Tiedote 28.7.2017

Positive vibe in the equity markets continued, strong half-year for Ilmarinen

In January–June, the return on Ilmarinen’s investment portfolio was 3.8 per cent (-0.6 per cent in Jan–Jun 2016). At the end of June, the market value of investments stood at EUR 38.5 billion (30.6.2016: EUR 35.7 billion).

The long-term average real return remained at a good level, at 4.2 per cent. Solvency continued to strengthen compared to the situation at the turn of the year. At the end of June, solvency capital was EUR 8,949 (7,386) million and the solvency ratio was 130.1 (126.1) per cent.

Ilmarinen’s customer acquisition went well during the year. Measured in premiums written, net customer acquisition was EUR 83 million during the first half of the year. Ilmarinen’s customers were interested in the new partial early old-age pension: 1,766 decisions were made in the first half of the year.

In June, Ilmarinen’s Board of Directors approved a merger agreement, according to which Etera will merge into Ilmarinen as of 1 January 2018. The arrangement will require approval from both companies’ general meetings and from the relevant authorities.

Ilmarinen’s President and CEO Timo Ritakallio:

“The first half of 2017 was strong in terms of Ilmarinen’s investment returns. The market value of investment assets grew by EUR 1.3 billion and stood at EUR 38.5 billion at the end of June. In the past 12-month period, Ilmarinen’s investments have yielded 9.1 per cent. The good investment result is especially attributed to the favourable development of share prices. Listed equity investments generated the best returns in January–June.

The average annual real return on Ilmarinen’s investments since 1997 is at a good level, at 4.2 per cent. This clearly exceeds the 3.0 per cent return assumption used by the Finnish Centre for Pensions in its calculations. Solvency also remained strong and the solvency ratio, i.e. pension assets in relation to technical provisions, rose to 130.1 per cent.

Along with the pension reform, partial early old-age pension was introduced at the start of the year and raised much interest among Ilmarinen’s customers. During the first half of the year, we made 1,766 decisions concerning partial early old-age pension. The new type of pension brings flexibility to the end of people’s careers, but when considering the options, it’s good to keep in mind that earlier retirement will reduce one’s pension permanently.

Ilmarinen’s customer acquisition showed strong growth in the first half of the year; measured in terms of premiums written, net customer acquisition amounted to EUR 83 million. Together with our customers we developed new services as part of the Wauhdittamo innovation accelerator, which culminated in a final event held in May. The mobile app Parempi vire (‘More energy’) was launched in the spring. It promotes an increase in work ability and well-being, and raised great interest: by the end of June, 550 client companies had ordered the service, and user accounts were activated for more than 20,000 employees. In April, we awarded Finland’s happiest entrepreneur. As part of the Workplace of the Future project, we also surveyed Finnish workplaces’ and employees’ readiness for change.

In investment activities, Ilmarinen’s efforts to take into account the impacts of climate change received international recognition. Ilmarinen received the highest AAA rating in the global climate organisation AODP’s index, which compares the carbon risk management of the world’s largest investors. We were the best Finnish company in the climate index of 500 investors, and came in ninth place overall. The environmental organisation WWF also ranked Ilmarinen and other Finnish pension companies at the top in Europe in terms of how well their investments are aligned with the goals of the Paris climate agreement. In our real estate investments, we broadened the environmental certification of our properties by including old properties. In the first phase, environmental certificate will be sought for the Lepakko building, which serves as Ilmarinen’s head office.

In June, a merger agreement was signed, according to which earnings-related pension insurance company Etera will merge into Ilmarinen as of 1 January 2018. The arrangement will require approval from both companies’ general meetings and from the relevant authorities. The merger will bring synergies and improved cost-effectiveness that will benefit the clients of both companies. By combining the companies’ strengths, the goal is to build an innovative and agile service company that offers even more diverse and higher-quality services than before. In addition, the entire Finnish earnings-related pension system and solvency overall will strengthen. The new company will manage the pension cover of more than 1.1 million Finns – and would thus be the largest earnings-related pension insurer in Finland’s private sector.”

Read more:

• Ilmarinen's Interim Report 1 January–30 June 2017 (pdf)
• Attachments (pdf)

Further information:

• Timo Ritakallio, President and CEO, tel. +358 0500 536 346
• Mikko Mursula, CIO, tel. +358 050 380 3016
• Jaakko Kiander, CFO, +358 050 583 8599
• Päivi Sihvola, Senior Vice President, Corporate Communications, tel. +358 040 7574992