Skandia: March Sales SEK 13.7 Billion


STOCKHOLM, Sweden, April 18, 2001 (PRIMEZONE) -- Skandia (SSE:SDIA) - March sales SEK 13.7 billion (1).

Skandia's sales through March amounted to SEK 38.7 billion (61.0). In addition to sales of SEK 38.7 billion, paid-in premiums to Skandia Liv totaled SEK 4.2 billion (3.3), and discretionary management inflows for Skandia Asset Management totaled SEK 0.7 billion.

Of total sales, SEK 25.8 billion (40.1) pertain to unit linked assurance, SEK 10.7 billion (18.6) to mutual fund savings products, and SEK 1.5 billion (1.7) to direct sales of funds.

Worldwide new sales (2) of unit linked assurance - excluding the USA - increased, due to strong development for unit linked assurance with annual premium. The decline in total new sales, including the USA, was thereby limited to 18 percent. Sales of single-premium unit linked assurance and mutual fund savings products fell considerably, mainly due to the continued stock market decline. Customer withdrawals of unit linked savings remained at a low level in relation to assets under management at the start of the year.

In the USA, sales of variable annuities amounted to USD 1.1 billion (2.7), and sales of mutual funds totaled USD 0.8 billion (1.6).

In the UK, sales totaled GBP 0.8 billion (1.0), and in Sweden, sales by SkandiaLink totaled SEK 3.4 billion (3.0). Sales in New Markets totaled SEK 4.1 billion (5.0). New sales of unit linked assurance increased by 3 percent in the UK, by 20 percent in Sweden, and by 11 percent in New Markets.

Recalculated to average exchange rates, sales were favorably affected by currency movements in the amount of SEK 2.7 billion.

 (1) All comparison figures pertain to the corresponding period a year
     earlier, unless otherwise indicated.
 (2) According to industry practice, new sales are defined as regular
     premiums recalculated to full-year figures plus 1/10 of single
     premiums during the period.

In order to achieve accurate recognition of income and expenses, Skandia has been using the embedded value method since 1989 for business control as well as for external reporting purposes according to the group overview.

Skandia's result measurement is described in the 2000 Annual Report, which also includes a sensitivity analysis describing the impact of various factors on the result. The trend in the stock markets is significant for the result. Since contracts in force span long periods of time, sharp swings in the financial markets during short periods of time have a major impact on the present value of future profits. The sensitivity analysis presented in the Annual Report shows that a one- percent increase or decrease in the stock market affects the result by +/- SEK 176 million, respectively. The negative trend in the stock markets during the first quarter entails that the trend for the indexes that are relevant for Skandia is expected to be in the range of minus 19-21 percent, including assumed fund growth of 1.5 percent.

The negative result effect of the above is an expression of the impact of the stock market during the first quarter in relation to Skandia's assumptions for fund growth, and will be permanent only under the condition that the stock market does not recover. According to Skandia's Annual Report, p. 11, Skandia's long-term assumption for fund growth is approximately 6 percent per year.

On March 23 it was announced that Skandia is carrying out an operating expense reduction program to better align its operating infrastructure in the USA with the current market situation. The planned cost reduction will exceed USD 38 million on a yearly basis, which will have a result impact starting with the second quarter. During the first quarter of 2001, the level of costs in the US operation exceeded the cost assumptions that applied for the price setting of new sales during the quarter by slightly more than USD 20 million.

The interim report for the first quarter of 2001 will be released on April 27, 2001.

The full Press release including tables can be downloaded from the enclosed link.



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