Swedish pension provider Alecta has published its interim results for 2024, whilst acknowledging that the first half of this year has been “characterised by the events in 2023 that damaged our confidence”.

Key figures show that the group’s solvency ratio also decreased to 201 per cent, from 209 per cent at 30 June 2023, but total capital managed by Alecta increased to SEK 1,309bn (SEK 1,210bn: 30 June 2023).

The collective funding ratio for the defined benefit insurance was 164 per cent, down from 175 per cent at 30 June 2023. Assets under management in the total defined benefit portfolio totalled SEK 1,015bn (SEK 960bn: 30 June 2023) at the end of the period.

However, Alecta Optimal Pension generated a positive return - 7.7 per cent – a stronger performance than the 6.6 per cent recorded on 30 June 2023. On an annual basis over the past five-year period the return was 8.5 per cent (7.6 per cent: 30 June 2023). Assets under management in the Alecta Optimal Pension totalled SEK 294bn, up from SEK 250m, at the end of the period.

Alecta's operating costs for the interim period totalled SEK 586m, which was higher than the target of SEK 576m. The higher outcome is mainly attributable to non-recurring costs related to the extraordinary events in 2023.

Commenting, Alecta CEO, Peder Hasslev, said: “We have worked intensively to develop and implement improvement measures to strengthen Alecta, while the day-to-day operations continued to deliver high quality for the benefit of customers. In the first half of 2024, the return was competitive.

"Alecta has continued to work on the improvements in governance, risk management, skills and culture that we initiated in 2023 in response to the losses in the US banks and the question marks surrounding the investments in Heimstaden Bostad.”

Alecta has faced several crises over the past 18 months, which began when it lost SEK 12bn in March 2023 on its investments in three American banks – Silicon Valley Bank, First Republic Bank and Signature Bank.

Following this, the Swedish Financial Supervisory Authority (FSA) opened an investigation into these investments in May 2023 before expanding the remit to include Alecta’s investments in indebted real estate company, Heimstaden Boden, in September 2023, in which Alecta lost SEK 12.7bn.

Preliminary findings of the FSA investigation into Alecta released in July found that the company “violated several regulations”. The FSA said it has notified Alecta of its observations from its investigations, which have now moved on to a sanction review. Alecta has been given until the 6 September to respond to the FSA.

As part of its interim announcement, Alecta said that its owner representatives from the Confederation of Swedish Enterprise, Unionen, PTK, Sveriges Ingenjörer and Ledarna decided on a new model for the governance of Alecta at the ordinary meeting of the Board of Governors in April 2024, when four new board members were elected, three of whom are independent of the social partners, and four members resigned.

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