THIRD QUARTER PUSHED RETURN ON INVESTMENT INTO POSITIVE FIGURES

21.10.2016 11:25:10
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Tiedote

In January–September, Ilmarinen’s investment portfolio generated a return of 2.3 per cent. The Q3 return was 2.9 per cent and the successful quarter pushed the negative return in the first half of the year into clearly positive figures. At the end of September, the market value of investments came to EUR 36.5 billion. The long-term average real return is at a good level, at 4.1 per cent.

Solvency strengthened during the quarter. At the end of September, solvency capital was EUR 8,002 million and the solvency ratio was 27.9 per cent.

Ilmarinen’s customer acquisition improved as planned during the early part of the year. A record number of new pension decisions were made. The operating expense ratio remained in control and the ratio of operating expenses to expense loading components, which measures operational efficiency, is expected to be at around 78 per cent.

President and CEO Timo Ritakallio:

”The third quarter was a good one for Ilmarinen’s investment return, pushing the return from the start of the year clearly into positive figures. The market value of investment assets grew by EUR 0.7 billion from the beginning of the year and was EUR 36.5 billion at the end of September. A key factor behind the improvement in investment returns was the positive development in the equity markets; all of the main indices yielded well during the third quarter. The historically low interest rate level continues to steer investors towards alternatives such as real asset classes and stocks.

Investing pension assets is a long-term business and investment returns should be observed over a long time span. The average real return on Ilmarinen’s investments from 1997 is at a good level, at 4.1 per cent, and solvency strengthened compared to the first part of the year. Strong solvency successfully buffered market and economic volatility, which was proven in the unusually challenging investment environment in the first part of the year.

We made more than 19,000 new pension decisions in January–September, which is 13 per cent more than last year. Ilmarinen has adopted a new pension processing system that initially became congested with pension applications, but the situation has improved during the early autumn and processing times are quickly falling due to automation. Ilmarinen’s operating expense ratio remained in control and the ratio of operating expenses to expense loading components, which measures operational efficiency, is expected to be at around 78 per cent.

Over the past year, Ilmarinen has invested in developing digital services in accordance with its strategy and, in the autumn, two new services targeted at customers have been taken into use: the ‘Parempi vire’ mobile app for improving work capacity and well-being and the ‘Sopiva työ’ service that is intended to reduce costs resulting from disability. We will continue to develop services and work together with our personnel and customers to come up with new ideas.”

Interim report 1.1.-30.9.2016

Attachments

For more information, please contact:
Timo Ritakallio, President and CEO, tel. +358 10 284 3838, +358 500 536 346
Mikko Mursula, CIO, tel. +358 10 284 3840, +358 50 380 3016
Jaakko Kiander, CFO, +358 10 284 2599, +358 50 583 8599