Country Profile Sweden www.lloyds.com/SwedenMI
April 2014 filip.wuebbeler@lloyds.com
KEY FACTS FULL NAME / CAPITAL CITY: Kingdom of Sweden / Stockholm
GDP (PPP):
US$ 410bn (Global Rank #34)
LANGUAGE:
POPULATION:
10m (Global Rank #84)
IMF CATEGORISATION:
“Developed”
Swedish
MAIN EXPORT PARTNERS:
Germany 10%, Norway 9%, UK 7% (2011)
MAIN IMPORT PARTNERS:
Germany 18%, Denmark 8%, Norway 8% (2011)
MAIN EXPORTS:
Machinery, motor vehicles, paper products
MAIN IMPORTS:
Machinery, petroleum and petroleum products, chemicals
2012 Rank
2013 Rank
Change in Rank
EASE OF DOING BUSINESS:
14
13
1
COMPETITIVENESS:
3
4
-1
FREEDOM FROM CORRUPTION:
4
4
0
DISASTER
YEAR
ECONOMIC COST (US$ x 1000)
Storm
2005
2,800,000
Storm
1999
160,000
Flood
1985
5,800
Storm
1990
5,000
Storm
1990
5,000
Source: Disaster Statistics based on: Prevention Web (2013); Export Statistics based on CIA World Factbook; Doing Business Indicators based on World Bank & World Economic Forum © Lloyd’s
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KEY STATISTICS WEALTH PER CAPITA
Purchasing Power Parity (PPP) basis in International $ bn
Purchasing Power Parity (PPP) basis in International $
600
70,000
Norway
Denmark
Government Effectiveness
99
98
99
Political Stability and Absence of Violence/Terrorism
90
94
75
Control of Corruption
99
99
100
Regulatory Quality
99
92
98
Rule of Law
99
100
98
500 400
50,000 40,000
300
30,000 200
20,000
100
10,000
0
0 2006
Voice and Accountability
60,000
40,304
Sweden
2012
35,343
DK
394
NO
322
SE
48,718
SIZE OF ECONOMY
487
GOVERNANCE INDICATORS Percentile Rank (1-100) 2012
100
100
2013
2018f
2006
DK
SE
2012
2018f
99 SE
NO
NO
DK
TOTAL NON-LIFE DIRECT INSURANCE MARKET
NON-LIFE DIRECT INSURANCE MARKET
LLOYD’S GROSS SIGNED PREMIUMS
Premiums in US$ m
Premiums in US$ m; by OECD Class
Gross Signed Premiums in US$ m; by country of origin 450
7,289
Motor
400 350
PA & Health
300 Property Liability
4,000
3,563
Sweden 2013 US$ 7.3bn
3,506
Miscellaneous
0 2011 SE
2012 NO
200 150 100
MAT
2,000
250
168
6,000
666
166
5,305
8,000
129
153
8,625
10,000
537
2013 DK
50 0 2011
2012
2013
SE
NO
DK
All data, sources & data limitations are available for download at www.lloyds.com/comparecountries
LLOYD’S TRADING POSITION Sweden www.lloyds.com/crystal
Insurance:
Yes (other than aircraft liability) for this territory on a Freedom of Services basis, and all classes except assistance, life and death insurance on an Establishment basis) Reinsurance: Yes Coverholders: Yes © Lloyd’s
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BUSINESS ENVIRONMENT Left-green parties likely to win the parliamentary election in September 2014. The left-green opposition parties – the centre-left Social Democratic Party (Socialdemokraterna: S), left-wing Left Party (Vänsterpartiet: V), and centrist Green Party (Miljöpartiet: MP) – have recovered from low voter support and are likely to oust the centre-right coalition government in the September 2014 parliamentary election. S and MP would likely form a coalition government, with V as either a third coalition partner or formal support in parliament. Such a government would raise taxes for employees and businesses, and abolish many of the tax exemptions currently in place, including those enjoyed by companies employing young people. However, the left-green parties, particularly S and M, are generally pro-business and their policy differentiation from the centre-right government is limited overall. Riots increase risk to Sweden's security environment. A week of riots hit Swedish cities in May 2013, with protestors vandalising dozens of vehicles and property, and clashing with police. The riots were largely attributed to the problem of social inequality in immigrant-dominated suburbs that suffer from high unemployment. Although the riots will not seriously affect Sweden's overall security, they indicate the presence of underlying conditions that could be triggered again. An uncertain international environment reinforces the slowdown in Sweden. According to the November 2013 forecast, real GDP is projected to expand by 0.6% in 2013 and 1.6% in 2014. IHS believes the risks are on the downside, in accordance with the still far from certain Eurozone outlook, which has triggered downward revisions to our 2013/14 growth forecasts. The contributions to growth will be broad-based in 2014, but we could see a smaller contribution from consumer spending. Households are aware of rising debt levels, which could trigger some deleveraging, particularly when faced with the prospect of higher interest rates in 2015. Interest rates are expected to remain at current low levels, but could fall further should the outlook deteriorate. IHS expects the repo rate to remain unchanged at 1.00% until late 2014, but low inflation could convince the Riksbank to cut by 25 basis points to 0.75%, and is unlikely to be hiked until end2014. The Riksbank noted signs of improvement in economic activity both in Sweden and the Eurozone, but believes the recovery in the latter will be less pronounced. Elsewhere, it predicts the recovery in the US will continue, but uncertainty has risen in line with political disagreements over fiscal objectives.
GROSS DOMESTIC PRODUCT (GDP)
TOP-10 SECTORS (BY VALUE ADDED)
BUSINESS ENVIRONMENT INFORMATION
(nominal GDP levels in US$ bn; Real GDP change)
(value added in US$ bn & 2014 Change in real %)
(provided by IHS Global Insight, April 2014)
1,200
7%
TOP SECTORS
6.3%
6%
900
5% 4%
600 3%
3.0% 1.9%
300 1.3%
2.2%
2.3%
2.2%
1.9%
2%
1.5% 1%
0
0% 2010
2011
2012
2013
2014
2015
2016
2017
2018
2013 Value Added
2014 Percentage Change
1. Health and social services
56.5
0.6
2. Real estate 3. Business services 4. Wholesale trade 5. Education 6. Construction 7. Retail trade - total 8. Public Admin. & Defense 9. Computing & related services 10. Banking & related financial
46.1 33.6 28.7 27.9 27.5 26.3 22.9 14.9 14.0 298.4
2.3 2.5 1.2 -0.1 1.7 1.3 1.5 2.0 3.3
Top-10 Total
For daily updates visit: > www.ihsglobalinsight.com © Lloyd’s
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INSURANCE ENVIRONMENT MARKET SHARE OF MAJOR INSURERS
2013 DIRECT GROSS PREMIUMS
(Market Share in % of total)
(Gross Written Premiums)
QUICK LINKS / USEFUL SOURCES Insurance Market Profiles > www.iii.org/international/profiles
100%
20%
Other Motor
75%
16%
129
The Swedish Insurance Federation > www.forsakringsforbundet.com
666
PA & Health
16%
Property
18%
Liability
50% 3,563
Sweden 2013 US$ 7.3bn
3,506
30%
Miscellaneous
Lloyd’s Agency Network > www.lloyds.com/agency Lloyd’s Claims Team > www.lloyds.com/claims
MAT
25%
The Financial Supervisory Authority > www.fi.se
537
0%
BUSINESS CULTURE GUIDE
2001 2007 2008 2009 2010 2011 2012 2013
> http://www.kwintessential.co.uk (View Resources > Culture Guide)
Source: Association: www.forsakringsforbundet.com
Source: Association: www.forsakringsforbundet.com
Non-life insurance market is estimated to be around US$ 7.3bn for 2013: Over the past few years, local insurers have posted good results. The market is soft but stable, but increases in private lines (household) can be seen. The Swedish insurance market is made up of very sophisticated buyers, particularly in the industrial sector. Swedish corporations have taken higher retentions, and many placed their covers in captives both in Sweden and abroad. Risk Management standards are generally very high. International Foreign Insurers: The Swedish insurance market is open to insurers from other EU and some non-EU countries. Foreign insurers operating in Denmark include , ACE, Chartis (AIG), Allianz, Chubb, QBE, XL and Zurich amongst others. Broker market: Since the beginning of the 1990s, there has been a fundamental change in the distribution of insurance, as brokers have gained an increasingly important position in the distribution of insurance. For larger industrial/commercial risks, however, an important amount of business is handled on a direct basis between insurers and dedicated departments within client offices. Sweden is a net quoting market in which there are market-wide agreements. UIB has recently established an office in Stockholm. Agents, remain an important channel of distribution for small and medium-sized enterprises. Relatively new independent broking house, Söderberg & Partners growing rapidly in the P&C and agency sector. No local reinsurers: The involvement of the Swedish market in international reinsurance is much less than it was in the past, but there are still a few reinsurers situated in Sweden writing some business, generally within the Nordic region. Outlook: Results for non-life insurers in Sweden have been good over recent years but increased competition from new market participants is expected to increase competition. © Lloyd’s
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LLOYD’S BUSINESS 2009-2013 LLOYD’S TOTAL PREMIUMS
2013 LLOYD’S HIGH LEVEL CLASSES
Gross Signed Premiums; Direct versus Reinsurance; in million US$
Gross Signed Premiums; high level classes; in million US$
2013 GROSS SIGNED PREMIUMS*
180
UK Motor
0.0
160 140
64
120 100
62
64 60
53
Total
US$ 168m
Reinsurance Direct
US$ 62m US$ 106m
Property Treaty
26.9
Property (D&F)
28.2
Marine
80
*COUNTRY OF ORIGIN PREMIUMS
60 40
Overseas Motor
89
74
101
106
Policyholders are based or headquartered in this territory;
Premiums may be written outside this territory;
73
20 0 2009
2010 Direct
2011
2012 Reinsurance
2013 X X
Not necessarily where risks are located May differ to what is reported to local regulator (dependent on local requirements).
47.7
Energy
15.1
Casualty
15.0
Casualty Treaty
0.6
Aviation
12.1
Accident & Health
22.6
0
10
20
30
40
50
SOURCE: Market Intelligence based on *Gross Signed premiums; Xchanging (2014); unaudited figures based on country of origin and processing by calendar year; see Appendix for details
Mr Erik Börjesson Type 3 Office
A Type 3 office is defined as a Lloyd's office headed by a Country Manager who in addition to meeting regulatory requirements in that territory also proactively supports the business development objectives of the managing agents in that territory.
Lloyd’s Country Manager
Stureplan 4c 4th Floor Stockholm 114 35, Sweden
TELEPHONE: EMAIL:
+00 46 705 399 982 erik.borjesson@lloyds.com © Lloyd’s
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LLOYD’S OBJECTIVES
The Nordic office will continue to promote the strong reputation of Lloyd’s as a financially secure, compliant, transparent and easily accessible insurance market. We will further strengthen the Lloyd’s Managing agent’s relationships and interaction with the local insurance communities with a focus on Managing Agent’s class of business appetite.
LLOYD’S KEY INITIATIVES 2014
More visibility among a) brokers, b) risk managers c) re insurance buyers:
Enhanced support to Lloyd’s Managing Agents for business development:
More frequent individual meetings with the senior staff of the above Facilitate increased contacts with Managing Agent’s and a), b) & c) above Participate in high profile events and arrange COB events
Deliver more detailed profitability figures from local market incl. soft intelligence Supply tailor made contact lists to Managing Agents and Lloyd’s brokers Offer to be more deeply involved in Managing Agents business planning
Evaluate licence situation to support business opportunities and regulatory demands:
P&C Licence in Finland Life licences in Denmark and Norway Assist local brokers with line slips and other facilities
EVENTS & MARKET INTELLIGENCE 2014 INDUSTRY EVENTS
2014 LLOYD’S EVENTS
MARKET INTELLIGENCE Available Market Intelligence products for this territory include:
Country Profile Market Presentation Country Roundup Class Review – Lite www.lloyds.com/SwedenMI © Lloyd’s
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APPENDIX MACRO-ECONOMIC & BUSINESS ENVIRONMENT DATA Source: IMF (www.imf.org/external/data.htm), World Bank (http://data.worldbank.org/), IHS Global Insight. Notes: GDP data on size and wealth of the economy is reported in Purchasing Power Parity (PPP) terms; this is the most accurate indicator of the true standard of living in each country and therefore potential demand. To calculate this, GDP is converted from local currency to an international $ currency using PPP exchange rates rather than the market exchange rate. The PPP local currency-to-international $ exchange rates are determined such that a standard basket of goods has the same price in international $ terms in each country. This adjusts for the differing costs of goods across countries, when converted at market exchange rates. INSURANCE MARKET DATA Source: Reported data derived by Lloyd’s Market Intelligence team; original source is regulatory bodies, associations, third party information providers. Notes: Data is reported in US$. For more information, see www.lloyds.com/comparecountries. Exchange Rates Note: Where required, data has been converted to US$ using annual average exchange rates as per www.oanda.com. LLOYD’S PREMIUM DATA Source: Reported data derived by Lloyd’s; original source is Xchanging (data therefore contains only premiums processed by Xchanging). Notes: Data is reported is US$, on a calendar year basis and is signed gross premiums. This differs from the data published in the Lloyd’s Annual Report, which is also on a calendar year basis, but is written gross premiums and sourced directly from Syndicates. Differences are therefore (1) timing inconsistencies between signed and written gross premiums; (2) inconsistent use of exchange rates by Syndicates and Xchanging; & (3) incompleteness of Xchanging data set for certain classes of business (a substantial amount of premium is not processed by Xchanging and missing from the REG 258 data set; this comprises, for example, UK Motor). Exchange Rates Note: Data has been converted to US$ using monthly exchange rates provided by Xchanging. Definitions: Gross Signed Premiums: Original and additional inward premiums, plus any amount in respect of administration fees or policy expenses remitted with a premium but before the deduction of outward reinsurance premiums. Calendar Year: Relates to the calendar year in which the premium, additional or return, is processed by Xchanging. This is irrespective of the actual underwriting year of account, which is determined by the inception date of each risk. Country of Origin: Denotes the domicile of the insured party (i.e. the coverholder or policyholder). This is the country from which demand for the insurance / reinsurance emanates, & is irrespective of the country to which the risk is classified for regulatory reporting purposes. Example: A policy holder in the UK insuring a holiday home in France would be classified as a UK risk by “Country Of Origin”, but “French” for regulatory reporting purposes. Similarly a risk incepting on 1st December 2007 would be classified at 2007 “Underwriting Year of Account” but may not be processed by Xchanging until 2008 and so be allocated to the 2008 “processing year”. ACCESSING THE DATA: to access the raw data in this document, and equivalent data for other countries, see www.lloyds.com/comparecountries.
DISCLAIMER: This document is intended for general information purposes only. Whilst all care has been taken to ensure the accuracy of the information, Lloyd's does not accept any responsibility for any errors or omissions. Lloyd's does not accept any responsibility or liability for any loss to any person acting or refraining from action as a result of, but not limited to, any statement, fact, figure, expression of opinion or belief contained in this document. © Lloyd’s
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