Market Guide: Life Insurance and Pensions in Sweden 2006

This report is most appropriate for companies looking for an overview of the life insurance and pensions markets in order to assess the level of market opportunity (using our market data and forecasts), regulatory barriers and opportunities, and level of competition in the market. For more detailed market data please refer to Datamonitor's European Life and Pensions Interactive Database 2006.

Report Highlights


The updated separation requirement for life insurance companies mandates that life companies maintain a separation between the assets and liabilities attributable to operations involving occupational pension insurance and those involving their other operations. While not yet on the Swedish legislative agenda, the regulator has been vocal on the issue of the right of transfer for savers in pension insurance policies. This right is currently assured with new insurance contracts only. However, Finansinspektionen is concerned that it be available for all policies, both new and existing. The EC is expected to publish its formal proposal for a Framework Directive on Solvency 2 by July 2007; however in 2006, FI implemented the traffic light model for supervision of insurance companies. This measures their exposure to financial risk, with a view to ensuring that they can meet their commitments.
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EXECUTIVE SUMMARY - MARKET HIGHLIGHTS 3
Market overview 3
Market forecasts 3
Market regulation 3
Competitive market structure 4
Market leaders 4
INTRODUCTION 10
What is this report about? 10
Who is the target reader? 10
How to use this report 10
CHAPTER 1 MARKET OVERVIEW 11
Introduction 11
Key findings 11
Over the last 5 years, pensions have accounted for a growing proportion of premium income in Sweden 12
Since 2001, the proportion of premium income attributed to individual policies has been in steady decline 13
Premium income from non unit-linked insurance represents an increasing majority of all life and pensions premium income 15
Following a decline to 37% in 2002, the equity proportion of the investment assets of life and pensions insurance companies has increased to 51% 16
CHAPTER 2 MARKET FORECASTS 18
Introduction 18
Key findings 18
Pensions will account for a larger proportion of the growth in premium income between 2006 and 2010 18
CHAPTER 3 MARKET REGULATION 20
Introduction 20
Key findings 20
Finansinspektionen regulates the Swedish insurance sector 20
Insurance companies are subject to regulations on financial advice 21
Amended regulations on information provided to policyholders aim to improve consumer protection 21
The IORP directive affects the investment operations and technical provisions of insurance providers 22
The Insurance Intermediary Directive creates a single passport for insurance intermediaries and enhances consumer choice 23
Upcoming legislation will enhance consumer protection 24
Proposed legislation may encourage intensified competition among insurers 24
CHAPTER 4 COMPETITIVE MARKET STRUCTURE 26
Introduction 26
Key findings 26
Roughly half of all providers are traditional life insurance companies 26
The top 5 life insurers control 47% of the market, by premium income 28
CHAPTER 5 MARKET LEADERS 30
Introduction 30
Key findings 30
SEB TL Fond is the market leader, based on premium income 30
Alecta trails the market leader in the life insurance sector 31
Skandia Liv ranks third among life insurance companies 31
AMF Pension is the fourth highest ranked life insurer by premium income 31
Robur Forsakring rounds out the top 5 life insurers 32
APPENDIX 33
Definitions 33
Defined contribution pension scheme 33
Defined benefits pension scheme 33
Group policy 33
Individual pension scheme 33
Individual policy 33
Life assurance 33
Occupational pension scheme 34
Pension insurance policy 34
Premium income 34
Regular premium 34
Single premium 34
Technical provisions 34
Traditional insurance 34
Unit-linked insurance 35
Further reading 35
Interactive Databases 35
Reports and Briefs 35
Wealth, Investments & Protection writing team 36

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Table 1: Life and pensions insurance premium income, segmented by product, EURm, 2001-2005 12
Table 2: Life and pensions insurance premium income, segmented by product, in percentages, 2001-2005 13
Table 3: Life and pensions insurance premium income, segmented by buyer, EURm, 2001-2005 14
Table 4: Life and pensions insurance premium income, segmented by buyer, in percentages, 2001-2005 14
Table 5: Life and pensions insurance premium income, segmented by investment risk, EURm, 2001-2005 15
Table 6: Life and pensions insurance premium income, segmented by investment risk, in percentages 16
Table 7: Investment assets of life and pensions insurance companies, EURm, 2001-2005 17
Table 8: Investment assets of life and pensions insurance companies, EURm, 2001-2005 17
Table 9: Life and pensions insurance premium income, segmented by product, EURm, 2006-2010 19
Table 10: Life and pensions insurance premium income, segmented by product, in percentages, 2006-2010 19
Table 11: Number of life insurance companies segmented by type, as at Dec 2005 27
Table 12: Top 5 life and pensions insurers by premium income, as at Dec 2005 29


Figure 1: Pension premiums accounted for 53% of total premium income in 2005 12
Figure 2: Group policies account for a growing proportion of life and pensions premium income, increasing by 4.7% p.a. on average, over the last 5 years 13
Figure 3: In the last 5 years, average annual growth in premium income from non unit-linked insurance has been marginal; however unit-linked premium income has declined 15
Figure 4: Since 2002, equity investments have accounted for a growing proportion of the investment assets of life and pensions insurance companies, primarily at the expense of bonds 16
Figure 5: Over the next 5 years, premium income is set to grow at an average annual rate of 1.5% 18
Figure 6: Swedish traditional life insurance companies dominate the life and pensions market, by number 26
Figure 7: SEB TL Fond leads the Swedish life and pensions sector 28

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