Sweden’s KPA Pension returns 7.6% on investments in 2023

Sweden’s KPA Tjänstepensionsförsäkring AB returned 7.6 per cent in 2023, a 15.4 percentage point increase on the previous year, its annual financial results have revealed.

The positive return was primarily attributed to improvements in equity markets, alongside interest rates contributing positively to the return.

However, this was partially offset by the negative performance of real estate investments.

Its average return over the past five and 10 years was 5.5 per cent and 5.6 per cent respectively.

Despite the improved return, the pension company’s solvency ratio fell by 2 percentage points to 232 per cent.

However, its managed capital increased from SEK 253.4bn to SEK 296.2bn during the year.

KPA Pension’s rate of return, determined by premium, was 8.8 per cent in 2023, while its defined benefit pension rate of return was 5.5 per cent.

Over the year, KPA Pension’s premium income increased by 49 per cent to SEK 28.9bn.

Earlier in the year, KPA Tjänstepension and KPA Tjänstepensionsförsäkring merged into one company: KPA Tjänstepensionsförsäkring AB.

“Happily, this year we have also improved our results and increased premium income, partly as a result of the new AKAP-KR pension agreement, which in turn leads to a higher pension for our customers,” commented KPA Pension CEO, Camilla Larsson.

“We have continued to work with green bonds and continue to be, according to a customer survey, the pension company that is the best in terms of sustainability.”

Folksam director of investment, Marcus Blomberg, added: “Despite unrest in the world that affects the financial market negatively, we continue to have a good return.

“During the year, we made new investments, among other things, in infrastructure and the real estate sector, which is in line with our long-term strategy.”

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