1 Kund: Skandia Uppdragsgivare: Centrum för Näringslivshistoria Uppdrag: Presentation av företagets historia Översättare: Roger Howard Skandia 1855-2005 The Pioneer Company On November 20, 1854 an invitation was issued to purchase shares of the insurance company Skandia. It began with the following words: ”The absence of a domestic institution offering life insurance as well as insurance against fire damage without consideration of certain locations or certain types of property, has long been acknowledged and requested.” The proclamation received broad support and on January 12, 1855, Skandia was granted a concession by King Oscar I. Skandia’s name is a Swedicized spelling of Scandia, the Latin name for Scandinavia. The company was a pioneer in many respects. It was the first Swedish insurance company that operated as a share company. Earlier insurance companies were of the mutual variety, owned entirely by the insured parties. Skandia was also the first Swedish company to offer life insurance policies. The main office was established at Mynttorget 1, very near the Royal Palace in Stockholm. From the very beginning Scandia aimed at the international market. One quarter of the shares were issued in Norway, Finland and Denmark. Shortly thereafter branches were opened in these Nordic countries as well as in St. Petersburg, Hamburg and Rotterdam. The company’s first claim was in 1855 for a fire in the Norwegian city of Bergen. Skandia was established as the industrial revolution swept through the Nordic region. Many companies with valuable assets also were founded during this period, which created a growing market for business insurance. In pace with the growing prosperity, the market for life insurance also increased. Skandia was the first Swedish company that was able to meet the needs for insurance that was created by industrialism. Previously only foreign companies were active in this market. As a share company, Skandia found it easier than the mutual insurance companies to raise capital. This made it possible to establish a strong presence on insurance markets with a wide geographical reach. Furthermore, as a share company, Skandia also had the ability to reinsure itself. This allowed the company to assume larger risks, which would be required in the future. Through the years, like many other insurance companies, Skandia has been placed under large stress and paid claims for wide-spread fires, natural disasters, property crises and stock market crashes, as well as internal company strife. However, Skandia has survived and continues to develop. Currently, Skandia is the only active modern company that was part of the initial day of trading on the Stockholm Stock Exchange on February 4, 1863. Carl Gustaf von Koch The foremost figure behind the founding of Skandia was lawyer and civil servant, Carl Gustaf von Koch. He had previously managed Swedish agents for foreign insurance companies, and in 1852 began making plans for a Swedish joint stock insurance company. When the Swedish Parliament decreed in August of 1854 that a government-backed insurance company should be established, the race was on for those that wanted to establish the same type of service as private companies. By the formation of Skandia the Government plans never materialized.
2 Carl Gustaf von Koch became Skandia’s first Managing Director and placed great emphasis on the sales of insurance policies (he received commissions on gross premiums). Unfortunately, the company was lacking in the area of risk assessment. In 1857 Skandia found itself in crises due to the recession after the Crimean War. The following year after that, von Koch left the company. The first hundred years On June 25, 1888, the cities of Sundsvall and Umeå were ravaged by fires, which resulted in large claim payments for Skandia. The stately stone city in Sundsvall that was quickly built after the fire reminds us today of the value of having comprehensive fire insurance. In 1900, Skandia established itself as the first non-British foreign company in the United States of America. Six years later the great San Francisco earthquake devastated the city and this became at the time Skandia’s largest loss. But the company fulfilled its obligations in an expedient way which gave it a good reputation on the American market. In pace with the growth in economical prosperity, the types of insurance policies expanded. During the first half of the 1900’s Skandia started to sell burglary insurance, accident insurance, health insurance and home owner’s insurance. New insurance legislation in 1949 compelled Skandia to divide its property and life insurance divisions. Two companies were formed with the property insurance division serving as the mother company. Sven Palme Sven Palme was the Swedish insurance industry’s most successful man for his time. He had been working at Skandia for a short time, when in 1888 he was named Managing Director of Liv-Thule in Stockholm. Liv-Thule was founded in 1872 as a joint-stock life insurance company and was purchased by Skandia in 1963. Palme transformed Thule into the largest life insurance company in the Nordic region by concentrating on a wider population group. Palme felt that the profits from the life insurance business should firstly go to the policy holders, and Thule placed high restrictions on new share issues which forced competitors to do the same. His motto was, “The science is basic, a professional character is the key and active social politics is the goal”. As a liberal MP, he initiated new insurance legislation in 1903, and helped to establish the National Private Insurance Supervisory Service, which in 1991 merged with the Financial Supervisory Authority. In 1931, Palme resigned as Managing Director and was succeeded by his son Gunnar Palme, whose son Olof Palme later became Sweden’s Prime Minister. The era of merger In 1960, three Swedish insurance company groups were merged when Skandia purchased Sveagruppen in Gothenburg and Skånegruppen in Malmoe. The three company groups formed what became know as the S-bolagen (The S-Companies). In 1961, Skandia purchased the marine insurance company group Öresund, with locations in Malmoe and Stockholm. At the beginning of the 1960’s, Thule, which was the largest insurance company in the Nordic region, experienced extensive economic problems, which lead to Skandia’s purchase of Thule in 1963. The five merging company groups had roots in more than 50 Swedish insurance companies. In 1964, the new group was launched as the Skandia Group. At that time the company adopted their current logotype, the well known Skandia umbrella. In 1940, Thule had moved into a modern head office at Sveavägen 44 in Stockholm. In 1965, with the acquisition of
3 Thule, that location became the head office for Skandia, which provided much needed office space for the company. Pehr Gyllenhammar The driving force behind the merger at the beginning of the 1960’s was Pehr Gyllenhammar. Since 1953 he had been the Managing Director of Sveagruppen. Gyllenhammar became Managing Director of Skandia in 1961. In the merger between the five insurance groups, he carried out “a slaughter of juridical persons” in which 23 companies became two large companies specializing in property and life insurance and one small company dealing in health insurance. Pehr Gyllenhammar was succeeded in 1970 by his son, Pehr G. Gyllenhammar, who stayed in the position for less than a year before taking over as Managing Director of Volvo. The international Skandia Since the beginning, Skandia has been an international company. In 1950, nearly half of the fire insurance premiums were from foreign markets, and half of those from the USA. In the early 1920’s Skandia was established in Belgium. During the post war period the company became even more active internationally, establishing locations in Australia in 1952, Columbia (along with Sveagruppen and Öresund) in 1953 followed by Mexico and India in 1957. The merger gave Skandia nearly one third of the Swedish insurance market. It was then decided to place more emphasis in the international arena. Between 1967 and 1983, premium income from the foreign markets increased five fold. In 1983 Skandia transferred its international operations to its subsidiary, Skandia International. Operating from offices and subsidiaries in 25 countries, the company now could provide coverage for over 100 countries. Income form the foreign market accounted for over 70% of the gross premiums. The international operation was repurchased in 1988 partly to enable Skandia to enter the international fund insurance business. Up until then, the company had worked almost exclusively with liability insurance on the international market, but the successful life insurance operation in Great Britain showed the way of the future. The women of Skandia The first woman was employed by Skandia in 1857, when C.F. Kjelland was hired to examine reinsurance policies from foreign companies. From 1936, married women were employed by Skandia. Before that time only unmarried women were accepted. For a long period of time, women were relegated to the lower positions in the company. In the 1970’s a systematic equality program was initiated at Skandia. The first woman director was Valborg Anderzon, who was named in 1979. In the early 1990’s Marie-Louise Wenander became the first woman on the group executive board. Ideas for Life In 1987 Skandia sent out an appeal to the Swedish people, “Help us with ideas for a safer society!” The response was enthusiastic and led to a book named “2,293 Ideas for Life”. Skandia also organised a program within the company known as “Ideas for Life”, which is still very active. The goal of the Ideas for Life program is to develop and support projects for children and teenagers. The program drives other projects and stimulates people to contribute in various ways to better life for young people. Skandia’s employees are also encouraged to take part
4 in the various projects. Participation can include helping students with their homework, staffing telephone help lines, or even serving as a youth camp counsellor among other things, all on company time. Transformation to savings specialists During the end of the 1980's major world changes also led to major changes in the insurance industry. Within a decade, Skandia had transformed from a comprehensive insurance company to an international company specialising in long term savings programs. One important challenge was the rapid development of information technology. Another was internationalisation. These two challenges created new possibilities – as well as new competition – within the insurance industry. These factors also contributed to the revision of standing political rules and regulations. The strict boundaries between banks and insurance companies were less restricted as were establishment controls of the insurance industry. The journey to the new Skandia started in Great Britain when Skandia Life began offering unit linked policies in 1978. Unit linked policies are insurance schemes in which the individual investor chooses their own portfolio of stock or interest funds. Skandia started unit linked operations in several countries under the name Skandia Assurance and Financial Services founded in 1988. In 1987 the company American Skandia Life was founded and became very successful. Skandia sold the company in 2002. In Sweden, Skandia became the pioneer for unit linked policies when SkandiaLink began in 1990. Previously this type of insurance had not been allowed in Sweden. After 1993 the premium volume of Skandia’s life and fund insurance operations outgrew its casualty insurance operation. SkandiaBanken was founded in 1994, a telephone bank that has enjoyed great success. Skandia launched its web page Skandia.com in 1995, becoming the first financial company in Europe to enter the online world. The following year SkandiaBanken started offering services on the Internet. In the year 2000 SkandiaBanken Norway was launched, followed by Denmark in 2001. Skandia sold its reinsurance operations to Hanover Re in 1997 and in 2002 sold its capital assets operations to Norwegian bank DnB NOR. In 1987, as a step towards establishing a Nordic home market, Skandia purchased the majority of the Danish company Kgl. Brand. That same year Skandia and Finnish company Pohjola, purchased large blocks of shares in each others companies. In 1989, Skandia purchased Norwegian company Norska Vesta. In 1999, Skandia transferred its casualty insurance operations to “If Skadeförsäkring”, a company founded by Skandia and Norwegian company Storebrand, based in Stockholm. In 2004 Skandia’s and Storebrand’s shares were sold to Finnish company Sampo. Currently, Skandia has operations in some 20 countries located on four continents, with Europe as the base. The principal markets are Great Britain and Sweden. The company is also active on the market in Asia, South America and Australia. Skandia’s goal is to become a leading supplier of long term savings programs and continues its rapid growth on these markets. However, on the Swedish market there are some problems due to negative publicity during recent years. Skandia’s business concept involves offering products and services that provide for the customer’s ever changing savings needs throughout various stages of life. This also takes into account the fluctuation present on the global economic market. Skandia works with independent distributors and fund managers that supply innovative, world class financial services. Skandia has defined as its core operations the areas of fund selection, fund
5 management, product development, marketing and marketing support to the company’s distributors. Skandia can create tailor made savings solutions for its customers. The company collaborates with the world’s leading fund managers and is continuously developing its range of products. Skandia is proud to offer high quality services and freedom of choice.