The return on Elo’s investments was 7.2 per cent in the first half-year

19.8.2019
In January–June, the return on Elo Mutual Pension Insurance Company’s investments was 7.2 per cent (1 January–30 June 2018: 0.8 per cent) or EUR 1.6 billion. The market value of Elo’s investments rose to EUR 23.8 billion (EUR 23.4 billion). In the second quarter, return on investments was 1.9 per cent (1.2 per cent).

“The first half of the year was very good. Our assets under management grew and our solvency improved. The return on our investments rose to an excellent level,” says Elo’s CEO Satu Huber.

Listed equities generated the highest returns at 14.7 per cent, while the return on bonds was also strong at 5.5 per cent.

“The main factor underpinning the strong returns was that the global equity markets on the whole generated very good returns during the first half of the year. All of the major markets reached returns exceeding 10 per cent,” says Elo’s Chief Investment Officer Hanna Hiidenpalo.

Growth has slowed down in all main economic areas

During the first half of the year, global economic growth slowed down in all main economic areas due to concerns related to trade policy and geopolitical development. The consensus forecast of global economic growth this year has declined to 3.3 per cent. In the United States, economic growth is predicted to exceed two per cent. Growth in the euro zone is expected to slow down to a rate of approximately one per cent, while the growth forecast for the Finnish economy is 1.6 per cent.

“In the equity markets, the first half of the year ended with strong performance. The continued easing of monetary policy by central banks has led to interest rates falling,” Hiidenpalo adds.

Low expected returns in the second half of the year

The weakening of economic growth has been quite moderate thus far. The main concerns are still related to the globally weaker industrial outlook due to trade disputes as well as Brexit and, from Finland’s perspective, the rapid weakening of the German economy. However, the labour markets have developed favourably, which supports private consumption demand.

“The continuation of global economic growth now depends largely on the results of trade negotiations between the United States and China. The negotiations are challenging, and they have been suspended occasionally. There are no quick solutions on the horizon,” Hiidenpalo explains.

The domestic outlook of the Finnish economic environment remains positive for the remainder of the year, but the challenges associated with global economic development increase the risk of economic development being weaker than the current forecasts would suggest.

“Finnish listed companies are well-positioned to enter more uncertain times, as most of them have improved their profitability and strengthened their balance sheet in recent years,” Hiidenpalo says.

Sharper strategy for responsible investing

In March, Elo published its updated principles of responsible investing. The principles sharpen Elo’s strategy of responsible investing and emphasise the significance of engagement as a way for an active owner to influence companies. The company also published a new ownership policy in the first half-year. The policy highlights the significance of responsibility in increasing shareholder value.

In June, Elo came second at the Transparent Asset Owner Awards reporting competition in the category of medium-sized and small investors. The purpose of the awards is to recognise global best practices in responsible investing and the transparency of ESG reporting.

First pensions now paid faster than before

The issuing of decisions on old-age pensions became even faster than before at the start of the year, with a preliminary pension decision issued initially based on the earnings data contained in the register, followed by a final decision once the employer has reported the last earnings to the income register. During the first half of the year, the processing time of old-age pensions was 20 days, which is more than 30 per cent faster than the average of other employment pension companies.


The company improved its online services by launching new services during the first six months of the year. The pension calculator for self-employed persons was also updated to include a feature that provides an estimate of the pension at the time of retirement. The development efforts are partly based on the use of data analytics to identify customer needs.


A total of 238,600 (233,500) pensioners were paid their pensions by Elo at the end of June. A total of EUR 1,697 million (EUR 1,621 million) was paid in pensions in the first half-year, of which old-age pensions accounted for EUR 1,427 million (EUR 1,371 million), including partial early old-age pensions.  Elo issued a total of 13,265 (12,756) pension decisions on the basis of an application.

Elo topped the Customer’s Voice survey for the second time

The number of new customers using Elo to insure their pension security continued to grow. In the second transfer period of the year, the net numbers of customers transferred to Elo were 141 new self-employed customers and 41 corporate customers. During the two transfer periods this year, a net total of 285 new self-employed customers and 62 corporate customers transferred to Elo. Elo is the market leader in YEL pension insurance, and one in three employer companies use Elo to insure their employees.


“The adoption of the national income register represented a major change for our customers as well as Elo. The insurance service’s customer satisfaction remained very good, with an NPS score of approximately 86, despite the adoption of the income register. Providing the best customer service in our industry is one of our key goals, and the indicators suggest we are continuing to move in the right direction,” Huber says.


The telephone service of Elo’s insurance services was again selected as the best in Finland in the Finnish “Customer’s Voice” competition in May. The Customer’s Voice index was excellent at 84.96, which represents a slight improvement on the previous year’s index score of 84.10. The Customer’s Voice index has a strong correlation with the Net Promoter Score (NPS).


Elo Interim Report 1 January - 30 June 2019 >

Elo Interim Report 1 January - 30 June 2019 Presentation >

Further information:
CEO Satu Huber, tel.
+358 20 703 5811
CIO Hanna Hiidenpalo, tel. +358 20 703 5668
CFO Sarianne Kirvesmäki, tel.
+358 20 703 5134