohuslän • Employees are involved in Mitt Liv, Junior Achievement

Sweden and My Dream Now. • Finances two safety patrollers in socially disadvan-

taged areas to increase social inclusion for children and young people.

• Main partner of IFK Göteborg football club and sup-ports initiatives to bring up young people in a positive supporter culture.

13. Länsförsäkringar Skaraborg • Works together with the Habo Wolley integration proj-

ect where young people born in Sweden act as mentors to new arrivals.

• Supports sports clubs for disabled people. • Supports handball cup and Fair Play green card. • Involved in new enterprise organisation to encourage

more people start their own company.

14. Länsförsäkringar Östgöta • Awards the Östgötapriset prize to initiatives that

improve community spirit and security in Östergötland. • Partners with football clubs on attitudes on and off the

pitch in the Respect in Football programme. • Involved in the #starkaretillsammans initiative to help

new Östergötlanders in society. Provides mentors and offering training in banking and insurance.

15. Länsförsäkringar Älvsborg • Sponsors and engages with sports clubs to promote

secure clubs. Trains sports coaches together with Friends.

• Partners with Räddningsmissionen and Erikshjälpen in the Solrosen project to support children and young people with family in jail.

• Promotes anti-bullying in preschools and schools by distributing tools for having difficult conversations in seven municipalities.

16. Länsförsäkringar Gotland • Contributes to Skolfonden on school projects focusing

on core values and equal treatment. • Awards the prize of Gotland’s Hero to one or more peo-

ple who deserve acknowledgement for their selfless and kind acts.

• Supports football through Kvartersligan to encourage children to be more active.

17. Länsförsäkringar Jönköping • Sponsors summer football schools to give young peo-

ple meaning full recreation in the holidays. • Instigated an award for food contractor of the year in

Jönköping county to highlight locally produced food. • Financed a quick-charge pole together with Tranås

energi.

18. Länsförsäkringar Halland • Holds CSR workshops to train companies in Halland to

become more sustainable. • Involved in the county administrative board’s integra-

tion efforts and hired a person on a project basis to explain banking and insurance in Sweden to new arrivals.

• Distributes reflector tags to the local population.

19. Länsförsäkring Kronoberg • Collaborates with Växjö Lakers on security, consider-

ation and inclusion in ice hockey for children and young people.

• Awards an annual sustainability prize for extraordinary work. This year’s winner was Öster i samhället, which works towards a sustainable society.

• Arranges Framtidsdagen – a regional forum on sustain-ability for business owners.

20. Länsförsäkringar Kalmar län • Arranges Samtalsforum Framåtblick, which links

research with society for the practical application of research results at local level.

• Sponsors clubs and cultural activities, and contributes to involvement and equal opportunity.

• Supports local mussel farming for a healthier Kalmar Strait.

21. Länsförsäkringar Blekinge • Sponsors a car for Vägga School’s vehicle and trans-

port programme. • Created a grant for upper-secondary school pupils at

two schools with a focus on industrial jobs involving engineering.

• Created a sustainability prize to highlight the sustain-ability work of companies, organisations or people.

22. Länsförsäkringar Göinge-Kristianstad • Supports Tusen röster för Nordöstra Skåne, which

focuses on Young people’s view of the future. Activities include workshops on equality, accessibility, discrimi-nation, the environment and climate.

• Arranged a seminar on increasing diversity in schools during the Almedalen political week.

• Arranged a pitch marathon at “Sweden’s best business day” where young entrepreneurs could present their ideas, companies and projects.

23. Länsförsäkringar Skåne • Supports Ung Aktiv 9 and MFF in their work on creating

active and productive everyday lives for young people. • Sponsors Live it up, an leadership programme for

young women.

Social commitment 2017

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The regional insurance companies actively support claims-prevention activities throughout Sweden. A brief selection is presented below.

1. Länsförsäkringar Norrbotten • Distributes reflective vests to preschool children in

Norrbotten. • Hands out water alarms when inspecting newly insured

houses. • Holds training courses in CPR on children in partner-

ship with the Fire Protection Association and emergency services.

• Partners with Verisure to increase the number of households with fire and burglar alarms.

2. Länsförsäkringar Västerbotten • Conducts regular farm inspections. • Distributes reflective vests to inhabitants • Arranges information events with tips and advice for

preparing vacation homes for the winter.

3. Länsförsäkringar Jämtland • Distributes free reflective vests to preschools. • Preventive measures to reduce water damage and help

customers install water leak detection systems. • Awards a prize for metal workshop of the year to

stimulate eco-friendly and safe care repairs. 4. Länsförsäkringar Västernorrland • Supports Sotarprojektet Övik. • Prevents water damage in kitchens by installing water

alarms in customers’ homes. • Organises information meetings with builders and con-

tractors in the county to increase know-how in water damage and fire risk.

5. Länsförsäkringar Gävleborg • Arranges home visits to customers to prevent claims. • Partners with Sandvikens IF to arrange night-time

football matches, dances and city patrollers for inclu-sion and security.

• Offers training in CPR on children. • Contributes to 300 sports coaches receiving CPR

training via Swedish Lifesaving Society and Gävleborgs Idrottsförbund.

6. Dalarnas Försäkringsbolag • Arranges home visits to customers, farms and companies

focusing on water and fire safety and burglar security. • Participates in the Dalarnas Villa project, which has

developed upper-secondary vocational courses together with Dalarna University.

• Participates in Sweden’s largest fire drill.

7. Länsförsäkringar Värmland • Inspects single-family homes with OCAB and performs

electrical inspections at farms with ÅF. • Arranges customer training courses for driving in icy

conditions. • Trains suppliers in structural engineering to ensure

water installations and crisis management in the event of water or fire damage.

8. Länsförsäkringar Uppsala • Inspects homes and homes on farms to detect risks of

fire and water damage. • Participates in Sweden’s largest fire drill. • Involved in projects on installing water leak detection

systems for customers in certain areas. • Electrical inspections at farms.

9. Länsförsäkringar Bergslagen • Arranges customer events on how to renovate

correctly. • Safe Farm and Safe Horse Farm – provides advice for

how customers can reduce accidents on their farms. • Participates in Sweden’s largest fire drill. • Distributes reflective vests to preschool children in

23 municipalities.

10. Länsförsäkringar Stockholm • Distributes reflective vests to preschool in the county. • Conducts claims-prevention inspections when new

homeowner insurance is taken out. • Supports claims-prevention programmes for commer-

cial traffic and agriculture. • Participates in Sweden’s largest fire drill.

11. Länsförsäkringar Södermanland • Distributes reflector tags and reflective vests to

customers. • Work together with the police and emergency services

to reduce crime and increase security via Neighbour-hood Watch.

• Collects environmentally harmful waste from farms of agricultural customers.

12. Länsförsäkringar Göteborg och Bohuslän • Conducts safety visits at customers’ homes to identify

potential claims risks, focusing on fire, water and burglary.

• Invites customers to know-how events and sends out claims-prevention tips and advice.

13. Länsförsäkringar Skaraborg • Provides tips and advice to customers to reduce the

risk of water damage, fire and burglary. • Provides tips and advice to customers to reduce the

risk of theft and vandalism. • Participates in safety patrols with the municipality,

police and associations in towns. • Trains parents in ABC (Airway, Breathing, and

Circulation).

14. Länsförsäkringar Östgöta • Distributes reflector tags to pedestrians, zip lights to

school children and reflective vests to cyclists. • Road Safety Day where transport programme pupils

receive road safety information and test-drive heavy vehicles in icy conditions.

• Partners with various organisations to reduce bicycle theft, for example, through security marking.

15. Länsförsäkringar Älvsborg • Claims prevention tips for bikes and yachts. • Participates in Sweden’s largest fire drill.

16. Länsförsäkringar Gotland • Claims-prevention activities in water, fire and motor

third-party liability claims. • Partners with the Swedish Lifesaving Society on sum-

mer swimming schools on the island. • Partners with Gotland driving practice course for road

safety.

17. Länsförsäkringar Jönköping • SANT project on mapping flooding around the River

Svartån. • Offers customers free inspections to prevent water

damage. • Participates in Safer Town together with the emergency

services and police to provide training in measures to prevent fire and burglary in the countryside.

18. Länsförsäkringar Halland • Distributes fire extinguishers to new household insur-

ance customers. • Provides first aid courses for children and pensioners.

19. Länsförsäkring Kronoberg • Security information for 30-plus neighbourhood watch

organisations. • Collaborates with the police and Markaryd municipality

to encourage inhabitants to DNA-label their valuables. • Activities to reduce the incidence of water damage by

offering leak detection systems.

20. Länsförsäkringar Kalmar län • Distributes reflective vests to preschools and holds

first aid courses for parents • Neighbourhood Watch partner with local police and

municipalities. • Participated in Wild Animal Week – safer roads,

together with the police and emergency services, with claims-prevention advice, distributed reflective vests and warning stickers.

21. Länsförsäkringar Blekinge • Distributes reflective vests to preschool children. • Partners with the police, emergency services and the

Federation of Swedish Farmers on “Safe Town” and Neighbourhood Watch.

22. Länsförsäkringar Göinge-Kristianstad • Participates in fire safety projects. • Participates in safety patrols to create a safe

atmosphere for young people who are out late.

23. Länsförsäkringar Skåne • Offers property owners in Sofielund, Malmö the option

of “security certification” for their properties, which makes everyday life more secure for residents.

• Offers recycling insurance to agricultural customers together with Keep Sweden Tidy where environmen-tally harmful waste is collected from farms.

• Provides tips on how to make climate adjustments to a house.

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Claims-prevention activities in 2017


Research field Project Schedule

Tomorrow’s society: Digitisation, urbanisation, sharing economy

The geography of trust: Trust in local society in a changing Sweden. Ersta Sköndal University College.

Start 2017Final report 2019

Regional growth against all odds: Driving forces for long-term growth in Nordic regions. Lund University.


Regional economic development and transformation in Sweden: Then, now and tomorrow. Lund University.


Road safety Wheel-bound, unprotected road-users. Swedish National Road and Transport Research Institute (VTI) Linköping.


Climate changes Flooding risks along the Swedish coast. Swedish Meteorological and Hydrological Institute (SMHI) Norrköping.


Lower climate risk in the buildings and homes of the future – lessons from past events and urban planning. Karlstad University.


Short and long-term consequences of home-owners’ risk awareness, willingness to pay and risk behaviour for the insurance industry. Mid Sweden University.


Mutual business models Mutuality in the Swedish insurance model. Uppsala University. Start 2016Final report 2018

Secure homes Nudging my future self: Behavioural economics studies of the financial decisions of young people. Linköping University.


Responsible insurance offering

Länsförsäkringar offers a wide range of insurance that provides security for various needs. Länsförsäkringar can contribute to a sustainable society through its claims-prevention activities and responsible damage repairs.

Claims prevention is environmental workPreventing a claim is always a win for the environment and customers. Claims-pre-vention activities help reduce impact on the environment through less waste, energy, new materials, transportation and other resources – for both the claim incident itself and also for restoration and repairs. Natural catastrophe, water and fire damage claims, and motor insurance claims have the great-est impact on the environment and are thus Länsförsäkringar’s focus areas for claims-prevention activities.

Initiatives to prevent natural catastrophesThere are many reasons for higher claims costs caused by natural catastrophes: the

rising trend of more extreme weather situa-tions and urban planning with new develop-ments in vulnerable areas. Dialogue on cli-mate change and development planning is conducted with decision-makers in society. Länsförsäkringar informs its customers how they can protect themselves from natural catastrophes, such as hurricanes, thunder-storms, heat waves, drought and heavy snow -fall, and reduce the risk of starting a forest fire. Research into climate change is carried out via Länsförsäkringar’s research fund.

Initiatives to prevent water damage Water-damage claims are the most common claims type in our homes. More than 100,000 cases of water damage are reported every year

in Sweden. Average water damage to a home generates about 300 kg in carbon emissions. Water-damage claims can be avoided by choosing the right materials and methods and by installing water alarms and leak detectors. Länsförsäkringar continuously informs its customers and contractors about how they can reduce the risks of water damage.

Initiatives to prevent fire-damage claims Fire is the single largest claim incident, encompassing everything from total dam-age in large commercial buildings to initially smaller incidents that still cause serious fires in the home. The kitchen is where most fires start, almost half of them at the hob. A fire at a home emits an average of 25 tonnes of carbon dioxide. Fires also result in other chemical emissions to air, land and water. Sanitising and restoring a house after a fire requires a vast amount of energy as well as new or recycled resources, and results in huge volumes of waste. Läns-

Climate impact and natural catastrophesGlobal warming is a financial risk for the insurance operations and the long-term consequences are difficult to predict. A warmer climate, resulting in a greater risk of natural catastrophes in the form of extreme weather conditions such as hurri-canes, torrential rain and drought, will entail a risk of higher payouts for weather-related insurance claims, with considerable varia-tions over years and parts of the country. In

many respects, adjustment problems asso-ciated with managing financial risk and reducing the consequences of climate change present a brand new situation. Using historic data and correlations risks leading to systematically underestimating risks with this rising trend.

Länsförsäkringar’s Research FundLänsförsäkringar has supported scientific research into security for people through

Länsförsäkringar’s Research Fund for many years. The aim of research is to contribute to greater financial and physical security in society. The results are made available to the public and are increasingly used in the oper-ations in customer activities. Five focus areas are prioritised: Tomorrow’s society, road safety, climate change, mutual busi-ness models and secure homes.


försäkringar continuously informs its cus-tomers about how they can reduce the risks of fire damage.

Initiatives to reduce road-traffic accidents Länsförsäkringar is the leader in motor insurance and strives to reduce the number of accidents on the road. One of the results of these efforts is a joint work method and “Claims on a Map” statistics database. Every motor and motor third-party liability acci-dent and incident is reported geographically and the complete incident and accident sta-tistics provide knowledge of where acci-dents occur and why, and aid efforts to pre-vent long-term insurance claims in collaboration with municipal street depart-ments and municipalities. Customers can plot claims via the online claims notification service, which led to the number of claims in the database increasing during the year.

Länsförsäkringar also carries out pre-ventive initiatives on four-wheel drive vehi-cles and children, and bicycle accidents. Länsförsäkringar’s Research Fund finances research into road safety.

Sustainability of claims repairsLänsförsäkringar AB has produced a certifi-cation programme for car workshops in col-laboration with Autoteknik. Most regional insurance companies have joined this pro-gramme, which ensures that the workshops used for damage repairs meet environmen-tal and quality requirements. Workshops are to use used car parts for repairs as far as possible and try to repair plastic details instead of replacing them, thus reducing the impact on the environment. The regional insurance companies check the quality of completed repairs. About 1,300 workshop checks were carried out in 2017. The Swedish Motor Insurers’ survey of 30 June 2017 revealed that certified workshops had 35% fewer shortfalls than non-certified work-shops. The regional insurance companies will continue to perform quality inspections of completed repairs in 2018.

The regional insurance companies impose high quality demands on repairs to properties and homes. Methods and sys-tems for setting requirements for compa-nies that repair damage to buildings were further developed with Länsförsäkringar AB. Companies are also engaged in dialogue regarding construction methods, recycling and materials that reduce adverse environ-mental impacts.

Partnership with recycling companies Several regional insurance companies have a partnership with Godsinlösen, a company specialised in the re-use and recycling of damaged goods, and local partnerships are also in place with other recycling companies. Via Godsinlösen, the regional insurance companies reduced their carbon emissions in 2017 by 243 tonnes and their volumes of electronic waste (mobile telephones, com-puters and tablets) and bicycles by 852 tonnes. Data is available only for these prod-uct categories.

Several of the regional insurance compa-nies offer recycling services in cooperation with the Keep Sweden Tidy Foundation and local entrepreneurs to reduce scrap and environmentally harmful waste in the Swedish countryside. In 2017, 469 tonnes (399) of hazardous waste and 3,388 tonnes (3,027) of scrap from the agricultural sector was collected.

Health for a sustainable lifeLänsförsäkringar is one of Sweden’s leading companies in health care, accident and health insurance, and actively participates in public debate on good health and a sustain-able working life. Health care insurance is based on preventive health services and providing the right type of care at the right time with effective rehabilitation. Indepen-dent medical examinations are used to ensure that mediated health care is based on medical grounds and provides the best long-term results for customers. The aim is for health care providers to follow the same guidelines for the forms of treatment that are recommended for various complaints, thus meaning that health care and rehabili-tation have better results for customers. The aim of these preventive health services is to promote good health and prevent illness by, for example, reducing stress, improving sleep and maintaining a healthier lifestyle. Rehabilitation includes medical and work-oriented rehabilitation, as well as treatment for addiction and substance abuse.

Health promotion and claims-prevention activities for animals Agria is the market leader in pet insurance in Sweden, conducts claims-prevention and health-promotion activities for animals and actively supports research into animal health. Customer are involved in matters related to pets and veterinary care. Agria

offers advice and information via digital channels, such as the Agria app, a podcast that provides advice and tips for animal owners, and the Firstvet service where cus-tomers can use a video link free of charge to consult a veterinarian if their animal is ill or has been injured.

Agria’s research fund supports research on animal health and well-being and the importance of animals to people and society. Agria has extensive claims statistics that are used by researchers and breed clubs to improve animal health and sustainability.

Uncertain insurance cases Länsförsäkringar’s aim is to ensure that its policyholders are treated correctly and that the right compensation is paid to the right person. Each regional insurance company has a complaints officer whom customers can contact if they are unhappy with a deci-sion or their claim.

Insurance fraudIt is important to counteract insurance fraud to protect policyholders and to keep premiums down.

According to Insurance Sweden, insur-ance fraud accounts for between 5% and 10% of claims costs, meaning that insurance fraud costs the entire insurance industry between SEK 3 and 6 billion every year.

Länsförsäkringar’s investigation organi-sation looks into cases of suspected fraud and conducts preventive measures related to crime trends by arranging training courses and carrying out targeted activities. One of Länsförsäkringar’s focus areas in 2017 was travel claims. The investigation organisation stopped erroneous payments of between SEK 170 and 180 M from about 2,700 claims cases. Fraud is an area that is spreading quickly throughout society.

Länsförsäkringar works together with the insurance industry and the authorities via Insurance Sweden to combat fraud and enhance security for customers. This work creates the conditions for influencing soci-ety’s attitudes towards fraud and helping gain an overview of the extent of the prob-lem. Länsförsäkringar participated in indus-try-wide activities on car fires in 2017. Läns-försäkringar follows Insurance Sweden’s guidelines on insurance fraud.


Responsible pension and savings offering

Customers’ savings are invested in both Länsförsäkringar’s own and external funds. The basic view is that well-managed, sustainable companies are a better investment in the long term. Active corpo-rate governance, international conventions, manager selection pro-cedures and partnerships form the basis of responsible investments. Länsförsäkringar strives to transparently disclose its methods and procedures for responsible investments.

Active corporate governanceCorporate governance includes company dialogues on sustainability issues, active participation in the nomination committees of portfolio companies to influence board compositions and voting at general meet-ings. A long-term objective is to increase diversity in terms of gender, age and back-ground, on the boards of the portfolio com-panies. During the annual general meeting season of 2017, the percentage of women board members increased to 43% (41) in the companies in which Länsförsäkringar Fond-förvaltning served on the nomination com-mittee. As a preventive measure, Läns-försäkringar AB engages in dialogue with companies on sustainability issues. Two focus areas for 2017 were water risks in companies in emerging markets and work conditions in the agricultural chain of the food industry.

Ethical basis in international conventionsWork related to responsible investments is based on the international conventions signed by Sweden in the areas of environ-ment, human rights, labour laws, corruption and controversial weapons (nuclear weap-ons, cluster munitions, biological and chemi-cal weapons, and landmines). An external ethics consultant has been engaged to anal-yse listed company holdings based on these conventions. Based on these analyses, Läns-försäkringar AB strives to engage in dialogue with companies that breach these conven-tions. The aim is that the analysed company will stop its breaches and take measures to prevent similar incidents from being repeated. If the dialogue does not achieve the desired results, the holdings in the com-pany may, as a last resort, be divested.

Partnerships with other investorsLänsförsäkringar AB has partnerships with other investors to give greater impetus to

dialogue and to pursue industry-wide issues. Partnerships include the United Nations- supported Principles for Responsible Investment (PRI).

Requirements on external managers Länsförsäkringar Fondförvaltning’s Swedish equity funds are managed by internal man-agers. Länsförsäkringar AB’s other invest-ments are managed by external managers through funds or discretionary mandates. The investment philosophy is based on using leading managers in Sweden and abroad with a variety of investment areas and man-agement approaches. Sustainability require-ments are included in the procurement of new managers. The integration of sustain-ability issues into management models is monitored every year.

Climate risks in investmentsLänsförsäkringar AB sees financial risks in investing in companies that base their oper-ations on fossil fuels since fossil assets risk becoming “stranded assets.” In 2016, Läns-försäkringar AB divested from its own funds and direct investments about 80 mining companies and energy companies that derive more than 50% of their sales from coal. The sales level was lowered to 20% in 2017 and led to a further 50 coal companies being divested.


Employees

Länsförsäkringar is not one company but a federation of 23 indepen-dent and customer-owned regional insurance companies throughout Sweden, that jointly own Länsförsäkringar AB. Employees are Läns-försäkringar’s most important resource. They posses a variety of specialist and professional expertise that is vital to carrying out and developing the operations.

Local and jointAttracting, recruiting and retaining employ-ees, termination of employment and bene-fits are issues that are mainly managed indi-vidually by each company in the Länsförsäkringar Alliance. Development and coordination in certain issues take place jointly between the regional insurance com-panies and Länsförsäkringar AB. A shared ambition is to advance Länsförsäkringar’s positions as an attractive employer.

Good development opportunitiesThe Länsförsäkringar Alliance has a broad range of professional expertise in banking, insurance and real-estate brokerage ser-vices, and specialist roles in a number of dif-ferent areas. 23 independent regional insur-ance companies and a jointly owned service and development company, Länsförsäk-ringar AB, offer a large internal labour mar-ket, which provides employees with many opportunities for further development by changing job, either in the local regional insurance company or within the Läns-

försäkringar Alliance. Employees can change job by working on a temporary assignment basis, while retaining their main position, or by changing to a completely new role. Employees can credit their entire length of service even when they change company within the Alliance.

Skills-development opportunities are available in the regional insurance compa-nies and through joint training activities at Länsförsäkringar AB, which offers an exten-sive portfolio of courses in life assurance, banking and non-life insurance and also leadership. These courses focus on giving employees the skills needed in a business context to offer customers products and solutions that meet their requirements. A total of 12,099 in-house training courses (8,572) for the employees of the Länsförsäk-ringar Alliance were held in 2017. Employees also received training through skills transfer, external courses and seminars.

Responsible banking offering

Länsförsäkringar Bank is an important part of the financial system and by pursuing responsible loan origination can increase customer value and financial stability. Länsförsäkringar Bank’s loans are granted in Sweden and in SEK.

Loan orientation at low sustainability riskThe geographic spread of lending to both retail and corporate customers is well-di-versified, with low average lending per cus-tomer. The bank has very limited lending to the large-corporates sector in which envi-ronmental and social risks are typically sig-nificantly greater. Accordingly, the business model for loan origination has relatively low credit risks.

Strict requirements are imposed on cus-tomers’ repayment capacity and the quality of collateral. Credit scoring, combined with the local customer and market knowledge of the advisors, provides favourable conditions for a loan portfolio with high credit quality and low sustainability risks.

Anti-money laundering and terror financingLänsförsäkringar AB makes extensive efforts to minimise the risk of the operations being used for or exposed to financial crime. Transactions are monitored actively to detect, for example, money laundering and terror financing. Other attempts at fraud, for example, card fraud, are monitored, and a shared system for deviation reporting is in place at the Länsförsäkringar Alliance.


Limited direct environmental impactThe direct environmental impact of the operations is relatively limited and primarily comprises business travel, heating and electricity in office premises, and paper print-outs. The main strategies for reducing the climate impact of Länsförsäkring-ar’s own operations are energy effi-ciency, a move to renewable energy, reducing travel and increasing the use of digital technology. Climate compensation is applied for the carbon emissions generated by the business.

Governance and direction Core values, requirements and expertise are essential in order for Länsförsäkringar to achieve its goal of a higher level of sustainability in its operations. Governance in guidelines and policies, and targets, supports this work. Improvements are contin-uously made to work methods and procedures to enhance sustainability.

Länsförsäkringar AB also signed the UN Global Compact’s ten princi-ples, the UN Principles for Responsi-ble Investment (PRI) and the UN Principles for Sustainable Insurance (PSI). Länsförsäkringar is a member of several trade organisations and participates in numerous sustainabil-ity partnerships with other actors.

Manager training is also offered through the partner European Alliance Partners Company. Senior-level managers and spe-cialists are nominated for these training programmes every year.

Work environment and healthLänsförsäkringar is a highly positive work environment and collaboration and cooper-ation are key words for creating strong solidarity and companionship. An open and tolerant working climate free from all forms of discrimination is the very foundation of relationships between colleagues and with customers.

Promoting equality and diversity is a natural element of the corporate culture.

Länsförsäkringar is one of the Sweden’s leading companies in health care insurance and takes out such insurance for its employ-ees. This insurance includes medical consul-tations, personal counselling and preventive health services encompassing a health pro-file and online health programmes. The insurance also includes work-oriented reha-bilitation. Länsförsäkringar’s aim is that its employees will enjoy a good work-life bal-ance at all times.

One of Sweden’s most attractive employersYoung university graduates named Läns-försäkringar the best employer in insurance for the tenth consecutive year, resulting in a 53rd place in the top 100 best employers, in the Career Barometer survey. In the Corporate Barometer, business students at Swedish universities and colleges ranked Länsförsäkringar as their dream employer in the insurance industry for the 15th year. Länsförsäkringar came 26th of the top 50 large employers (with more than 600 employees) in the Sweden’s Best Employer survey. The survey is internal and based on employee responses to the Career Barometer.

Stable market-leading positionNon-life insurance Strong earnings, healthy volume growth and once again the most satisfied retail customers according to the Swedish Quality Index were the highlights of 2017. Premiums earned increased to SEK 25.5 billion, the combined ratio improved to 92% and the market-lead-ing position was stable with a market share of 31%.

Most of Länsförsäkringar’s non-life insur-ance business is underwritten by the regional insurance companies. Some non-life insurance business lines, including pet and health insurance, is underwritten by the jointly owned Länsförsäkringar AB’s subsid-iary. Of the Länsförsäkringar Alliance’s total premiums earned in non-life insurance of SEK 25.5 billion, SEK 19.9 billion is under-written in the 23 regional insurance compa-nies and the remainder in the Länsförsäk-ringar AB Group.

The non-life insurance marketPremium income for the non-life insurance market in Sweden is growing steadily and paid-in premiums reached SEK 80 billion in 2017. Premium income has risen SEK 22 bil-lion over the past 10 years, up 38%. This increase is high but unevenly distributed between insurance lines. Premium income for accident and health insurance has dou-bled over ten years, while commercial lines

have instead fallen by about 4%. The num-ber of insured households and single-family homes increased slightly year-on-year, whereas the number of vacation homes remained relatively unchanged. The number of passenger-car insurance policies is con-tinuing to increase since sales of new cars in 2017 were at an all-time high.

Distribution via digital channels is con-tinuing to accelerate. Manual and work- intense processes are being simplified, made more efficient and automated through robotics and more intelligent deci-sion-making support. Risks can be more accurately priced by using the supply of information and analysis, which results in an individual offering that is harmonised and tailored to customer needs. At the same time, digitisation brings higher risks of cyber attacks that are increasing in frequency and sophistication.

The passenger-car market is in a state of major change. The number of new car

Premiums earned: SEK 25,504 M

Operating profit: SEK 7,078 M

Combined ratio

Non-life insurancePercentage of premiums paid

Source: Insurance Sweden


If 18.5%

Folksam 15.7%

Trygg-Hansa 14.6%

Moderna 3.2%



Other 12.2%

Länsförsäkringar strengthened its position as a leader in the non-life insurance market, with a market share of 30.8%.

Commercial linesPercentage of premiums paid




If 9.6%

Trygg-Hansa 9.4%

Moderna 4.7%


Gjensidige 2.7%

Folksam 2.2%

Other 12.0%

Länsförsäkringar strengthened its strong position in commercial lines, with a market share of 44.8%.

Market shares

Non-life insurance20 Länsförsäkringar Alliance 2017

registrations has broken new records, while the share of privately hired vehicles bucked the trend in 2017 and declined slightly. The new car market is expected to remain strong over the next few years but advances towards active safety and automated vehi-cles will reduce the claims frequency and claims costs. Many changes to insurance needs and legislation can be expected, probably involving a shift from personal lia-bility to producer liability. At the same time, there is a continued trend towards electric and fossil-free vehicles. Many indicators suggest that electric vehicles will dominate the vehicle-market in the future, but such a transition takes time and the financial aspects weigh heavily on consumers. A slow-down factor is that electric cars are now significantly more expensive than their fossil-fuelled counterparts. Subsidies, taxa-tion and other political decisions, such as banning new sales of fossil-fuelled cars, could however speed up the transition in the wait for the price of electric cars to fall.

New technology is driving the develop-ment of intelligent homes and properties. By using functions in intelligent homes, new solutions can be found in claims-prevention activities that are more automated and sus-tainable and that take a holistic view for the

customer. This provides opportunities in the form of modernised claims-prevention ser-vices linked to water and fire damage as well as burglary that can enhance the cus-tomers’ perceived sense of security. Tech-nological advances can also present new work methods in risk assessment and claims adjustment that result in a lower claims frequency and claims costs.

Market positionLänsförsäkringar strengthened its position as market leader in a growing non-life insurance market, commanding a share of 30.8% (30.2), measured in premium income. Länsförsäkringar is a market leader in com-mercial, homeowner, motor and pet insur-ance lines.

Länsförsäkringar’s market share of com-mercial lines strengthened to 44.8% (41.0), measured in premium income.

The market share for homeowner insur-ance, 39.9%, and household insurance, 26.0%, measured in the number of insurance policies were essentially unchanged com-pared with competitors, despite an increase in the total number of insured objects. Läns-försäkringar’s portfolio increased by 9,000 homeowner insurance policies and 27,000 household policies in 2017.

The motor insurance business is continuing to capture market shares. Motor third-party liability increased to 39.5% (38.7) and in motor insurance to 27.3% (26.8), measured in premium income.

Brokered businessLänsförsäkringar Mäklarservice is Läns-försäkringar’s link to customers who choose to be represented by insurance bro-kers. The Länsförsäkringar Alliance’s bro-kered non-life insurance premiums rose 14% to SEK 2,044 M (1,787). The brokered non-life insurance business accounted for 31% of the Alliance’s total non-life insurance portfolio for commercial insurance. The strategy of clearly prioritising larger bro-kerage companies, to increase the effect on medium-sized companies, has proven to be successful. In addition to sales efforts, Länsförsäkringar continued to develop automated services in brokered non-life insurance business, to aid insurance bro-kers’ daily contact with Länsförsäkringar.

The Länsförsäkringar Alliance’s brokered group and health businesses amounted to SEK 257 M (255). Länsförsäkringar’s growth during the year was generated by new busi-ness in existing group life assurance.

Passenger-car insurancePercentage of no. of policies



If 23.9%

Folksam 18.9%

Trygg-Hansa 10.4%


Moderna 3.2%

Gjensidige 3.1%

Protector, 1.1%

Other 1.1%

The market share of passenger-car insurance amounted to 35.0%. Both Länsförsäkringar’s premium portfolio and the number of policies increased.

Homeowner insurancePercentage of no. of policies



Folksam 27.8%

If 12.6%

Trygg-Hansa 9.9%


Gjensidige 2.5%

Moderna 2.1%

Other 0.4%

Länsförsäkringar remained a market leader in home-owner insurance, with a market share of 39.9%.

Household insurancePercentage of no. of policies



Folksam 47.0%

If 11.2%

Trygg-Hansa 9.9%

Moderna 2.0%

Gjensidige 1.5%


Other 1.0%

The market share for household insurance amounted to 26.0%. The number of household insurance policies rose during the year.

Market shares

Non-life insurance

Non-life insurance 21Länsförsäkringar Alliance 2017

MotorLänsförsäkringar offers vehicle insurance in the retail, corporate and agriculture seg-ments. Growth remained strong in 2017. Länsförsäkringar’s premium income for motor third-party liability and motor insur-ance rose 5%, compared with market growth of slightly more than 3%. Läns-försäkringar thus increased its market share to 30.8% (30.3), measured in premium income.

Market positionLänsförsäkringar’s premium income for motor insurance increased almost 7%, in a market than grew 5%. The market share measured in premium income thus strengthened to 27.3% (26.8). In motor third-party liability insurance, Länsförsäk-ringar’s market share increased to 39.5% (38.7), measured in premium income. with growth of just under 2% in a market that essentially stood still. In the largest prod-uct – passenger-car insurance – Läns-försäkringar’s portfolio grew by 46,000 vehicles during the year. As a result, Läns-försäkringar retained its leading position in the market and insures more than one-third of cars in Sweden.

DevelopmentTo ensure long-term robust competitive-ness in motor insurance, one of the focus areas in 2017 was developing the motor-in-surance offering to our customers. Product content was strengthened and digital ser-vices for motor-insurance customers were improved. Digital services were expanded, for example with claims reporting in Läns-försäkringar’s app, and more options for customers to change their insurance directly online. Improving pricing models for motor-insurance products was also a high priority for the retail and corporate segments.

HomeLänsförsäkringar offers home insurance for single-family homes, apartments and vaca-tion homes. The total home-insurance mar-ket grew SEK 166 M in 2017, corresponding to 1.0% measured in premium income. During the same period, Länsförsäkringar increased its premium income in home insurance by SEK 312 M or 6.7%.

Market positionLänsförsäkringar remains a market leader in home insurance, with a market share of 30.9% (29.3), measured in premium income.Länsförsäkringar also remains a market leader in homeowner insurance, with a mar-ket share of 39.9%, measured in the number of insurance policies. Länsförsäkringar is also a market leader in vacation-home insurance, holding a market share of 40.9%, measured in the number of insurance poli-cies. In the separate household insurance segment, Länsförsäkringar has a market share of 26.0%, measured in the number of insurance policies.

DevelopmentCompetition in the home-insurance seg-ment varies across Sweden and is generally unchanged, at the same time as market shares remain stable. The continued trend in home insurance is attractive package offerings with broad coverage, and what was previously supplementary insurance is now being included in the basic package. All insurance companies are working to offer good digital solutions.

YachtLänsförsäkringar offers yacht insurance. The market share in 2017 amounted to 32.5% (32.4), measured in the number of insurance policies.

Market positionLänsförsäkringar retained its leading mar-ket position in 2017. The closest competitor Moderna Försäkringar/Atlantica has a mar-ket share of 18.7%, measured in the number of insurance policies.

DevelopmentTheft of primarily newer types of outboard engines continued to increase during the year, although the number of registered claims fell slightly. The unstable summer weather and lack of major storms in the autumn were probably the reasons for the slightly lower claims figure in 2017 than in 2016.

Non-life insurance

Motor 2017 2016

Premiums earned, gross, SEK M 8,757 8,358

Passenger cars, no. of policies 1,718,000 1,672,000

Market share, no. of passenger cars, % 35.0 36.1

Other vehicles, no. of policies 1,422,000 1,387,000

Market share, no. of other vehicles, % 48.0 49.5

Home 2017 2016


Household, no. of policies 841,000 814,000

Market share, no. of households, % 26.0 26.0

Homeowner + home content, no. of policies 696,000 687,000

Market share, no. of homeowner + home content, % 39.9 40.1

Vacation homes, no. of policies 236,000 235,000

Market share, no. of vacation homes, % 40.9 40.9

Yacht 2017 2016

Premiums earned, gross, SEK M 149 147

Yachts, no. of policies 90,000 86,000

Market share, no. of yachts, % 32.5 32.4


CommercialLänsförsäkringar offers insurance for all industries, from small to large companies. Premium income for commercial lines amounted to SEK 5,991 M (5,691) in 2017.

Market positionLänsförsäkringar’s market share measured in premium income rose to 44.8% (41.0), and Länsförsäkringar thus retained its leading position. The higher market share was largely due to If and Trygg-Hansa changing their reporting during the year and report-ing liability insurance under other non-life insurance business. Even after adjusting for this, Länsförsäkringar’s market share was stable at 41%, measured in premium income.

DevelopmentA new commercial insurance policy “start your own company insurance” was launched during the year, customised to new small businesses. The insurance is a set package and offers broad insurance cover. Many companies are continuing to offer commer-cial insurance which leads to general price pressure, while portfolio procurements from larger insurance brokers are more and more common. For small companies, the trend is shifting towards industry-specific insurance and digital distribution.

Competition remains fierce in cargo insurance, particularly in the large company segment, and premium volumes were rela-tively unchanged during the year. In liability insurance, the trend of an increasing num-ber of players showing interest in the small and medium-sized businesses segment is continuing, thus intensifying competition.

Through the International Network of Insurance (INI), Länsförsäkringar is one of the few companies in the Swedish market that can offer customised and local insur-ance solutions in more than 100 countries at competitive prices.

AgricultureLänsförsäkringar offers insurance for resi-dential farming, part-time agricultural operations and production agriculture.

Market positionIn 2017, premium income for agricultural insurance increased 4%. Länsförsäkringar remains the leader in providing insurance cover for agricultural customers.

DevelopmentThe segmentation among agricultural cus-tomers has improved opportunities to give customers tailored insurance cover and to risk adjust premiums in the various insur-ance solutions. Jointly handling the main operations in “green businesses” has led to standardisation and efficiency enhance-ments. The option of supplementing cus-tomer cover in the agricultural area with commercial solutions on the same insur-ance policy means that Länsförsäkringar is well-equipped for the continued rapid development in agriculture towards larger and more complex, diversified companies.

Agria DjurförsäkringLänsförsäkringar offers pet and crop insur-ance through Agria. Premiums earned amounted to SEK 3,140 M (2,895).

Market positionAgria is the benchmark and market leader in pet insurance in both Sweden and Nor-way. The Swedish operations continued to deliver stable growth, mainly in cat, pet and horse insurance. Agria launched new dog insurance policies customised for 423 dif-ferent breeds on 1 April. Focus on cat insur-ance is continuing and a new collective vet-erinary-care insurance for cat shelters was launched at year-end. The operations in Norway continued to display a stable trend with higher business volumes. More compa-nies consider pet insurance to be an attrac-tive niche in the insurance industry and the offering in the Norwegian market is increas-ing. The Danish operations also posted a stable, positive volume growth. Horse insur-ance was launched in Denmark with strong, initial sales. Profitability improved in the UK and awareness of the Agria brand improved during the year and the portfolio grew sig-nificantly. We are closely following develop-ments after the UK referendum to leave the EU and are making preparations for the changes that may be needed in connection with Brexit. Establishment of operations commenced in France during the year.

DevelopmentAgria conducts claims-prevention and health-promotion activities for animals and offers advice and information to animal owners via various digital channels, such as the Agria app, the Pälspodden podcast, and the Firstvet service. Agria’s Research Fund supports research on animal health and well-being and the importance of animals to people and society. Agria’s extensive claims statistics are used by researchers and breed clubs to improve animal health and sustainability.

Non-life insurance

Commercial 2017 2016


No. of policies 234,000 230,000

Market share, premium income commercial lines, % 44.8 41.0

Agriculture 2017 2016


Agricultural insurance, no. of policies 190,000 189,900

Tractor insurance, no. of policies 283,000 283,000

Agria Djurförsäkring 2017 2016



Health 2017 2016


Market share, accident and health insurance, premiums paid, % 20.5 20.0

Children’s insurance 2017 2016

Premiums earned, gross, SEK M 538 494

No. of insured parties 300,000 290,000

Non-life insurance

Children’s insuranceLänsförsäkringar offers pregnancy and chil-dren’s insurance. A new children’s insurance was launched in 2015 and Länsförsäkringar has since invested heavily in the insurance, which is hailed by the Swedish Consumers Insurance Bureau as one of the best in the market. Annual sales have increased by more than 30%, measured in the number of insurance policies, since the new product was launched in 2015.

ReinsuranceLänsförsäkringar Sak manages the Läns-försäkringar Alliance’s joint reinsurance cover and internal Alliance reinsurance with a number of pool solutions. The internal reinsurance and the reinsurance jointly pro-cured for the Länsförsäkringar Alliance is a major asset for Länsförsäkringar and its customers. The system ensures a stable solution at low cost by distributing risk within the Länsförsäkringar Alliance and procuring external cover for large claims. The Länsförsäkringar Alliance’s internal reinsurance, to which Länsförsäkringar Sak contributes a 15% share of assumed reinsurance, noted few large claims during the year.

Länsförsäkringar Sak also underwrites a highly diversified portfolio in internation-ally assumed reinsurance, both risk and catastrophe business, specialising in prop-erty business. The long established strategy is to underwrite business from mutual companies with broad geographic risk diversification.

HealthLänsförsäkringar offers health care, acci-dent and health insurance. Premiums earned increased by slightly more than 7% to SEK 1,665 M (1,551) in 2017.

Market positionLänsförsäkringar’s market share was stable at slightly more than 20%. The market for personal-risk insurance was affected by growing concern that social insurance in Sweden will be insufficient, and greater household debt. Personal-risk insurance provides an important supplement for increasing financial security in the event of illness, accident, unemployment and death. Länsförsäkringar remains a market leader in health care insurance and has the most comprehensive products featuring preven-tive health services, the right care at the right time, and effective rehabilitation.

DevelopmentDigital handling of insurance policies was developed during the year. The policies have a digital health declaration, which improves the efficiency of handling times and pro-vides better and faster service. Digital ser-vices for the Bo Kvar insurance, which pro-vides cover in the event of death, illness or unemployment, were also developed during the year. This insurance policy is now offered to customers that have their house-hold insurance with Länsförsäkringar, in addition to customers with mortgages with Länsförsäkringar Bank.

The government is preparing a fringe -benefit tax for health care insurance paid by the employer, which could come into effect on 1 July 2018. Länsförsäkringar believes that health care insurance supports employers’ health and safety activities and serves as a health-promoting and rehabili-tating measure and should therefore be taxed like similar measures.


Claims Number

Claims costs,

SEK M1)

Commercial 35,400 2,491

Agriculture 24,200 880

Home 293,600 2,699

Accident and health 58,100 369

Yacht 2,753 81

Private motor 370,500 2,839

Commercial motor 94,300 1,267

Total 878,853 10,6261) Compensation paid for claims that occurred in 2017.

Service outside SwedenCustomer needs are also met outside Sweden and the claims-adjustment service has been expanded to provide rapid assistance abroad, for both individual claims and more large-scale events. For emergency claims, special resources are required. The Länsförsäkringar Alliance is one of the largest shareholders of SOS International, which assists customers through both travel and vehicle insurance. Help is provided for medical assistance and transportation when customers suddenly fall seriously ill or are involved in an accident while abroad, and for other types of events, such as delayed baggage. For motor insurance claims abroad, help is provided in the form of breakdown services, referrals to car repair garages and transportation. SOS Interna-tional processes slightly more than 15,000 international cases for the regional insur-ance companies every year.

Non-life insurance

Claims adjustmentEach individual regional insurance company offers a comprehensive range of non-life insurance products to its private, agricul-tural and commercial customers. Claims processing takes place locally, close to cus-tomers. The combination of local presence and the ability to tie together these resour-ces with shared expertise results in high-quality customer service for all types of claim incidents. A total of 900 people in the Länsförsäkringar Alliance work in the area of claims adjustment and an international network of partners also provides service outside Sweden.

Claims adjustment entails the delivery of the product purchased by the customer and should be quick, secure, be carried out in a highly skilled manner and provide the cor-rect compensation. Rapid digital develop-ments combined with fierce competition continuously set high demands on claims adjustment, which requires that work meth-ods, terms and conditions, and service options in digital channels are developed and refined to meet customers expecta-tions when a claim arises.

Natural catastrophes It was a second consecutive year of rela-tively minor natural catastrophes. Total expenses amounted to SEK 135 M, com-pared with SEK 155 M for 2016 and an aver-age cost of about SEK 540 M per year for 2013-2015. The summer, which many holidaymakers perhaps though was “bad” was on the con-trary quiet and “good” from a claims point of view. Without the most intense high-summer heat, there are fewer instances of torrential rain and less thunder storms. However, several areas around Gothenburg and Bohuslän province did suf-fer from two major cases of flooding due to torrential rains in June and September.

The issue of natural catastrophes has matured despite fewer natural disasters in 2017. Länsförsäkringar is active in public debate and, as an expert in the field, can describe risks based on monetary terms to help boost understanding.

Claims preventionClaims prevention is a key element of the regional insurance companies’ sustainability efforts and avoiding claims is always a ben-efit for the environment.

Follow-up tests of sealing layers were car-ried out in 2017 and it was concluded that there are still shortcomings in various choices of method and materials, but it is positive that the number of sub-standard sealing layer solutions has fallen.

During the year, Länsförsäkringar focused intensely on unprotected road-us-ers, for example, by performing crash tests of different bicycle models and testing bicycle helmets. Important research find-ings were published and gained widespread media attention.

Major claims Major claims require special resources. Länsförsäkringar has prepared a contin-gency plan for managing large claims, and the regional insurance companies also con-tinuously monitor the risks in their local areas. The primary purpose of the contin-gency plan is to establish a state of pre-paredness within the individual regional insurance companies, and also to coordi-nate available resources. Consequently, the regional insurance companies are well-equipped and prepared for any major claim that may occur.


Non-life insurance

Comments on financial results, Non-life Insurance

Earnings and profitabilityEarnings from the Länsförsäkringar Alli-ance’s non-life insurance operations consist of the total earnings of the 23 regional insur-ance companies and the Länsförsäkringar AB Group, excluding Länsförsäkringar Fond-liv and the Länsförsäkringar Bank Group.

Operating profit for the Länsförsäk-ringar Alliance’s non-life insurance opera-tions increased to SEK 7,078 M (4,626), after bonuses and discounts to customers of SEK 1,798 M (1,202).

Investment income increased to SEK 6,969 M (5,009) and the technical result improved to SEK 2,529 M (1,813) due to solid premium growth and a moderate increase in claims payments. The claims ratio

improved to 74% (75). The expense ratio fell to 18% (20) and the combined ratio improved to 92% (95).

Solvency capital increased SEK 8,193 M in 2017, amounting to SEK 66,149 M on 31 December 2017. The solvency margin amounted to 253% (236).

Business volumesLänsförsäkringar continued to strengthen its leading position in the Swedish non-life insurance market with a market share of 30.8%, according to statistics from Insur-ance Sweden for 2017.

Premiums earned increased 6% to SEK 25,504 M (24,073). Both portfolio and pre-mium increases contributed to the increase.

Private insurance increased almost 7%, with growth continuing to be driven by house-hold, homeowner and accident insurance. Agria reported robust growth, particularly in its international operations. The commer-cial segment increased strongly by more than 6%, primarily driven by healthy growth in commercial property and commercial insurance. Premiums earned in the total motor insurance segment rose 5%, driven by both portfolio and premium increases. Länsförsäkringar’s growth in the total motor insurance segment remained stronger than market growth, which according to Insur-ance Sweden was slightly more than 3% in 2017. Premiums earned in the agriculture segment increased slightly more than 4%.

Non-life insurance 2017 2016 2015 2014 2013


Technical result before bonuses, SEK M 2,529 1,813 2,700 2,266 1,247

Operating profit, SEK M 7,078 4,626 4,365 5,209 3,863

Expense ratio 18 20 19 19 19

Claims ratio 74 75 72 74 79

Combined ratio 92 95 91 93 98

Technical result as a percentage of premiums earned after ceded reinsurance 10 8 12 11 6

Solvency capital, SEK M 66,149 57,956 51,628 46,493 40,458

Solvency margin, % 253 236 222 209 206



Non-life insurance

Operating profitSEK M

0

2,000

4,000

6,000

8,000

20172016201520142013

The improved operating profit in 2017 was mainly due to strong investment income, but also an improved technical result.

Allocation of investment assets

Equities, 41.8%

Interest-bearing, 29.1%

Property, 8.2%

Other, 20.9%

Total investment assets amounted to SEK 101.4 billion on 31 December 2017.

Solvency ratio on 31 December 2017

%

0

50

100

150

200

250

300

Länsförsäkringar Sak

23 regional insurance companies

The regional insurance companies and Länsförsäkringar Sak remained very well capitalised in 2017.

Claims trendClaims payments after ceded reinsurance amounted to SEK 18,571 M (17,942), up 3.5%. The claims ratio fell to 74% (75). The trend from earlier quarters in 2017 persisted with lower claims costs for accident and water damage, but higher costs for fire damage and motor insurance claims.

Länsförsäkringar sees a clear connec-tion between the claims trend and the dis-traction of using a mobile telephone while driving. Claims costs for young car owners have increased markedly by 30-40% in the past five years. Länsförsäkringar welcome the new Swedish law that came into effect on 1 February 2018 that bans drivers from holding a mobile in their hands while driving.

Investment incomeThe favourable performance of the global stock markets in the fourth quarter, partic-ularly in emerging markets, was reflected in the Länsförsäkringar Alliance’s investment income of SEK 1,756 M for the fourth quar-ter. This resulted in very healthy investment income for 2017 of SEK 6,969 M (5,009). Investment income amounted to 7% of the asset value at the end of 2017, driven by high returns on equities investments and properties.


The bank with Sweden’s most satisfied customersBanking Länsförsäkringar Bank is a customer-owned bank with a strong local presence. With its close customer relationships through local meetings and market-leading digital services, Länsförsäkringar Bank is the company in the bank market with the most satisfied banking and mortgage customers in both the retail and corporate sectors.

Economic environment and market A sense of optimism prevailed in the eco-nomy during 2017, with the global economy growing stronger. The largest surprise was Europe’s performance where the economy clearly surged and growth exceeded expec-tations. However, inflation remained far short of targets, which means that the ECB is expected to maintain its expansive mone-tary policy. The US economy also trended positively, particularly the strong labour market, although inflation was lower than anticipated, which led to the Fed continuing its austerity measures in monetary policy at a restrained rate and increased interest rates three times. The Republican tax reform slightly raised expectations of US growth in 2018, further fuelling stock mar-ket performance. In general, the global economy was surprisingly stable in 2017, particularly in light of the political risks that dominated the news. The UK applied to leave the EU, Germany experienced difficul-ties in forming a government and the US markedly elevated its tone towards North Korea, while risks in the Middle East increased. Stock markets generally posted a favourable trend for the year, led by emerging markets.

The fixed-income market reported no major fluctuations during the year. Long-term US interest rates moved sideways fol-lowing a sharp upswing towards the end of 2016, while short-term rates tracked the Fed’s three rate hikes. Swedish and Euro-pean long-term interest rates ended 2017 slightly higher than at the start of the year and short-term rates fell marginally. Rates on Swedish covered bonds fell during the year and demand from investors was good.

The Swedish economy performed strongly during the year; growth was sur-prisingly positive, the labour market contin-ued to improve and inflation rose. The

employment rate is now well above levels prior to the financial crisis of 2008. Never-theless, the Riksbank decided to wait out interest rate increases, and the repo rate has been negative for almost three years. The SEK strengthened against the USD but weakened against the EUR during the year. Continued expansive signals from the Riks-bank, a degree of concern regarding the Swedish housing market and a stronger EUR underpinned this trend. Housing prices generally show seasonal variations with a weaker performance towards the end of the year, yet 2017 reported considerably weaker figures than normal and housing prices, excluding seasonal variations, fell 5.3% in the second half of the year.

The Swedish Financial Supervisory Authority’s decision to introduce a stricter repayment requirements combined with a temporarily high supply of new-builds may have accelerated this development. Looking forward, the housing market has now become a more distinct risk for the Swedish economy, even though the underlying eco-nomic conditions for households remain unchanged.

Regulatory developmentRegulatory changes are expected to con-tinue to have a major impact on banks. During the year, the European Commission and Basel Committee continued their work on the ongoing overview of current capital adequacy regulations.

At the end of 2016, the European Com-mission published its proposed reviews of the existing capital adequacy rules concern-ing both the regulation and the directive. EU negotiations are under way and are expected to be completed at the end of 2018. The effective date is currently uncertain.

In December 2017, the Basel Committee published its regulatory reforms to com-

Business volume: SEK 520 billion

Primary bank customers who are also insurance customers

Number of primary bank customers: 467,000

Banking28 Länsförsäkringar Alliance 2017

plete the applicable Basel III rules. These reforms entail major changes and are pro-posed to come into effect on 1 January 2022, with a phase-in period of five years. For Sweden, these reforms must first be incorporated into EU law.

In December 2017, the Swedish National Debt Office announced its decision on re- solution plans and minimum requirements for own funds and eligible liabilities (MREL) for the institutions that have business activ-ities that are deemed to be critical to the Swedish financial system, including Läns-försäkringar Bank. The implementation of the new accounting rules under IFRS 9 was also completed during the year and will impact the method used for provisions for loan losses in 2018.

In addition to capital adequacy and accounting related rules, the Bank is also impacted by a number of other operational regulations. Examples of this are MiFID II that has been gradually implemented into the operations and that comes into effect at the start of 2018 and the Payment Ser-

vices Directive (PSD2), which is another set of regulations that will have a major effect on banks in the future.

Länsförsäkringar Bank is highly prepared and well capitalised for impending changes, even if it is slightly unclear at this stage what the effects will be.

Strategy and goalsLänsförsäkringar Bank was founded in 1996 and is now the fifth largest retail bank in Sweden with a business volume of SEK 520 billion.

The banking operations are conducted only in Sweden and the market position is continuing to continuously strengthen.

The strategy is to offer banking services to the Länsförsäkringar Alliance’s custom-ers and leverage Länsförsäkringar’s strong brand and local presence. The banking operations have a large potential customer base with the Länsförsäkringar Alliance’s 3.8 million customers. The main target groups are the 3.2 million retail customers, of whom 2.3 million are home-insurance cus-

tomers. Other target groups are agricul-tural customers and small businesses. The aim is, based on sustained low risk, to main-tain healthy growth in volumes and profit-ability, have the most satisfied customers and more customers who have both bank-ing and insurance with Länsförsäkringar.

According to the 2017 Swedish Quality Index customer satisfaction survey, Läns-försäkringar Bank is the single player on the bank market with the most satisfied retail customers, an accolade that Länsförsäk-ringar Bank has won twelve times in the past fourteen years. For the first time, Läns-försäkringar Bank was also named the sin-gle player with the most satisfied corporate customers and the player with the most satisfied mortgage and corporate custom-ers for property loans. This is confirmation of the banking operations’ clear customer focus and high quality. With a comprehen-sive banking and insurance offering from Länsförsäkringar, both retail and corporate customers receive a secure, total solution.

GDP growth%

-8

-6

-4

-2

0

2

4

6

8

Sweden US

Germany Eurozone

The Swedish economy performed well during the year.

Housing-price trendIndex 2005-01 = 100

100

150

200

250

300

Housing prices Tenant-owned apartments Single-family homes

The Swedish housing market declined in 2017, due to higher supply, stricter mortgage repayment require-ments and greater uncertainty regarding future trends in the housing market.

Market facts

Inflation%

-2

-1

0

1

2

3

4

5

Sweden US

Eurozone

Inflation (CPI) in Sweden rose during the year, partly driven by temporary effects.

01 06 1102 07 1203 08 1304 09 1405 10 15 16 1708 09 10 11 12 1413 15 16 17 05 06 07 08 09 10 11 12 1413 15 16 17

Banking

Banking 29Länsförsäkringar Alliance 2017

Banking

Offering

SavingsLänsförsäkringar focuses on giving custom-ers secure savings. For example, customers are offered savings through various types of deposit accounts and also through such products as mutual fund savings, Invest-ment Savings Accounts (ISK) and equities savings. Customer meetings strive to ensure that customers have secure private finances in which savings and mortgage repayments are key elements. By makingmortgage repayments, a customers’ privatefinances can become more balanced overtime.

DepositsDeposits from the public rose 9% to SEK 99 billion and growth has been stable in recent years. The market share for household deposits was 4.8% and the number of deposit accounts increased 10%.

The Investment Savings Account (ISK) displayed healthy growth during the year.

Fund and securitiesSweden’s fund market continued to grow in 2017. Länsförsäkringar Fondförvaltning commands a market share measured in fund assets of 3.4%. The fund offering

includes 37 mutual funds managed underLänsförsäkringar’s own brand with variousinvestment orientations and a fund plat-form with external funds. Work continued during the year on establishing in-house Swedish equity fund management. Several steps were taken in sustainability, for exam-ple, a sustainability analysis was developed for Swedish equity asset management. In addition, publication of Morningstar’sSustainability Rating for funds was initiatedon Länsförsäkringar’s website and Swesif’ssustainability declaration on Länsförsäk-ringar’s website was upgraded.

The fund volume increased 15% to SEK 159 billion during the year, of which man-aged funds under Länsförsäkringar’s own brand amounted to SEK 139 billion. The average return of the funds for the year was 9.8%. Länsförsäkringar’s award-winning mobile app allows customers to manage fund savings, change, purchase and sell funds and shares, thus consolidating the bank’s strong position in digital services. Trading in equities and other securities is growing steadily among customers and the number of deposits rose during the year. Structured products are also offered, such as equity -linked bonds.

Loans The bank’s lending is continuing to grow stably and maintains low risk. Lending increased 15% to SEK 261 billion. The largest product is retail mortgages, which com-prises 76% of the loan portfolio. Retail mortgages are mostly granted by Läns-försäkringar Hypotek, which offers mort-gages up to 75% of the market value. Any surplus mortgage portions are offered by Länsförsäkringar Bank. Loans to tenant- owners’ associations and to multi-family housing are offered besides mortgages. The market share for mortgages amounted to 6.3%.

In 2014, Länsförsäkringar Bank was the first Swedish bank to licence all of its mort-gage loan application processors. Such licensing exams, which are based on the proficiency requirements of the EU Mort-gage Credit Directive, create greater secu-rity for customers.

Länsförsäkringar is one of the largest providers of agricultural loans in Sweden. The bank’s agricultural loans are primarily targeted to family-owned agricultural oper-ations that are insurance customers with Länsförsäkringar. The average agricultural loan commitment is small and the percent-

Business volumes and net interest income

SEK bn SEK M

0

100

200

300

400

500

600

201720162015201420130

1,000

2,000

3,000

4,000

5,000

6,000

Mutual funds

Deposits

Mortgages

Agricultural loans

Other loans

Net interest income, SEK M

Total business volumes have increased an average of 12% over the past five years. Net interest income has risen an average of 15%.

Bank cards and card-payment transactions

Cards, thousands Transactions, millions

0

200

400

600

800

201720162015201420130

50

100

150

200

Cards, thousands Transactions, millions

The number of bank cards and card-payment transac-tions has risen steadily over the past five years.

Customer satisfaction bank, retail customersSource: Swedish Quality Index

Index

0

10

20

30

40

50

60

70

80

Länsförsäkringar Bank is the single player in the bank market with the most satisfied retail customers accord-ing to the Swedish Quality Index (SQI 2017).

Source: Swedish Quality Index

Länsförsäkringar BankIndustry

SwedbankHandelsbanken Nordea

SEB


Banking

age of first-lien mortgages is 94%. Agricul-tural lending grew at a lower rate than other loans during the year and its share of total loans is falling.

Wasa Kredit offers leasing, hire pur-chase and unsecured loans. Lending rose by 18% to SEK 22 billion during 2017.

Payments and bank cardsBank cards are continuously developed to offer customers security and a high level of service in their payment services. The num-ber of bank cards increased 13% to 655,000 and the number of card-payment transac-tions rose 14% to 154 million. The Swish ser-vice, which allows private individuals to send payments directly to the recipient’s account using a mobile telephone number, performed well during the year. Läns-försäkringar Bank, which is one of the driv-ers of the Swish partnership, owns 10% of the company that manages and develops the service.

Corporate segmentDeposits in the corporate segment con-tinued to grow and deposits from small businesses amounted to SEK 11.2 billion. The largest increase was noted in deposits in trading and investment accounts. Loans to small businesses amounted to SEK 1.8 billion.

Offering to young peopleThe bank’s offering to young people directed to teenagers aged 12-17 is one of the best in the market. The young person’s bank card makes everyday life easy, with purchases and cash withdrawals immedi-ately debited from the young person’s account. A card and payment service is offered to young people from the age of 16, comprising a young person’s account and bank card, internet and telephone banking and digital services. The account also includes the Swish service.

Retail deposits

Source: Statistics Sweden


Swedbank, 20.7%

Handelsbanken 18.4%

Nordea 13.5%

SEB 11.7%

Danske Bank 2.1%

SBAB 4.4%

Other 24.4%

The market position in retail deposits strengthened to 4.8% (31 December 2017).

Managed funds under Länsförsäkringar’s own brand

Source: Moneymate


Swedbank Robur 20.5%

SEB 11.9%

Nordea 11.5%

Handelsbanken 11.0%

AMF Fonder 3.1%

SPP Fonder 4.2%

Other 34.4%

The volume of managed funds under own brand represents a market share of 3.4% of the Swedish fund volume.

Retail mortgages

Source: Statistics Sweden


Swedbank 24.4%

Handelsbanken 22.7%

SEB 14.2%

Nordea 14.2%

Danske Bank 3.5%

SBAB 8.0%

Other 6.7%

The market position in mortgages amounted to 6.3% (31 December 2017).

Market shares

Loans, product distribution

Mortgages, 75.7%

Agriculture, 10.2%

Unsecured loans, 3.2%

Leasing, 2.8%

Hire purchase, 3.6%

Multi-family housing, 3.0%

Other 1.5%

The loan portfolio primarily comprises retail mortgages, representing 76% of lending in the Bank Group.


Banking

Loans and credit quality

Credit processLänsförsäkringar Bank’s loans are granted in Sweden and in SEK. The geographic spread of lending to both retail and corpo-rate customers is well-diversified, with low average loan commitments per customer. Loan origination is primarily directed towards retail mortgages for private indi-viduals, small-scale family-owned agricul-tural operations with a low risk level and finance-company products. Loans are based on standardised, centrally estab-lished credit regulations and most credit decisions are made locally. In the business model between Länsförsäkringar Bank and the regional insurance companies, there is a strong incentive to maintain high credit quality. The high credit quality of the loan portfolio is the result of the low risk appe-tite, credit regulations combined with credit scoring and local customer and market knowledge. The credit regulations impose strict requirements on customers’ repay-ment capacity and the quality of collateral. In connection with credit scoring, the repayment capacity of borrowers is tested using “left to live on” calculations. These calculations apply a significantly higher interest rate than the actual rate. Both the loan portfolio and value of the collateral are continuously monitored and quality assured. Distribution and sales of finance-company products and credit deci-sions on these products mainly take place through Wasa Kredit’s own channels.

Mortgages for private individualsPoliticians, authorities and banks focused intently on housing prices and household debt during the year. It is essential to main-tain high credit quality. Mortgage repay-ments are a key tool in ensuring that house-holds have stable and secure finances. Mortgage repayment requirements were introduced on new mortgages in June 2016, meaning that customers meeting these requirements must make the minimum required repayments. Länsförsäkringar

encourages all customers to make repay-ments by presenting a recommended repayment plan, as well as an alternative plan, at all customer meetings where mort-gages are discussed. Even customers that do not fall under the repayment require-ments are encouraged to pay off their mortgage. Stricter repayment requirements on new mortgages for customers with debt ratios of more than 450% will be imple-mented in March 2018.

Loans to the public amounted to SEK 261 billion. Retail mortgages for private indi-viduals’ housing comprise 76% of the loan portfolio. First-lien mortgages, meaning loans with a loan-to-value ratio (LTV) of up to 75%, account for 95% of retail mort-gages. A total of 72% of the collateral for retail mortgages comprises single-family homes. The average loan commitment is low at SEK 1.2 M per borrower. 58% of borrow-ers have a commitment of less than SEK 2 M. The geographic spread of lending is diverse, thus reducing Länsförsäkringar Bank’s concentration risk in the event of price declines in the market.

The weighted average loan-to-value ratio for mortgage lending declined to 60%. Market-value analyses of the collateral in retail mortgages are performed continu-ously and a market-value update is per-formed at least once per year for all sing-le-family homes and tenant-owned apartments.

First-lien mortgages for agricultural operationsA total of 94% of agricultural loans, repre-senting 10% of the loan portfolio, comprises first-lien mortgages. The remaining lending comprises second-lien mortgages and operating credits. Family-owned agricul-tural operations account for 97% of agricul-tural loans. The average commitment is low at SEK 2.4 M per borrower. Agricultural lending grew at a lower rate compared to other lending during the year.

Leasing, hire purchase and unsecured loansWasa Kredit offers leasing and hire pur-chase products that jointly represent 6% of the Group’s loan portfolio. Wasa Kredit also offers unsecured loans, comprising a further 3% of the loan portfolio.

Loans to small businessesLoans to small businesses totalled SEK 1.8 billion at year-end, of which SEK 1.0 billion comprised first-lien mortgages for indus-trial and office properties and SEK 0.8 bil-lion operating credits to small businesses. The business is continuing to be developed while maintaining low risk.

Impairment and impaired loansThe high credit quality of the loan portfolio is a result of loan origination being based on a low risk tolerance. A settlement model is applied regarding the commitment that the regional insurance companies have for loan losses related to the business they have originated. The model entails that the regional insurance companies cover 80% of the provision requirement on the date when an impairment is identified, by off-setting this against a buffer of accrued commission.

Loan losses amounted to SEK 58 M (38), corresponding to a loan loss level of 0.02% (0.02). Reserves totalled SEK 268 M (250), corresponding to a reserve ratio in relation to loans of 0.10% (0.11). In addition, SEK 88 M (130) of the remuneration to the regional insurance companies is withheld, in accor-dance with the settlement model described above. The reserve ratio in relation to loans, including withheld remuneration to the regional insurance companies, was 0.14% (0.17).

During the year, the bank completed its work on implementing the new rules on provisions for loan losses in accordance with IFRS 9.


Funding and liquidity

Targets The aim of the funding operations is to ensure that the Group has a sufficiently strong liquidity reserve to manage turbulent periods in capital markets, when funding opportunities are limited or prevailing cir-cumstances render funding impossible. The Group’s liquidity risk is controlled on the basis of a survival horizon, meaning how long all known cash flows can be met without access to financing in the capital market.

Financing sourcesThe composition of financing is a result of the bank being a retail bank with large mortgage lending operations. Accordingly, the main financing sources are deposits in Länsförsäkringar Bank and funding based on Länsförsäkringar Hypotek’s covered bonds. These covered bonds have the high-est credit ratings, Aaa from Moody’s and AAA/Stable from S&P Global Ratings. Long-term senior funding and short-term funding takes place in Länsförsäkringar Bank. The Group endeavours to maintain a sound balance of covered and senior unsecured funding and all capital market funding is conducted under a number of funding pro-grammes. The single most important source of financing is the Swedish covered bond market, where Länsförsäkringar Hypotek has a number of outstanding liquid bench-mark bonds. At year-end, Länsförsäkringar Hypotek had six outstanding benchmark

loans with maturities until 2024. The Swe-dish covered bond market is one of Europe’s largest and most liquid, which secures good access to long-term financing.

DiversificationSince all lending is in SEK, the Group has no structural need for financing in foreign currency. However, the bank has chosen to conduct a certain portion of its capital mar-ket funding in international markets in an effort to diversify and broaden the investor base. Funding has continuously taken place through issuance of Euro Benchmark Cov-ered Bonds. Länsförsäkringar Bank also issued a senior unsecured Euro Benchmark bond for the first time in 2017, which has increased funding diversification and strengthened the brand in both the Swedish and European capital markets. In addition, diversification takes place through issu-ances of bonds, primarily in NOK, CHF and GBP. The international markets were pri-marily used for long maturities.

Refinancing and liquidity risk management The Bank Group works pro-actively with its outstanding liabilities by repurchasing bonds with short remaining terms against issuance of long-term liabilities as a means of managing and minimising the liquidity and refinancing risk. The market risks that arise in the lending and funding operations are managed through derivative instruments.

DepositsThe share of deposits in the Group’s total financing amounted to 33% on 31 December 2017. Deposits were up 9% during the year, strengthened as a result of the bank’s healthy customer growth.

Funding operations A relatively large portion of the funding took place during the first six months of the year when there was high demand in the market.

In March, Länsförsäkringar Hypotek issued a seven-year Euro Benchmark- covered bond for a nominal EUR 500 M, and in September, Länsförsäkringar Bank issued a five-year senior unsecured Euro Bench-mark-covered bond for a nominal EUR 500 M. The transaction was the first step of a long-term strategy to also build up an investor base in the Euro market for senior funding. In addition, Länsförsäkringar Hypotek issued two Swedish benchmark bonds during the year, LFH516 and LFH517, which mature in September 2023 and September 2024, respectively. The average remaining term for the long-term financing is 2.6 years for senior unsecured bonds and 3.7 years for covered bonds.

LiquidityEffective long-term planning and low risk tolerance are the hallmarks of the bank’s liquidity and funding management. A satis-factory liquidity reserve is in place to ensure that sufficient liquidity is always available. The management and investment of the liquidity reserve are conservative.

The liquidity reserve amounted to SEK 48 billion at 31 December 2017. The liquidity reserve is invested in securities with very high credit quality and that are eligible for transactions with the Riksbank and, where appropriate, with the ECB. A total of 58% of the liquidity reserve comprises Swedish covered bonds, 21% Swedish government securities, 8% other Swedish bonds with an AAA/Aaa credit rating, 6% bonds issued or guaranteed by European governments and multinational development banks, 4% deposits with the Swedish National Debt Office and central bank and 3% Nordic

Banking

Financing sources

Covered bonds, 48.3%

Deposits, 32.8%

Senior unsecured bonds, 11.7%

Equity, 4.7%

Commercial papers, 0.3%

Due to credit institutions, 1.3%

Subordinated debt, 0.9%

The largest source of financing in the Group is covered bonds, representing 48.3%.

Funding by currency

SEK 79%

EUR 17%

CHF 2%

NOK 1%

USD 0.5%

GBP 0.5%

Wholesale funding primarily takes place in the Swedish market and in SEK.


AAA/Aaa-rated covered bonds. Slightly more than SEK 600 M of the liquidity reserve comprises green bonds. By utilising the liquidity reserve, contractual undertak-ings can be met for more than two years without needing to secure new funding in the capital market.

The Group’s Liquidity Coverage Ratio (LCR) for the consolidated situation on 31 December 2017 according to the Swedish Financial Supervisory Authority’s definition amounted to 202% and according to the European Commission’s delegated act to 339%. The Net Stable Funding Ratio (NSFR) for the consolidated situation amounted to 116%* on 31 December 2017.

* The calculation is based on Länsförsäkringar Bank’s interpreta-tion of the Basel Committee’s most recent Net Stable Funding Ratio proposal.

RatingLänsförsäkringar Bank’s long-term credit rating is A1/Stable from Moody’s and A/Stable from S&P Global Ratings. The short-term credit ratings are A–1 from S&P Global Ratings and P–1 from Moody’s. Länsförsäk-ringar Hypotek’s covered bonds maintained the highest credit rating of Aaa from Moody’s, and AAA/Stable from S&P Global Ratings. Länsförsäkringar Hypotek is thus one of three issuers in the Swedish market for covered bonds with the highest rating from both S&P Global Ratings and Moody’s.

Maturity profileSEK bn

0

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35

40

2025–2024202320222021202020192018

Covered bonds Senior unsecured funding Commercial papers

Comments on financial results, Länsförsäkringar Bank

Earnings and profitabilityThe Länsförsäkringar Bank Group’s operat-ing profit increased 9% to SEK 1,599 M (1,467), due to higher net interest income. Net interest income rose 15% to SEK 3,996 M (3,464) attributable to increased volumes and lower refinancing costs. The return on equity amounted to 10.0% (10.1).

IncomeOperating income includes SEK 42 M in divi-dends received from the sale of the holding in Visa Europe. Net losses from financial items amounted to SEK –49 M (gains: 68) due to unrealised changes in the market value of financial items. Net commission amounted to SEK –750 M (–662) due to higher remuneration to the regional insur-

ance companies as a result of a healthy volume trend and strengthened profitability in the business.

ExpensesOperating expenses increased 14% to SEK 1,601 M (1,399), of which 7 percentage points was due to higher staff costs associated with additional personnel from Länsförsäk-ringar AB to the Bank Group’s Business Service unit and the Economic Research Department, and the recruitment of new fund managers at Länsförsäkringar Fond-förvaltning. The underlying cost increase amounted to 7% partly attributable to initia-tives for future-oriented IT investments.

The cost/income ratio before loan losses amounted to 0.49 (0.48).

Loan lossesLoan losses amounted to SEK 58 M (38*), net, corresponding to loan loss level of 0.02% (0.02). Impaired loans, gross, amoun-ted to SEK 278 M (240), corresponding to a percentage of impaired loans, gross, of 0.11% (0.11). Reserves totalled SEK 268 M (250), corresponding to a reserve ratio in relation to loans of 0.10% (0.11). In addition, SEK 88 M (130) of the remuneration to the regional insurance companies’ credit-risk commit-ments for generated business is withheld in accordance with the settlement model. The reserve ratio in relation to loans, including withheld remuneration to the regional insur-ance companies, was 0.14% (0.17).

* The comparative figure includes dissolution of reserves of SEK 23 M.

Länsförsäkringar Bank, Group

Income statement

SEK M 2017 2016

Net interest income 3,996 3,464

Net commission -750 -662

Other operating income 12 102

Total operating income 3,258 2,904

Staff costs -549 -470

Other administration expenses -960 -853

Depreciation/amortisation and impairment of property and equipment and intangible assets -92 -76

Total operating expenses -1,601 -1,399

Profit before loan losses 1,657 1,505

Loan losses, net -58 -38

Operating profit 1,599 1,467

Tax -362 -331

NET PROFIT FOR THE YEAR 1,237 1,137

Balance sheet

SEK M 31 Dec 2017 31 Dec 2016

ASSETS

Treasury bills and other eligible bills 10,532 7,867

Loans to credit institutions 265 280

Loans to the public 261,444 226,705

Bonds and other interest-bearing securities 35,718 32,810

Intangible assets 969 488

Property and equipment 10 8

Other assets 6,428 7,793

TOTAL ASSETS 315,366 275,951

EQUITY AND LIABILITIES

Due to credit institutions 3,996 3,873

Deposits and funding from the public 99,404 91,207

Debt securities in issue 188,407 156,000

Subordinated liabilities 2,596 2,595

Other liabilities 6,635 9,094

Equity 14,328 13,182

TOTAL EQUITY AND LIABILITIES 315,366 275,951


Stronger customer protection and greater transparency make customers the winnerLife assurance and pension insurance 2017 was the year when the technological possibil-ities, new regulations and increasing customer expectations started to make a real impact and change the market to its very core. Länsförsäkringar approaches these opportunities and challenges in the market from a position of strength as the leader in its main market of unit-linked insurance for individual occupational pensions and with robust key figures and the aim of creating the best customer experiences in the market.

Länsförsäkringar Fondliv offers customers fund management, guarantee management and personal-risk insurance. Länsförsäk-ringar primarily targets small and medi-um-sized businesses. No new policies are underwritten in Länsförsäkringar Liv, but the company manages traditional life assur-ance that was taken out before it was closed in 2011.

Länsförsäkringar was one of the first companies in the industry to launch an entirely digital purchase service where self-employed persons can take out occu-pational pensions and personal insurance directly online. A fully digital health declara-tion is linked to the service. A service where customers can calculate their future pen-sion and experiment with various parame-ters was also launched, and has proven to be very popular and attracted many visi-tors. Furthermore, a fund guide is available to make choosing funds more easy for cus-tomers. The overall aim of these activities is to make everything simpler and more understandable for Länsförsäkringar’s cus-tomers. During the year, an option was launched for customers via My Pages to add the Bevara pension progressive reduction service. This service automatically reduces risk in the investment portfolio as retire-ment approaches.

Länsförsäkringar works to incorporate active sustainability efforts throughout the entire operations, particularly in the form of offering responsible investments for cus-tomers’ pension savings. Accordingly, responsible investments are an integral part of the fund-selection process. A number of

measures were taken in 2017 to improve the offering, for example, Morningstar’s sus-tainability globes and Swesif’s sustainability declaration were included in the price list. The range was also expanded with new funds that have a sustainability focus. This work will continue at high intensity in 2018. Länsförsäkringar received the highest sus-tainability rating in Söderberg & Partners’ and Max Matthiessen’s surveys during the year.

All major brokers carried out new plan procurements in 2017 and it was very posi-tive that Länsförsäkringar is an eligible manager in all of the plans. Länsförsäkringar aims to be the number one choice for cus-tomers who want to procedure via brokers, and these brokers are important partners and distributors for the business.

MarketLänsförsäkringar remains the number one in its main market – the unit-linked insur-ance market for individual occupational pensions. Länsförsäkringar is the market leader, measured in both premium income and in sales, according to fourth-quarter 2017 statistics from Insurance Sweden.

Measured in premium income, the mar-ket share was 18.7%, meaning that the mar-gin between Länsförsäkringar and the sec-ond place company SEB is 1.9 percentage points. However, the market share declined by 1.2 percentage points compared with the fourth quarter of 2016. Actual premium income for Länsförsäkringar increased 2% compared with 2016. At the same time, total premium income in the market rose 9%,

Länsförsäkringar Fondliv, managed assets:

Länsförsäkringar Liv managed assets:

SEK bn

SEK bn

Life assurance and pension insurance 35Länsförsäkringar Alliance 2017

which is the reason for the slightly lower market share.

Länsförsäkringar also retained its first place in the main market measured in new sales. The market share increased 0.5 of a percentage point compared with 2016.

Länsförsäkringar is the fourth largest company in the total unit-linked insurance market with a market share of 10.2% and in the overall occupational pension market, which includes traditional insurance and deposit insurance, Länsförsäkringar is the sixth largest company with a market share of 5.3%.

Länsförsäkringar Fondliv’s unit-linked insurance and guarantee managementUnit-linked insuranceSlightly more than 90% of the funds in the total fund range performed positively in 2017. More than 50% of the funds increased by more than 10%, with no funds declining more than 10%. 2017 was a positive stock-market year that resulted in a favour-able performance for many equities funds. Equities funds investing in Asia, small com-panies and technology reported the stron-

gest trend. The performance of funds tar-geting commodities, Russia and certain hedge funds was weaker.

Both the scope and quality of Läns-försäkringar’s fund range was expanded in 2017 as part of realising a new fund strategy of simplifications and greater choice for customers. More than 30 new funds from several different fund companies were launched. The funds in the recommended range are carefully analysed and assessed based on criteria including management organisation, return and sustainability.

Guarantee managementLänsförsäkringar Fondliv offers manage-ment of pension insurance carrying a guar-antee element regarding paid-in premiums. The guarantee principle is that the cus-tomer recoups premiums paid in to savings, but with the possibility of additional returns. Full guarantee, meaning “at least your pre-mium back” applies for a minimum ten-year savings period. A sliding scale is applied to shorter savings periods, with the guarantee at 80% of paid-in premiums for periods of five to ten years until retirement, and a min-

imum of 70% of paid-in premiums with less than five years until retirement. The assets are divided between equity and inter-est-bearing investments, with the inter-est-bearing portion always being at least 40% and the equities portion may be as low as zero. On 31 December 2017, 65% of the investments comprised interest-bearing investments and 35% equities. Managed assets amounted to SEK 3.1 billion (2.9). The return rose to 6.0% (5.3). Both equity and interest-bearing investments also made a positive contribution to the total return.

Länsförsäkringar Liv’s traditional managementLänsförsäkringar Liv, which is closed for new business, conducts traditional life assurance for its customers divided into four portfolios: New Trad, Old Trad, New World and Insured Pension. Total managed assets amounted to SEK 115 billion (116).

New TradLänsförsäkringar Liv customers with tradi-tionally managed insurance have had the

Total occupational pension market


Länsförsäkringar, 5.3%

Alecta, 21.3%

Folksam, 14.5%

Skandia, 12.4%

AMF Pension, 10.8%

SEB, 7.2%

Avanza, 5.1%


SPP, 4.6%

Nordea Liv, 3.8%

Länsförsäkringar’s market share in the overall occupa-tional pension market, measured in premium income, amounted to 5.3% (5.7).

Total unit-linked insurance market




SEB, 14.1%

Folksam, 13.4%

Handelsbanken, 9.7%

Skandia, 8.2%

Nordea Liv, 8.0%

SPP, 7.1%

Danica, 5.3%

Movestic, 4.3%

Länsförsäkringar’s market share in unit-linked insurance, measured in premium income, amounted to 10.2% (10.8).

Individual occupational pensions, unit-linked insuranceSource: Insurance Sweden


SEB, 16.8%

SPP, 12.9%

Skandia, 12.8%

Movestic, 9.0%

Handelsbanken, 7.2%


Danica, 5.6%

Nordea Liv, 4.9%

Folksam, 2.6%

Länsförsäkringar is the market leader in the individual occupational pension sub-market, measured in premium income.

Market shares Unit-linked insurance


Life assurance and pension insurance36 Länsförsäkringar Alliance 2017

opportunity to transition their existing insurance to New Trad since 2013. Transi-tions from Old Trad to New Trad involve lower fees and a reduction in the guaran-teed rate. The reduced guarantee rate allows capital in New Trad to be invested in other types of assets that have higher expected returns.

Managed assets in New Trad amounted to SEK 21 billion (18). Investments as at 31 December 2017 comprised 60% inter-est-bearing investments, 34% equities, 4% alternative investments and 2% properties. The total share of interest-bearing invest-ments increased slightly in 2017. Invest-ment return for New Trad amounted to 6.4% (4.3). The return was mainly attribut-able to equities investments, which contrib-uted 5.5 percentage points.

The bonus rate on 31 December 2017 was 6% (4). The bonus rate was raised from 5% to 6% on 1 October 2017. The average bonus rate since New Trad started in 2013 has been 6.4%.

Old TradIn Old Trad, Länsförsäkringar Liv manages assets of SEK 81 billion (85) on behalf of its customers. The aim of risk-taking in the Old Trad investment portfolio, given the prevail-ing low interest-rate environment, is to ensure that the guaranteed bonus can be realised also in the event of a negative mar-ket trend. At the same time, balanced risk-taking is applied to facilitate a reason-able return on customers’ savings.

A large portion of the capital comprised long-term interest-bearing investments in 2017. Investments as at 31 December 2017 comprised 87% interest-bearing invest-ments, 7% equities, 4% alternative invest-ments and 2% properties. Investment return amounted to 2.7% (5.9).

The bonus rate for 2017 was unchanged at 2%.

New World New World is a traditional insurance policy whereby customers benefit from upturns on the equities market, while at the same time are guaranteed to recoup at least the premiums paid, after deductions for expenses and yield tax.

Managed assets amounted to SEK 12 billion (11). The percentage of equities for the New World management form is nor-mally 70% and the remaining 30% com-prises interest-bearing investments. How-ever, the investment mix can vary within defined intervals, with the percentage of equities comprising 60–80%. Investment return amounted to 13.3% (5.1).



Comments on financial results, Länsförsäkringar Fondliv

Earnings and profitabilityProfit for Länsförsäkringar Fondliv strengthened in 2017 to SEK 604 M (516), mainly due to increased income from grow-ing managed assets.

Total managed assets increased SEK 14 billion to SEK 128 billion (114) on 31 Decem-ber 2017. The increase was mainly the result of a high value growth trend due to a favourable stock-market climate, but also a positive net inflow from existing and new customers.

Total premium income increased 6% to SEK 9,133 M (8,637), of which capital transferred to the company accounted for SEK 1,444 M (1,321). Premium income after ceded rein-surance for insurance risk increased to SEK 198 M (173). Commission income, which is strongly linked to managed assets, increased to SEK 1,583 M (1,412).

Operating expenses rose to SEK 1,028 M (973), primarily due to higher distribution and administration expenses from increased business volumes. Investments

were also made in digital development, such as the launch of a digital purchase service where self-employed persons can take out occupational pensions directly online.

Capital situationLänsförsäkringar Fondliv’s capital situation is expressed and measured in accordance with Solvency II as a ratio of own funds in relation to risk-based capital requirements. Länsförsäkringar Fondliv’s solvency ratio on 31 December 2017 amounted to 152% (150).


Länsförsäkringar Fondliv

Income statement

SEK M 2017 2016

Premium income after ceded reinsurance 198 173

Fees from financial agreements 725 659

Investment income, net 10,343 8,049

Claims payments -98 -104

Change in technical provisions -10,253 -7,947

Operating expenses -1,028 -973

Other technical revenue and expenses 858 743

Technical result for insurance operations 745 600

Non-technical revenue/expenses -46 15

Profit before tax 699 615

Tax -95 -99

NET PROFIT FOR THE YEAR 604 516

Balance sheet

SEK M 31 Dec 2017 31 Dec 2016

ASSETS

Assets 213 195

Investments in associated companies – 29

Other financial investment assets 3,614 3,501

Investment assets for which the policyholder bears the investment risk 125,344 112,050

Reinsurers’ portion of technical provisions 29 17

Receivables 794 588

Other assets 298 429

Prepaid expenses and accrued income 1,190 1,145

TOTAL ASSETS 131,482 117,954

EQUITY, PROVISIONS AND LIABILITIES

Equity 2,601 2,748

Technical provisions 2,762 2,471

Insurance commitments for which the policyholder bears the risk 125,583 112,225

Provisions 4 5

Deposits from reinsurers 29 17

Liabilities 460 463

Accrued expenses and deferred income 43 26

TOTAL EQUITY, PROVISIONS AND LIABILITIES 131,482 117,954

Life assurance and pension insurance38 Länsförsäkringar Alliance 2017


Länsförsäkringar Liv, Group

Income statement

SEK M 2017 2016

Premium income after ceded reinsurance 1,533 1,720

Investment income, net 4,770 6,027

Claims payments -5,404 -5,683

Change in technical provisions 1,990 1,221

Operating expenses -417 -447

Technical result for insurance operations 2,472 2,838

Non-technical revenue/expenses -96 -110

Profit before tax 2,376 2,728

Tax -13 -46

NET PROFIT FOR THE YEAR 2,363 2,682

Balance sheet

SEK M 31 Dec 2017 31 Dec 2016

ASSETS

Investment assets 115,349 117,382

Reinsurers’ portion of technical provisions 472 477

Receivables 1,219 1,909

Other assets 5,421 4,763

Prepaid expenses and accrued income 102 144

TOTAL ASSETS 122,563 124,675

EQUITY, PROVISIONS AND LIABILITIES

Equity 24,405 23,050

Technical provisions 90,166 92,217

Provisions for other risks and expenses 149 240

Deposits from reinsurers 472 477

Liabilities 7,162 8,478

Accrued expenses and deferred income 210 213

TOTAL EQUITY, PROVISIONS AND LIABILITIES 122,563 124,675

Comments on financial results, Länsförsäkringar Liv

Earnings and profitabilityProfit for Länsförsäkringar Liv amounted to SEK 2,363 M (2,682). The positive earnings derive from a positive investment income in New and Old Trad, and transitions from Old Trad to New Trad, which continued to strengthen earnings through lower techni-cal provisions.

Changes in market interest rates affect Länsförsäkringar Liv’s earnings with rising market interest rates leading to lower liabil-ities to policyholders since future commit-ments are discounted with the market interest rate. However, the company can largely protect itself from interest-rate changes impacting earnings by matching assets and liabilities against each other. In 2017, about 80% of the interest-rate sensi-tivity of liabilities was matched, generating a positive earnings effect of about SEK 100 M when long-term market interest rates rose. The Swedish ten-year government bond rate increased by just under 25 basis points.

Liabilities to policyholders declined SEK 2.0 billion (1.2) during the period, primarily due to negative cash flows, meaning that payouts and external transfers exceeded premium payments. The assumption for future operating expenses was adjusted in 2017, which led to higher liabilities of SEK 685 M. The increase in the expense assump-

tions is because the company is closed for new business and thus the insurance portfo-lio decreases over time, which is expected to lead to a slightly higher unit cost over time.

Operating expenses fell to SEK 417 M (447) in 2017, mainly due to lower develop-ment costs.

Investment income was positive for all management portfolios and totalled SEK 4.8 billion (6.0). New World contributed SEK 1.4 billion, which does not affect earnings and instead is transferred directly to the policy-holders.

In December 2017, Länsförsäkringar Liv divested two property-owning subsidiaries to Humlegården Fastigheter AB (publ) (referred to below as Humlegården) in exchange for payment in newly issued shares in Humlegården and cash and cash equivalents. Based on this transaction, Länsförsäkringar Liv became the second largest owner of Humlegården with a hold-ing of 11.6%. The transaction better diversi-fies Länsförsäkringar Liv’s property expo-sure and provides an interest in a property portfolio that is deemed to be of high qual-ity with great potential.

Länsförsäkringar Liv is operated accord-ing to mutual principles and is not consoli-dated in Länsförsäkringar AB.

Capital situationLänsförsäkringar Liv’s capital situation is expressed and measured in accordance with Solvency II as a ratio of own funds in relation to risk-based capital requirement. Länsförsäkringar Liv’s solvency ratio on 31 December 2017 increased to 207% (195).

Collective consolidation is calculated as the ratio between total capital and insur-ance capital. Collective consolidation on 31 December 2017 amounted to 117% (114) in New Trad and 123% (125) in Old Trad.

Länsförsäkringar Liv has worked actively on measures to strengthen the company’s balance sheet and own funds for several years. A strengthened balance sheet pro-vides the company with greater flexibility and opportunities to invest in asset classes with higher expected returns. These mea-sures have resulted in equity strengthening from SEK 10.9 billion to SEK 24.4 billion between 2012 and 2017.

Transitions from Old Trad to New Trad also contributed to the strengthened capi-tal situation in 2017. Such transitions to New Trad have strengthened own funds by a total of SEK 4.8 billion since 2013, of which SEK 0.4 billion in 2017.


The real-estate brokerage with the most satisfied customers in the marketReal-estate brokerage Through Länsförsäkringar Fastighetsförmedling, Länsförsäkringar offers a total solution for reliable mortgage transactions: real-estate brokerage, banking and insurance services all in one company. Real-estate brokerage is also a key customer meeting for sales of mortgages and insurance.

Länsförsäkringar Fastighetsförmedling has 160 branches throughout Sweden. Strong growth has advanced Länsförsäkringar Fastig hetsförmedling to the position of third largest brokerage in Sweden. Länsförsäk-ringar Fastighetsförmedling is Sweden’s fastest growing estate-agent chain for the second consecutive year had the most satisfied customers according to the Swedish Quality Index’s customer satisfac-tion survey for the estate-agent industry.

The real-estate brokerage is an inte-grated part of the local regional insurance companies’ full-service offering. The aim is to offer more than just the brokerage and sale of residential properties. The opera-tions are conducted in franchise form, whereby the regional insurance company acts as the franchiser for the local branch. This also means that Länsförsäkringar Fastig hetsförmedling differs from other

national estate-agent chains by always being locally based.

Länsförsäkringar Fastighetsförmedling can summarise strong sales figures for 2017. A total of 21,801 (19,938) properties were brokered between January and December, of which 11,896 (10,923) tenant-owned apartments and 8,816 (7,998) single-family homes. The number of properties sold increased a total of more than 9% year on year. Commission income rose 12% to SEK 905 M (808). The total sales value for the period amounted to SEK 48.7 billion (41.9).

Länsförsäkringar’s sales of single-family homes increased in 2017, resulting in SEK 4.0 billion (3.2) in first-lien mortgages in Länsförsäkringar’s mortgage institution, divided between 1,766 (1,560) transactions. This was achieved despite the total market for single-family homes declining 4% during the year, with the number of land registra-tion certificates totalling 71,472 (74,559).

Number of single-family homes soldSource: Värderingsdata

Länsförsäkringar Fas-

tighetsförmedling 11.5%

Fastighetsbyrån 25.7%

Svensk Fastighets-

förmedling 14.6%

Mäklarhuset 4.8%

SkandiaMäklarna 3.9%

Bjurfors 3.2%

HusmanHagberg 3.1%

Mäklarringen 1.5%

Hemverket 1.4%

ERA 1.3%

Other brokers and private

29.0%

Länsförsäkringar Fastighetsförmedling is the third largest brokerage group, measured in number of single-family homes. Tenant-owned apartments are not included in the industry statistics.

Number of single-family homes and tenant-owned apartments sold by Länsförsäkringar FastighetsförmedlingBillion 000s

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The number of residential properties sold increased 9% (1).

Value of sales of single-family homes 2017SEK M

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Hem

verket

ERA

Mäklarringen

Husm

anHagberg

Mäklarhuset

Skandiamäklarna

Bjurfors

Länsförsäkringar Fastighetsförm

edlingSvensk Fastighetsförm

edling

Fastighetsbyrån

The sales value of single-family homes for Länsförsäk-ringar Fastighetsförmedling amounted to SEK 19.5 billion (17.4). Tenant-owned apartments are not included in the diagram and, including them, the value of sales was SEK 44.2 billion (38.9).

Single-family homes sold with loans invested in Länsförsäkringar HypotekSEK M Number

0

1,000

2,000

3,000

4,000

201720162015201420130

500

1,000

1,500

2,000

Loan total, SEK M Number of loans

Sales of single-family homes resulted in SEK 4.0 billion (3.5) in first-lien mortgages in Länsförsäkringar Hypotek.

40 Länsförsäkringar Alliance 2017Real-estate brokerage

Länsförsäkringar Alliance in figures 41Länsförsäkringar Alliance 2017

Länsförsäkringar Alliance in figuresThe combined earnings of the Länsförsäkringar Alliance’s non-life insurance operations are presented first on the following pages. This is followed by key figures from each of the 23 regional insurance companies.

42 Länsförsäkringar Alliance, non-life insurance

44 Länsförsäkringar Norrbotten

44 Länsförsäkringar Västerbotten

44 Länsförsäkringar Jämtland

45 Länsförsäkringar Västernorrland

45 Länsförsäkringar Gävleborg

45 Dalarnas Försäkringsbolag

46 Länsförsäkringar Värmland

46 Länsförsäkringar Uppsala

46 Länsförsäkringar Bergslagen

47 Länsförsäkringar Stockholm

47 Länsförsäkringar Södermanland

47 Länsförsäkringar Göteborg och Bohuslän

48 Länsförsäkringar Skaraborg

48 Länsförsäkringar Östgöta

48 Länsförsäkringar Älvsborg

49 Länsförsäkringar Gotland

49 Länsförsäkringar Jönköping

49 Länsförsäkringar Halland

50 Länsförsäkring Kronoberg

50 Länsförsäkringar Kalmar län

50 Länsförsäkringar Blekinge

51 Länsförsäkringar Göinge- Kristianstad

51 Länsförsäkringar Skåne

Contents

Länsförsäkringar Alliance in figures42 Länsförsäkringar Alliance 2017

Länsförsäkringar Alliance 2017

NON-LIFE INSURANCE, SEK M

Result after ceded reinsurance 2017

Premiums earned 378 804 436 457 486 1,229 611 777 1,234 1,860 597 1,414 706 1,386 1,217 215 1,058 708 503 765 333 500 2,206 5,623 25,504 25,504

Investment income transferred from financial operations 22 24 12 15 8 21 3 9 14 15 7 90 12 21 39 3 12 30 4 13 4 6 24 26 356 356

Claims payments –270 –605 –341 –374 –356 –939 –469 –620 –1,008 –1,402 –467 –1,089 –478 –999 –836 –121 –823 –494 –366 –589 –247 –351 –1,640 –3,764 –18,571 –18,571

Operating expenses –72 –130 –79 –96 –104 –194 –106 –135 –198 –361 –84 –302 –118 –245 –186 –41 –182 –140 –89 –125 –63 –99 –368 –1,167 –4,629 –4,629

Other income/expenses –1 –5 –2 –3 –3 –7 –3 –6 –7 –6 –3 –37 –3 –7 –6 –1 –6 –4 –3 –4 –2 –3 –11 259 –130 –130

Technical result from non-life insurance operations before bonuses and discounts 57 87 27 –1 30 110 36 26 35 106 50 77 119 157 228 54 58 99 49 60 25 53 211 977 2,529 2,529

Bonuses and discounts –14 –66 – – – –178 –30 – –165 – –103 –193 –40 –238 –70 –70 –47 –133 –60 –59 –40 –92 –200 – –1,798 –1,798

Technical result for non-life insurance operations 42 21 27 –1 30 –68 6 26 –130 106 –53 –116 79 –81 158 –16 11 –34 –11 1 –15 –39 11 977 731 731

Total investment income 87 263 203 125 135 661 121 269 657 313 303 889 203 654 728 76 382 312 168 294 131 228 963 1,001 6,969 6,969

Investment income transferred to insurance operations –22 –24 –12 –15 –8 –21 –3 –9 –14 –15 –7 –90 –12 –21 –39 –3 –12 –30 –4 –13 –4 –6 –24 –26 –434 –434

Other income/expenses 2 8 –2 –9 8 22 4 31 27 59 3 19 6 30 12 9 –22 –2 3 –3 1 3 17 –416 –189 1,100

Operating profit 109 269 215 100 166 594 128 316 541 463 246 702 275 583 860 67 360 247 157 279 114 186 967 1,536 7,078 8,367

Balance sheet, 31 Dec 2017

ASSETS

Investment assets

Shares in Länsförsäkringar AB 329 881 595 680 774 1,582 517 1,103 1,287 2,114 844 1,534 702 1,722 1,509 206 1,233 856 531 800 318 824 2,267 – – –

Other shares and participations 499 1,798 1,132 436 521 2,871 576 1,183 2,944 1,059 1,912 4,103 903 3,066 4,441 518 1,905 1,605 795 1,733 697 1,155 5,040 1,488 42,381 43,463

Bonds and other interest-bearing securities 287 1,204 644 650 709 1,717 552 1,132 1,073 2,281 826 1,232 856 1,926 1,341 514 1,585 846 645 782 492 720 2,091 5,369 29,475 68,114

Other investment assets 185 432 99 24 0 596 249 15 710 310 8 875 419 1,161 237 57 579 363 410 406 274 232 570 16,719 29,573 21,295

Total investment assets 1,300 4,315 2,471 1,791 2,004 6,766 1,894 3,433 6,014 5,764 3,590 7,743 2,880 7,875 7,528 1,295 5,301 3,670 2,381 3,721 1,781 2,931 9,969 23,575 101,429 132,872

Reinsurers’ portion of technical provisions 184 259 242 161 547 388 280 314 344 307 230 309 255 486 372 119 467 210 169 275 178 182 673 10,447 10,447 10,475

Receivables and other assets 158 371 229 208 370 541 256 401 558 849 265 493 317 751 478 101 442 253 202 308 157 212 838 2,579 11,147 413,979

Cash and bank balances 250 142 133 68 48 510 767 101 573 110 93 114 69 196 183 65 263 95 106 142 47 287 339 637 5,340 5,634

Prepaid expenses and accrued income 9 42 36 14 27 127 27 49 26 55 36 191 15 71 71 41 36 125 13 26 9 20 167 323 1,548 3,162

Total assets 1,901 5,129 3,110 2,241 2,995 8,332 3,224 4,298 7,515 7,086 4,214 8,850 3,536 9,379 8,632 1,621 6,510 4,353 2,872 4,472 2,172 3,632 11,986 37,562 129,911 566,122


Equity 742 2,510 1,434 896 1,039 4,122 1,322 1,795 3,465 1,339 2,046 4,394 719 4,644 4,831 815 3,030 2,086 1,328 2,217 928 1,817 5,274 18,564 54,950 61,243

Untaxed reserves – – – – – – – – – 1,800 – – 621 – – – – – – – – – – – – –

Technical provisions (before ceded reinsurance) 904 1,868 1,255 1,115 1,602 3,270 1,488 1,946 2,941 3,137 1,583 3,324 1,817 3,490 2,869 638 2,575 1,713 1,191 1,729 998 1,389 5,080 16,141 57,114 59,876

Other provisions and liabilities 204 626 355 211 339 800 319 465 942 558 571 1,052 353 1,199 888 162 876 530 336 514 237 412 1,550 1,179 14,748 438,906

Accrued expenses and deferred income 51 125 66 18 15 140 95 92 167 252 14 81 26 46 44 6 27 24 16 12 8 15 83 1,678 3,100 6,098

Total equity and liabilities 1,901 5,129 3,110 2,241 2,995 8,332 3,224 4,298 7,515 7,086 4,214 8,850 3,536 9,379 8,632 1,621 6,510 4,353 2,872 4,472 2,172 3,632 11,986 37,562 129,911 566,122

Solvency capital / Total capital 897 2,923 1,715 1,016 1,276 4,728 1,592 2,168 4,135 3,546 2,415 5,184 1,533 5,577 5,503 925 3,545 2,452 1,564 2,603 1,142 2,115 6,307 19,580 66,149 72,442

Solvency margin 237 353 384 218 257 375 256 268 327 184 398 356 211 391 440 419 326 339 300 340 332 414 278 341 253 –

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The Länsförsäkringar Alliance comprises 23 local and customer-owned regional insurance companies and the jointly owned Länsförsäkringar AB. The Länsförsäkringar Alliance is not a Group in the legal sense of the term. Most of the non-life insurance business in the Alliance is underwritten by the regional insurance companies. The business conducted by Länsförsäkringar AB’s non-life insurance Group comprises health insurance, animal insurance, ceded and assumed reinsurance as well as marine and cargo insurance and some casualty, property and motor insurance.

Earnings from the Länsförsäkringar Alliance’s non-life insurance operations consist of the total earnings of the 23 regional insurance companies and the Länsförsäkringar AB Group, excluding Länsför-säkringar Fondliv and the Länsförsäkringar Bank Group. The holdings and change in value in the Länsförsäkringar AB share and transactions between the regional insurance companies and the Länsförsäkringar AB Group have been eliminated. The 23 regional insurance companies and the Länsförsäkringar AB Group apply the approved International Financial Reporting Standards (IFRS).


NON-LIFE INSURANCE, SEK M

Result after ceded reinsurance 2017

Premiums earned 378 804 436 457 486 1,229 611 777 1,234 1,860 597 1,414 706 1,386 1,217 215 1,058 708 503 765 333 500 2,206 5,623 25,504 25,504

Investment income transferred from financial operations 22 24 12 15 8 21 3 9 14 15 7 90 12 21 39 3 12 30 4 13 4 6 24 26 356 356

Claims payments –270 –605 –341 –374 –356 –939 –469 –620 –1,008 –1,402 –467 –1,089 –478 –999 –836 –121 –823 –494 –366 –589 –247 –351 –1,640 –3,764 –18,571 –18,571

Operating expenses –72 –130 –79 –96 –104 –194 –106 –135 –198 –361 –84 –302 –118 –245 –186 –41 –182 –140 –89 –125 –63 –99 –368 –1,167 –4,629 –4,629

Other income/expenses –1 –5 –2 –3 –3 –7 –3 –6 –7 –6 –3 –37 –3 –7 –6 –1 –6 –4 –3 –4 –2 –3 –11 259 –130 –130

Technical result from non-life insurance operations before bonuses and discounts 57 87 27 –1 30 110 36 26 35 106 50 77 119 157 228 54 58 99 49 60 25 53 211 977 2,529 2,529

Bonuses and discounts –14 –66 – – – –178 –30 – –165 – –103 –193 –40 –238 –70 –70 –47 –133 –60 –59 –40 –92 –200 – –1,798 –1,798

Technical result for non-life insurance operations 42 21 27 –1 30 –68 6 26 –130 106 –53 –116 79 –81 158 –16 11 –34 –11 1 –15 –39 11 977 731 731

Total investment income 87 263 203 125 135 661 121 269 657 313 303 889 203 654 728 76 382 312 168 294 131 228 963 1,001 6,969 6,969

Investment income transferred to insurance operations –22 –24 –12 –15 –8 –21 –3 –9 –14 –15 –7 –90 –12 –21 –39 –3 –12 –30 –4 –13 –4 –6 –24 –26 –434 –434

Other income/expenses 2 8 –2 –9 8 22 4 31 27 59 3 19 6 30 12 9 –22 –2 3 –3 1 3 17 –416 –189 1,100

Operating profit 109 269 215 100 166 594 128 316 541 463 246 702 275 583 860 67 360 247 157 279 114 186 967 1,536 7,078 8,367

Balance sheet, 31 Dec 2017

ASSETS

Investment assets

Shares in Länsförsäkringar AB 329 881 595 680 774 1,582 517 1,103 1,287 2,114 844 1,534 702 1,722 1,509 206 1,233 856 531 800 318 824 2,267 – – –

Other shares and participations 499 1,798 1,132 436 521 2,871 576 1,183 2,944 1,059 1,912 4,103 903 3,066 4,441 518 1,905 1,605 795 1,733 697 1,155 5,040 1,488 42,381 43,463

Bonds and other interest-bearing securities 287 1,204 644 650 709 1,717 552 1,132 1,073 2,281 826 1,232 856 1,926 1,341 514 1,585 846 645 782 492 720 2,091 5,369 29,475 68,114

Other investment assets 185 432 99 24 0 596 249 15 710 310 8 875 419 1,161 237 57 579 363 410 406 274 232 570 16,719 29,573 21,295

Total investment assets 1,300 4,315 2,471 1,791 2,004 6,766 1,894 3,433 6,014 5,764 3,590 7,743 2,880 7,875 7,528 1,295 5,301 3,670 2,381 3,721 1,781 2,931 9,969 23,575 101,429 132,872

Reinsurers’ portion of technical provisions 184 259 242 161 547 388 280 314 344 307 230 309 255 486 372 119 467 210 169 275 178 182 673 10,447 10,447 10,475

Receivables and other assets 158 371 229 208 370 541 256 401 558 849 265 493 317 751 478 101 442 253 202 308 157 212 838 2,579 11,147 413,979

Cash and bank balances 250 142 133 68 48 510 767 101 573 110 93 114 69 196 183 65 263 95 106 142 47 287 339 637 5,340 5,634

Prepaid expenses and accrued income 9 42 36 14 27 127 27 49 26 55 36 191 15 71 71 41 36 125 13 26 9 20 167 323 1,548 3,162

Total assets 1,901 5,129 3,110 2,241 2,995 8,332 3,224 4,298 7,515 7,086 4,214 8,850 3,536 9,379 8,632 1,621 6,510 4,353 2,872 4,472 2,172 3,632 11,986 37,562 129,911 566,122


Equity 742 2,510 1,434 896 1,039 4,122 1,322 1,795 3,465 1,339 2,046 4,394 719 4,644 4,831 815 3,030 2,086 1,328 2,217 928 1,817 5,274 18,564 54,950 61,243

Untaxed reserves – – – – – – – – – 1,800 – – 621 – – – – – – – – – – – – –

Technical provisions (before ceded reinsurance) 904 1,868 1,255 1,115 1,602 3,270 1,488 1,946 2,941 3,137 1,583 3,324 1,817 3,490 2,869 638 2,575 1,713 1,191 1,729 998 1,389 5,080 16,141 57,114 59,876

Other provisions and liabilities 204 626 355 211 339 800 319 465 942 558 571 1,052 353 1,199 888 162 876 530 336 514 237 412 1,550 1,179 14,748 438,906

Accrued expenses and deferred income 51 125 66 18 15 140 95 92 167 252 14 81 26 46 44 6 27 24 16 12 8 15 83 1,678 3,100 6,098

Total equity and liabilities 1,901 5,129 3,110 2,241 2,995 8,332 3,224 4,298 7,515 7,086 4,214 8,850 3,536 9,379 8,632 1,621 6,510 4,353 2,872 4,472 2,172 3,632 11,986 37,562 129,911 566,122

Solvency capital / Total capital 897 2,923 1,715 1,016 1,276 4,728 1,592 2,168 4,135 3,546 2,415 5,184 1,533 5,577 5,503 925 3,545 2,452 1,564 2,603 1,142 2,115 6,307 19,580 66,149 72,442

Solvency margin 237 353 384 218 257 375 256 268 327 184 398 356 211 391 440 419 326 339 300 340 332 414 278 341 253 –

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Länsförsäkringar Västerbotten

Länsförsäkringar Jämtland

President: Kjell LindforsBoard Chairman: Mats Fabricius

President: Göran SpetzBoard Chairman: Maria Wallin Wållberg

President: Tomas ErikssonBoard Chairman: Karin Mattsson Weijber

Länsförsäkringar Norrbotten

Key figures 2017 2016

Operating profit before bonuses and discounts, SEK M 124 113

Total assets, SEK M 1,901 1,758

Solvency ratio, % 241 220

Number of employees 75 74

Number of branches 3 3

Bank

Deposits, SEK M 977 911

Loans, SEK M 298 285

Retail mortgages, SEK M 2,780 2,419

Fund volumes managed, SEK M 242 190

Number of customers 10,600 10,000

Life assurance

Premium income, SEK M 76 76

Total insurance capital, SEK M 2,155 2,124


Non-life insurance

Premiums earned, SEK M 378 346

Technical result for insurance operations, SEK M 57 22

Bonuses and discounts to the customers, SEK M 14 13

Combined ratio after ceded reinsurance, % 94 105

Total return on asset management, % 6 9








Bank

Deposits, SEK M 4,054 3,773

Loans, SEK M 1,407 1,332


Fund volumes managed, SEK M 1,692 1,326


Life assurance




Non-life insurance













Bank


Loans, SEK M 1,087 951




Life assurance




Non-life insurance







Länsförsäkringar Västernorrland

Länsförsäkringar Gävleborg

Dalarnas Försäkringsbolag

President: Mikael BergströmBoard Chairman: Stig Högberg

President: Per-Ove BäckströmBoard Chairman: Mats Åstrand

President: Anders Grånäs Board Chairman: Maria Engholm







Bank


Loans, SEK M 1,517 1,443




Life assurance




Non-life insurance

Premiums earned, SEK M 1,229 1,161












Bank






Life assurance




Non-life insurance












Bank






Life assurance




Non-life insurance


Technical result for insurance operations, SEK M –1 7





Länsförsäkringar Värmland

Länsförsäkringar Uppsala

Länsförsäkringar Bergslagen

President: Ulrika Obstfelder PeterssonBoard Chairman: Patrik Sandin

President: Ulrica HedmanBoard Chairman: Bengt-Erik Jansson

President: Mikael SundquistBoard Chairman: Bengt-Erik Lindgren







Bank






Life assurance




Non-life insurance












Bank


Loans, SEK M 1,671 1,605


Fund volumes managed, SEK M 1,163 918


Life assurance




Non-life insurance


Technical result for insu-rance operations, SEK M 26 –53

Combined ratio after ce-ded reinsurance, % 97 110

Total return on asset -management, % 9 9



Operating profit before -bonuses and discounts, SEK M 705 462





Bank


Loans, SEK M 3,617 3,560




Life assurance




Non-life insurance



Bonuses and discounts to the customers, SEK M 165 –





Länsförsäkringar Stockholm

Länsförsäkringar Södermanland

Länsförsäkringar Göteborg och Bohuslän

President: Fredrik BergströmBoard Chairman: Christer Villard

President: Anna-Greta LundhBoard Chairman: Caesar Åfors

President: Ricard RobbstålBoard Chairman: Hans Ljungqvist







Bank


Loans, SEK M 1,628 1,564




Life assurance

Premium income, SEK M 2,407 2,404



Non-life insurance


Technical result for insu-rance operations, SEK M 106 115










Bank






Life assurance




Non-life insurance












Bank


Loans, SEK M 1,409 1,277




Life assurance

Premium income, SEK M 1,058 1,015



Non-life insurance








Länsförsäkringar Skaraborg

Länsförsäkringar Östgöta

Länsförsäkringar Älvsborg

President: Jonas RosmanBoard Chairman: Eric Grimlund

President: Sven EggefalkBoard Chairman: Peter Lindgren

President: Örian SöderbergBoard Chairman: Lars Hallkvist







Bank


Loans, SEK M 3,478 3,436




Life assurance




Non-life insurance













Bank


Loans, SEK M 1,749 1,776




Life assurance




Non-life insurance













Bank


Loans, SEK M 2,222 2,028




Life assurance




Non-life insurance








Länsförsäkringar Gotland

Länsförsäkringar Jönköping

Länsförsäkringar Halland

President: Mariette NicanderBoard Chairman: Eva Wetterdal

President: Henrietta HanssonBoard Chairman: Göran Lindell

President: Christian BilleBoard Chairman: Karin Starrin







Bank


Loans, SEK M 1,693 1,711




Life assurance




Non-life insurance













Bank


Loans, SEK M 2,345 2,234




Life assurance




Non-life insurance

Premiums earned, SEK M 1,058 990












Bank


Loans, SEK M 3,006 3,000




Life assurance




Non-life insurance








Länsförsäkring Kronoberg

Länsförsäkringar Kalmar län

Länsförsäkringar Blekinge

President: Beatrice Kämpe NikolaussonBoard Chairman: Per-Åke Holgersson

President: Anna BlomBoard Chairman: Jan-Olof Thorstensson

President: Jens ListeröBoard Chairman: Bengt Mattsson







Bank


Loans, SEK M 1,351 1,256


Fund volumes managed, SEK M 1,118 826


Life assurance




Non-life insurance













Bank


Loans, SEK M 1,325 1,201




Life assurance




Non-life insurance













Bank


Loans, SEK M 1,054 956




Life assurance




Non-life insurance








Länsförsäkringar Göinge- Kristianstad

Länsförsäkringar Skåne

President: Niklas LarssonBoard Chairman: Göran Trobro

President: Susanne PeterssonBoard Chairman: Otto Ramel







Bank


Loans, SEK M 1,922 1,874




Life assurance




Non-life insurance








Operating profit before -bonuses and discounts, SEK M 1,167 711





Bank


Loans, SEK M 4,590 4,143




Life assurance




Non-life insurance







52 Länsförsäkringar Alliance 2017About Länsförsäkringar AB

Shareholdings in Länsförsäkringar AB on 31 December 2017

Number of shares

Company A B CShare of

equity, %

Länsförsäkringar Skåne 141,849 882,046 – 9.8

Länsförsäkringar Stockholm 129,212 802,382 – 8.9

Länsförsäkringar Östgöta 114,155 663,463 – 7.5

Dalarnas Försäkringsbolag 104,708 609,639 – 6.9

Länsförsäkringar Göteborg och Bohuslän 87,010 605,143 821 6.6

Länsförsäkringar Älvsborg 100,176 581,374 – 6.5

Länsförsäkringar Bergslagen 86,351 495,089 – 5.6

Länsförsäkringar Jönköping 82,812 474,021 – 5.3

Länsförsäkringar Uppsala 73,298 424,791 – 4.8

Länsförsäkringar Västerbotten 57,195 330,919 – 3.7

Länsförsäkringar Halland 56,785 329,857 – 3.7

Länsförsäkringar Södermanland 58,117 323,139 – 3.7

Länsförsäkringar Göinge-Kristianstad 49,982 322,347 – 3.6

Länsförsäkringar Kalmar län 56,717 295,878 – 3.4

Länsförsäkringar Gävleborg 60,058 281,083 – 3.3

Länsförsäkringar Skaraborg 64,058 253,172 – 3.0

Länsförsäkringar Västernorrland 50,186 257,122 – 2.9

Länsförsäkringar Jämtland 35,795 226,453 – 2.5

Länsförsäkring Kronoberg 36,701 203,130 – 2.3

Länsförsäkringar Värmland 31,160 202,208 – 2.2

Länsförsäkringar Norrbotten 16,960 127,878 – 1.4

Länsförsäkringar Blekinge 23,088 120,500 – 1.4

Länsförsäkringar Gotland 16,305 74,315 – 0.9

16 local insurance companies – – 5,134 0.0

Total number of shares 1,532,678 8,885,949 5,955 100.0

Share trend, Länsförsäkringar AB

SEK 2017 2016 2015 2014 2013

Equity per share on 31 December 2,269 2,046 1,858 1,675 1,557

Organisation and facts Länsförsäkringar AB

Länsförsäkringar AB is wholly owned by the regional insurance com-panies, together with 16 local insurance companies. Through its dis-tinct role in the Länsförsäkringar Alliance’s value chain, Länsförsäk-ringar AB contributes to increasing competitiveness and reducing costs for joint development. In turn, this creates possibilities for the regional insurance companies to be successful in their respective

markets. In addition to the Parent Company, Länsförsäkringar AB, the Group consists of Länsförsäkringar Sak, Länsförsäkringar Bank, Länsförsäkringar Fondliv, Länsförsäkringar Liv and the subsidiaries of these companies. Länsförsäkringar Liv and its subsidiaries are not consolidated in the consolidated financial statements since the com-pany is operated according to mutual principles.

Länsförsäkringar AB

Länsförsäkringar Sak Försäkrings ABSupplements the regional insurance companies’ non-life insurance offering with specialist products, serves as an engine for new business and is responsible for joint reinsurance.

Länsförsäkringar Bank ABOffers a broad range of banking services to the regional insur-ance companies’ customers through Länsförsäkringar Hypotek, Länsförsäkringar Fond-förvaltning and Wasa Kredit.

Länsförsäkringar Fondliv Försäkrings ABOffers pension savings with fund management and guarantee management and personal-risk insurance to the regional insur-ance companies’ customers.

Länsförsäkringar Liv Försäkrings ABManages traditional life assurance taken out before Sep-tember 2011 when the company closed for new sales.

3.8 million customers

23 local regional insurance companies

53Länsförsäkringar Alliance 2017 Definitions

Definitions

Operating expenses in the insurance operationsIncludes costs of marketing, sales and adminis-tration in insurance operations.

Expense ratio, non-life insuranceOperating expenses as a percentage of premiums earned after ceded reinsurance.

After ceded reinsuranceThe proportion of an insurance transaction for which the insurance company assumes the risk, and which is not reinsured with another company. Sometimes the term “for own account” is used.

Claims paymentsThe cost during the period for claims incurred, including costs for claims that have not yet been reported to the insurance company. The cost also includes the run-off result.

Technical provisionsProvision for unearned premiums and unexpired risks, life-assurance reserves and provision for claims outstanding and comparable commit-ments in accordance with signed insurance con-tracts. For life assurance, this shall correspond to the insurance company’s guaranteed insurance commitments.

Investment income, non-life insuranceThe net of the following income and expense: interest income, interest expense, dividends on shares and participations, earnings from compa-ny-owned property, change in the fair value of shares, interest-bearing securities and deriva-tives, earnings from the sale of investment assets, currency exchange gains and losses, and operat-ing expenses in asset management.

Investment income transferred from financial operations Premiums are paid in advance, while operating expenses and claims costs are paid in arrears. Funds that have not yet been paid out are invested in order to obtain a return. The estimated interest on these investments – the cost of capital – is transferred from investment income to the insur-ance operations.

Solvency ratioOwn funds in relation to the solvency capital requirement, according to the Solvency II Direc-tive in Swedish law.

Cost/income ratio, bankTotal expenses in relation to total income. The cost/income ratio is calculated before and after loan losses.

Consolidation ratio, life assuranceThe ratio between the market value of total net assets and the company’s total commitments to policyholders (guaranteed commitments and pre-liminarily distributed bonus) for the insurance pol-icies that carry bonus rights.

Solvency margin, non-life insuranceSolvency capital as a percentage of premium income after ceded reinsurance.

Solvency capitalThe sum of equity, untaxed reserves, deferred tax liabilities, subordinated debt as well as surplus values on assets.

Loan losses net, bankConfirmed loan losses and reserves for loan losses less recoveries of receivables and net expense for the year for loan losses for guaran-tees and other contingent liabilities.

Loan losses in relation to loans, bankNet loan losses in relation to the carrying amount of loans to the public and to credit institutions.

Investment margin, bankNet interest income in relation to average total assets.

Investment assetsInvestment assets are current or long-term assets that take the form of an investment. This includes real estate and securities in the case of an insurance company.

Premium incomePremiums paid in during the period or recognised as receivables at the end of the period since they have fallen due for payment. Premium income is a common measure of the volume of insurance operations.

Premiums earnedThe proportion of premium income attributable to the period.

Tier 1 capital, bankTier 1 capital is part of own funds and comprises equity and Additional Tier 1 instruments. Deduc-tions are made for such items as deferred tax assets, goodwill and other intangible assets, investments in financial companies and the differ-ence between expected losses and reserves established for probable loan losses.

Tier 1 ratio, bankTier 1 capital at year-end in relation to the closing risk-weighted amount.

Return on equityOperating profit less standard tax at a rate of 22.0% in relation to average equity adjusted for capital contributions and Additional Tier 1 Capital loans.

Net interest income, bankInterest income from loans to the public, credit institutions and income from interest-bearing securities less expenses for deposits and funding from the public, credit institutions and expenses for interest-bearing securities.

Technical result for non-life insurance operationsPremiums earned less claims payments, claims adjustment costs and operating expenses in the insurance operations plus profit/loss from ceded reinsurance and investment income transferred from financial operations.

Claims ratio, non-life insuranceThe ratio between claims payments, including claims adjustment costs and premiums earned after ceded reinsurance.

Total return ratio The sum of direct yield, realised gains and losses, and unrealised changes in the value of assets in relation to the average fair value of managed assets.

Combined ratio, non-life insuranceThe sum of operating expenses, claims payments and claims adjustment costs in relation to premi-ums earned after ceded reinsurance.

ReinsuranceIf an insurance company cannot, or does not wish to, assume the entire liability to policyholders, it reinsures part of its underwritten policies with other companies. In this connection, the reinsur-ance is said to be “ceded” by the first company and “assumed” by the second company.

54 Länsförsäkringar Alliance 2017Financial calendar

Financial calendar 2018

First quarter:Interim report January-March 2018, Länsförsäkringar Bank 25 AprilInterim report January-March 2018, Länsförsäkringar Hypotek 25 April

Second quarter:Interim report January-June 2018, Länsförsäkringar Bank 19 JulyInterim report January-June 2018, Länsförsäkringar Hypotek 19 JulyInterim report January-June 2018, Länsförsäkringar Alliance 29 August

Third quarter:Interim report January-September 2018, Länsförsäkringar Bank 25 OctoberInterim report January-September 2018, Länsförsäkringar Hypotek 25 October

55Länsförsäkringar Alliance 2017 Addresses

Addresses

Länsförsäkringar NorrbottenBox 937SE-971 28 LuleåVisit: KöpmantorgetTel: +46 920-24 25 00E-mail: [email protected]

Länsförsäkringar VästerbottenBox 153SE-901 04 UmeåVisit: Nygatan 19Tel: +46 90-10 90 00E-mail: [email protected]

Länsförsäkringar JämtlandBox 367SE-831 25 ÖstersundVisit: Prästgatan 18Tel: +46 63-19 33 00E-mail: [email protected]

Länsförsäkringar VästernorrlandBox 164SE-871 24 HärnösandVisit: Köpmangatan 13 Tel: +46 611-36 53 00E-mail: [email protected]

Länsförsäkringar GävleborgBox 206SE-801 03 GävleVisit: Drottninggatan 35Tel: +46 26-14 75 00E-mail: [email protected]

Dalarnas FörsäkringsbolagBox 3SE-791 21 FalunVisit: Slaggatan 9Tel: +46 23-930 00E-mail: [email protected]

Länsförsäkringar VärmlandBox 367SE-651 09 KarlstadVisit: Köpmannagatan 2 ATel: +46 54-775 15 00E-mail: [email protected]

Länsförsäkringar UppsalaBox 2147SE-750 02 UppsalaVisit: Fyrisborgsgatan 4Tel: +46 18-68 55 00E-mail: [email protected]

Länsförsäkringar BergslagenBox 1046SE-721 26 VästeråsVisit: Stora Gatan 41Tel: +46 21-19 01 00E-mail: [email protected]

Länsförsäkringar StockholmSE-169 97 SolnaVisit: Telegrafgatan 8ATel: +46 8-562 830 00E-mail: [email protected]

Länsförsäkringar SödermanlandBox 147SE-611 24 NyköpingVisit: Västra Storgatan 4Tel: +46 155-48 40 00E-mail: [email protected]

Länsförsäkringar Göteborg och BohuslänSE-404 84 GothenburgVisit: Lilla Bommen 8Tel: +46 31-63 80 00E-mail: [email protected]

Länsförsäkringar SkaraborgBox 600SE-541 29 SkövdeVisit: Rådhusgatan 8Tel: +46 500-77 70 00E-mail: [email protected]

Länsförsäkringar Östgöta Box 400SE-581 04 LinköpingVisit: Platensgatan 11Tel: +46 13-29 00 00E-mail: [email protected]

Länsförsäkringar ÄlvsborgBox 1107SE-462 28 VänersborgVisit: Vallgatan 21Tel: +46 521-27 30 00E-mail: [email protected]

Länsförsäkringar GotlandBox 1224SE-621 23 VisbyVisit: Österväg 17Tel: +46 498-28 18 50E-mail: [email protected]

Länsförsäkringar JönköpingBox 623SE-551 18 JönköpingVisit: Barnarpsgatan 22Tel: +46 36-19 90 00E-mail: [email protected]

Länsförsäkringar HallandBox 518SE-301 80 HalmstadVisit: Strandgatan 10Tel: +46 35-15 10 00E-mail: [email protected]

Länsförsäkring KronobergBox 1503SE-351 15 VäxjöVisit: Kronobergsgatan 10Tel: +46 470-72 00 00E-mail: [email protected]

Länsförsäkringar Kalmar länBox 748SE-391 27 KalmarVisit: Norra Långgatan 17Tel: +46 20-66 11 00E-mail: [email protected]

Länsförsäkringar BlekingeBox 24SE-374 21 KarlshamnVisit: Drottninggatan 56Tel: +46 454-30 23 00E-mail: [email protected]

Länsförsäkringar Göinge- KristianstadBox 133SE-291 22 KristianstadVisit: Tivoligatan 6Tel: +46 44-19 62 00E-mail: info.goinge-kristianstad@ lansforsakringar.se

Länsförsäkringar SkåneBox 742SE-251 07 HelsingborgVisit: Södergatan 15Tel: +46 42-633 80 00E-mail: [email protected]

JOINT COMPANIES

Länsförsäkringar ABSE-106 50 StockholmVisit: Tegeluddsvägen 11–13Tel: +46 8-588 400 00E-mail: [email protected]

Länsförsäkringar LivSE-106 50 StockholmVisit: Tegeluddsvägen 11–13Tel: +46 8-588 400 00E-mail: [email protected]

Länsförsäkringar FondlivSE-106 50 StockholmVisit: Tegeluddsvägen 11–13Tel: +46 8-588 400 00E-mail: [email protected]

Länsförsäkringar SakSE-106 50 StockholmVisit: Tegeluddsvägen 11–13Tel: +46 8-588 400 00E-mail: [email protected]

Länsförsäkringar BankSE-106 50 StockholmVisit: Tegeluddsvägen 11–13Tel: +46 8-588 400 00E-mail: [email protected]

Länsförsäkringar HypotekSE-106 50 StockholmVisit: Tegeluddsvägen 11–13Tel: +46 8-588 400 00E-mail: [email protected]

Länsförsäkringar FondförvaltningSE-106 50 StockholmVisit: Tegeluddsvägen 11–13Tel: +46 8-588 400 00E-mail: [email protected]

Wasa Kredit Box 6740SE-113 85 StockholmVisit: Tegeluddsvägen 11–13Tel: +46 8-635 38 00E-mail: [email protected]

Agria DjurförsäkringBox 70306SE-107 23 Stockholm,Visit: Tegeluddsvägen 11–13Tel: +46 8-588 421 00E-mail: [email protected]

Länsförsäkringar FastighetsförmedlingBox 518SE-101 30 StockholmVisit: Tegeluddsvägen 21Tel: +46 10-219 54 00E-mail: [email protected]

Länsförsäkringar MäklarserviceBox 27120SE-102 52 StockholmVisit: Tegeluddsvägen 21Tel: +46 8-588 490 00E-mail: [email protected]

Humlegården FastigheterBox 5182SE-114 34 StockholmVisit: Engelbrektsplan 1Tel: +46 8-678 92 00E-mail: [email protected]

56 Länsförsäkringar Alliance 2017

Production: Länsförsäkringar AB in cooperation with Intellecta.Photos: Länsförsäkringar’s image bank, Jimmy Eriksson. Print: GöteborgsTryckeriet. We print on environmentally friendly paper.

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Länsförsäkringar Alliance · Strong earnings and continued market successes Comments. The Länsförsäkringar Alliance can sum up another successful year of strong earnings and