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Health bond

A region, an insurance company and a bank combatting diabetes .

A region, an insurance company and a bank combatting diabetes 

An increasing number of people are suffering from type 2 diabetes, but preventive resources are scarce. Therefore, Region Stockholm decided to try a unique approach: Issuing a health bond, with Skandia as the investor and SEB as the adviser and arranger.

The cooperation between the private sector and the region has strengthened the region's capabilities to combat type 2 diabetes.

This is how the health bond works

  • The bond of SEK 30 million has a maturity of five years. The money will be used for preventative measures focusing on lifestyle habits for 925 individuals at risk of developing type 2 diabetes.
  • The participants are chosen through a health survey and follow-up testing. A health coach thereafter develops a personal health plan for them.
  • In addition, the participants get a grant to buy services – within areas such as exercise, food, sleep and stress – to help develop a healthier lifestyle.
  • If these measures prove successful, the investor – Skandia – gets interest on its investment.
  • The interest rate will be slightly higher than if Region Stockholm would have taken a regular loan. At the same time, the cost savings for Region Stockholm will be significant, compared to a scenario where the participants had in fact developed type 2 diabetes.
  • If the preventive measures fail to achieve the desired health effects, however, Skandia will receive a negative return.

Learn more (in Swedish):
Region Stockholm först med en hälsoobligation

Facts about diabetes 2 and the health bond

  • Type 2 diabetes is often referred to as a lifestyle disease, with being overweight, poor diet, stress and lack of exercise as triggering factors. This is also why preventive measures can have great effect. Still, the disease is becoming more common and is to an increasing degree developed early in life. This boosts the health care costs and sufficient resources often lack.

  • Put simply, a bond is a loan. The issuer of a bond borrows money from the investor. This means that the issuer gets access to finance, while the investor – who takes a risk – can earn interest on its money.

  • The new health bond to prevent type 2 diabetes is unique in its kind. The publisher, Region Stockholm, receives SEK 30 million to invest in preventive care, which can result in large future savings. The investor, Skandia, gets interest on its loan – but only if positive health effects are in fact achieved.

  • SEB's role has been that of adviser and financial organizer of the bond. This entails creating a model that all parties benefit from and making sure that all the practical aspects of the bond function.

Contact us

For questions regarding the health bond you are welcome to contact us.

Region Stockholm – Disa Hammar, Debt Manager:disa.hammar@sll.se 

Skandia – Lars-Göran Orrevall, Head of Asset Management: lars-goeran.orrevall@skandia.se 

SEB – Mats Olausson, Senior Advisor, Climate & Sustainable Finance: mats.olausson@seb.se