Strong market development in shares and participations

Development of market value among many financial instruments was very weak in the fourth quarter of 2018 and developments in holdings of shares and participations had the largest impact on insurance companies’ total portfolio of investment assets. In the first quarter of 2019, the market recovered for most instruments, and as with the decrease in the previous quarter, the development in holdings of shares and participations had the largest impact on the total portfolio of insurance companies’ capital investments. At the end of 2019, the value of insurance companies’ holdings of shares and participations amounted to SEK 2 753 billion. At the end of the first quarter, the corresponding amount was SEK 3 040 billion. Life insurance companies made net purchases of shares and participations amounting to SEK 18 billion in the quarter. The market development in this asset class in the first quarter of 2019 was the single largest contributor to the fact that the value of insurance companies’ capital investments exceeded the investments at the end of the third quarter of 2018, before the market fell in the following quarter.

Unusually small net investments

Insurance companies tend to invest most in the first quarter of the year, compared with net transactions in the other quarters of the year. Net investments in the first quarter of 2019 were relatively small; the net investments of SEK 53 billion in this period is the smallest amount registered in a first quarter of a year in the past five years, despite a comparison in nominal terms and an increase in the total value of managed capital investments from SEK 3 566 billion to SEK 4 935 billion in the same period.

Non-life and life insurance in the first quarter

Due to the nature of their activities, non-life insurance companies’ holdings of insurance companies’ total amount of investment assets are small (just below 12 percent). Thus, the developments described so far accurately summarise the quarter with regard to life insurance companies. Net sales of SEK 1 billion in capital investments during the quarter distinguished non-life insurance companies from life insurance companies. This is not entirely uncommon, as the cycle for net investments is different for life insurance and for non-life insurance companies.

In other respects, the market value of non-life insurance companies’ capital investments also recovered after a weak fourth quarter 2018, primarily driven by a favourable development in the market value of holdings of shares and participations.

2019-09-06 at 09:30.