SWEDEN - Alecta, the occupational pensions specialist, may reduce employer contribution premiums as improved returns in the first six months of this year have tipped its solvency ratio above the maximum required.

The Swedish insurance company saw returns for the first half of 2007 climb from 0.1% in the previous period to 5.2% to June 30 2007, while assets under management have doubled from SEK22.3bn (€2.4bn) to SEK45.8bn.

A spokesman for Alecta told IPE results have improved on the back of "positive financial markets", of which the firm "succeeded in taking advantage of".

This has also boosted the company's its collective solvency ratio from 143% to 165% - substantially higher than the 140% target the company has set as its required funding level - so chief executive officer Tomas Nicolin has announced the company may allow customers to benefit from its improved returns and reduce the contributions required of employers.

Insurance companies in Sweden are required to report their funding ratio to the Swedish Financial Supervisory Authority, with 100% recognised as normal funding.

According to the Alecta website, the firm is see to maintain a target solvency ratio of 140% but allows a fluctuation of between 125% and 155%.

This solvency ratio increase to 165% is substantially higher than its own target limits so the pension provision firm may need to be taken "in order to create conditions for restoring the level of collective solvency to the normal level".

That said, any decision to review the solvency ratio target is not usually taken by the company's board until the end of the year, said the spokesman, as it necessary to see whether the performance trend continues.

"Even if the solvency ratio is well above [the target], it is not negative so if we take the decision to hand out some of this [growth] by lowering premiums, it will then take some time to do," continued the spokesman.