Skandia: Year-End Report January-December 2005(*)

FOURTH QUARTER:

Good growth in all divisions

-- The underlying result before tax improved, to SEK 586 million (-399).

-- The result for the period according to IFRS, including the result for discontinued operations, was SEK -50 million (-1,406).

-- Revenues rose 19%, and expenses included in the underlying result decreased by 6%.

-- Earnings per share before dilution were SEK -0.06 (-1.34).

-- Cash flow from operating activities, excluding changes in lending/deposits to and from the public in banking operations, was SEK 0.3 billion (-0.4).

-- The calculated profit margin for unit linked assurance increase to 18.7%, compared with 17.3% during the preceding quarter, and the present value of new business amounted to SEK 544 million, compared with SEK 505 million during the preceding quarter.

-- The operating result according to the embedded value method increased to SEK 2,824 million (-830). Of this improvement, changes in operative assumptions for unit linked accounted for SEK 1,061 million (-504) and financial effects for SEK 853 million (515).

-- Net asset value per share increased during the quarter by SEK 2.38, to SEK 34.92

-- The Board of Directors proposes an increased dividend of SEK 0.40 (0.35) per share. The Annual General Meeting will be held on 27 April 2006. See also page 22.
Underlying result

According to IFRS According to embedded value method
Result Result of Operating
before tax 1) operations 2) result 2)
2005 2004 2005 2004 2005 2004
SEK million Q4 Q4 Q4 Q4 Q4 Q4
Unit linked
assurance 502 50 1,116 1,174 1,969 1,689
Mutual funds 17 -34 17 -34 17 -34
Life assurance 10 -22 64 -51 63 -82
Banking 54 14 54 14 54 14
Other businesses -22 155 -22 155 -22 155
Joint
functions 3) 25 -562 25 -562 25 -562
Total underlying
result 586 -399 1,254 696 2,106 1,180
Write-down of
goodwill and
restructuring
costs for
Bankhall -5 -1,072 -5 -1,072 -5 -1,072
Structural
costs 4) -268 24 -268 24 -268 24
Provision for
restructuring
costs -1 -308 -1 -308 -1 -308
Outcome compared
with operative
assumptions -69 -150 -69 -150
Change in
operative
assumptions 1,061 -504 1,061 -504
Total 312 -1,755 1,972 -1,314 2,824 -830

1) Excluding result from discontinued operations, totalling SEK -645
million as per Dec. 2005, SEK 834 million as per Dec. 2004, SEK
-160 million as per Q4 2005 and SEK 0 million as per Q4 2004.

2) For definitions, see page 30.

3) Joint functions include joint-group expenses, costs for the
divisions that are not distributed among the business segments,
and joint-group financial result..

4) Structural costs in 2005 are mainly related to the bid process.

JANUARY-DECEMBER:

Improvement in underlying IFRS result

-- The underlying result before tax improved to SEK 2,008 million (247).

-- The result for the year according to IFRS, including the result for discontinued operations and goodwill amortisation, was SEK -765 million (197), see table on page 9.

-- Revenues rose 16% to SEK 16,758 million (14,419). Expenses included in the underlying result increased by 4% to SEK -14,750 million (-14,172).

-- Earnings per share before dilution were SEK -0.76 (0.24), of which SEK -0.63 (0.81) pertains to discontinued operations and SEK -1.11 (-1.05) to the write-down of goodwill in Bankhall. The return on shareholders' equity was -1% (-4%).

-- Cash flow from operating activities, excluding changes in lending/deposits to and from the public in banking operations, was SEK 0.5 billion (-2.0).
Underlying result

According to IFRS According to embedded value method
Result before Result of Operating
tax 1) operations 2) result 2)
2005 2004 2005 2004 2005 2004
SEK million 12 mos. 12 mos. 12 mos. 12 mos. 12 mos. 12 mos.
Unit linked
assurance 1,919 911 4,354 3,908 7,832 4,608
Mutual funds 8 -122 8 -122 8 -122
Life assurance 3 -17 55 -57 48 -88
Banking 351 330 351 330 351 330
Other businesses -22 154 -22 154 -22 154
Joint
functions 3) -251 -1,009 -251 -1,009 -251 -1,009
Total underlying
result 2,008 247 4,495 3,204 7,966 3,873
Result according
to plan 2005 1,028 3,795 3,795
Write-down of
goodwill and
restructuring
costs for
Bankhall -1,232 -1,072 -1,232 -1,072 -1,232 -1,072
Structural
costs 4) -489 -54 -489 -54 -489 -54
Provision for
restructuring
expenses 2 -308 2 -308 2 -308
VAT provisions -151 0 -151 0 -151 0
Outcome compared
with operative
assumptions -178 -382 -178 -382
Change in
operative
assumptions , , 1,312 -295 1,312 -295
Total 138 -1,187 3,759 1,093 7,230 1,762

1) Excluding result from discontinued operations, totalling SEK -645
million as per Dec. 2005, SEK 834 million as per Dec. 2004, SEK
-160 million as per Q4 2005 and SEK 0 million as per Q4 2004.

2) For definitions, see page 30.

3) Joint functions include joint-group expenses, costs for the
divisions that are not distributed among the business segments,
and joint-group financial result.

4) Structural costs in 2005 are mainly related to the bid process.

Improvement in embedded value result

-- The present value of new business, unit linked (VNB) increased by 13% in local currency, to SEK 2,131 million (1,870).

-- The calculated profit margin for new business was level with the preceding year, at 18.6%.

-- The operating result according to the embedded value method increased to SEK 7,230 million (1,762). Of this improvement, changes in operative assumptions for unit linked accounted for SEK 1,312 million (-295) and financial effects for SEK 3,478 million (700).

Growth in all divisions

-- Premiums and deposits increased by 28% during the year in local currency. New sales of unit linked assurance rose 14% in local currency.

-- Growth in the UK was favourable during the year, and Skandia's UK market share increased to 5.6% during the third quarter.

-- New sales of unit linked assurance in Sweden rose 18% during the year. Skandia's market share (unit linked) in Sweden was 18.7% on a moving twelve-month basis.

-- Several countries in the Europe & Latin America division are showing favourable performance. Premiums and deposits rose by over 40% compared with a year ago.

-- Funds under management rose 36% in local currency, to SEK 566,049 million as per 31 December 2005, thanks to a net inflow of SEK 69,973 million and good growth in value.

(*) Livforsakringsaktiebolaget Skandia is not consolidated and istherefore not included in the year-end report. All comparison figurespertain to the corresponding period in 2004, unless indicatedotherwise.
For information on this report, please contact:
Jan Erik Back, Chief Financial Officer, tel. +46-8-788 37 20
Harry Vos, Head of Investor Relations, tel. +46-8-788 36 43
Eva Groth, Assistant Head of Investor Relations, tel. +46-8-788 16 90

For information on historical disputes, please contact:
Bjorn Bjornsson, Vice Chairman, tel. +46-8-788 25 00

Skandia's published financial reports are available on Skandia'swebsite: www.skandia.com. Skandia's website also provides links to alive webcast of the press and analyst meeting on Skandia's year-endreport on Tuesday, 21 February 2006. In addition to the year-endreport, Skandia has also published the document Financial SupplementQ4 2005 on www.skandia.com under Investor Relations/Reports andEvents/Interim Reports. This document can also be ordered by phone.

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