A macroeconomic outlook and a snapshot of the investement trends in life insurance Anna Pettersson Westerberg, Insurance Sweden
1 years ago
Economic growth in all countries at the same time Source: IMF
26 26 27 28 28 29 21 21 211 212 212 213 214 214 215 216 216 217 218 26 26 27 28 28 29 21 21 211 212 212 213 214 214 215 216 216 217 218 13 12 11 1 Confidence Indicators Manufacturing Industry Index=1, Monthly data 9 8 7 6 5 Consumer Confidence Indicators Index=1, Monthly data 13 12 11 1 9 8 7 6 5 PMI, USA Confidensindicator, Euro area USA Euro area Source: IMF, OECD, Macrobond and Konjunkturinstitutet. Source: Konjunkturinstitutet, Conference Board, Europeiska kommissionen and Macrobond.
2 2 21 22 23 24 25 25 26 27 28 29 21 21 211 212 213 214 215 215 216 217 Unemployment Per cent of labour force, Seasonally adjusted data GDP Growth Percentual change, Annual data 14 12 1 8 6 4 2 8 6 4 2-2 -4-6 World US Euro area Euro area Germany Japan GB US Source: Konjunkturinstitutet and Macrobond. Source: IMF, OECD, Macrobond and Konjunkturinstitutet.
Increased optimism about growth has been reflected in higher equity prices Stock market indices 1 = 21-1-1 3 25 2 15 1 5 21 211 212 213 214 215 216 217 218 Sweden (OMXS 3) US (S&P 5) Germany (DAX) Sources: Nasdaq OMX Nordic, Börse Frankfurt and S&P.
GDP growth Import-adjusted contribution to GDP growth Percental change and per cent units 6 4 2 211 212 213 214 215 216 217 218 219-2 Household consumption Fixed gross investments Export of goods and services Government consumption expenditure Changes in inventories Source: Konjunkturinstitutet.
25 25 26 27 27 28 29 29 21 211 211 212 213 213 214 215 215 216 217 Lack of labour in the business sector Share of yes-answers, Seasonally adjusted halfyear-values 4 35 3 25 2 15 1 5 Hourly earnings in business sector, local and central government Percental change, seasonally adjusted values 6 5 4 3 2 1 Business sector Average 25-217 Business sector Central government sector Local government
The Swedish inflation is still below the target Annual percentage change 3, 2,5 2, 1,5 1,,5, 212 213 214 215 216 217 218 CPIF CPIF excluding energy Source: Statistics Sweden. Note: CPIF is the consumer price index with a fixed interest rate.
Low interest rates forever? Per cent 6 5 4 3 2 1 22 24 26 28 21 212 214 216 218 22-1 Repo rate Yield on Swedish 1-year government bond Source: The Riksbank. Note: The doted line is the Riksbank s forecast of the repo rate (Monetary policy report February 218).
And then there is the Riksbank s holdings of government bonds Billion SEK (left axis) and percentage (right axis) 5 5 4 4 3 3 2 2 1 1 The Riksbank's holdings of government bonds (total nominal amount) As share of government bonds issued in SEK (right axis) Sources: The Riksbank and Riksgälden. Note: Both nominal and inflation-linked are included in the government bonds. The doted line is the Riksbank s forecast of its holdings (Monetary policy report February 218).
Good return on life insurance companies' assets despite low interest rates Per cent 15 1 5-5 -1 Annual average total return on life insurers' assets Yield on Swedish 1-year government bond (at year-end) Sources: Insurance Sweden and the Riksbank. Note: The annual average total return is weighted with the market value of the assets on which the total return is based on.
A relatively large share of Swedish insurers assets are equities Insurance companies holdings of assets December 216, per cent 1 9 8 7 6 5 4 3 2 1 16,7 29,6 27,6 15, Sweden Government bonds Equities Loans Cash/deposits 11,9 18, 3,4 28,9 EU average Corporate and bank bonds Investment funds Properties Other Source: EIOPA. Note: Refers to insurance companies reporting under Solvency II. Unit-linked is excluded.
Life insurance companies have not actively increased their risk taking Share of Swedish life insurance companies' assets, percent 1 9 8 7 6 5 4 3 2 1 21 211 212 213 214 215 216 217 218 Deposits Bonds Equities Loans Real estate Other Source: Statistics Sweden. Note: Assets that belong to unit linked are excluded. Equities also include investment funds. Real estate refers to buildings and wholly owned property companies. Other includes e.g. repo and derivatives.
Swedish insurance companies have a strong financial position Solvency ratios in Solvency II, Q2 217, per cent 1 9 8 7 6 5 4 3 2 1 MCR ratio SCR ratio Source: EIOPA. Note: The ratios are a weighted average for the countries insurance companies. The dashed line is the requirement of these ratios in Solvency 2 (1 %)
25 Premium payments life insurance a growing market 2 15 1 5 211212 213 214 215 216 217 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Occupational pension Private pension Others Private equity insurance for occupational pension Private equity insurance Källa: Finansinspektionen
Risks and uncertainties
Thank you for your attention! For further contact: anna.pettersson.westerberg@insurancesweden.se www.insurancesweden.se