I have now completed my first year as CEO for this successful company. And I feel extremely honoured to have been entrusted with the task of leading AMF into the future.

In 2009 it became clear that the pensions industry faces a number of challenges. For example, procurement procedures have increased in number, bringing considerable pressure on fees and shorter agreement periods – often three or five years. In addition, savers now have greater opportunities to "vote with their feet" by switching between pension fund managers.

While this trend is good for savers, it entails increased financial risk for the industry. Companies could previously count on savers staying with them for many years and were able to adapt their investment activities accordingly. The growing mobility of the market imposes cost pressure on the companies while savers expect increased service and accessibility.

The financial crisis has also entailed new challenges for the industry in terms of generating sustained stable returns on savers' money. Following the major recession in the global economy during the latter half of 2008, with plummeting stock markets, a recovery began, with stock markets returning to positive trends in 2009. In this new reality, AMF enjoys a favourable starting position. The brand is strong and we have a long history of delivering the highest return on savers' money at a low cost.

After the end of the year, we were able to confirm our success in the autumn pension selections in which 1.1 million private sector employees had the opportunity to select pension fund managers (SAF-LO collective agreement occupational pensions). AMF was selected as a supplier of both traditional and unit-linked insurance and as a default selection alternative for those not making an active choice. Being selected in all categories is recognition of the fact that we provide the best pension solutions.

Following the selection procedure, AMF's share amounted to 68.3 percent – a very strong result. This means we are able to welcome slightly more than 726,000 savers who have either actively or passively entrusted us with the management of their occupational pensions.

AMF has also again been chosen as a supplier in the selection process for the ITP supplementary pension funds for salaried employees that will take place during the spring of 2010. AMF's repeated selection in the major procurement processes demonstrates the competitiveness of our offering. Over the year, an increasing number of companies also chose to use AMF as their pension supplier.

Continued high returns and strong finances
In 2009 we again managed to provide one of the highest returns in the industry (12.6 per cent). Given the turbulence we have seen in the global financial markets, and that still exists to some extent, we are very pleased with this performance. Our funds have also achieved an average rating of 4.5 of a possible 5 in Morningstar's ratings for 31 December 2009. This is a unique achievement.

AMF's consolidation policy is designed to allow us to distribute money to savers as quickly as possible when our asset management efforts provide favourable results and to apply the brakes when progress is poorer. This meant that, as a consequence of the sharp stock market declines at the end of 2008, we implemented an 8 per cent reallocation in February 2009. We have now regained a very strong level of consolidation with the industry's strongest balance sheet and solvency level of 230 percent. In the past 15 years, AMF's total yield has averaged 9.9 percent – the best among comparable life insurance companies.*

However, we face a challenge in maintaining our position as the company with the lowest costs. To enhance our efficiency and improve our service to savers, extensive investments are needed in, for example, IT systems. These efforts were in focus in 2009 and will remain so over the next few years.

Lessons from the past year
The first half of 2009 was undeniably an unusual and turbulent period for AMF. Those of us who work here called the spring's discussions regarding the company, it Board of Directors and it morals as "the temporary glitch" since it was important to stress the fact that these were isolated individual events that did not reflect the true AMF. We always put the savers' interests first and work hard to provide them with the highest possible return at the lowest possible cost.

Many people find pensions complicated and have difficulty understanding how Sweden's strongest pension company was the only one to temporarily cut pensions last spring. On this score, we can improve further in explaining how the pieces fit together. For this reason, we have extended our efforts in what we call "security finance" and we will work to further improve our dialogue with savers during 2010.

All surpluses in AMF are returned to our savers. Working in various ways for their best interests is a cornerstone that pervades all of our operations. AMF's committed employees do their utmost to ensure that we continue to provide the highest return at the lowest possible cost. I look forward to continuing to lead this fine company that always safeguards the interests of its savers.

Ingrid Bonde
President and CEO

* According to preliminary statistics from the Swedish Insurance Federation as per 31 December 2009.