From the CEO

Johan Sidenmark, vd AMF

Dear customer,

Thanks for entrusting us to be part of your endeavour to create a better future. Whether you've just started working, are mid-life, or have stopped working, we want to do everything we can for you, and our four million other customers, to have the best and most secure occupational pension possible.

We want to see your pension growing well, while also being careful about costs, so we can keep charges as low as possible. We also want you to feel sure that we're managing your money responsibly.

Our owners, the Swedish Trade Union Confederation and Confederation of Swedish Enterprise, have given us a clear guiding principle: to always do what's best for our customers for the long term. This perspective defines our commitment for the long term, and our day-to-day efforts. Our owners have also decided that we should always return profits to you, the customer. As we get better at making your money grow, and finding new, smart ways to cut costs, there's more left for your pension. That's why I'm delighted that last year, we reduced our costs per customer from SEK 164 to 156.

Healthy growth in a future-proof portfolio

Last year, economic progress was positive in many parts of the world. Alongside our active asset management, this meant that your pension assets grew well, despite low interest rates. Meanwhile, most commentators agree that it will probably be harder to generate good returns from fixed-income assets in future, which means that in the event of a stock market setback, we won't have a fixed-income portfolio to rely on as previously.

To address this, we're working actively for a more diversified portfolio. For a few years now, we've been upscaling our investments in alternative asset classes, grown strongly in real estate and invested in wind power. We also made investments in established unlisted companies like Spotify, Volvo Cars and Anticimex. We're in an especially good position to execute this kind of transaction, thanks to our financial strength and long-term investment horizon.

Sustainability – our self-evident starting-point

Sustainability and corporate responsibility are self-evident for AMF, and our assignment demands this. If we are to provide good occupational pensions now and in the future, we must be part of social progress that is viable over time. We don't see any conflict between high ambitions in sustainability and high returns for the long term. On the contrary.

That's why we endeavour to make sustainability a fundamental approach to everything we do, not just in selected segments or special products. It will permeate how we structure our offering, which assets we choose to invest in, and how we exert our influence as an owner.

With this in our sights, we are now prioritising activities including working for our whole bond portfolio to be sustainable, instead of focusing on more niche products. We would prefer to persuade the companies that we own to get better, than just head for the exit. We feel a special responsibility for those customers that don't decide to get involved in savings themselves to still get the best occupational pension possible.

In the year, we continued our work to integrate sustainability issues fully into our business, through channels including developing our work on diversity and responsible investment. Obviously, critical agreements like the UN Global Compact and the UN Principles for Responsible Investment, as well as Agenda 2030, are a central cornerstone.

The right potential for the best occupational pensions in Europe

The debate on the Swedish pension system focused on problems and challenges last year. In the light of what emerged, AMF has taken the opportunity to highlight the strength of the Swedish occupational pension model in different contexts where participants on the labour market negotiate good terms for savers.

We were also an active contributor to the discussion on the special regulation of occupational pension providers that the government is preparing. Working from the savers' perspective, we have emphasised the need for well-considered balance between protecting customers, and the opportunity to take risk. We have emphasised the importance of maintaining the potential to negotiate collective solutions for large groups of people that reduce costs, and provide long-term security.

Simpler and more understandable with technology

Nowadays, more customers are approaching us through digital channels. The number of people active in our Internet branch is increasing steadily, and more people are receiving information on their pensions from us via the Min Pension ('my pension') portal. We have been an active contributor to Min Pension's and the Swedish Pension Agency's project to help pensioners plan their pension withdrawals, and thus simplify something, which at present, appears complex. In the year, we also joined the Kivra digital social mailbox and digital power of attorney portal as part of our ambition to keep making it easier to get an overview of your pension and make different choices.

Our skilled customer service function – rated as one of the best in the country in the year – helps customers that prefer personal contact, or need assistance in getting up and running on digital alternatives.

Finally, we put a lot of focus last year on producing a new strategy for how we will benefit from, and address, future opportunities and challenges. With my committed colleagues, I'm looking forward to continuing our work in challenging ourselves, the sector and the pension system. AMF will be Sweden's best provider of occupational pensions.

Johan Sidenmark
CEO & President of AMF
Stockholm, Sweden, March 2018