2014 Performance report for Veritas Pension Insurance Company: Premium income grew, investments yielded high returns – improvements in customer service attracted more TyEL customers

  • The premium income increased by 3.9 per cent for a total of 470.2 million euro (452.8 million euro in 2013)
  • The total return on investments was 6.5 (7.4) per cent, the best yield was achieved from unlisted shares, at 9.9 per cent.
  • The yield on fixed income investments was 5.3 per cent.
  • Client bonuses will increase by 10.3 per cent
  • The solvency ratio strengthened and was 28.9 (27.6) per cent of the technical provisions, or 2.2 (2.1) times the solvency limit.
  • Loading profit, indicating the efficiency of the company’s operations, decreased to 90.6 (91.0) per cent.

In 2014, Veritas’ customer portfolio developed positively and the premium income increased to 470.2 million euro (as compared to 452.8 million in 2013). “We have invested in our customer service and have succeeded in meeting the expectations of our customers. As a result, small and medium-sized companies are increasingly choosing Veritas as their pension insurer. The number of TyEL insurance policies underwritten by Veritas increased by 2.1 per cent,” explains Jan-Erik Stenman, President of Veritas.

Veritas insured altogether 6,931 TyEL customers and 10,739 YEL customers in 2014. Even though the number of YEL insurance policies fell slightly, the insured income grew by 1.2 per cent for a total of 255.1 million euro.

“This is encouraging development, since the insured income has an effect on the overall social security of self-employed persons. Our mission is to secure pensions and, in this light, we have succeeded well in this mission over the past year,” states Stenman.

The number of persons receiving pension from Veritas increased to 28,673 (28,064). A total of 454.8 (432.0) million euro in pensions and other claims were paid in 2014.

Investments had a yield of 6.5 per cent

Veritas’ investments yielded a positive return of 6.5 per cent in 2014. The best yield was achieved by equity investments at 9.1 per cent. Positive development within the equity market was supported by the growth in risk-taking brought about by the central banks.

“Central bank communications continued to support liquidity, while growth expectations – and inflation expectations, in particular – dropped globally during the year,” says Niina Bergring, Chief Investment Officer at Veritas.

Fixed income investments brought an excellent yield of 5.3 per cent in 2014. “You might say that, this year, we already collected future returns on fixed income investments; the interest rate level in Europe is near zero and, as a result, the expectations are extremely low,” adds Bergring.

Veritas’ annual nominal yield has been 6.0 per cent since 1997. The real return for the corresponding period was 4.2 per cent, which exceeds the assumption of 3.5 per cent applied by the Finnish Centre for Pensions when calculating long-term forecasts.

Client bonuses increase by 10 per cent

Veritas’ solvency strengthened over the previous year. The solvency capital was 595.9 (541.1) million euro or 28.9 (27.6) per cent of the technical provisions. The solvency position was 2.2 (2.1).

The good investment result and the company’s strong solvency had a positive impact on the client bonuses. The transfer to client bonuses will increase by 10.3 per cent from 5.6 to 6.1 million euro.

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Further information
Jan-Erik Stenman, President, tel. 010 550 1600, 050 343 2299
Niina Bergring, Chief Investment Officer, tel. 010 5501 882, 040 8221 514