Swedish pension provider AMF this morning reported a total return of 4.4% for the first half of this year for its traditional insurance – a with-profits, defined contribution (DC) product – and said its financial strength meant it could continue broadening its investments.

The return is on a par with the 4.3% return reported by its larger rival Alecta last week, for the defined benefit (DB) scheme which represents the bulk of its assets, but lower than Alecta’s 6.6% return for its DC savings product – Alecta Optimal Pension.

AMF, Sweden’s second-largest occupational pension fund after Alecta, reported that its total assets under management grew to SEK777bn (€67.6bn) at the end of June, with SEK200bn of that managed by its AMF Fonder mutual funds subsidiary and SEK576bn run within its main traditional insurance business.

Back at the end of 2022, AMF’s total assets was SEK639bn.

The solvency ratio slipped to 224% at the end of June from 227% at the end of March, as reported in first-quarter results.

Johan Sidenmark, chief executive officer of the Stockholm-based pension fund, said: “The first six months of the year have been marked by continued uncertainty, geopolitical tensions and a challenging economic situation.”

However, he said important parts of Swedish industry had been resisting the downturn, and the stock market had developed positively.

Tomas Flodén, AMF’s head of asset management, said the firm’s listed equity portfolio returned 11.4% during the reporting period, with interest-bearing assets and the alternatives part of the portfolio also contributing positively.

“Despite this, the future development is uncertain, not least in the short term,” he said.

“Therefore, it feels good that we have such a well-diversified portfolio, and that thanks to our strong financial position, we can continue to develop and broaden our holdings,” said Flodén.

Sidenmark said AMF had worked to improve its traditional insurance during the spring, and to “adapt it to a changing environment”.

“We have raised the guarantee for premiums paid to 100%, introduced a new guarantee reinforcement model and converted SEK9.3bn of accrued surplus into guarantees,” he said, adding that this had bolstered security for AMF’s savers in an uncertain time.

To ensure a fair distribution of surpluses that had arisen following unexpectedly large inheritance profits, Sidenmark said, AMF had also distributed SEK2.1bn to around 1.7 million customers without repayment protection, above all for savers in the blue-collar SAF-LO collectively-agreed occupational pension plan.

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