The insurance companies report their funding ratio to the Swedish Financial Supervisory Authority. Within the insurance industry a funding ratio of 100 percent indicates normal funding.
Collective funding is a buffer for Alecta’s insurance commitments to protect against fluctuations in investment return and insurance risks. It is the difference between Alecta’s assets and the company’s insurance commitments to policyholders and insured individuals.
The funding ratio is normally allowed to vary between 125 and 175 percent. The following limits apply to the allocation of surpluses: