Tiedote 28.2.2013

Financial statements 2012: ILMARINEN SUCCESSFUL IN PENSION FUND MARKETS

In 2012, Ilmarinen’s performance in the competition for customers between pension insurance companies was excellent. Sales were successful, and the company’s premiums written amounted to EUR 4.0 billion (EUR 3.7 billion in 2011).

In 2012, Ilmarinen’s performance in the competition for customers between pension insurance companies was excellent. Sales were successful, and the company’s premiums written amounted to EUR 4.0 billion (EUR 3.7 billion in 2011).

“Thanks to our good sales result, we can expect Ilmarinen’s market position to strengthen yet again,” says Ilmarinen’s President and CEO Harri Sailas.

Ilmarinen’s insurance portfolio experienced solid growth in 2012. The company strengthened its market leadership in pension insurance policies for self-employed persons (YEL) and showed excellent performance also in the sales of employees’ pension insurance policies (TyEL).

“A record number of clients transferred from other pension insurance companies to Ilmarinen last year. An increasing number of new start-ups also chose Ilmarinen as their pension insurance company. Our customer base was expanded particularly by an increase in small and medium-sized clients,” Sailas says.

Pension cover for approximately 900,000 Finns

The number of persons insured with Ilmarinen continued to increase, standing at around 588,000 (572,000) at the end of the year. Employees numbered 529,000 (515,000) and self-employed persons 58,800 (56,700). Ilmarinen handles the pension cover for approximately every third Finn working in the private sector.

The number of both pension recipients and the amount of pensions paid increased as expected. At the end of the year, Ilmarinen paid out pensions to 308,000 (302,100) people in a total amount of EUR 3.8 (3.6) billion. The company issued a total of around 22,400 (22,100) new pension decisions. Ilmarinen processed the pension decisions faster than the industry average.

Good long-term return secures pensions

2012 was a varied year for pension investors, with the euro crisis causing fluctuations in share prices. Nevertheless, the year turned out to be a fairly good one for Ilmarinen. Return on investments improved considerably from the previous year and stood at +7.5 (-4.0) per cent, thus exceeding the figure stated in the preliminary information. The market value of the pension investments managed by Ilmarinen rose by EUR 2 billion to EUR 29.5 (27.5) billion.

“The risks in our investment portfolio are well diversified, and we have the flexibility to react to changes in the markets, if necessary,” Sailas says.

Ilmarinen’s returns are at a good level even when considered in the long term. Calculated from 1997, the average nominal return on investments has been 5.6 per cent per annum, which corresponds to an annual real return of 3.7 per cent. The Finnish Centre for Pensions uses a 3.5 per cent expected real return rate to estimate the future level of earnings-related pension insurance contributions.

“Ilmarinen’s investment operations place emphasis on a long-term approach and thoroughly considered, controlled risk-taking,” Sailas sums up.

Ilmarinen’s solvency strengthened. At the end of 2012, solvency capital was EUR 5.8 (4.8) billion i.e. 23.9 (21.1) per cent of the technical provisions. The solvency position was 2.2 (2.5) times the solvency limit. Excluding the temporary legislation concerning the solvency of pension institutions, the solvency ratio would have been 18.9 (16.2) per cent and the solvency position 1.7 (2.0).

Ilmarinen’s customers benefit from successful investment operations and high cost efficiency in the form of competitive client bonuses. Client bonuses rose to EUR 62 (55) million.

The ratio of operating expenses to expense loading components, which measures cost efficiency, weakened slightly from the previous year, but still stood at a highly competitive level, at 80 (74) per cent.

Demand for well-being at work services remained at a good level

Ilmarinen’s well-being at work services continued to be in high demand in 2012. The effect of well-being at work on productivity and on the management of labour costs was a key topic in many client companies. Ilmarinen’s experts helped even more Finnish companies to make their well-being at work activities target-oriented and measurable.

“Despite a financially challenging year for many Finnish companies, demand for our well-being at work services remained at a good level in 2012. It is also a positive sign that many companies remembered to take care of well-being at work issues even amidst difficult change situations,” Sailas points out.

In 2012, Ilmarinen implemented over 1,200 co-operation projects supporting well-being at work with its customers.

Attachment (pdf)
Report on operations and financial statements 2012 (pdf)

For further information, please contact:

Harri Sailas, President and CEO, tel. +358 10 284 3000 Timo Ritakallio, Deputy CEO, Chief Investment Officer, tel. +358 10 284 3838, +358 500 536 346 Jaakko Kiander, Senior Vice President, Finance and Pension Policy, tel. +358 10 284 2599, +358 50 583 8599 Päivi Sihvola, Senior Vice President, Corporate Communications and Human Resources, tel. +358 10 284 3590, +358 40 757 4992