- Veritas’ investments had a successful yield in the first half of the year, at 5.8 per cent.
- The best yield was gained from listed equities, at 13.3 per cent.
- The yield on real estate investments was 5.0 per cent.
- The return on fixed income investments was 1.1 per cent.
- The TyEL payroll increased by 1.3 per cent to 1,618.6 million euro.
- The YEL income increased by 0.9 per cent to 257.5 million euro.
- The company’s solvency was excellent, and the solvency capital rose to 676.0 million euro, which was 31.8 per cent of the technical provisions.
NiinaBergring, Chief Investment Officer at Veritas, is satisfied with the investment yield achieved by the company during the two first quarters. “As a pension insurance company, we have to be able to think long-term and focus on achieving stable returns.This is of particular importance during these insecure times.”
Bergring has certain concerns, however, in terms of the approaching autumn quarter. “We anticipated the problems in China and Greece and reduced our risk level throughout the spring.China remains a concern, however, and it has proven to be a bigger disappointment than anticipated at the start of the year.The Chinese economy does not have a solid foundation and the risks are considerable, even though the state still has some means to affect the development of its economic situation.We have withdrawn nearly entirely from China.”
Due to relatively weak global growth expectations, the duration of the fixed income investments has been held stable, even though the interest rate levels are at an all-time low.“The excellent return on fixed income investments, achieved during the first quarter of the year, found itself leveling out during the second quarter.The recent turbulence has shown, however, that decentralization within the portfolio management of a pension insurance company is essential.”
Due to its long-term investment philosophy, Veritas' annual nominal yield has been 6.2 per cent since 1997 (with a real return of 4.4 per cent).The company’s solvency strengthened in the second quarter as the solvency capital rose to 676.0 million euro, which was 31.8 per cent of the technical provisions.Thesolvency capital was 2.4 times the solvency limit.
Positive development in the insurance portfolio
Despite the weak economic situation, Veritas’ insurance portfolio developed positively.Both the TyEL payroll and YEL income increased, even thoughthe number of insurance policies dropped slightly. “Our growth reflects the economic situation at large. While we saw a slight decrease in the number of policies within both insurance lines,it’s encouraging that there was growth in both the payroll and income despite the economic downturn,” says Jan-Erik Stenman, President of Veritas.
According to Stenman, it will be increasingly important to secure employment in the future. “I hope that Finland is able to reach some type of social agreement that would reverse the current negative development.We need to safeguard and strengthen our employment situation.”
VERITAS PENSION INSURANCE
Jan-Erik Stenman, President, tel.+358 (0)10 550 1600, +358 (0)50 343 2299
Niina Bergring, Chief Investment Officer, tel.+358 (0)10 5501 882, +358 (0)40 8221 514
Tommy Sandås, Financing Director, tel.+358 (0)10 5501 186, +358 (0)50 593 0138