- The overall yield from Veritas’ investments stood at -0.2 per cent during the first quarter.
- Listed equities resulted in a yield of -0.7 per cent.
- The return on fixed-income investments was 0 per cent.
- The solvency ratio was 130.8 per cent.
The market movements during the first quarter of the year were characterised by anxiety. Compared to the previous year, the situation has changed as several central banks have restrained their expansionary monetary policies. The minor increase in inflation, geopolitical concerns and the threat of a trade war also made the market quite skittish. The interest rates rose and the equity index has fluctuated around zero.
During the period in review, yields on Veritas’ investments were negative at -0.2 per cent. “We have prepared for increasing fluctuations with a moderate risk allocation. The diversification of our portfolio is working and our solvency remains strong”, states Niina Bergring, Chief Investment Officer and Deputy CEO for Veritas.
The valuation levels for the stock markets are no longer favourable, but the development of performance has been positive. “The stock markets are already setting their prices for a sunny future. The banks continue to increase their lending, which will serve to support growth for the time being”, says Bergring.
“The indebtedness level in the global economy, however, raises concerns. As interest rates rise, the upswing in the price of funding may indeed hinder economic growth in the future.”
Interest rates are expected to increase slightly this year. “At a certain point, this will create a headwind for high-risk asset classes. Additionally, corporate loan margins are particularly low, so the overall yield expectations will remain moderate in the near future.”
Veritas’ annual real return since 1997 has been 4.5 per cent, which exceeds, by one percentage point, the return assumption set for a sustainable pension scheme. “Our solvency is strong enough to enable us to successfully endure possible market fluctuations in the future.”
At the end of the first quarter, Veritas’ solvency capital was 754.7 million euro. The solvency ratio, or the relation of the pension funds to technical provisions, was 130.8 per cent. The solvency capital was 2.3 times the solvency limit.
VERITAS PENSION INSURANCE
Niina Bergring, Chief Investment Officer and Deputy CEO, tel. +358 (0)10 5501 882, +358 (0)40 8221 514
Carl Pettersson, CEO, tel. +358 (0)10 550 1600
Tommy Sandås, Financing Director, tel. +358 (0)10 5501 186, +358 (0)50 593 0138
Veritas Pension Insurance is an experienced professional pension insurer. We are specialised in personal, first-rate service, and it is our goal to become the best employment pension partner for small and medium-sized companies and entrepreneurs.