Report of the Directors Volumes 2007 2006 Sales volume (weighted), SEKm Traditional life and sickness/health insurance 8,923 8,104 Unit-linked insurance 35,416 39,597 Total 44,339 47,701 Premium income (SEKm) Traditional life and sickness/health insurance 8,129 8,226 Unit-linked insurance 18,241 22,856 Total 26,370 31,082 Assets under management (net assets), SEK bn Traditional life and sickness/health insurance 272.2 275.6 Unit-linked insurance 136.2 119.7 Total 408.4 395.3 volume, rose by 6 per cent compared with last year, excluding the effect of the legislative initiatives in Sweden, which stopped the high-volume product “Kapitalpension”. Increased competition from new entrants reduced sales of corporate pension through the broker channel in Sweden, while sales of regular endowment policies increased in all channels. As a consequence, the sales margin on new business decreased slightly, to 23.7 per cent (24.5). Sales in Denmark were somewhat higher than last year and premiums paid rose by 11 per cent. The Danish occupational pension market has grown by approximately 10 per cent annually since year 2000, while the private market has shown virtually zero-growth. SEB Pension’s growth rate within occupational pension has been in the range of 15–18 per cent in recent years, and the company has increased its market share accordingly. The Baltic subsidiaries are mainly focused on unit-linked insurance, but offer traditional insurance and sickness/disability insurance as well. 86 per cent of the sales volume is private- and 14 per cent corporate-paid. Sales in the Baltic countries rose by 76 per cent. Sales of the Portfolio Bond in Sweden through SEB Life & Pension Inter natio nal grew, too. International showed a strong trend and increased its share of business volume to 10 per cent (7) in total. SEB sold its first life insurance policy in Ukraine. Total premium income (premiums paid) amounted to SEK 26.4bn, compared with SEK 31.1bn last year. Excluding the effect of the legislative actions in Sweden including the transfer stop, premium income rose by SEK 3.1bn, or 14 per cent. The total value of unit-linked funds increased by 14 per cent, to SEK 136bn, compared with SEK 120bn last year. The positive trend is a result of increasing fund values, premium payments and a generally low level of surrenders. Total assets under management (net assets) increased by 3 per cent from last year, to SEK 408bn. Traditional insurance in Sweden The main part of traditional insurance business is run by Gamla Livförsäkringsaktiebolaget SEB Trygg Liv (”Gamla Liv”). The entity is operated according to mutual principles and is not consolidated with SEB Trygg Liv’s result. Gamla Liv is closed for new business. Traditional insurance business was also run by Nya Livförsäkringsaktiebolaget SEB Trygg Liv (“Nya Liv”), which in October 2007 was merged with Fondförsäkringsaktiebolaget SEB Trygg Liv. Previously, Nya Liv was operated according to mutual principles and not consolidated with SEB Trygg Liv’s results. After the merger the result of this business – with respect to investment income and Unit-linked insurance in Sweden, new business Per cent SEB Trygg Liv 22.1 (29.3) Skandia 14.1 (15.7) Moderna 13.4 (6.7) Länsförsäkringar 12.7 (7.3) Swedbank 10.2 (11.3) SHB 8.2 (7.7) Folksam 7.7 (7.9) Other 11.6 (14.1) Source: The Swedish Insurance Federation statistics Sales margin SEKm 2006 Sales volumes weighted (regular + single/10) 3,345 Present value of new sales (8% disount rate) 1,775 1,788 Selling expenses –901 –970 Profit from new business 874 818 Sales margin, per cent 23.7 24.5 2007 is calculated for the total Division, 2006 is business area Sweden. The effect of Denmark and the Baltics: Sales volume weighted (regular + single/10) 845 Profit from new business 224 Sales margin new business, per cent Gamla Livförsäkringsaktiebolaget in Sweden 2006 Assets under management, net assets, SEKm 182,684 Result for the period, SEKm 17,455 Premium income, SEKm 2,219 Collective consolidation ratio1), retrospective reserve, % 122 Bonus rate, % 7 Solvency ratio2), % 230 Capital base, SEKm 94,556 Required solvency margin, SEKm 3,659 Solvency quota3) 25.8 Total return, % 11.1 Share of equities/equities exposure, % 43 Share of fixed income, % 45 Share of real estate, % 12 insurance risk – is still allocated to the policyholders. However, SEB guarantees the contractual benefits to the policyholders. 2007 3,689 0.8 2007 180,116 8,238 2,122 114 12 230 95,045 3,573 26.6 2.8 42 45 13 1) The collective consolidation ratio shows the company’s assets in relation to its commitments to policyholders. The commitments include both guaranteed and non-guaranteed values. 2) The company’s net assets (including equity and subordinated debts) in relation to the guaranteed commitments in the form of technical provisions. 3) Quota capital base / required solvency margin. SEB ANNUAL REPORT 2007 33
