Average market risk premiums (MRP’s) in Sweden have fluctuated between 2011 and 2024. As of 2024, the average market risk premium in Sweden amounted to *** percent. Compared to other countries in Europe, Sweden’s average MRP was relatively low. Similar countries included the Netherlands and Norway, among others. Required, historical and expected Separating the three types of market risk premiums is straightforward. Required MRP’s differ between investors, as approaches to investment change, and measure the rate of return needed for an investment to be made. Expected premiums look at the rate of return, and what they are calculated to come out as, while historical MRP’s look back over a period at the average rate of return that investors previously got in the past. Risk-free rates Risk-free rates are closely associated to market risk premiums and measure the rate of return on an investment with no risk. As there is no risk associated, the rate of return is lower than that of an MRP. Average risk-free rates across Europe (with some exceptions) were relatively low in 2022. As of 2023, The average risk-free rate of investment in Sweden was roughly *** percent, the highest ratio recorded since 2015.

The median market risk premium (MRP) used for selected countries in Europe as of 2024 was highest in Ukraine, at **** percent, followed by Russia, Turkey, and Romania. The lowest median market risk premium was recorded in the Switzerland and Norway, at *** percent.

The average risk-free rate (RF) used in Sweden fluctuated between 2015 and 2023. The risk-free rate is a theoretical rate of return of an investment with zero risk. This rate represents the minimum interest an investor would expect from a risk-free investment over a period of time. It is important to remember that the risk-free rate is only theoretical, as all investments carry even the smallest of risks. As of 2024, the risk-free rate in Sweden was *** percent, the highest ratio recorded since 2015.

Over the five years through 2024, the insurance industry’s revenue is forecast to edge downwards at a compound annual rate of 1.7%. Bulk annuities have boomed in popularity, fuelled by pension funds de-risking. Performance from the private client or the retail market is mixed and unequal across product segments, with life coverage facing the brunt of lacklustre growth in income as people consider where to save money. Despite the less-than-bright outlook, opportunities remain. Commercial and speciality lines have boomed thanks to digitisation and geopolitics. The frequency and severity of natural catastrophes intensify with climate change, and inflation only adds to the cost of payouts, depleting reserves and pushing up premiums. In 2024, revenue is expected to increase by 2% to €1.5 trillion and profit is anticipated to reach 5.4%%. Over the five years through 2029, revenue is forecast to grow at a compound annual rate of 5.3% to €1.9 trillion. Rising sales for speciality commercial lines like Natural Catastrophe, cyber and clean energy will drive growth. As weather events become more severe and frequent across Europe, premiums will continue to rise and NatCat coverages become a more attractive opportunity. Regulation will focus on societal outcomes, with the European Parliament following in similar footsteps to the UK, relaxing capital reserve requirements and countries introducing national guarantee schemes.

Capital ratios express a bank's capital as a percentage of its risk-weighted assets (RWAs). Following the Basel III accord, European banks faced higher capital requirements phased in from January 1, 2015, establishing a new minimum Common Equity Tier 1 (CET1) ratio of 4.5 percent. As of the last quarter of 2024, all European banking systems exceeded the required CET1 ratio. Cyprus, Latvia, and Bulgaria maintained the highest CET1 ratios, while the Netherlands and Greece recorded the lowest. European Banking Authority stress test Since 2014, the European Banking Authority has conducted stress tests to assess whether Europe's largest banks could withstand another financial crisis. These tests measure each bank's capital ratio under a 3-year adverse scenario. In the 2025 stress test, all institutions except La Banque Postale were determined to have sufficient capital to weather a potential financial crisis. Goldman Sachs Bank Europe SE emerged as the top performer in this latest assessment. Liquidity coverage ratio (LCR) As of January 1st, 2015, it became a requirement for banks to hold a minimum of 60 percent in high quality liquid assets (HQLA), which allowed them to survive in times of liquidity stress lasting up to 30 days. This minimum requirement was to increase annually by 10 percent until it reaches 100 percent as of 2019. As of December 2024, all European countries were able to meet this minimum requirement.