Swedish ICMIF member Folksam Liv (Life) has announced this week that it will be sending out refund notices to 600,000 customers. In total, they will share close to SEK 286 million (USD 32.2 million) with its members.
The refund will be paid to certain policyholders who have life cover through their membership of certain trade unions and who had their insurance policy in place on 31 December 2019.
The customers who are awarded a refund will be notified in October and November 2020, and then the refund will be paid out in November and December.
The refund is a one-time payment, and the size of a customer's refund depends on how much has been paid in and also on actuarial factors, says Folksam Liv.
The mutual insurer says that a refund is being given is partly due to the return on capital being higher than expected, and partly due to there being fewer payments than estimated in 2019.
“Surpluses can occur because we decide how much an insurance should cost in advance, based on different assumptions and forecasts. To get a long-term sustainable insurance, we try to keep a steady price level instead of raising and lowering the premium from year to year. When we have a surplus, which we have now, as a customer-owned company we choose to pay it out as cash payment directly to our customers,” says Anna-Karin Laurell, Business Area Manager, Folksam Liv.