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

STOCKHOLM, Sweden -- Skandia:

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

--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 is therefore not included in the year-end report. All comparison figures pertain to the corresponding period in 2004, unless indicated otherwise.

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's website: www.skandia.com. Skandia's website also provides links to a live webcast of the press and analyst meeting on Skandia's year-end report on Tuesday, 21 February 2006. In addition to the year-end report, Skandia has also published the document Financial Supplement Q4 2005 on www.skandia.com under Investor Relations/Reports and Events/Interim Reports. This document can also be ordered by phone.

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