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Assets and investments for the Swedish insurance industry

Swedish insurance and occupational pension companies are investing around SEK 6,800 billion in the Swedish and global economy. These investments, mainly in equities and bonds, contribute to economic growth and the green transition. The return on these assets has been high over the past ten years, which benefits policyholders in the form of, among other things, higher pension payments.

Assets are larger than Sweden’s GDP

At the end of 2021, Swedish insurance and occupational pension companies had financial assets of just under SEK 6,800 billion. That is more than Sweden’s gross domestic product (GDP). The assets are invested in the Swedish and the global economy. Most of the capital – about 90 per cent – is managed by life insurance
and occupational pension companies, while the rest is managed by non-life insurance companies. The reason why life insurance and occupational pension companies have such large assets is because paid-in premiums are saved for many years and the capital saved grows as a result of the return on the assets.

The assets of life insurance and occupational pension companies are mostly related to traditional life insurance, but unit-linked and deposit insurance has increased more during the most recent years (see figure 26). In unit-linked and deposit insurance, the policyholders choose the investment funds in which to invest capital and the financial risk is borne by the policyholder. Unit-linked and deposit insurance thus differ from traditional insurance, where the companies choose how to manage the capital and also bear the financial risk.
Of the total assets of life insurance and occupational pension companies at the end of 2021, 58 per cent of the investment assets were linked to traditional insurance, while 30 per cent were linked to unit-linked insurance and just over eleven per cent to deposit insurance.

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Swedish companies have large assets

The size of Swedish insurance and occupational pension companies’ assets in relation to the size of the economy, i.e., the country’s GDP, is among the highest in Europe (see figure 27). This is a frequent measure of the importance of the insurance industry within a country. Also when comparing the size of the assets in SEK billion, Swedish companies are among the largest in Europe. French and German companies have the largest assets, but they are also the largest economies in Europe.

Swedish occupational pension companies, second only to the Dutch ones, have the largest assets in relation to GDP among occupational pension companies in Europe, while Swedish insurance companies have the sixth largest assets in relation to GDP among insurance companies.

The fact that companies in Lichtenstein and Luxembourg have assets more than three times (300 per cent) larger than GDP is because many companies, which mainly target policyholders outside these countries, have chosen to be located in Lichtenstein and Luxembourg. The reason for this may be that these countries have large financial sectors and it may also be related to taxes. The fact that Dutch occupational pension companies have such large assets in relation to GDP can be explained by the design of the pension system in the Netherlands, where occupational pensions account for a larger proportion of pension payments than in, for example, Sweden.

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Difference between the assets of life insurance and occupational pension companies by type of savings

In 2021, the four pension and life insurance groups/companies with the largest assets were Alecta, Skandia, Folksam and AMF Pension (see figure 28). These company groups/companies accounted for 60 per cent of the market in terms of the total assets of life insurance and occupational pension companies.

There are differences between the life insurance companies as to how much of their assets are linked to traditional insurance, unit-linked insurance, and deposit insurance. For the four companies with the largest assets their holdings are mainly linked to traditional insurance. For the other companies, except for Afa Försäkring, the assets mainly belong to either unit-linked or deposit insurance.

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