Advance information regarding Pension Fennia’s financial statements for 2012: Investment income at 10.3%

“In terms of investments, the year 2012 will go down as one of the best in Pension Fennia’s history, with our investment income standing at 10.3 per cent. Our operational efficiency was also excellent; the administration cost surplus of 13.2 million euro was, in terms of euro amounts, the best in Pension Fennia’s history,” says Lasse Heiniö, Managing Director of Pension Fennia, as he sums up the year 2012.

According to preliminary information about the financial statements, Pension Fennia's investment income for 2012 stood at 10.3 per cent (-1.6% in 2011). In 2012, the best yield was gained from quoted shares at 16.7 per cent (-18.4%) and direct real estate investments at 14.8 per cent (8.4%). Calculated from the start-up of operations in 1999, the average nominal yield for Pension Fennia’s investments was 5.0 per cent and the real yield was 3.0 per cent. The average nominal yield for investments over a period of five years was 2.9 per cent and the real yield was 0.7 per cent. The average nominal yield for investments over a period of ten years was 5.3 per cent and the real yield was 3.4 per cent.

“The final quarter was better than expected, and for that reason, the investment income for the whole year exceeded our estimates. We succeeded well in our equity and credit risk allocation and in their selections. The investment income in all asset classes remained at an excellent level despite the declining economic growth in the Euro Zone and the weakening profit development experienced by companies. The excellent yield from our real estate investments is the result of a concentrated focus on residential flats and shopping centres,” states Eeva Grannenfelt, Director and Chief Investment Officer at Pension Fennia.

“The key reasons for the excellent yield in the investment markets included an extremely low interest rate and the exceptionally loose fiscal policies of the central banks,” adds Eeva Grannenfelt.

Throughout 2012, Pension Fennia retained its strong position as an insurer of self-employed persons and SMEs, despite the fact that the overall transfer business result met with a slight loss. The area of new business has remained at a good level.

In December 2012, the Board of Directors of the Mutual Insurance Company Pension Fennia and Tapiola Mutual Pension Insurance Company signed a letter of intent concerning the initiation of a plan to merge the companies’ operations. The aim is to form a new employment pension company that provides its customers with high-quality services for the management of employment pension security and competitive client bonuses. During the spring, the parties will draft a plan aimed at a merger, and this plan will be discussed and finalised by the administrative bodies of both companies by the end of June 2013. In accordance with the letter of intent, the activities of the merged company will begin on 1 January 2014, provided that the actual corporate law process and official paperwork have been completed.

“An international study about the Finnish employment pension system, which was published at the beginning of January, calls for the establishment of larger pension insurance companies as one means of improving the overall efficiency of the pension system. The merger of Pension Fennia and Tapiola Pension is a welcome undertaking in terms of the pension system and Finnish society in general, because it will bring efficiency and operational reliability to the entire system. Our customers have also seen the benefit of the new company and reacted positively to the news of the merger,” states Lasse Heiniö.

These figures are preliminary. Pension Fennia's official financial statements for 2012 will be published in week 10.

Advance information regarding Pension Fennia's Financial Statements for 2012>>

For further information, please contact:

Lasse Heiniö, Managing Director, tel. +358 (0)10 503 7204
Eeva Grannenfelt, Director, Chief Investment Officer, tel. +358 (0)50 544 6355