Länsförsäkringar Alliance

Transcription

1 1 August Interim Review January June January-June compared with January-June Operating profit for the s non-life insurance operations increased to SEK 5,215 M (1,414). Premiums earned after ceded reinsurance rose to SEK 12,495 M (11,777). The technical result for the s non-life insurance operations increased to SEK 948 M (828). The combined ratio improved to 95% (96). Investment income in the increased to SEK 4,629 M (1,426). Operating profit for the Bank Group increased to SEK 737 M (697). Net interest income strengthened to SEK 1,911 M (1,618). Operating profit for Länsförsäkringar Fondliv increased to SEK 29 M (249). Premium income rose to SEK 4,751 M (4,394). Commission income increased to SEK 85 M (698). Profit for Länsförsäkringar Liv increased to SEK 2,61 M (383). Second quarter of compared with first quarter of Operating profit for the s non-life insurance operations increased to SEK 3,5 M (2,166). Premiums earned after ceded reinsurance rose to SEK 6,366 M (6,129). The technical result for the s non-life insurance operations amounted to SEK 428 M (52). The combined ratio amounted to 95% (94). Investment income in the increased to SEK 2,777 M (1,852). Solvency capital rose SEK 2,89 M to SEK 62,772 M. Operating profit for the Bank Group increased to SEK 385 M (353). Net interest income strengthened to SEK 971 M (94). Operating profit for Länsförsäkringar Fondliv increased to SEK 154 M (136). Premium income amounted to SEK 2,289 (2,462). Commission income increased to SEK 413 M (351). Profit for Länsförsäkringar Liv amounted to SEK 1,36 M (1,25). Comment We are pleased with the fantastic earnings for the for the first six months of. Operating profit for the non-life insurance operations increased to SEK 5.2 billion, with very strong investment income of SEK 4.6 billion. The technical result also strengthened, with solid growth in premiums of 6% and a combined ratio of 95%. Operating profit for the banking operations increased 6% to SEK.7 billion, with deposits up 11% and lending up 14%. The bank s growth share was larger than its market share in the mortgage market. The unit-linked insurance operations benefited from a high value growth trend and a positive net inflow, which resulted in managed assets of SEK 122 billion. We expanded our fund range by about 3 new funds from several different fund companies during the first six months of. Länsförsäkringar attended the political week in Almedalen to promote social issues that are important to us and our customers. Climate issues were included in several of the seminars we held since sustainability is a central part of our operations. We are very pleased that our Global Hållbar sustainability fund was given the green light by Söderberg & Partners and placed in its Swedish top ten list. We continue to receive confirmation that our customers appreciate what we do Länsförsäkringar won ServiceScore for the best service in the insurance sector, Länsförsäkringar Fastighetsförmedling once again topped the Swedish Quality Index s customer satisfaction survey and more and more customers are using the savings navigator function in our bank app. The Länsförsäkringar website was redesigned in June and we hope that it will create even better customer experiences. Johan Agerman President and CEO of Länsförsäkringar AB, The s jointly owned company lansforsakringar.se

2 Market commentary The comprises 23 local and customer-owned regional insurance companies and the jointly owned Länsförsäkringar AB. Customers are provided with a complete offering of banking, insurance and real-estate brokerage services through the regional insurance companies. The starting point is local presence and decision-making. Experience shows that local decision-making authority combined with joint strength creates substantial added value for customers. Long-term respect for customers money is fundamental. There are no external shareholders; it is the customers money that is being managed. This approach characterises the entire business. The has 3.7 million customers and 6,2 employees. The is not a Group in the legal sense of the term. Most of the non-life insurance business in the Länsförsäkringar Alliance is underwritten in the regional insurance companies. The business conducted by Länsförsäkringar AB s non-life insurance group comprises health insurance, pet insurance, as well as cargo insurance and some liability, property and motor insurance. The Länsförsäkringar AB Group also manages the s reinsurance cover and assumed international reinsurance. Earnings from the s non-life insurance operations consist of the total earnings of the 23 regional insurance companies and the Länsförsäkringar AB Group, excluding Länsförsäkringar Fondliv and the Länsförsäkringar Bank Group. Länsförsäkringar Liv is operated according to mutual principles and is not consolidated in Länsförsäkringar AB. Transactions between the regional insurance companies and Länsförsäkringar AB Group have been eliminated. Länsförsäkringar Bank AB Rating Company 3.7 million customers 23 local regional insurance companies Länsförsäkringar AB Länsförsäkringar Sak Försäkrings AB Agency Länsförsäkringar Fondliv Försäkrings AB Long-term rating Länsförsäkringar AB S&P Global Ratings A /Stable Länsförsäkringar AB Moody s A3/Stable Short-term rating Länsförsäkringar Bank S&P Global Ratings A/Stable A 1(K 1) Länsförsäkringar Bank Moody s A1/Stable P 1 Länsförsäkringar Hypotek 1) S&P Global Ratings AAA/Stable Länsförsäkringar Hypotek 1) Moody s Aaa Länsförsäkringar Sak S&P Global Ratings A/Stable Länsförsäkringar Sak Moody s A2/Stable Länsförsäkringar Liv Försäkrings AB* * The company is operated according to mutual principles and is not consolidated in Länsförsäkringar AB. Sentiment remained positive in the second quarter in relation to growth and financial markets. Political risks in Europe have declined, mainly due to the results of the French parliamentary elections. In the US, President Trump presented his budget proposal that focused on boosting spending on defence while making cuts to welfare programmes. Global stock markets continued to rise on par with the strong economy and improved profit forecasts. Both the Swedish stock market and emerging markets were stronger than global indexes. Swedish and European long-term interest rates rose slightly during the second quarter due to expectations of gradually less expansive monetary policies from the central banks. The US Federal Reserve raised its key interest rate in June, announcing that it would decrease reinvestment of maturing securities holdings but without providing a specific timetable. The ECB kept the key interest rate and the deposit facility rate unchanged in the second quarter and maintained the pace of its corporate sector purchase programme. Mario Draghi, President of the ECB, stated in June that the ECB s monetary policy measures may need to be adjusted in the future due to the strong economic trend in the eurozone, but wanted to maintain the level of economic stimulus measures. The statement could be interpreted as the ECB now preparing the market for normalising monetary policy, although the process will be very slow. The Riksbank unexpectedly extended its government bond purchases by SEK 15 billion in April. The subsequent impact on inflation was higher than the Riksbank and other analysts had anticipated, although a rise in interest rates is not expected until mid-218. Rates on covered bonds fell slightly during the quarter, while demand from investors remained high. The real economic trend for the second quarter was mostly positive. First-quarter growth figures indicate a continued strong global economy and leading indicators suggest a robust continuation of growth this year. However, hopes of a rapid fiscal stimulus in the US have diminished, but strong private sector demand meant that the economic outlook nevertheless remains positive. The tight labour market could hamper the rate of growth in the future. The economic scenario in Europe is brighter than previously. Reduced political risk and higher business investment are paving the way for the favourable economic trend to continue. Optimism in Sweden remains high and the domestic economy has improved further. The inflation trend in Sweden has generally exceeded expectations with upturns in all inflation indicators. The SEK strengthened against the USD but weakened against the EUR in the second quarter. Housing prices rose by just over 1% in April and May excluding seasonal effects. The Swedish Financial Supervisory Authority announced in May a proposal for stricter amortisation requirements and the housing market have slowed slightly in June. 1) Pertains to the company s covered bonds. Interim Review January June 2

3 Financial overview Report commented on the development January-June compared to the same period in, unless otherwise stated. Amounts are in SEK, unless otherwise stated. Total capital, SEK M 68,185 65,79 58,226 68,185 58,226 63,39 Non-life insurance Solvency capital, SEK M 62,772 59,963 53,525 62,772 53,525 57,956 Solvency margin, % Return on equity, % Premiums earned after ceded reinsurance, SEK M 6,366 6,129 5,96 12,495 11,777 24,73 Technical result, SEK M ,813 Operating profit, SEK M 3,5 2,166 1,691 5,215 1,414 4,626 Combined ratio Länsförsäkringar AB, Group 1) Operating profit, SEK M ,497 1,115 2,286 Total assets, SEK M 454, ,558 46,36 454,846 46,36 421,75 Return on equity, % Own funds for the group (FRL) 2) 41,567 41,613 37,583 41,567 37,583 4,62 Solvency capital requirement for the group (FRL) 2) 3,412 3,625 28,17 3,412 28,17 3,121 Own funds for the financial conglomerate 3) 41,562 41,554 37,258 41,562 37,258 4,352 Capital requirement for the financial conglomerate 3) 3,412 3,625 28,17 3,412 28,17 3,121 Länsförsäkringar Sak, Group Premiums earned after ceded reinsurance, SEK M 1,414 1,373 1,333 2,787 2,63 5,342 Technical result, SEK M Operating profit, SEK M Solvency ratio, % (Länsförsäkringar Sak Försäkrings AB) Länsförsäkringar Bank, Group Deposits from the public, SEK M 97,144 91,888 87,62 97,144 87,62 91,27 Loans to the public, SEK M 242, , ,29 242, ,29 226,75 Operating profit, SEK M ,467 Return on equity, % Tier 1 ratio Bank Group, % Länsförsäkringar Fondliv Premium income (rolling 12-months), SEK M 8,995 8,8 8,44 8,995 8,44 8,637 Operating profit, SEK M Managed assets, SEK M 121, ,794 12, ,897 12, ,45 Solvency ratio, % Länsförsäkringar Liv, Group Premium income after ceded reinsurance, SEK M ,72 Profit, SEK M 1,36 1,25 1,465 2, ,682 Managed assets, SEK M 115,51 115, , ,51 116, ,784 Solvency ratio, % ) Excluding Länsförsäkringar Liv Försäkrings AB. The company is operated in accordance with mutual principles. 2) According to försäkringsrörelselag (FRL), Solvens II directive in Swedish law. 3) The finanicial conglomerate comprises Länsförsäkringar AB, all insurance companies in the Group, Länsförsäkringar Bank AB with subsidiaries and Länsförsäkringar Liv Försäkrings AB. Interim Review January June 3

4 Non-life insurance January-June Figures in parentheses pertain to the same period in. Operating profit increased to SEK 5,215 M (1,414), benefiting from very healthy investment income of SEK 4,629 M (1,426). Premiums earned after ceded reinsurance increased 6% to SEK 12,495 M (11,777). The technical result rose to SEK 948 M (828). The combined ratio improved to 95% (96), with a claims ratio of 76% (77). Solvency capital increased SEK 4,816 M during the period to SEK 62,772 M. Earnings Operating profit for s non-life insurance operations increased to SEK 5,215 M (1,414). The strong earnings were mainly due to very healthy investment income that increased to SEK 4,629 M (1,426). The technical result rose to SEK 948 M (828), benefiting from favourable growth in premiums. The combined ratio improved to 95% (96). The claims ratio fell to 76% (77) and the expense ratio amounted to 19% (19). The rolling 12-month combined ratio remained stable below 95%. Solvency capital increased SEK 4,816 M during the first six months, amounting to SEK 62,772 M. The solvency margin amounted to 246% (223). Business volumes Länsförsäkringar continued to strengthen its leading position in the Swedish non-life insurance market with a market share of 3.3% for the first quarter of, according to statistics from Insurance Sweden. Premiums earned increased 6.1% to SEK 12,495 M (11,777) during the first six months of. The portfolio increases and premium increases made approximately equal contributions to the increase. Private insurance increased 6.9%, with growth driven by household and homeowner insurance and accident insurance. Agria reported healthy growth due to both portfolio increases and premium increases, while growth in the health care business was attributable to previous premium increases. The commercial segment increased 5.5% driven by healthy growth in commercial property and commercial insurance. Solid growth in the motor insurance segment continued, with premiums earned rising 5.8%, primarily due to portfolio increases. Länsförsäkringar s growth in the motor insurance segment was again stronger than market growth, which according to Insurance Sweden was 3.4% in the first quarter of. Premiums earned in the agriculture segments rose 3.4%. Non-life insurance, Key figures, SEK M Premiums earned after ceded reinsurance 6,366 6,129 5,96 12,495 11,777 24,73 Technical result ,813 Bonuses and discounts ,22 Total investment income 2,777 1,852 1,576 4,629 1,426 5,9 Operating profit/loss 3,5 2,166 1,691 5,215 1,414 4,626 Solvency capital 62,772 59,963 53,525 62,772 53,525 57,956 Solvency margin, % Expense ratio Claims ratio Combined ratio Claims trend Claims payments after ceded reinsurance amounted to SEK 9,324 M (8,921). The claims ratio fell to 76% (77). Claims costs for accident and water damage declined during the period, although costs increased for fire damage and motor insurance claims. SEK 13 M was reserved for two large fires and SEK 5 M was reserved in international reinsurance for a fire-damage claim. Theft of car spare parts increased sharply in Sweden in, resulting in a 14% increase in claims costs for the entire market. Länsförsäkringar s claims costs for spare Combined ratio Rolling 12-months figures % Q 3 Q 4 part theft is estimated at approximately SEK 25 M for. Claims-prevention activities have been initiated. Investment income Global stock markets continued to rise and the Swedish stock market was stronger than global indexes. This trend was reflected in the very healthy investment income that increased to SEK 4,629 M (1,426), primarily from equities investments and properties. Investment income amounted to 4.9% of the asset value at the end of. Allocation of investment assets 8.% 2.6% 3.5% Equities Interest-bearing Property Other Total investment assets amounted to SEK 96.9 billion on 3 June. 4.9% Interim Review January June 4

5 Bank January-June Figures in parentheses pertain to the same period in. Operating profit rose 6% to SEK 737 M (697) and the return on equity amounted to 9.5% (9.8). Net interest income increased 18% to SEK 1,911 M (1,618). Business volumes rose to SEK 486 billion (422). Deposits rose to SEK 97 billion (88) and lending increased to SEK 242 billion (213). The number of customers with Länsförsäkringar as their primary bank rose 1%. The number of bank cards increased 11%. Resultat The Bank Group s operating profit rose 6% to SEK 737 M (697) as a result of higher net interest income. Net interest income rose 18% to SEK 1,911 M (1,618) due to increased volumes and lower refinancing costs. The return on equity amounted to 9.5% (9.8). Net losses from financial items amounted to SEK 35 M (gains: 81) attributable to unrealised changes in the market value of financial items. Net commission amounted to SEK 328 M ( 291) due to higher remuneration to the regional insurance companies as a result of a healthy volume trend and strengthened profitability in the business. Operating expenses increased 15% to SEK 799 M (692), of which 7 percentage points was due to higher staff costs associated with additional personnel from Länsförsäkringar AB to the Bank Group s Business Service unit and the Economic Research Department, and the recruitment of new fund managers at Länsförsäkringar Fondförvaltning. The underlying cost increase amounted to 8%, partly attributable to initiatives for future IT investments. The cost/income ratio before loan losses amounted to.51 (.49). Bank operating profit and return on equity SEK M % Operating profit Return on equity, % Länsförsäkringar Bank, Group Key figures, SEK M Deposits from the public 97,144 91,888 87,62 97,144 87,62 91,27 Loans to the public 242, , ,29 242, ,29 226,75 Operating profit ,467 Return on equity, % Cost/income ratio before loan losses Loan losses amounted to SEK 21 M (32), net, corresponding to a loan loss level of.2% (.3). Impaired loans, gross, amounted to SEK 261 M (264), corresponding to a percentage of impaired loans, gross, of.11% (.12). Business volumes increased 15% to SEK 486 billion (422). Lending increased 14% to SEK 242 billion (213) with continued high credit quality. Lending in Länsförsäkringar Hypotek increased 15% to SEK 182 billion (158). Deposits rose 11% to SEK 97 billion (88). The fund volume increased 21% to SEK 147 billion (122), attributable to positive changes in value and increased inflows in the fund business. Business volumes for the Bank Group SEK bn June 213 June 214 June 215 June June Retail mortgages Customer deposits Agricultural loans Funds Other loans Funding and liquidity The Bank Group has a low refinancing risk and the maturity structure is highly diversified. Debt securities in issue increased to a nominal SEK 165 billion (146), of which covered bonds amounted to SEK 134 billion (115), senior long-term funding to SEK 3 billion (29) and short-term funding to SEK 1 billion (2). The average remaining term for the longterm funding was 3.5 years (3.5) on 3 June. Covered bonds were issued during the period at a volume corresponding to a nominal SEK 2 billion (19), repurchased covered bonds to a nominal SEK 2 billion (3) and matured covered bonds to a nominal SEK 6 billion (8). Länsförsäkringar Bank issued senior unsecured bonds in the nominal amount of SEK 5 billion (4) during the period. On 3 June, the liquidity reserve totalled SEK 45 billion (45)*. The liquidity reserve is invested in securities with very high credit quality that are eligible for transactions with the Riksbank and, where appropriate, with the ECB. By utilising the liquidity reserve, contractual undertakings can be met for about two years without needing to secure new funding in the capital market. *According to the Swedish Bankers Association s definition. The Group s Liquidity Coverage Ratio (LCR) for the consolidated situation, according to the Swedish Financial Supervisory Authority s definition, amounted to 215% (198) at 3 June. Interim Review January June 5

6 Life assurance and pension insurance Länsförsäkringar offers life-assurance and pension solutions to corporate customers and private individuals. Fund management, Guarantee Management and personal-risk insurance are offered through Länsförsäkringar Fondliv. No new policies are underwritten in Länsförsäkringar Liv, and the company manages traditional life assurance that was taken out before it was closed in 211. January-June Figures in parentheses pertain to the same period in. Operating profit for Länsförsäkringar Fondliv increased to SEK 29 M (249). Total managed assets increased to SEK 122 billion (13). Profit for Länsförsäkringar Liv increased to SEK 2,61 M (383). Total managed assets amounted to SEK 116 billion (116). The bonus rate for New Trad was raised from 4% to 5% on 1 April. The Länsförsäkringar Global Hållbar sustainability fund was given the green light by Söderberg & Partners and Earnings Operating profit for Länsförsäkringar Fondliv rose to SEK 29 M (249), due to increased income from higher managed assets. Total managed assets increased SEK 7 billion in the period to SEK 122 billion (13) on 3 June. The increase was mainly the result of a high value growth trend, but also a positive net inflow. Total premium income increased 8% to SEK 4,751 M (4,394), of which capital transferred to the company accounted for SEK 711 M (552). Premium income for insurance risk after ceded reinsurance amounted to SEK 12 M (83). Commission and fee income was SEK 85 M (698) due to higher managed assets. Operating expenses rose 7% to SEK 515 M (483), primarily as a result of higher distribution costs from increased business volumes, but also investments in digital development. Profit for Länsförsäkringar Liv increased to SEK 2,61 M (383). This result was mainly due to positive investment income in Old and New Trad, and transitions from Old Trad to New Trad, which continued to strengthen earnings through lower technical provisions. Changes in market interest rates affect Länsförsäkringar Liv s earnings with rising market interest rates leading to lower liabilities to policyholders since future commitments are discounted. However, the company can largely protect itself from earnings effects by matching liabilities and assets. Generally, market interest rates increased moderately during the period, the interest rate on the ten-year Swedish government bond rose about 1 points. In total, the interest rate effect on earnings was small for the period, where rising market interest rates resulted in a net earnings effect of SEK 1 M. Liabilities to policyholders declined a total of SEK 1.5 billion (increase:.9) during the Länsförsäkringar Fondliv and Länsförsäkringar Liv Key figures, SEK M Länsförsäkringar Fondliv Premium income, net (rolling 12 months) 8,995 8,8 8,44 8,995 8,44 8,637 Operating profit Managed assets 121, ,794 12, ,897 12, ,476 Solvency ratio, % Länsförsäkringar Liv Profit/Loss 1,36 1,25 1,465 2, ,682 Managed assets 115,51 115, , ,51 116, ,784 Collective consolidation ratio, New Trad, % Collective consolidation ratio, Old Trad, % Solvency ratio, % period, primarily due to negative cash flows from payments and external transfers exceeding premium payments. Investment income was positive for all management portfolios and contributed SEK 2.8 billion (3.7) in earnings. Transitions from Old Trad to New Trad made a positive contribution of SEK.2 billion to earnings, and operating expenses declined to SEK 187 M (215). Länsförsäkringar Fondliv and Länsförsäkringar Liv s capital situation is expressed in accordance with Solvency II and is measured as a ratio of own funds in relation to risk-based capital requirement. Länsförsäkringar Fondliv s solvency ratio on 3 June amounted to 16% (155). Länsförsäkringar Liv s solvency ratio on 3 June amounted to 229% (19). Fund and guarantee management Unit-linked insurance Some 89% of the funds in the total fund range performed positively during the first six months of. 22 of the funds increased by more than 1%, while five funds declined more than 1%. Sustainability requirements Managed assets unit-linked insurance SEK bn are imposed in procurement processes of new funds and fund managers work on responsible investment is followed up every year. 98% of all of Länsförsäkringar Fondliv s recommended funds have signed the United Nations-supported Principles for Responsible Investment (PRI). Länsförsäkringar Fondliv s new fund strategy improved both the range and the quality of the funds in the first six months of. For example, about 3 new funds from several different fund companies were launched. Interim Review January June 6

7 Länsförsäkringar Fondliv is the market leader in the unit-linked insurance market in individual occupational pensions, commanding a market share of 19.7% measured in premium income and 21.8% measured in new sales, according to statistics from Insurance Sweden for the first quarter of. Equities funds benefited from global growth, rising profits and low market interest rates in the first six months of. Examples of high-performing funds in the range in the first half of were Lannebo Europa Småbolag, GAM Star China and Fidelity Asian Special Situation. However, funds investing in Russia and commodities reported the weakest performance. Guarantee Management Länsförsäkringar Fondliv offers management of pension insurance carrying a guarantee element regarding paid-in premiums. The guarantee principle is that the customer recoups premiums paid in to savings, but with the possibility of additional returns. Full guarantee, meaning at least your premium back applies for a minimum ten-year savings period. A sliding scale is applied to shorter savings periods, with the guarantee at 8% of paid-in premiums for periods of five to ten years until retirement, and a minimum of 7% of paid-in premiums with less than five years until retirement. The assets are divided between equity and fixed-income investments, with a fixed-income portion always being at least 4% and a equities portion that may be as low as zero. On 3 June, 66% of the investments comprised interest-bearing investments and 34% equities. Managed assets amounted to SEK 2.9 billion (2.4). The return for the first six months of amounted to 4.% (.4), with Swedish and US equities making the largest contribution. Traditional management Länsförsäkringar Liv, which is closed for new business, conducts traditional life assurance divided into four portfolios: New Trad, Old Trad, New World and Insured Pension. Total managed assets amounted to SEK 116 billion (116). New Trad New Trad offers customers the opportunity to change the conditions of their existing traditional insurance policies. Managed assets in New Trad amounted to SEK 19 billion (16). Investments as at 3 June comprised 58% interest-bearing investments, 32% equities, 2% properties and 8% alternative investments. The total share of interest-bearing investments has increased slightly in. The total return was 4.% (neg:.1). The positive return was mainly attributable to the strong performance of equities investments. The bonus rate on 3 June was 5% (6). The bonus rate was raised from 4% to 5% on 1 April. Old Trad In Old Trad, Länsförsäkringar Liv manages capital of SEK 83 billion (87) on behalf of its customers. The aim of risk-taking in the Old Trad investment portfolio, given the prevailing low interest-rate environment, is to ensure that the guaranteed bonus can be realised also in the event of a negative market trend. At the same time, balanced risk-taking is applied to facilitate a reasonable return on customers savings. Investments were relatively unchanged in and a large portion of the capital is comprised of long-term interest-bearing investments. Investments as at 3 June were allocated as follows: 87% interest-bearing securities, 7% alternative investments and the remainder was equities and property. The total return was 1.4% (4.8). The bonus rate was unchanged at 2%. New World The percentage of equities for the New World management form is normally 7% and the remaining 3% comprises interest-bearing investments. However, the investment mix can vary within defined intervals, with the percentage of equities comprising 6 8%. With the New World management form, customers are guaranteed to recoup at least the premiums paid, subject to deductions for expenses and yield tax. Managed assets amounted to SEK 12 billion (11). The total return was 7.7% (neg: 1.6). Interim Review January June 7

8 Real-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. Realestate brokerage is also a key customer meeting for sales of mortgages and insurance. Länsförsäkringar Fastighetsförmedling has 16 branches throughout Sweden. Strong growth has advanced Länsförsäkringar Fastighetsförmedling to the position of third largest brokerage in Sweden. The real-estate brokerage is an integrated 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 operations are conducted in franchise form, whereby the regional insurance company acts as the franchiser for the local branch. This also means that Länsförsäkringar Fastighetsförmedling differs from national estate-agent chains by always being locally based. According to the Swedish Quality Index s customer satisfaction survey, Länsförsäkringar Fastighetsförmedling has Sweden s most satisfied customers. The total market for single-family homes declined 16% year-on-year. However, Länsförsäkringar Fastighetsförmedling s total market share increased.6 percentage points in a shrinking market. A total of 7,777 (8,798) single-family homes, 11,45 (1,563) tenant-owned apartments and 455 (473) agricultural properties were brokered between July and June. The value of the sales amounted to SEK 41. billion (38.7). Sales of single-family homes resulted in SEK 3.3 billion (3.2) in first-lien mortgages in Länsförsäkringar s mortgage institution, divided between 1,54 (1,755) transactions. Number of single-family homes and tenantowned apartments sold by Länsförsäkringar Fastighetsförmedling SEK bn s 5 25 Single-family homes sold by Länsförsäkringar Fastighets förmedling where loans were invested in Länsförsäkringar Hypotek SEK M 3,5 Number of loans 2,1 Value of sales of single-family homes July - June SEK bn , 2,5 1,8 1, , 1, , , Jul 13- Jun 14 Jul 14- Jun 15 Jul 15- Jun 16 Total value, SEK billion Number of residential properties sold Number of single-family homes sold July - June Jul 16- Jun 17 Jul 13- Jun 14 Loan total, SEK M Number of loans Jul 14- Jun 15 Jul 15- Jun 16 Market shares single-family homes 3 June Jul 16- Jun 17 Fastighetsbyrån Svensk Fastighetsförmedling Länsförsäkringar Fastighetsförmedling SkandiaMäklarna Bjurfors Mäklarhuset Husman & Hagberg Mäklarringen ERA Fastighetsbyrån 18,31 Svensk Fastighetsförmedling 1,37 Länsförsäkringar Fastighetsförmedling 7,777 Mäklarhuset 3,518 SkandiaMäklarna 2,861 Husman & Hagberg 2,151 Bjurfors 2,43 Mäklarringen 1,122 ERA 99 Other brokers and private 21,844 Fastighetsbyrån 25.5% Svensk Fastighetsförmedling 14.7% Länsförsäkringar Fastighetsförmedling 11.% Mäklarhuset 5.% SkandiaMäklarna 4.1% Husman & Hagberg 3.% Bjurfors 2.9% Mäklarringen 1.6% ERA 1.3% Other brokers and private 3.9% Interim Review January June 8

9 Financial statements non-life insurance Income statement SEK M Premiums earned after ceded reinsurance 6,366 6,129 5,96 12,495 11,777 24,73 Investment income transferred from financial operations Claims payments after ceded reinsurance 4,79 4,534 4,358 9,324 8,921 17,942 Operating expenses 1,211 1,146 1,157 2,358 2,236 4,644 Other technical revenue/expenses Technical result for non-life insurance operations before bonuses and discounts ,813 Bonuses and discounts ,22 Technical result for non-life insurance operations after bonuses and discounts Total investment income 2,777 1,852 1,576 4,629 1,426 5,9 Investment income transferred to insurance operations Other non-technical expenses Operating profit for the period 3,5 2,166 1,691 5,215 1,414 4,626 Balance sheet SEK M 3 Jun 31 Dec ASSETS Shares and participations 39,628 36,985 Bonds and other interest-bearing securities 29,542 29,91 Other investment assets 27,72 27,98 Total investment assets 96,891 93,984 Reinsurers portion of technical provisions 11,181 1,396 Receivables and other assets,12,553 11,254 Cash and bank balances 5,678 4,681 Prepaid expenses and accrued income 1,468 1,398 TOTAL ASSETS 127, ,714 EQUITY, PROVISIONS AND LIABILITIES Equity 52,439 48,33 Technical provisions (before ceded reinsurance) 57,863 54,664 Other provisions and liabilities 14,457 16,3 Accrued expenses and deferred income 3,12 3,14 TOTAL EQUITY, PROVISIONS AND LIABILITIES 127, ,714 Interim Review January June 9

10 Länsförsäkringar AB, Group Income statement SEK M Premiums earned before ceded reinsurance 1,813 1,938 1,63 3,751 3,419 7,18 Reinsurers portion of premiums earned ,533 Premiums earned after ceded reinsurance 1,424 1,521 1,334 2,945 2,772 5,485 Interest income 1,12 1, ,178 1,958 4,33 Interest expense Net interest income ,91 1,62 3,464 Change in unit-linked insurance assets policyholder bears the risk 1,253 4,37 1,345 5,623 1,654 7,916 Dividends in unit-linked insurance assets policyholder bears the risk 7 Investment income, net Commission income ,476 1,297 2,697 Other operating income ,229 1,4 2,129 Total operating income 5,11 8,371 4,863 13,382 5,231 22,21 Claims payments before ceded reinsurance 1,219 1,122 1,21 2,341-2,311 3,986 Reinsurers portion of claims payments Claims payments after ceded reinsurance ,882 1,774 3,584 Change in life-assurance reserve Change in unit-linked insurance liabilities policyholder bears the risk 1,31 4,434 1,376 5,735 1,646 8,5 Commission expense ,562 1,412 2,926 Staff costs ,82 1,2 1,973 Other administration expenses ,522 1,443 3,159 Loan losses Total expenses 4,34 7,545 4,285 11,885 4,115 19,735 Operating profit ,497 1,115 2,286 Tax Net profit for the period , ,845 Earnings per share before and after dilution, SEK Statement of comprehensive income SEK M Net profit for the period , ,845 Other comprehensive income Items that may subsequently be transferred to profit and loss Translation differences attributable to foreign operations Cash-flow hedges Change in fair value of available-for-sale financial assets Tax attributable to items that may subsequently be transferred to profit and loss Total Items that cannot be transferred to profit and loss Revaluation of owner-occupied property Revaluation of defined-benefit pension plans 2 Tax attributable to items that cannot be reversed to profit for the period Total Total other comprehensive income for the period, net after tax Comprehensive income for the period ,119 1,87 2,27 Interim Review January June 1

11 Länsförsäkringar AB, Group Statement of financial position SEK M 3 Jun 31 Dec ASSETS Goodwill Other intangible assets 4,184 4,5 Deferred tax assets Property and equipment Owner-occupied property 2,793 2,721 Shares in Länsförsäkringar Liv Försäkrings AB 8 8 Shares and participations in associated companies Reinsurers portion of technical reserves 11,23 1,413 Loans to the public 242, ,75 Unit-linked insurance assets policyholder bears the risk 118, ,799 Shares and participations 2,166 2,24 Bonds and other interest-bearing securities 42,34 41,844 Treasury bills and other eligible bills 13,698 7,867 Derivatives 5,97,6,26 Change in value of hedge portfolios Other receivables 6,119 3,674 Prepaid expenses and accrued income 1,858 1,747 Cash and cash equivalents 3,124 1,171 TOTAL ASSETS 454, ,75 SEK M 3 Jun 31 Dec EQUITY AND LIABILITIES Equity Share capital 1,42 1,42 Other capital contributed 1,272 1,272 Additional tier 1 instruments 1,2 1,2 Reserves Retained earnings including profit for the period 1,361 9,179 Total equity 23,731 22,529 Subordinated liabilities 2,596 2,595 Technical reserves 2,356 18,757 Provisions for life assurance policyholder bears the risk 119,66, 112,225 Deferred tax liabilities 1,37 1,339 Other provisions Debt securities in issue 17, ,44 Deposits from the public 94,641 89,946 Due to credit institutions 9,196 3,873 Derivatives 1,733 1,936 Change in value of hedge portfolios 2,295 3,191 Other liabilities 3,858 3,34 Accrued expenses and deferred income 4,852 4,477 TOTAL EQUITY AND LIABILITIES 454, ,75 Interim Review January June 11

12 Länsförsäkringar Liv, Group Income statement SEK M Premium income after ceded reinsurance ,72 Investment income net 1,56 1,713 2,596 2,769 3,711 6,27 Claims payments -1,,332 1,374 1,53-2,76-2,962-5,683 Change in technical provisions 1, , ,221 Operating expenses Technical result, life insurance operations 1,68 1,59 1,467 2, ,838 Non-technical expenses Profit/Loss before tax 1,41 1,31 1,483 2, ,728 Tax Profit/Loss for the period 1,36 1,25 1,465 2, ,682 Items that cannot be transferred to profit and loss Comprehensive income for the period 1,36 1,25 1,465 2, ,682 Balance sheet SEK M 3 Jun 31 Dec ASSETS Investment assets 117, ,382 Reinsurers portion of technical provisions Receivables 1,144 1,99 Other assets 5,43 4,763 Prepaid expenses and accrued income TOTAL ASSETS 124, ,675 EQUITY, PROVISIONS AND LIABILITIES Equity 24,613 23,5 Technical provisions 9,689 92,217 Provisions for other risks and expenses Deposits from reinsurers Liabilities 8,311 8,478 Accrued expenses and deferred income , TOTAL EQUITY, PROVISIONS AND LIABILITIES 124, ,675 Changes to reporting In order to conform with the classification in the solvency regulations, financial instruments are measured at fair value including accrued interest from 1 January. The change affects comparative figures in the balance sheet as per 31 December. The asset items impacted are: bonds and other interest-bearing securities by SEK 646 M, interest-bearing securities issued by Group companies by SEK 23 M, derivatives by SEK 35 M and prepaid expenses and accrued income by a negative SEK 612 M. The liability items impacted are: derivatives by SEK 363 M. Comparative figures have been updated to the new reporting method. The change did not affect equity. Interim Review January June 12

13 LF 6682 utg 3 Sitrus Financial calendar Interim Report third quarter 1 November For further information, please contact Johan Agerman, President and CEO Länsförsäkringar AB johan.agerman@lansforsakringar.se, +46 () , +46 () Malin Rylander Leijon, CFO Länsförsäkringar AB malin.rylander-leijon@lansforsakringar.se, +46 () , +46 () Anna Glennmar, Investor Relations Länsförsäkringar AB anna.glennmar@lansforsakringar.se, +46 () , +46 () Fanny Wallér, Director of Corporate Communications Länsförsäkringar AB fanny.waller@lansforsakringar.se, +46 () , +46 () Länsförsäkringar AB (publ) Corporate Registration Number Street address: Tegeluddsvägen Postal address: SE-16 5 Stockholm Telephone: +46 () lansforsakringar.se