Swedish mutuals Folksam and Länsförsäkringar make further investments in social bonds to support the fight against coronavirus

Wednesday, 08 April 2020

Last week, Swedish ICMIF members Länsförsäkringar and Folksam announced that they both made additional investments in social bonds to counteract the social and economic effects of the Covid-19 (coronavirus) pandemic. This follows a combined investment of SEK 1 billion (USD 100 million) from the two insurers last month in a social bond issued by the International Finance Corporation (IFC), part of the World Bank Group, to provide financial support to companies affected by the Covid-19 pandemic.

In this latest investment in social bonds, Folksam has invested a total of SEK 1 billion (USD 100 million). This includes a SEK 900 million (USD 90 million) investment in a bond issued by the Nordic Investment Bank to fund projects in the Nordic countries and the Baltic States, which are primarily aimed at promoting effective health care systems and providing financial support to reduce the disruptions that have occurred in various supply chains. Folksam also invested a further SEK 100 million (USD 10 million) in a bond issued by the European Investment Bank (EIB).

Länsförsäkringar also invested in the EIB social bond, intended to support the European healthcare system during the ongoing pandemic virus pandemic. Their investment was SEK 380 million (USD 37 million). The issue from the EIB is specifically intended to combat the Covid-19 pandemic and to increase access to health care. Funds from the bond can be distributed by the EIB to national health authorities, hospitals and laboratory facilities.

These latest investments of a combined SEK 1.38 billion (USD 135 million) by Folksam and Länsförsäkringar bring the total amount invested in social bonds by these two Swedish mutual insurers over the previous two weeks to just under SEK 2.4 billion (USD 235 million).

Commenting on Folksam’s latest investment in social bonds, Ylva Wessén, President and CEO, said: “The Folksam Group is actively seeking investment opportunities that alleviate the social and economic consequences of the coronavirus. The investment in the Nordic Investment Bank's bond will be of direct benefit to our clients. The pandemic we are now experiencing has a major global impact on all parts of society. In the Folksam Group we do everything possible to run our business safely for our customers and employees. The Folksam Group's first and biggest focus is always our customers. We do our utmost to make our customers and employees feel safe while helping to reduce the spread of the coronavirus.”

Kristofer Dreiman, Head of Responsible Investments at Länsförsäkringar, commented “The rapid spread of Covid-19 imposes a heavy burden on public health, jobs and the economy. Our investment in the EIB's bond complements previous investment in IFC's social Covid-19 bond. This investment in the EIB's bond gives us the opportunity to support hard-hit Europe during the ongoing pandemic. The intention of the issue also reflects our own work on responsible investing and contributes to the UN's Global Goal 3 on good health and well-being, one of Länsförsäkringar's priority Sustainable Development Goals (SDGs)”

Read more about the first investments by Folksam and Länsförsäkringar in the social bond issued by the IFC in March 2020 below: