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Ilmarinen’s Interim Report 1 January to 30 September 2017: Good investment result boosts solvency

27.10.2017
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In January–September, Ilmarinen’s investment portfolio generated a return of 5.5 per cent (1 Jan–30 Sep 2016: 2.3 per cent). At the end of September, the market value of investments stood at EUR 38.9 billion (30 Sep 2016: EUR 36.5 billion).

The long-term average real return was at a good level, at 4.3 per cent.

Solvency strengthened during the quarter. At the end of September, solvency capital was EUR 9,158 (8,002) million and the solvency ratio was 130.6 (127.9) per cent.

Ilmarinen’s customer acquisition was excellent in the third quarter. Measured in premiums written, net customer acquisition amounted to approximately EUR 96 million by the end of September.

Ilmarinen’s and Etera’s merger as of the start of 2018 was confirmed.

President and CEO Timo Ritakallio: “The strong development of Ilmarinen’s investment returns continued during the third quarter. Investments generated a return of more than EUR 2 billion in January–September and the value of Ilmarinen’s investment assets at the end of September was EUR 38.9 billion. The Q3 return was 1.7 per cent and the return for the entire period under review rose to 5.5 per cent. In the past 12-month period, Ilmarinen’s investments have yielded 8.1 per cent. The good investment result is especially attributed to the favourable development of share prices. In January–September, listed equity investments generated the best returns, at 11.3 per cent.

The average annual real return on Ilmarinen’s investments since 1997 is at a good level, at 4.3 per cent. This clearly exceeds the 3.0 per cent return assumption used by the Finnish Centre for Pensions in its calculations. Solvency also remained strong and the solvency ratio, i.e. pension assets in relation to technical provisions, rose to 130.6 per cent.

In real estate investments, we continued the international diversification of the portfolio in line with our strategy and expanded our investments in the US real estate market. The newly formed joint venture with American New York Life Insurance Company invests in US office properties in the long term. The first investments include six office properties in growing metropolitan areas on both the West and East Coasts of the United States.

Ilmarinen’s customer acquisition was excellent in the third quarter. Measured in premiums written, net customer acquisition was EUR 96 million since the beginning of the year. We restructured our Better Working Life services into three areas: Luotaamo offers the Parempi vire application and insight into the working community’s state of well-being through pulse surveys, Valmentamo supports work capacity management, and through Ohjaamo (Virtual Control Room), customer companies can forecast and manage disability risks. Through these areas, we wish to improve the quality of working life, increase companies’ productivity and prevent disability together with customers.

We also continued our campaign celebrating the centenary of Finland’s independence where we challenge companies to join us in doing good deeds for a better working life. As part of the campaign, we donated EUR 30,000 to the Faculty of Management of the University of Tampere for a research project directed at discovering ways to improve the well-being at work and quality of working life for self-employed people.

The first applications for the years-of-service pension introduced by the pension reform were received in the summer. The years-of-service pension can be granted at the age of 63 after a strenuous and wearing career lasting at least 38 years, resulting in reduced work capacity. The years-of-service pension can start at the earliest on 1 February 2018. Interest towards the new pension type has been minor so far; only a few applications had been received by the end of September. Ilmarinen’s customers have shown clearly more interest towards the other new pension type, the partial early old-age pension, for which we made 2,491 pension decisions in January–September.

Ilmarinen’s extraordinary general meeting in September approved Etera’s merger into Ilmarinen. The transaction was confirmed in October when the Financial Supervisory Authority gave it its approval. As of 1 January 2018, we will together form a cost-effective and attractive earnings-related pension company, offering an even more diverse service package and the sector’s most competitive client benefits.”

Read more:
Ilmarinen's Interim Report 1 January–30 June 2017 (pdf)
Attachments (pdf)

Further information:
Timo Ritakallio,
President and CEO, tel. +358 500 536 346
Mikko Mursula,
CIO, tel. +358 50 380 3016
Jaakko Kiander,
CFO, +358 50 583 8599
Päivi Sihvola,
Senior Vice President, Corporate Communications, tel. +358 40 757 4992