Stronger market position and more efficient operations

Ilmarinen’s financial statements for 2006

Harri Sailas, President and CEO, characterizes Ilmarinen’s performance in 2006 as good. The year was particularly successful in terms of the development of the insurance portfolio, as a result of which the company’s market share is estimated to have clearly increased. Investments also generated a good return, the company’s solvency was strengthened and its cost-efficiency improved.

The number of employees insured by Ilmarinen increased by 8.4 percent compared with the previous year and stood at 387,000 at the end of 2006 (357,000 in 2005). The market share calculated from the total wage bill insured under TEL (Employees’ Pensions Act) in 2006 is estimated to have risen considerably from the 32.4 percent in 2005.

The number of entrepreneurs’ pension (YEL) insurance policies also increased and the number of YEL policies was 49,898 at year-end (49,495). Ilmarinen is clearly the largest insurer of entrepreneurs with its share of more than 30 percent. All in all, the company’s premiums written grew by 13.1 percent to EUR 2,652.6 (2,346.0) million.

Net investment income amounted to 8.5 (12.1) percent. Investment income calculated at market values stood at EUR 1,803.0 (2,174.1) million. Equity generated a return of 20.2 (30.8) percent at market values. The proportion of equity in the company’s investment assets was 39 (33) percent at year-end.

“Ilmarinen’s strong solvency has enabled an investments strategy focusing on equity and, through that, seeking a better return. According to our strategy, we further increased the amount of equity last year. It also yielded the best return, even if we did not quite reach last year’s level,” says Sailas.

The company’s solvency capital, which indicates its risk tolerance and solvency, grew to EUR 5,828.0 (5,090.1) million at the end of 2006; it was 2.4 (2.5) times the solvency limit and 33.7 (32.0) percent of the technical provisions used in solvency calculations.

Ilmarinen’s overall result for 2006 totaled EUR 850.3 (1,514.9) million. The company recorded an underwriting result of EUR 19.9 (51.2) million. The efficiency of operations improved and the loading profit grew to EUR 22.9 (11.7) million. At the same time, total operating expenses decreased to EUR 85.9 million from the EUR 87.6 million for last year.

“Improving the efficiency of operations is one of our most central strategic goals. In the light of last year’s figures, I can say that we are moving in the right direction. I am particularly pleased with the fact that the reduction of operating expenses succeeded in spite of the clear volume growth,” says Sailas.

The amount available for discounts to be granted on TEL contributions, or client bonuses, is determined by the company’s solvency capital and solvency position. Ilmarinen will transfer EUR 81 (78) million to client bonuses from the result for 2006, which is EUR 209 (218) per employment relationship insured with the company. The transfer represents 0.70 (0.76) percent of the total wage bill insured.

Ilmarinen had almost 258,000 (244,000) pension recipients at the end of last year. Ilmarinen issued altogether less than 18,000 new pension decisions during 2006 and paid a total of EUR 2,239.1 (2.035.8) million in pensions.

Ilmarinen Mutual Pension Insurance Company
Satu Mehtälä
Senior Vice-President, Corporate Communications

For more information, please contact:

Harri Sailas, President and CEO, tel. +358 10 284 3000
Jaakko Tuomikoski, Deputy CEO, tel. +358 10 284 3447
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

Appendices

The figures in the financial statements bulletin and its appendices are unaudited.

Annual report, Annual General Meeting and interim report

The Finnish annual report for 2006 will published in printed form in week 12. It can also be read on the Internet at www.ilmarinen.fi in the same week. The English annual report will be published both in printed form and as a Web version in week 13, as well as the Web version of its Swedish abridged edition.

Ilmarinen’s Annual General Meeting will be held on March 29, 2007, at 10 am at Ilmarinen, Porkkalankatu 1, Helsinki, Finland.

Ilmarinen will publish an interim report in August 2007.