Pension Fennia Performance Report for 1 January – 30 September 2013: Investment yield at 6.3 per cent

22.10.2013

Pension Fennia’s investment activities showed a yield of 6.3 per cent for the period of 1 January–30 September (as compared to 7.3% for 1-9/2012). The best yield was gained from direct real estate investments at 15.0 per cent (6.0%) and listed equities at 14.7 per cent (12.8%).

The merger of Pension Fennia and LähiTapiola Mutual Pension Insurance Company on 1 January 2014 will involve the harmonization of the investment valuation principles as of 31 December 2013. For this purpose, the real estate investments were valued by an external assessor on the basis of the portfolio and market status on 30 September. The change in the valuation principles for real estate investments increased the property values, and this had an impact of about 0.5 percentage points on the investment income. Additionally, Pension Fennia’s real estate investment strategy worked exceptionally well within the current market situation that favours low-risk objects, a fact that was reflected in the increased value of residential flats and shopping centres in particular.

“The grim outlook in the equities market at the start of the summer was followed by an especially good third quarter. The markets further picked up with the US Federal Reserve’s announcement concerning the continuation of its expansive bond-buying programme. We anticipate that the investment income at the end of the year will remain at the same level as it was at the end of September,” states Eeva Grannenfelt, Director and Chief Investment Officer at Pension Fennia.

Calculated from the year 1999, the average nominal yield for Pension Fennia’s investments stood at 5.1 per cent and the real yield at 3.2 per cent at the end of September. The average nominal yield for investments over a period of five years was 5.9 per cent and the real yield was 4.2 per cent. The average nominal yield for investments over a period of ten years was 5.4 per cent and the real yield was 3.5 per cent.

The company’s solvency capital totalled €1,533 million (solvency margin including an EMU buffer of €1,273 million on 30 September 2012). The solvency capital before the equalization amount was €1,319 million (€1,017 million). The solvency ratio stood at 23.4 per cent (20.7%) of the technical provisions and was 2.5 (3.1) times the solvency limit.

The year’s four transfer rounds for employment pension insurance policies decreased Pension Fennia’s total premium income by 42 million euro. The net reduction was 499 for TyEL policies and 508 for YEL policies.

Elo will launch its operations at the start of 2014

The merger of Pension Fennia and LähiTapiola Mutual Pension Insurance Company is moving forward as planned. As of 1 January 2014, Pension Fennia and LähiTapiola Mutual Pension Insurance Company will form a new employment pension company under the name Elo Mutual Pension Insurance Company. At the time of its launch, Elo’s market share will equal about 24 per cent, and the company’s investment assets will total more than 17 billion euro.

“This merger will significantly improve the efficiency and operational reliability of the overall employment pension system. The merger will also signify even more comprehensive services and more competitive premium discounts for our customers, since the synergetic benefits will be noteworthy following the transitional phase of the merger,” states Lasse Heiniö, Managing Director of Pension Fennia.”

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

Pension Fennia Interim Report 1 January–30 September 2013 >

For further information, please contact:
Lasse Heiniö, Managing Director, tel. +358 10 503 7204
Eeva Grannenfelt, Director, Chief Investment Officer, tel. 050 544 6355