Sweden

This technical note provides an assessment of the development of regulation and supervision of the Swedish insurance sector since the Financial Sector Assessment Program (FSAP) in 2011. The note is part of the 2016 FSAP for Sweden. The insurance sector is characterized by a large number of companies, high concentration, and the predominance of occupational pensions insurance. The five largest life companies, including providers of large collective pension arrangements for industry and labor organizations, account for over 50 percent of life sector assets and the largest four non-life companies for 80 percent of total non-life gross premium income. Most life insurance products offer a savings component. Occupational pensions dominate, now written almost entirely on a defined contribution basis. Sales of unit-linked products have been growing, but traditional products remain popular because they continue to offer guarantees, although at levels now aligned to prevailing low interest rates. With a relatively large duration gap and high levels of past business with guarantees, the life sector remains exposed to low interest rates, more so in combination with a fall in equity or real estate markets, where insurers hold significant investments.