Pension Fennia Biannual Review of Operations 1 January - 30 June 2012: A good result in uncertain market conditions

21.8.2012
  • Investment income stood at 3.6% 
  • The solvency ratio was 18.6% of the technical provisions and the solvency margin was 2.4 times the solvency limit 
  •  Effective operations with an administration cost surplus of 25.9%; increased investments in the development of pension customer service 
  • The number of self-employed customers exceeded the 40,000 mark


“Pension Fennia did well during the first half of the year. Our investment income was good and our solvency at a secure level. Operational efficiency remained excellent. Our position as an insurer of self-employed persons is strong, and we have exceeded the 40,000 mark in terms of the number of self-employed customers,” states Lasse Heiniö, Managing Director of Pension Fennia.


Good yield – difficult market
Pension Fennia’s investment income in the first six months of the year stood at 3.6% (1–6/2011: 0.4%). The best yield was gained from shares at 4.8% and corporate bonds at 5.9%.


The amount of the solvency margin and comparable items was €1,119 million (€1,160 million). The solvency ratio was 18.6% (19.9%) of the technical provisions and the solvency margin was 2.4 (2.5) times the solvency limit. Without the temporary solvency regulations, the solvency ratio would have been 13.8% (15.1%) of the technical provisions and the solvency position 1.8 (1.9) times the solvency limit.

 
“Equity investments and, above all, corporate bonds brought a healthy yield during the period under review. Despite the slowing down of global economic growth, and the swelling financial crisis in Europe, our results have developed positively up to and beyond June,” says Eeva Grannenfelt, Director and Chief Investment Officer at Pension Fennia.


The average nominal yield for investments over a period of five years was 1.4% and the real yield was -0.9%. The average nominal yield for investments over a period of ten years was 4.8% with a real yield of 3.0%. Calculated from the start-up of operations in 1999, the nominal yield for Pension Fennia’s investments stood at 4.7% and the real yield at 2.7%.


Pension Fennia is the highest recommended employment pension company
Pension Fennia spent 74% (79%) of the expense loading of the insurance premium on operating costs. The result is excellent in light of the fact that, during this same period, Pension Fennia has invested heavily in the development of its pension customer services. The premium income for the period from 1 January to 30 June 2012 stood at €670 million (€562 million for 1-6/2011) and it is estimated to total €1,341 million for 2012, which is nearly 12% higher than the previous year.


The three transfer rounds of employment pension policies in 2012 reduced Pension Fennia’s premium income by a total of €4.1 million. The net reduction of TyEL policies in the three transfer rounds was 45 and the net increase of YEL policies was 112. A total of 1,571 TyEL policies and 2,580 YEL policies were acquired through new customer prospecting.


During the period under review, the number of YEL insured by Pension Fennia exceeded the 40,000 mark. This is one indication of Fennia Group’s solid position as, in particular, an insurer of self-employed persons.
Within the field-specific customer satisfaction survey conducted by Taloustutkimus Oy in 2011, customers awarded Pension Fennia’s services with the highest rating in the employment pension industry. In the survey, customers said that they would also gladly recommend Pension Fennia to others.


The figures presented are those of the parent company and have not been audited.

Encl.:
Pension Fennia’s biannual review 1.1 – 30.6.2012 (pdf)
Pension Fennia’s biannual review slides (pdf)

For further information, please contact:
Lasse Heiniö, Managing Director, tel. +358 10 503 7204
Eeva Grannenfelt, Director, Chief Investment Officer, tel. +358 50 544 6355