Insurance in Sweden2012

We are all exposed to risk. It might be the risk of being in a traffic accident or of a fire in your home. It could be theft or long-term illness. Without insurance these events could entail financial disaster. But with insurance you can be financially protected.

The idea of insurance is simple: you share the risks. Through insurance a household or a company pays a premium in exchange for compensation by the insurance company if disaster should strike. A private individual can also take out a pension insurance that pays a given future income in exchange for premium payments made in the present.

Insurance makes it possible for private individuals and companies to live and work in economically stable conditions.

Through this brochure we want to provide an overall view of the insurance industry and describe its importance for the national economy.

Security for the individual – growth for the economy

The insurance industryThe insurance industry is an important part of the national economy. Through insurance individuals and companies can obtain financial protection at a low cost against different types of risk. Swed-ish insurance companies generated premium income of slightly less than SEK 250 billion in 2012, they employed over 20,000 people and invested SEK 3,165 billion in the global economy.

There are about 410 registered insurance companies in Sweden. Most of them are small local non-life insurance companies. The mar-ket is concentrated into a few large companies and company groups. In non-life insurance the five largest insurance companies/groups have 83 per cent of the market. In life in-surance the five largest insurance companies/groups have 53 per cent of the market.

The international presence has increased in the past ten years. At present there are 38 foreign insuran-ce companies represented via bran-ches or agencies.

The insurance industry employs about 20,000 people. This is equivalent to a half percent of all gainfully employed people in Sweden. Slightly more women than men work in the insurance industry.

There are many different jobs in the insurance industry. Common occupations are actuary, claims adjuster, economist and lawyer. The level of education has increased steadily in the past ten years.

Number of insurance companies, 2012

Number employed, 2012

Source: Swedish Financial Supervisory Authoriity

Source: Statistics Sweden (SNI code 66). Own calculations of gender distribution based on statistics from FAO (Swedish Insurance Employers’ Association) and KFO (employers’ organisation for cooperative business).

National insurance companies, of which 138

Unit-linked insurance companies 10

Other life insurance companies 32

Non-life insurance companies 96

Local insurance companies, of which 161

Large local companies 42

Small local companies 119

Friendly societies 79

Foreign companies, branches and agencies 38

Total 416

Women Men Total

Number of employees 11 098 9 453 20 551

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Insurance in SwedenIn Sweden 95 per cent of all households have home insurance. Most employees have occupa-tional pension insurance and a large proportion of the population also have private insurance policies. In recent years the number of private health care insurance policies also increased substantially. In 2012 non-life insurance companies paid out over SEK 49 billion in compensa-tion for various claims. Life insurance companies paid out over SEK 77 billion in pensions and death benefit.

In Sweden about 95 per cent of all individuals aged 16-84 are covered by home insurance. In the group “cohabiting adults with children” the figure is over 99 per cent. The per-centages have been relatively con-stant since the start of the 1990s. Home insurance consists of a package of various non-life in-surance policies that protect the policyholder’s belongings in the event of theft or fire, for example. The policies also provides travel insurance, insurance against assault or liability to pay damages.

The most common insurance policies in the group householder and homeowner insurance, holiday home insurance and boat insurance are householder and homeowner insurance. More than 4.7 million householder and homeowner insu-rance policies were written in 2012. Since 2000 the number of in-surance policies in this group has increased steadily. This is mainly because the number of home insu-rance policies has increased. The number of boat and holiday home insurance policies has remained relatively constant at 285,000 boats and about 580,000 holiday homes per year.

Percentage of households with home insurance, 16-84 years, 2006/2007

Number of non-life insurance policies written (home, holiday home, boat), 2001–2012

16-84 years with home insurance

Source: Statistics Sweden Living

Conditions Survey 2006/2007

5.00

5.10

5.20

5.30

5.40

5.50

5.60

5.70

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Million

Note: From 2011 Vesta is included in the reporting

I N S U R A N C E I N S W E D E N 2 0 1 2 5

5.0

5.5

6.0

6.5

2004 2005 2006 2007 2008 2009 2010 2011

Antal motorförsäkringarAntal trafikförsäkringar

Million

The number of claims for householder and homeowner, holiday home and boat insurance policies reported to the non-life companies in 2011 amounted to over 747,000. Insurance companies paid claims of almost SEK 8,7 billion. The most common type of claim was on all-risk policies, while the largest type of claim in terms of value was fire damage.

The numbers of claims reported and claims paid have increased since 2004. The increase was mainly within householder and homeowner insurance.

Motor third-party liability insurance is a compulsory policy that among other things covers personal injury. In 2011 it covered just under 5.9 million vehicles. Motor vehicle insurance covers damage to the vehicle itself, among other things. The number of vehicle and third party liability insurance policies has increased during the 2000s, with the exception of the period 2007–2008, when a premium tax was introduced for motor third party liability insurance. This led to a reduction in the number of policies written in both motor third party liability and motor vehicle insurance.

Number of non-life insurance policies written (home, holiday home, boat), 2001–2012

Number of claims reported and claims paid in non-life insurance (home, holiday home, boat), 2000–2011

Number of motor vehicle and motor third party liability insurance policies written, 2004–2011

0

100

200

300

400

500

600

700

800

900

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Antal anmälda skador

Number of damages, thousand Claims, SEK billion

Utbetalad ersättning

0

100

200

300

400

500

600

700

800

900

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Källa:

0

1

2

3

4

5

6

7

8

9

Number of claims reported

Claims paid

Number of motor vehicle insurance policies

Number of third party liability insurance policies

6 I N S U R A N C E I N S W E D E N 2 0 1 2

0

5

10

15

20

25

2006 2007 2008 2009 2010 2011

Arbetsgivarbetald Gruppförsäkring Individuell

Million

Between 2004 and 2010 both the number of claims reported and claims paid from motor vehicle insu-rance increased. However, for motor third party liability insurance we see a decrease in the number of claims reported. In 2010 the number of claims reported was just over 1,100,000. Insurance companies paid out compensation of more than SEK 11 billion.

Sickness and accident insurance consists of several different types of policy. It includes child insurance, rehabilitation insurance, health care insurance, accident insurance and various forms of sickness insurance. Group insurance is normally written via a trade union.

The number of claims reported and claims paid in motor vehicle and motor third party liability insurance, 2004–2010

Number of sickness and accident policies written, 2006–2011

Utbetalad ersättning trafikförsäkring

0

100

200

300

400

500

600

700

800

900

1000

2004 2005 2006 2007 2008 2009 2010

Anmälda skador trafikförsäkring

0

100

200

300

400

500

600

700

800

900

1000

2004 2005 2006 2007 2008 2009

Anmälda skador motorförsäkring Utbetalad ersättning motorförsäkring

0

1

2

3

4

5

6

7

8

9

10

Number of damages, thousand Claims, SEK billion

Claims reported motor third party liability insurance

Claims reported motor vehicle insurance

Claims paid, motor third party liability insurance

Claims paid, motor vehicle insurance

Employer-paid Group insurance Individual

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The number of private health care insurance policies has increased in recent years. In 2011 about 440,000 people had private health care insurance. Most of these people have their policy paid by their employer.

Private health care insurance complements public welfare and social protection systems. Health care insurance gives faster care and can also help towards covering some costs that arise in connection with health care.

Number of private health care insurance policies, 2006–2011

0

50

100

150

200

250

300

350

400

450

2006 2007 2008 2009 2010 2011

Arbetsgivarbetald Gruppförsäkring Individuell

Thousand

Employer-paid Group insurance Individual

Note: Includes Insurance Sweden’s member companies

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Private pension insurance is classified for taxation purposes either as pension insurance or endowment insurance. Premium income for private pension and endowment insurance was more than SEK 53 billion in 2012. The policies classified as endowment in-surance constitute over 77 per cent of all private pension insurance. Private pension insurance can be divided into unit-linked insurance and other life insurance. Of these, other life insurance is greatest by vo-lume. Other life insurance includes traditional life insurance and deposit insurance. During the latest year, savings in endowment insurance has decreased, probably due to people choosing investments savings accounts to a greater extend.

Premium income for private pension and endowment insurance, broken down into unit-linked insurance and other insurance, 2012

0

10

20

30

40

SEK billion

The Swedish pension system has three parts: national pension, occupational pension and private pension.

About 2 million people had private pension savings in 2011. In the age group 35-59 about 45 per cent had a private pension policy. Average savings for these were SEK 5,700 per person.

Percentage of people who save in a private pension scheme by age category, 2011

Private pension insurance, unit-linked

Private pension insurance, other life insurance

Endowment insurance, unit-linked

Endowment insurance, other life insurance

Note: Only includes pension insurance, not endowment insurance

Source: Statistics Sweden

0

5

10

15

20

25

30

35

40

45

50

Per cent

20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69

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The most common form of saving for Swedish households is insurance. The share of insurance was almost 52 per cent of total household saving 2012. Other types of savings are bank accounts, shares or mutual funds.

The financial crisis in 2008 meant that almost all forms of savings fell in value. The decline for insurance savings was, however, less than for shares and funds, for example.

Household financial saving by type of saving, 2000–2012

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

2008200220012000 2003 2004 2005 2006 2007

SEK billion

2009 2010 2011 2012

Försäkringssparande, kollektivt, ej PPM Försäkringssparande, individ

Fondandelar Aktier

Obligationer Bankinlåning

Insurance savings, collective, excluding Pension

Insurance savings, individual

Mutual fund units

Shares

Bonds

Bank deposits

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Insurance companiesThe insurance industry can be divided into non-life and life insurance. In non-life insurance there are a number of different products that cover a lot of different risks, such as property insu-rance, third-party insurance, legal expenses insurance, assault insurance, and travel insurance. In life insurance the risk is associated with the life and health of the person insured. Many life insurance products are also a form of saving.

Non-life insurance compensates for loss suffered to property and pays damages to third parties. Life insurance companies’ sickness and accident insurance is also classified as non-life insurance.

2012 premium income for non-life insurance companies was SEK 64 billion. The most common non-life insurance is motor vehicle in-surance closely followed by busi-ness and real property insurance, and householder and homeowner insurance.

Premium income for non-life insurance by class of business, 2012

Gross Written Premium for life insurance broken down into occupational pension, private pension and endowment insurance, 2012

Motor vehicle

Business and real property

Householder and homeowner

Third-party liability

Sickness and accident

Pet

Other

Occupational pension, unit-linked

Occupational pension, other

Private insurance, unit-linked

Private insurance, other

Endowment insurance, unit-linked

Endowment insurance, other

22%

37%

21%

3%

4%

9%

13%

4%

11%

17%

4%24%

30%

Life insurance pays compensation when the person insured is injured or dies, and when the insured per-son reaches pensionable age.

Insurance products that contain both insurance and savings compo-nents are called pension insurance. In 2012 premium income for pen-sion insurance policies amounted to SEK 185 billion. Pension insurance can be divided into occupational pension and pri-vate pension insurance. There are two basic taxation categories for the latter: pension insurance or endow-ment insurance.

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Gross Written Premium for life insurance was SEK 185 billion in 2012. The five largest life insurance companies are Skandia, Folksam, Alecta, AMF Pension and SEB Trygg Liv.

Premium income for non-life insurance companies amounted to SEK 64 billion in 2012. The five largest insurance companies are Länsförsäkringar, If Skadeförsäkring, Trygg Hansa, Folksam and Moderna Försäkringar.

Premium income for non-life insurance by company, 2012

Premium income for life insurance by company, 2012

Länsförsäkringar

If Skadeförsäkring

Trygg Hansa

Folksam

Moderna Försäkringar

Other

Skandia

Folksam

Alecta

AMF Pension

SEB Trygg Liv

Swedbank Försäkring

Länsförsäkringar

Nordea Liv

SPP

Handelsbanken

Other

19%

14%

11%

16%

8%

7%

15%

7%

5%

4%

16%

4%

11%

4%

30%

15%

15%

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Insurance companies’ investmentsInsurance companies are major investors in the global economy. They manage a lot of money for the benefit of their customers. At the end of 2012 insurance companies investment assets amounted to more than SEK 3,165 billion. That corresponds to about 89 per cent of Sweden’s GDP. The capital is mainly invested in shares, mutual funds and debt securities, as well as real property and infrastructure.

At the end of 2012 the value of the insurance industry’s investment assets was SEK 3,165 billion. Of this, life insurance companies accounted for 84 per cent.

Life insurance companies manage pension capital on behalf of their customers. They therefore have a long investment horizon that corresponds to these commitments.

The value of life insurance companies’ investment assets was SEK 2,665 billion at the close of 2012.

Insurance companies’ investment assets, 2001-2012

Life insurance companies’ investment assets, 2012

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2001 2002 2003 2004 2005 2006 20082007 2009 2010 2011 2012

SEK billion

Non-life insurance

Life insurance

Bonds issued by Swedish borrowers

Bonds issued by foreign borrowers

Swedish shares

Foreign shares

Investment funds

Land & building

Derivatives

Other financial investments

Short term investments

12%

11%

28%

2%

3%6%1%

26%

10%

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Non-life insurance companies manage premiums paid in to enable them to meet future claims payments. They therefore have a shorter investment horizon. Non-life insurance companies mainly invest in bonds issued by Swedish borrowers.

The value of non-life insurance companies investment assets was SEK 500 billion at the end of 2012.

Non-life insurance companies’ investment assets, 2012

Bonds issued by Swedish borrowers

Bonds issued by foreign borrowers

Swedish shares

Foreign shares

Investment funds

Land & building

Derivatives

Other financial investments

Short term investments

13%

17%

6%

9%

1%4%

6%

8%

36%

Print: TMG STHLM April 2013 Photos: Johnér Bildbyrå Layout: Jonas Ahlgren Design

Insurance Sweden PO Box 24043, SE-104 50 Stockholm Tel +46 8 522 785 00 www.svenskforsakring.se