Storebrand's business model

Life and Pensions Sweden (SPP Livförsäkring)

Product Categories

SPP offers pensions, insurance solutions and advice to corporate customers. The company also offers pension savings and personal risk coverage in the retail market. It is useful to divide the products into the following categories:

Traditional defined benefit plans: group occupational pensions with guarantees
Defined benefit plans are group pension plans that companies have bought for their employees. The customers consist of both active employees and pensioners, but new sales of this product are limited. The product involves a guaranteed benefit and profit sharing.

Defined contribution plans: individualised occupational pensions with guarantees
Defined contribution plans in SPP are occupational pensions with individualised contracts. The customer receives a guaranteed benefit and profit sharing. New sales are concluded with lower guaranteed rates than in earlier contracts.

Unit linked: occupational pensions without guaranteesSPP's unit linked product is a contribution-based occupational pension plan without any financial guarantees from the life insurance company. The investment risk is borne by the customer based on investments in underlying mutual funds.

Disability policies (pure risk coverage)
The disability policy product consists of long-term, individual disability coverage. The product is optional extra coverage for occupational pensions plans. The coverage primarily consists of compensation for loss of pay and a waiver of premiums in the event of disability.

International pension plans in BenCo (Euroben and Nordben)
Euroben offers pan-Scandinavian pension plans to the corporate market suitable for international customers who want a cross-border, flexible pension plan. The insurance contracts have guaranteed benefits. Nordben offers pensions and life insurance to ex-pats outside the EU/EEA area. In this document the description is limited to a review of Euroben.

Life and Pensions Sweden product overview
Insurance reserves as at 31.12.09



As the figure shows the largest proportion (75%) of SPP's Swedish life insurance business involves guaranteed products. These are products in which the company has agreed a guaranteed benefit (pension) at a defined period in the future.

However, customers are increasingly choosing products without interest rate guarantees. This means these products will experience continuous strong growth.  

The figure below shows the historic trends in SPP's customer portfolios:

Insurance reserves development per product area

Result Generation

The profit allocated to the life company is generated through the above-mentioned product areas with different earnings structures and the return in the company portfolio.

The life insurance company's result generation from the product areas
As the matrix below illustrates, the life insurance company´s (owner) earnings consist of the different result elements linked to the various product groups:

In addition to the result from the product areas, the owner generates profit from the company capital. This is described in the following two sections.

The company portfolio result
SPP's company capital consists of equity and subordinated loan capital. The company portfolio is established to provide the life insurance company with a capital base adequate to meet external and internal mandatory capital requirements, and as working capital for current operations. The company capital is invested in the financial market in a separate portfolio that primarily consists of short-term fixed income securities. The net return on the company capital is generated from the return on the portfolio less the interest costs for subordinated loan capital.

The subsidiaries' result
SPP´s result from other subsidiaries derives from SPP pension services (advisory and consulting services).



For more information on result generation, please view our guide to result modelling.

Profit Allocated to Customers

Good results for customers are important to ensure competitiveness over time. The profit allocated to the customer is driven by the return that exceeds the premium calculation rate. The profit is shared between the customers and owner. In the case of unit linked the return to customers is the result of the underlying funds/profiles and the entire financial result is allocated to the customers.