Moderate investment result and a record year
CEO Harri Sailas describes Ilmarinen's result last year as good overall and says the development of the insurance portfolio was the best in the company's history. Thanks to the excellent sales result, the company's market position improved markedly. Investment activities also managed to achieve a good result under difficult market conditions. The company's solvency remained high.
The number of employees and self-employed persons insured at Ilmarinen increased by 31,000 and stood at 468,000 at the end of the year (437,000 in 2006). The number of insured employees grew by 7.8 per cent compared with the previous year and market share, calculated on the basis of the amount of the insured TyEL payroll, is estimated to have increased clearly from the corresponding figure in 2006, which was 30.2 per cent.
The number of pension insurances of self-employed persons also increased and at the end of the year there were 51,298 (49,898) YEL insurances. Ilmarinen is clearly the largest insurer of self-employed persons with its market share of one-third. Overall, the company's premiums written increased by 4.5 per cent to EUR 2,772.5 (2,652.6) million.
Ilmarinen succeeded very well in the competition for employee pension insurance. Measured in terms of premium income, the total sales of policies increased to a record level of more than EUR 350 million, several times the average level of previous years.
"Last year's sales result was the best in Ilmarinen’s history, in terms of both the sales and transfers of policies. I feel this is a strong expression of confidence by our clients in our competence, services and competitiveness," said Harri Sailas.
The net return on Ilmarinen's investments at market value was 5.7 (8.5) per cent. Net income from investment activities at market value was EUR 1,325.0 (1,803.0) million. Return from shares at fair value was 9.1 (20.3) per cent. At the end of the year, shares and holdings made up a total of 47 (39) per cent of the company's investment assets. The best returns were achieved by private equity investments, 42.5 per cent, and hedge funds, 18.6 per cent. At the end of the year, hedge funds made up 3.4 (1.4) per cent of the company's investment assets.
? The year was challenging for investment activities. The investment climate was nervous, which led to sharp falls in the stock markets especially during the last quarter of the year. Considering this fact, the full-year investment return can be considered to be an achievement," Sailas said.
The solvency capital, which measures the company's risk-bearing capacity and solvency, increased to EUR 6,068.8 (5,828.0) million at the end of 2007 so it was 2.0 times (2.4) the solvency limit and 32.5 (33.7) per cent of the technical provisions used in solvency calculations. The company's solvency is very good.
Ilmarinen's overall result in 2007 was EUR 344.6 (850.3) million. The result of the underwriting business under the company's own responsibility was EUR 9.0 (19.9) million. Loading profit was EUR 14.0 (22.9) million. Total operating expenses were EUR 103.3 (98.6) million, up 5.0 per cent from the previous year. Expenses increased due to front-end weighted sales costs resulting from the excellent sales result and the introduction of the joint earnings data register for the employee pension sector.
The sum allocated for discounts on employment pension contributions, i.e. bonuses and rebates, is determined mainly on the basis of the company's solvency capital, but partly also on the result of the loading profit. Ilmarinen will transfer EUR 74.0 (81.0) million from the 2007 result into bonuses and rebates, which is EUR 177 (209) per employment contract insured by the company. The transfer is 0.60 (0.70) per cent of the total insured payroll.
Ilmarinen had almost 263,000 (258,000) pension recipients at the end of last year. Ilmarinen made a total of slightly less than 19,000 new pension decisions during 2007 and the company disbursed a total of EUR 2,398.4 (2,239.1) million in pensions.
Ilmarinen Mutual Pension Insurance Company
Satu Mehtälä
Senior Vice President, Corporate Communications
For more information, please contact:
Harri Sailas, CEO, tel. +358 10 284 3000
Jussi Laitinen, Chief Investment Officer, tel. +358 10 284
3838
Satu Mehtälä, Senior Vice President, Corporate Communications,
tel. +358 10 284 3590,
+358 50 539 8590
E-mail: firstname.lastname@ilmarinen.fi
Attachments:
Report on Operations and proposal of the Board of Directors on use of the profit (pdf)
Slides related to the financial statements (pdf)
The figures in the financial statements press release and attachments are unaudited.
Annual Report, Annual General Meeting and interim financial report
The Annual Report for 2007 will be available in Finnish on the Internet in week 11 at www.ilmarinen.fi. The printed version of the Annual Report in Finnish will be published in week 12. The Annual Report in English will be released both in printed form and on the Internet in week 13, together with the Internet version of the summary in Swedish.
Ilmarinen's Annual General Meeting will be held at 10:00 a.m. on 8
April 2008 at Ilmarinen's headquarters, Porkkalankatu 1,
Ilmarinen releases data on its result quarterly. The development of the investment business and solvency will now be monitored in between the full-year and half-year results