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Elo’s result 2023: Return on investment increased to 6 per cent and cost efficiency reached a record high level

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The figures are unaudited and the comparison figures in brackets are figures for 31 December 2022.

  • The market value of the investments exceeded EUR 30 billion.
  • Return on investment was 6.0 (-3.7) per cent, the fourth-quarter return was 3.3 (1.3) per cent.  
  • The solvency ratio was 121.3 (121.4) per cent and the solvency position remained at the same level (1.5).
  • Premiums written amounted to EUR 4.4 (4.3) billion. There was a slight increase in the amount paid in pensions and other benefit, amounting to EUR 4.5 (4.1) billion. 
  • Cost-efficiency continued to improve, and operating expenses covered with the expense loading component were at a record low level of EUR 74.2 (81.6) million.

Our customers benefit from our cost efficient operations

Elo’s strategic goal is to become the most preferred pension company in the industry. To achieve this goal, the focus will be on five key objectives: the most customer-centric and fastest growing, strong performance in services, excellent employee experience, a pioneer in work ability services and adequate solvency.

– We continued to improve our efficiency and will refund EUR 10.4 million to our customers. In addition, our customers will pay a significantly lower management fee in 2024, says Carl Pettersson, CEO. – A major customer project was the transfer of the statutory insurance portfolio of the Orion Pension Fund to Elo at the turn of the year. This was the first major pension portfolio transfer for Elo, and we successfully completed it.

The pension legislation for self-employed persons changed at the beginning of 2023, and as a result, Elo revised the earned incomes of more than 24,000 entrepreneurs during the year. For some customers, increasing their earned income took place at a difficult time due to the tightened economic situation. Dialogue between the customer and the pension company is particularly important in such circumstances. 

In terms of the number of insurance policies, Elo is the market leader in self-employed persons’ YEL pension insurance. Almost every third employer company is insured by Elo. At the end of 2023, Elo was responsible for about 83,487 (84,427) self-employed persons’ YEL insurance policies and 46,395 (47,002) TyEL insurance policies taken out by employers. The total number of insured employees and self-employed persons was 493,173 (503,710). 

The total annual number of pensions paid increased by almost 10 per cent to approximately EUR 4,191.0 (3,820.2) million. Old-age and disability pensions were the two largest items in claims expenditure. The number of pension decisions for the full year was 29,052, a decrease of 8 per cent compared to the previous year. The number of old-age pension decisions decreased by 21 per cent, which was due to the gradual rise in the lowest retirement age per age group.

The number of new disability pensions increased by 4 per cent during the year. Disability pension decisions increased especially among people over 60 years of age, whose most common reason for the pension was musculoskeletal disease. Disability pension decisions issued based on mental health disorders increased in all age groups and was the most common reason for disability pension among young people. The moderate downward trend in rehabilitation decisions continued. Of the persons participating in Elo’s vocational rehabilitation, 76 per cent stayed in employment and avoided going on disability pension. 

In Finland, recession decreased consumption and investments

Geopolitically, the year was turbulent. The war in Ukraine continued and maintained fears concerning the energy price in Europe. The global economy avoided a recession despite the uncertainty of the growth outlook and the rapid tightening of monetary policy by central banks. However, the global industrial cycle weakened after the early months of the year, particularly impacting the growth of the euro area, which is dependent on industry and foreign trade.    

Inflation slowed more than expected in the main markets, which is why the European and US central banks suspended their interest rate hikes during the second half of 2023. In the financial market, attention turned to the expected interest rate cuts for 2024 and this gave impetus to the increase in asset values towards the end of the year.    

The Finnish economy was in recession. Consumption and investments decreased as households and businesses reacted to the increase in financing costs. The downturn hit construction and related services, such as housing sales, hardest. The weakening of Finland’s economic situation and growth was also visible in the labor market. The unemployment rate increased from the beginning of the year by slightly less than one percentage point by the end of the year. 

Investment operations were successful, solvency remained at a good level

The main themes of 2023 were the moderation of inflation and the differentiation of economic growth between Europe, China and the United States. In early spring, the financial market was challenged by the US banking sector’s liquidity concerns, and in autumn by the conflict in the Middle East. 
– We performed well in a varied market environment. The return on investment rose to 6 per cent, well above Elo’s and the sector’s ten-year average nominal return. The market value of our investments exceeded EUR 30 billion for the first time in Elo's history, says Jonna Ryhänen, Chief Investment Officer.

The returns on listed equity and fixed income investments were strong. Returns on real estate investments were burdened by changes in fair value due to rising market interest rates. At the end of 2023, the total fair value of the company’s investments amounted to EUR 30,046.7 (28,182.3) million. The result of investment operations at fair values was EUR 267.8 (–1,493.2) million.  
The development of the equity market was strong in the main markets. In Finland and China, equity returns were negative. The moderation of inflationary developments and expectations of monetary policy easing supported the development of returns, especially in the last quarter of the year.  
The share of listed equities in Elo’s investment portfolio was increased towards the end of the year, and they accounted for 30.8 per cent of the investment portfolio at year-end. Equity investments generated a return of 8.6 (–6.9) per cent. 

Fixed income investments performed well, as expectations of monetary policy easing led to a decline in market interest rates in the last quarter of the year. Elo’s fixed income investments generated a return of 6.7 (–2.8) per cent. 

The uncertain economic outlook and changes in the financial market kept trade volumes low in the real estate investment market and the rise in yield requirements continued. The return on Elo’s real estate investments was –2.4 (5.3) per cent. The general increase in yield requirements was also reflected in the values of Elo’s real estate investments, and in 2023, a total of EUR 141.2 million in impairment was recognized in the values of direct real estate investments. 

Elo’s other investments generated a return of 4.4 (–0.5) per cent. Elo’s other investments consisted mainly of hedge fund investments, which generated a return of 4.8 (2.3) per cent. 

Towards a net zero investment portfolio

Elo is committed to the targets of the Paris climate agreement in the investment portfolio and continuously develops its climate goals and action. During the reporting year, the climate policy for investments was updated and the roadmap was extended until 2030. 

Furthermore, Elo’s sustainability program for direct Finnish real estate investments, including the updated carbon neutrality targets and measures, was published. To further integrate biodiversity into to the investment process, Elo made a biodiversity roadmap for investments. Elo will further refine its approaches concerning biodiversity as the investor frameworks and data for assessing biodiversity risks and opportunities develop. 


At the beginning of the year 2024, the growth outlook for the global economy is uncertain and growth is expected to be a few tens weaker than in the previous year. Inflation has fallen from its peak in all major economies, but wage growth continues to be fast. Central banks are cautious in guiding the expectations of the public and financial market. In Finland, private consumption needs household confidence, and the long-term growth outlook is crucial to investments. Weak export demand, slowly declining interest rates and oversupply of unsold apartments indicate a contraction in investments for some time to come. 

Elo’s year 2024  has started well. Elo will continue the efficient implementation of the employment pension system, and wants, in line with the strategy, to increase market share in TyEL insurance and maintain its position as the market leader in YEL insurance.  Elo will continue to invest in the development of work ability services and create added value for customers by reducing work ability related risks. According to the strategy, Elo ensures an adequate level of solvency in all market situations. 

Further information:
CEO Carl Pettersson, interview requests to Miia Pullinen/Communications, tel. +358 40 588 3637

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