Länsförsäkringsgruppen OPERATIONS 1999 Contents LÄNSFÖRSÄKRINGSGRUPPEN (LF INSURANCE GROUP) Major achievements in 1999..........................................2 The year in brief ...........................................................2 Länsförsäkringsbolag (regional insurance companies) 24 independent, regional mutual insurance companies, each conducting insurance A record year for our customers .....................................6 operations in a specific geographical region, and responsible for all customer con- tacts in the Group’s areas of operations. Five year overviews .......................................................8 Länsförsäkringsbolagens förening The 24 regional insurance companies............................10 A non-profit-making association comprising the 24 regional companies and eight local companies. The association’s aims are to further the interests of its members Länsförsäkringar Wasa in 1999 ...................................18 and promote the concept of insurance at the local level. The association is re- sponsible for the Group’s joint strategic development and market targets. Länsförsäkringar Wasa’s Board ...................................19 Länsförsäkringsgruppen (LF Insurance Group) The LF Insurance Group comprises the 24 regional companies and Länsförsäkringar Business environment, financial Wasa. management and markets ............................................20 Länsförsäkringar Wasa Non-life insurance ......................................................24 The Parent Company of an insurance Group owned by the 24 regional insurance companies (96.5%) and Eureko B.V.(3.5%). Länsförsäkringar Wasa conducts non- The savings market is expanding...................................28 life insurance business (including Lita), and also operations via life insurance (in- cluding Lita) banking, mutual fund, asset management and animal insurance com- Life and pension insurance...........................................30 panies. The Group is also responsible for the run-off of international direct insur- ance and reinsurance, provides services for the regional insurance companies in the Mutual funds..............................................................36 above fields, and is responsible for the LF Insurance Group’s development activities. Banking ....................................................................38 Länsförsäkringar Wasa Liv A wholly owned Länsförsäkringar Wasa subsidiary which conducts life insurance The asset management company...................................40 business, and unit-linked life insurance via its Länsförsäkringar Wasa Fondliv sub- sidiary. Operations are managed in accordance with mutual principles, and hence all Agria.........................................................................42 profits accrue to customers. Länsförsäkringar Wasa Fonder Lita ..........................................................................43 Wholly-owned subsidiary of Länsförsäkringar Wasa which conducts fund manage- ment operations. Run-off......................................................................44 Länsförsäkringar Wasa Kapitalförvaltning (LF Asset Management) Länsförsäkringar Miljö ...............................................44 Wholly-owned subsidiary of Länsförsäkringar Wasa which conducts asset manage- ment operations for both internal and external institutional customers. Länsfastigheter/Humlegården......................................45 Länsförsäkringar Bank Eureko ......................................................................46 Wholly-owned subsidiary of Länsförsäkringar Wasa which conducts banking opera- tions with a focus on private individuals and the agricultural sector. Employees .................................................................47 Agria Income statements and balance sheets, Wholly-owned subsidiary of Länsförsäkringar Wasa which insures animals and crops. Non-life insurance .................................................48 Länsfastigheter/Humlegården Life insurance company .........................................50 Owned by 22 regional insurance companies and Länsförsäkringar Wasa.Owns and Unit-linked insurance company ...............................50 manages properties which are mainly located in Stockholm. Banking Group......................................................51 Eureko B.V. Asset management company...................................51 European insurance alliance in which Länsförsäkringar Wasa is one of eight partners. Mutual fund management company.........................52 The aim is to create a unit in which permits development and an exchange of exper- tise and other resources at the international level. The various partner companies Glossary ....................................................................53 operate completely independently and have total control in their national markets. The Eureko B.V.holding company holds 3.5% of the shares in Länsförsäkringar Addresses ..................................................................54 Wasa.In its turn, Länsförsäkringar Wasa owns 8.2% of Eureko B.V. 24 regional insurance 65% companies* 96,5% Länsfastigheter/ Eureko B.V. Humlegården 3,5% Länsförsäkringar 35% Wasa 8,2% Länsförsäkringar Wasa Länsförsäkringar Wasa LF Asset Länsförsäkringar Bank Agria Liv* Fonder Management * Operated in accordance with mutual principles. 1 Major achieve- The yearMagnus Wändel shows Länsförsäkringar Skåne’s ments in 1999 claims adjuster, Åke Jeppsson, the damage to his greenhouse in Lilla Uppåkra in southern Sweden. • Income from non-life operations amounted to SEK 5,730 M (2,320) before appropriations and taxes.Premiums earned on own account amounted to SEK 8,744 M (7,743).More than one house- hold in three in Sweden is insured with Länsförsäkringar. • Twenty regional companies will pay spe- cial bonuses or dividend bonuses to cus- tomers amounting to a total of SEK 860 M,on the basis of 1999 earnings. • Profit for the year in life insurance (tradi- tional and unit linked) amounted to SEK 11,304 M (10,196).Operations are con- ducted in accordance with mutual prin- ciples,and therefore all profit accrues to customers. • As a result of the satisfactory yield during 1999,500,000 customers in Länsförsäk- No increase in premiums ringar’s life insurance companies will share a total of SEK 5 billion in addition to bonus interest.Each customer’s due to the storm savings increased by 6.25% on 31 Decem- ber 1999. • Länsförsäkringar was awarded the title best fund manager of the year in 1999 by The “Anatol”storm struck Sweden on the 12,000 claims were reported to Länsförsäk- night of 3–4 December, with gale force winds ringar Skåne, representing total compensa- the Swedish business journals (Sparöver- averaging 33 m/second at Hanö. The storm tion of over SEK 400 M to customers. sikt,Dagens Industri and Affärsvärlden). had previously raged over Denmark where it The LF Insurance Group will not increase 19 of 29 mutual funds exceeded the rele- caused the worst damage for 100 years – the its premiums for household, commercial or vant index. bill is expected to total to almost DKK 7 billi- farm insurance after the storm. The possibil- Agria received the “Swedish Quality • on. The damage in Sweden amounted to ity of autumn storms is taken into account Award”. about SEK 1 billion, and 20 of the 24 Länsför- when premiums are set, and premiums and • Almost half the LF Insurance Group’s säkringar’s regional insurance companies claims are evened out over the years. A single total premium volume of SEK 16.4 billion were affected. Farmers in Skåne in southern storm and the claims incurred do not affect now consists of life insurance and savings Sweden suffered most. Due to Länsförsä- premiums. products. kringar’s dominant position, approximately 2 in brief Länsförsäkringar – Sweden’s Länsförsäkringar’s pension-savers best mutual fund manager share an additional In September, the Sparöver- mutual fund manager according to SEK 5 billion sikt savings magazine ac- Dagens Industri and Affärsvärlden claimed Länsförsäkringar (Swedish business journals).When As a result of the satisfactory yield during as the best mutual fund Dagens Industri nominated Läns- 1999, pension customers in Länsförsäk- manager of the year, follow- försäkringar as the best mutual ringar’s traditional life insurance company ing a similar award earlier in fund manager in January 2000 for are sharing an additional SEK 5 billion. the year as the best bond fund the second year in a row, this was the At 31 December 1999, each customer’s manager. Länsförsäkringar was the best sixth award in less than two years. savings were augmented by 6.25% in addi- tion to the normal bonus interest. In all, 500,000 customers will be sharing the additional bonus, augmenting savings by an average of SEK 10,000. Agria – Swedish quality champion Agria, Länsförsäkringar’s specialist animal and crop insurance company, received the Swed- The regional in- ish Institute for Quality (SIQ) “Swedish Quality Award”in December. This is the highest award for the implementation of improvements for which a Swedish organization is eligible. surance companies This success is the result of the quality process which commenced five years ago. In 1998, the distribute SEK company achieved one of its targets when Agria became the first Swedish insurance com- pany to receive ISO 9001 certification. 860 M in bonuses As a result of record income from non-life business during 1999, 20 of the 24 Länsför- säkringar’s regional insurance companies decided