​Swedish roundup: AP7 tender; Folksam, KPA, Skandia and Länsförsäkringar returns

Sweden’s AP7, the SEK905.2bn (€78.2bn) national pension fund running the premium pension system’s default option, has launched a procurement process to find a company to carry out internal audit services.

The Stockholm-based institution said its internal audit works on behalf of the fund’s board.

The task of the internal audit is “to support and develop AP7’s operations by reviewing and evaluating the authority’s internal governance and control and to submit improvement proposals to the authority’s management and the board”, the fund said.

“The internal audit’s audit mission covers all activities that the authority conducts or is responsible for,” AP7 said in a statement on its website.

The deadline for tenders is the end of Thursday 31 August this year, AP7 said, giving a link to procurement documents, which it said were available for unrestricted, full and direct access, free of charge.

Folksam benefits from positive premium flows and rising stock markets

Pensions and insurance group Folksam reported a 5.1% return for its pensions division, Folksam Tjänstepension, in the six months to the end of June, and 4.9% for its local authority pensions subsidiary KPA Pension.

Group-managed capital including unit-linked insurance assets rose to SEK795bn, up from SEK716bn at the end of December, according to interim results reported on Friday.

“Both rising stock prices and positive net premium flows have contributed to the development,” Folksam said.

Ylva Wessén, president and chief executive officer of the Folksam group, said: “The return on capital during the first half of the year has been good and driven by strong development on stock exchanges.

“The stock market’s development is also an important explanation for the good solvency development during the quarter,” she said.

The solvency ratio for Folksam Tjänstepension rose to 216% by the end of June from 213% at the end of December, while for KPA Pension, the ratio rose to 239% from 234%, according to the interim report.

Skandia: weaker domestic currency boosts foreign equities return

Swedish pensions and insurance provider Skandia has released results for the first half, including a total return of 3.1%, which it described as “stable”.

Frans Lindelöw, Skandia’s CEO, said listed shares constituted the strongest-performing asset class between January and June, with the weaker Swedish krona meaning that investments in foreign equities did particularly well.

“We spread the risks over many different asset classes, where we combine a good long-term return with healthy risk-taking,” Lindelöw said, adding that Skandia’s life portfolio was composed to stand firm in all weathers.

Group assets under management increased to SEK797bn by the end of June from SEK765bn at the turn of the year, Skandia reported.

In the traditional, with-profits portfolio alone, total assets grew to SEK586bn from SEK574bn. That portfolio’s asset allocation included a 36.6% weighting to Swedish nominal bonds,16.7% to unlisted shares, 9.7% to real estate 9.6% to Swedish equities, according to the interim report.

Skandia’s solvency ratio for its life company ticked higher over the six months to 213% from 212%, the report showed.

Funds-based pensions produce double the return of guaranteed pensions for Länsförsäkringar clients

Länsförsäkringar, a Swedish group of customer-owned pensions and insurance companies, reported returns for the first half of this year of between 2.5% and 11.3% for the various pension products offered by its two main subsidiaries.

Länsförsäkringar’s life and pension insurance business is divided into two companies – Länsförsäkringar Fondliv, which is open for new policies, and Länsförsäkringar Liv, which is now closed to new business.

Reporting interim results, the group said total assets under management for the former rose to SEK220bn by the end of June from SEK191bn 12 months earlier and remained static at SEK104bn for the latter subsidiary, the group reported.

The guaranteed pension product offered by Länsförsäkringar Fondliv produced a 5.3% return in the six months to June, while customers investing via mutual funds saw an average return of 11.3%, it said.

Sara Rindevall, CEO of Länsförsäkringar Fondliv, said: “We are standing in a financially strong position in these uncertain times, and are reporting a stable result with continued good growth on premiums paid.”

Within Länsförsäkringar Liv’s business, the three portfolios behind its traditional, with-profits pension product generated returns of between 2.5% and 12.6%.

Jakob Carlsson, CEO of Länsförsäkringar Life, said several years of good results had strengthened the subsidiary he was leading, and that this allowed the firm to “create value and continue to give a good return to our customers, even if fluctuations in the financial markets continue”.

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