The risk of a change in value due to a deviation between actual and anticipated insurance costs. In other words, the risk that actual outcomes will deviate from projections e.g. in terms of longevity, mortality, morbidity or claim frequency.
Swedbank conducts insurance operations in Sweden, Estonia, Latvia and Lithuania, with Sweden as its largest market. Through Swedbank Insurance AB, Swedbank offers risk insurance and savings products, including endowment insurance, variable universal life insurance and pension products. The largest risks in these operations are market risk and insurance risk. Market risk is limited since the large part of the portfolio consists of products where the risk is borne by customers.
Insurance risk is managed by basing premiums on statistical assumptions and close monitoring e.g. to identify new trends. To further limit the company’s risk exposure, portions of its insurance risk is reinsured.