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Elo’s return on investment was 2.8 per cent and cost-efficiency improved significantly

Financial market returns were better than expected, thanks to good economic development. Equity market returns were highly diversified, particularly in late spring, both geographically and by sector. Interest yields were positive in the first half of the year, despite central bank rate hikes. Our operating expenses decreased for the second year in a row, and thus we improved our cost efficiency.


Key figures January–June 2023

  • The result of investment operations at fair values was EUR 34.1 (-1,141.3) million.
  • Net investment income was 2.8 (-4.5) per cent. 
  • The market value of the investments was EUR 29.0 (28.0) billion.
  • The solvency ratio was 121.0 (123.6) per cent and solvency capital was 1.5 (1.5) times the solvency limit.
  • Premiums written amounted to EUR 2.2 billion. The amount paid in pensions and other benefits was roughly at the same level. 

“We have succeeded in lowering our operating costs, and thus improved our cost efficiency. Thanks to the increased efficiency, we will refund EUR 7 million to our customers as management fee refunds in the February–March 2024 invoice,” says Carl Pettersson, CEO of Elo.

The pension legislation for self-employed persons changed with regard to the determination of the self-employed person’s earned income and regularity in reviewing earned income. We started the statutory reviews at the beginning of June. 

“The implementation of our new strategy continued, and we proceeded according to the action plan by developing service processes and management. Our customers have also noticed the positive change, giving us positive feedback,” Pettersson says.

Financial market returns better than expected

The development of returns from the equity and fixed income markets reflects investors’ expectations of a gradual slowing down of inflation without a significant diminishing of economic growth. This would probably mean a turnaround in the monetary policy of central banks,” says Hanna Hiidenpalo, Deputy CEO of Elo.

Elo’s equity investments generated a return of 4.3 (-8.2) per cent. Listed equities generated a return of 6.7 (-17.2) per cent during the first half of the year. With regard to listed equities, the US equity market was the best performer, driven by growth companies. Elo’s return on private equity investments was 1.7 (11.2) per cent. 

Central bank rate hikes continued steadily during the first half of the year. In the United States, interest rates were raised three times and the European Central Bank raised its interest rate four times. The shortest market rates increased with the rate hikes, but the longer rates remained in place or even decreased slightly. Elo’s fixed income investments generated a return of 2.2 (-3.5) per cent.

The uncertain economic outlook and rising interest rates had an impact on the real estate investment market. Trade activity continued to be soft, the construction sector was in a decline and yield requirements increased. The general market situation was also reflected in the return on Elo’s real estate investments, amounting to 0.2 (3.4) per cent. 

The number of applications for disability pensions decreased by 6 per cent year-on-year

In particular, the number of disability pension applications increased among those over 60 years of age. An increase was seen in the transport, construction, industry and commerce sectors in particular. Serious mental disorders did not increase in number, but the number of applications for disability pension due to less severe mental health challenges increased. Up to 38 per cent of new applicants for disability pension due to mental health reasons were under the age of 34. In 2022, the corresponding figure was 35 per cent.

Near-term outlook

The economic outlook is still affected by the impact of the rise in interest rates on economic growth and employment. The main risks of the financial market are the acceleration of inflation and continuing rise in interest rates.

“Both the housing trade and construction activity have weakened and there is no clear turn for the better in the construction sector without a recovery in real income or a decline in interest rates. The expectations of Finnish companies regarding the future operating environment have weakened, but employment has remained at a good level,” Hiidenpalo says.

The comparison figures in brackets are figures for 30 June 2022.
Further information:
CEO Carl Pettersson, interview requests Communications Manager Sara Salomaa, 
tel. +358 44 550 5450
Deputy CEO, CIO Hanna Hiidenpalo, tel. +358 20 703 5668
CFO Sarianne Kirvesmäki, tel. +358 20 703 5134

- Finacial statements 2022 >
- Key figures 2022 > 



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